Investors reacted positively as Meta Platforms, Inc. demonstrated robust financial health in its first-quarter report, significantly outperforming analyst predictions for both earnings and revenue. The company’s stock saw an uptick following the announcement, signaling confidence despite looming regulatory questions in Europe.
Strong Quarterly Performance
Meta reported impressive growth for the first quarter. Revenue climbed 16% year-over-year to $42.31 billion, exceeding the anticipated $41.40 billion. Net income also saw a substantial 35% increase, reaching $16.64 billion compared to $12.37 billion in the same period last year. Earnings per share were reported at $6.43, comfortably beating the $5.28 analysts had projected.
Here’s a quick look at the key Q1 figures compared to LSEG analyst estimates:
| Metric | Actual Result | Expected Result |
| Earnings Per Share (EPS) | $6.43 | $5.28 |
| Revenue | $42.31 billion | $41.40 billion |
Advertising and User Growth Drive Results
The primary engine behind these strong results was the company’s advertising business, which generated $41.39 billion in revenue during the quarter, surpassing Wall Street’s forecast of $40.44 billion. Furthermore, Meta’s global reach continued to expand, with Daily Active Users across its platforms growing to 3.43 billion, slightly ahead of the 3.39 billion estimate and up from 3.35 billion in the previous quarter.
Future Outlook and Investments
Looking ahead, Meta provided guidance for the second quarter, projecting revenues between $42.5 billion and $45.5 billion, which aligns with analyst expectations centered around $44.03 billion. The company slightly narrowed its total expense forecast for 2025 to a range of $113 billion to $118 billion.
However, Meta significantly increased its capital expenditure forecast for the current year, now estimating spending between $64 billion and $72 billion, up from the previous $60 billion to $65 billion range. The company attributed this increase to “additional data center investments to support our efforts in artificial intelligence, as well as an increase in the expected cost of infrastructure hardware.”
Reality Labs and Regulatory Headwinds
The Reality Labs division, focused on VR and AR technologies, reported an operating loss of $4.2 billion on sales of $412 million. While the loss was slightly less than anticipated, sales fell short of the projected $492.7 million.
Meta also issued a caution regarding potential regulatory action from the European Commission concerning its ad-free subscription model in Europe. The company warned that an unfavorable ruling could negatively impact user experience and significantly affect its business and revenue within the region starting from the third quarter.
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