Meta Platforms, the parent company of Facebook, achieved results that far exceeded market expectations in the first quarter of this year (January to March).
Meta announced on the 30th (local time) that it recorded revenue of $42.31 billion and earnings per share of $6.43 in the first quarter. Revenue was more than 2% higher than the Wall Street average estimate of $41.4 billion compiled by the market research firm LSEG, and earnings per share exceeded the estimate of $5.28 by about 20%.
First-quarter revenue increased by 16% compared to the same period last year, and net profit rose 35% to $16.64 billion.
Meta projected that its second-quarter revenue would reach $42.5 billion to $45.5 billion. Wall Street expects $44.03 billion.
Meta has slightly lowered its total expenditure range for the year from the original $114 billion to $119 billion to $113 billion to $118 billion. However, the capital expenditure outlook for this year was raised from the previous $60 billion to $65 billion to $64 billion to $72 billion.
Meta explained that this reflects additional data center investment to support artificial intelligence (AI) efforts and increases in anticipated infrastructure hardware expenses.
First-quarter advertising revenue was $41.39 billion, exceeding Wall Street's forecast of $40.44 billion. Reuters noted that "based on strong advertising performance in the first quarter, Meta exceeded analysts' expected revenue and the second-quarter outlook also aligns with market expectations, alleviating concerns about economic slowdown due to tariffs."
Revenue from the Reality Labs department, responsible for developing virtual reality and augmented reality technology, was $412 million, while operating losses reached $4.2 billion. This brings the cumulative loss in this institutional sector to over $60 billion since the end of 2020.
In the first quarter, the number of daily active users on its social media platforms, including Facebook, increased to 4.33 billion, up 80 million from three months ago.
Meta expressed concern that the recent decision by the European Commission (EC) could significantly worsen the service experience for European users, which could have substantial impacts on its business and revenue in Europe starting as early as the third quarter.
Meta stated that this is because the 'ad-free paid subscription service' for European users was deemed not compliant with EU regulations. The EU Commission imposed a penalty surcharge of €200 million (approximately 320 billion won), stating that Meta violated the Digital Markets Act (DMA) by not collecting personal data for advertising purposes from paid users of Facebook and Instagram while effectively forcing free users to consent to data collection.
After the earnings announcement, Meta's stock price rose 5.3% in after-hours transactions.