Meta shares climb after Q1 earnings beat expectations

Meta’s Q1 performance exceeded analyst estimates across revenue and users.

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Meta Platforms shares rose as much as 5% after the company reported stronger-than-expected revenue for the first quarter and issued second-quarter guidance broadly in line with market forecasts.

Meta posted first-quarter revenue of $42.31 billion, topping Wall Street expectations of $41.40 billion. Earnings per share came in at $6.43 versus estimates of $5.28.

The company reported a 16% increase in sales year-on-year and a 35% surge in net income to $16.64 billion.

Finance chief Susan Li said second-quarter revenue is projected to be between $42.5 billion and $45.5 billion. However, she noted a decline in advertising spend from Asia-based e-commerce exporters, likely tied to the looming end of a U.S. customs duty loophole.

Meta lowered its 2025 expense forecast slightly to a range of $113 billion to $118 billion, but raised its capital expenditures estimate to between $64 billion and $72 billion. The increase was attributed to AI-related data centre investments and higher infrastructure hardware costs amid global supply chain pressures.

CEO Mark Zuckerberg said Meta is "well positioned" despite macroeconomic headwinds and continues to focus on long-term investments, particularly in artificial intelligence and virtual platforms.

Advertising revenue for the quarter was $41.39 billion, beating estimates, while Reality Labs posted a $4.2 billion loss, narrower than expected. Reality Labs revenue fell 6% to $412 million.

Meta reported 3.43 billion daily active users in the quarter, ahead of the 3.39 billion forecast. Its Threads platform now has 350 million monthly users, up from 320 million in January.

Zuckerberg said Meta AI has reached nearly 1 billion monthly users, and the company plans to explore monetisation in the future. A standalone Meta AI app was launched earlier this week.

The company’s headcount rose 11% year-on-year to 76,834 employees. It laid off 5% of staff in February, citing performance-related restructuring.

Meta also cautioned that a recent ruling by the European Commission against its ad-free subscription model could significantly impact user experience and revenue in Europe as early as Q3.