Meta Platforms Inc., the parent company behind social media giants Instagram and Facebook, reported stronger-than-anticipated financial results for the first quarter, largely due to robust advertising revenue bolstered by artificial intelligence improvements. The company’s stock saw an upswing in after-hours trading following this announcement.
Debra Aho Williamson, the chief analyst at Sonata Insights, noted that while this quarter marks a successful period for Meta, it occurred prior to recent economic disruptions and the fluctuations in tariffs. Additionally, this period was before a reduction in advertising expenditure from Chinese companies such as Temu and Shein became apparent. Moving ahead, Williamson suggested that Meta could counteract any potential revenue dips from these advertisers if it continues to enhance its AI-powered advertising offerings.
During the first three months of the year, Meta recorded earnings of $16.64 billion, translating to $6.43 per share, marking a 35% increase compared to the $12.37 billion, or $4.71 per share, from the previous year’s equivalent period. Revenue surged by 16% to $42.31 billion from $36.46 billion a year ago. Analysts surveyed by FactSet had forecast earnings of $5.23 per share on revenues of $41.34 billion.
Looking ahead to the current quarter, Meta has projected revenues ranging between $42.5 billion and $45.5 billion, with analysts forecasting around $43.84 billion. Furthermore, the Menlo Park, California-based company revised its capital expenditure estimates for 2025 upwards to $64 billion-$72 billion from an earlier prediction of $60 billion-$65 billion. This adjustment encompasses additional investments in data centers needed to support their AI initiatives, alongside increased infrastructure hardware costs.
In a statement, CEO Mark Zuckerberg expressed optimism about the company’s future, noting, “We’ve had a strong start to an important year, our community continues to grow and our business is performing very well.” He also highlighted advancements in AI glasses and Meta AI, which currently boasts nearly 1 billion monthly active users.
During a call with analysts, Zuckerberg conveyed confidence in Meta’s ability to manage ongoing economic unpredictabilities. Analyst Andrew Rocco from Zacks Investment Research pointed out that whereas many companies have refrained from offering guidance amid tariff-related concerns and an uncertain economic climate, Meta’s decision to do so is an optimistic signal.
Meta announced that over 3.4 billion people engaged with at least one of its apps in March, representing a 6% increase compared to the previous year. In a recent development, the company launched a dedicated AI application, named Meta AI, which features a ‘discover’ feed enabling users to explore how others are engaging with AI.
Following these positive announcements, Meta’s shares rose $24.20, or 4.4%, to $573.20 in after-hours trading, although the stock remains approximately 8% lower than its value at the beginning of the year.