Meta Platforms beat analyst expectations for first quarter revenue, driven by strong advertising performance that eased investor concerns over tariff-related economic uncertainty. The social media company also announced plans to significantly increase capital expenditures this year, primarily focusing on building out infrastructure to support artificial intelligence development.
The Facebook and Instagram parent reported revenue of $42.31 billion for the quarter ending March 31, exceeding the average analyst estimate of $41.40 billion compiled by LSEG. Profit reached $6.43 per share, also surpassing expectations of $5.28 per share. Shares rose in extended trading following the announcement Wednesday.
Looking ahead, Meta expects second-quarter revenue between $42.5 billion and $45.5 billion, aligning with average estimates of $44.01 billion. Chief Financial Officer Susan Li noted the forecast reflected trends from April but acknowledged continued economic uncertainty makes prediction challenging.
Meta raised its 2025 capital expenditure forecast to between $64 billion and $72 billion. This follows previous guidance that the company could spend as much as $65 billion this year. Li indicated the increase reflects a decision to accelerate data center readiness for AI efforts and potential increases in hardware export costs due to tariffs /world/us/whats-trumps-partial-tariff-pause-2025-04-09/.
Executives stated most capital spending is for core business support, such as providing computing power for ads, rather than just generative AI development. However, the boost signals a commitment to AI infrastructure despite earlier analyst suggestions of potential pullbacks across the tech sector.
Alongside financial results, Meta shared updated guidance for advertisers. The company recommends brands leverage its AI-powered ad tools, citing system improvements that drove a 7% increase in time spent on Facebook, 6% on Instagram, and 35% on Threads in the last six months. Meta suggests advertisers experiment with tools like Generative Ads Recommendation (GEM) and Advantage+ products, which utilize AI understanding to maximize ad response.
Video consumption remains a priority, with Meta noting double-digit growth in video time spent among US audiences on Facebook and Instagram year-over-year. The company encourages advertisers to include video in their creative mixes and offers generative AI tools like Image Animation and Video Expansion within Ads Manager to facilitate this.
Messaging is another key focus as social media conversation increasingly shifts to platforms like WhatsApp, Messenger, and Instagram Direct. Meta suggests businesses explore implementing AI business agents for customer support and sales, while click-to-message ads can drive direct engagement.
New advertising opportunities include Threads ads, which the company says are proving efficient. A "Threads feed" placement is now on by default for specific campaign objectives, offering an option to /extend-your-campaign-to-threads/. Meta also highlighted the value of creator partnerships, noting the Instagram creator marketplace connects brands with relevant influencers and partnership ads allow collaboration.
While tariffs and regulatory challenges, including an EU ruling alleging breach of the Digital Markets Act /sustainability/boards-policy-regulation/apple-fined-570-million-meta-228-million-breaching-eu-law-2025-04-23/ and a US FTC trial /technology/meta-trial-5-key-moments-zuckerbergs-testimony-2025-04-16/ regarding acquisitions, present hurdles, Meta's core advertising business remains a reliable performer. Sonata Insights chief analyst Debra Aho Williamson stated, "If ad revenue continues to hold strong, then this increase in capital expenditures will be less of a bitter pill for investors to swallow."
Chief Executive Mark Zuckerberg emphasized Meta's AI bets are positioning the company to handle macroeconomic uncertainty. "The pace of progress across the industry and the opportunities ahead for us are staggering. I want to make sure that we're working aggressively and efficiently, and I also want to make sure that we are building out the leading infrastructure and teams," Zuckerberg said.
