Shares of Meta Platforms moved lower in after-hours trading, slipping by approximately 7%, though the company reported first-quarter earnings and revenue that surpassed analyst forecasts. The decline reflected investor concerns over the company’s increased capital expenditure outlook tied to artificial intelligence investments.
For the first quarter, Meta reported total revenue of $56.31 billion, exceeding consensus estimates and marking a 33% jump from the previous year. Adjusted earnings per share reached $10.44, also ahead of projections, with net income rising 61% year-over-year to $26.77 billion. Operating income for the period was $22.87 billion, well above expectations, and the company’s operating margin stood at 41%.
Advertising revenues remained robust, with the segment generating $55.02 billion, a 33% annual increase. The Family of Apps business contributed $55.91 billion in revenue, up 33% versus the prior year, while operating income for this unit grew 24% to $26.90 billion. Reality Labs, Meta’s division focused on virtual and augmented reality technology, posted revenue of $402 million—a slight decline year-over-year—while its operating loss of $4.03 billion was less than anticipated.
Daily active people (DAP) reached 3.56 billion, representing 4% year-on-year growth. However, user numbers declined more than 5% from the previous quarter, impacted by internet access issues in Iran and restrictions in Russia. Analysts had expected DAP to total 3.62 billion.
The company’s average price per ad increased 12%, and ad impressions grew 19% over the same quarter last year. Headcount edged up 1% to 77,986, with Meta recently disclosing job cuts of roughly 8,000 roles and halting hiring for 6,000 open positions as part of broader cost rationalization efforts.
Capital expenditures for the first quarter totaled $19.84 billion, coming in below the expected $27.57 billion. However, Meta announced a revised full-year CapEx guidance of $125 billion to $145 billion, up from the prior range of $115 billion to $135 billion, due to anticipated higher component costs and additional data center investments.
Costs and expenses increased 35% year-over-year to $33.44 billion. The period’s net income figure included an $8.03 billion income tax benefit linked to adjustments associated with new U.S. tax and spending legislation, boosting the reported earnings per share by $3.13.
For the second quarter, Meta forecast revenue between $58 billion and $61 billion, broadly aligned with market expectations and implying annual growth of roughly 25% at the midpoint.
Meta noted ongoing scrutiny from regulators in both the EU and the U.S., specifically mentioning heightened attention to youth safety. The company cautioned that current and upcoming legal proceedings could lead to significant financial impacts, while it recently lost two court cases in the U.S. related to youth safety, resulting in financial penalties.
In management commentary, CEO Mark Zuckerberg described the quarter as a milestone, citing strong performance across Meta’s application portfolio and the debut of the group’s first model from Meta Superintelligence Labs, as the company aims to advance its AI-driven capabilities for billions of users.
