The parent company of Facebook and Instagram, Meta (META), surpassed Wall Street’s forecasts on both the top and bottom lines when it revealed its second quarter profits on Wednesday after the bell. However, the business cautioned that it anticipates “significant” growth in capital expenditures by 2025.

“While we do not intend to provide any quantitative guidance for 2025 until the fourth quarter call, we expect infrastructure costs will be a significant driver of expense growth next year as we recognize depreciation and operating costs associated with our expanded infrastructure footprint,” CFO Susan Li said in a statement.

Wall Street is watching AI expenditure closely as they wait tensely for a return on Big Tech’s technological advances. Li increased the company’s projected total expenses for the upcoming year from between $94 billion and $99 billion to between $96 billion and $99 billion during the previous quarter.

Meta reported $5.16 earnings per share (EPS) on $39.07 billion in revenue for the second quarter. Bloomberg estimates show that analysts were anticipating EPS of $4.74 on revenue of $38.3 billion. During the same quarter previous year, Meta generated $31.9 billion in sales and $2.98 in earnings per share.

Revenue from the company’s Family of Apps, which comprises Facebook, Instagram, WhatsApp, and Messenger, came in at $38.72 billion, exceeding $37.7 billion in projections. In Q2 of previous year, Meta recorded $31.7 billion in revenue in the category.

The report caused Meta’s shares to rise by over 4%.

Wall Street is still attempting to ascertain how much longer Meta will need to invest in AI before it sees any sort of income reward, beyond its advertising revenue.

CEO Mark Zuckerberg unveiled Llama 3.1, Meta’s most recent large language model (LLM), as an open-source project last week. Furthermore, the founder of Facebook stated that the market ought to prioritize open-source AI over closed-source models like ChatGPT from OpenAI.

In contrast to forecasts of $376 million, Meta’s Reality Labs unit, which comprises its mixed reality hardware and software, reported revenue of $353 million for the quarter. Although the segment’s cash losses are still present, this is better than what the company reported during the same quarter previous year.

According to Meta, the segment lost about $4.49 billion in Q2, which was significantly less than the $4.53 billion that was anticipated. During Q1, it lost $3.8 billion. Reality Labs’ problems have been exacerbated by turnover and a vague vision within the organization, according to Yasmin Khorram of Yahoo Finance.

Additionally, Meta’s admission follows Texas Attorney General Ken Paxton’s announcement on Tuesday that he was able to reach a $1.4 billion settlement with the state regarding Meta’s purported exploitation of Texans’ biometric data for its Tag Suggestions feature without their consent.