Meta Q1 earnings report 2025

Meta shares surged over 5% following the company’s announcement of better-than-expected revenue for the first quarter and a second-quarter guidance that aligned with Wall Street’s predictions.

Here is a breakdown of how the company performed compared to analyst estimates from LSEG:

• Earnings per share: $6.43 vs. $5.28 expected
• Revenue: $42.31 billion vs. $41.40 billion expected

Meta experienced a 16% year-over-year increase in first-quarter sales, with net income rising by 35% to $16.64 billion from $12.37 billion in the previous year.

The company projected second-quarter sales to fall within the range of $42.5 billion to $45.5 billion, slightly below analysts’ expectations of $44.03 billion.

Meta also announced a reduction in its 2025 total expenses range to $113 billion to $118 billion, down from the previous estimate of $114 billion to $119 billion. However, the company raised its 2025 capital expenditures to $64 billion to $72 billion, up from the previous outlook of $60 billion to $65 billion.

“This updated outlook reflects additional data center investments to support our artificial intelligence efforts as well as an increase in the expected cost of infrastructure hardware,” the company stated in its earnings release.

Meta cautioned that a recent ruling by the European Commission could negatively impact user experience for European users and potentially lead to a significant impact on Meta’s European business and revenue as early as the third quarter. This decision was made due to the EC’s determination that Meta’s no-ads subscription service for European users does not comply with one of its regulations.

The company’s advertising revenue for the first quarter exceeded expectations at $41.39 billion, surpassing Wall Street’s projection of $40.44 billion.

In the first quarter, Meta’s Reality Labs hardware division reported an operating loss of $4.2 billion, lower than the anticipated $4.6 billion. However, Reality Labs’ sales of $412 million were down 6% from the previous year and fell short of analysts’ expectations of $492.7 million.

First-quarter daily active users reached 3.43 billion, exceeding analyst estimates of 3.39 billion and up from 3.35 billion in the previous quarter.

As of March 31, Meta’s employee headcount stood at 76,834, marking an 11% year-over-year increase. In February, the company laid off 5% of its workforce classified as its lowest performers.

The company reported $8.22 billion in first-quarter advertising sales from the Asia-Pacific region, slightly below analysts’ expectations of $8.42 billion.

During Google’s first-quarter earnings report, company executives noted potential challenges to its online ad business from Asia. Philipp Schindler, Google’s Chief Business Officer, mentioned that it is too early in the second quarter to provide a more specific outlook on the broader economy.

Snap, another online advertising-dependent company, recently released its first-quarter earnings and saw a decline in stock price due to macroeconomic uncertainties preventing the company from providing forward guidance. Reddit and Amazon are scheduled to report earnings on Thursday.

Stay tuned for more updates on this developing story.