Meta stock pops on stronger-than-expected revenue growth

The company reported first-quarter revenue of $42.31 billion, marking a 16% year-over-year increase. Net income surged to $16.64 billion, up 35% from the same period last year, while earnings per share rose 37% to $6.43. That’s better than consensus estimates, which had pegged Meta’s first-quarter 2025 earnings per share at $5.21 and a 13% rise in revenue to $41.2 billion.

The rosy results initially drove Meta shares up more than 5% in after-hours trading.

Chief executive Mark Zuckerberg said in a statement that the quarter was a “strong start to an important year.” And on the following call, he said this was a “pivotal moment” for the industry — in what he expects “will continue to be an intense year.”

Leading the way for Meta was its advertising business. Ad impressions from the company’s family of apps (including Facebook, WhatsApp, and Instagram) were up 5%, and the average ad price increased 10% year-over-year. On the earnings call, chief financial officer Susan Li said the online commerce vertical was the largest contributor to year-over-year growth.

Zuckerberg claimed on the call that integrating AI into its advertising department has helped drive revenue.

“AI has already made us better at targeting and finding the audiences that will be interested in [businesses’] products,” Zuckerberg said. “I think that this is really redefining what advertising is — into an AI agent that delivers measurable business results at scale.”

Meta is currently testing an ads recommendation model for reels, which the company said has increased conversion rates by 5%. Meta is seeing that 30% more advertisers used its AI creative tools in the last quarter.

“If we deliver on this vision, then over the coming years, I think that the increased productivity from AI will make advertising a meaningfully larger share of global GDP than it is today,” Zuckerberg said.

The CEO pointed to several advances in Meta’s artificial intelligence projects. Zuckerberg said that there are almost a billion monthly active users of Meta AI — and the company’s focus this year is on making it the “leading personal AI with an emphasis on personalization, voice conversations, and entertainment.” He envisions a world where AI is ever-present. Already, Meta AI is hard to avoid, after the company merged it with its search bar across its various apps.

“I think that we’re all going to have an AI that we talk to throughout the day, while we’re browsing content on our phones,” Zuckerberg said. The company just released its first standalone AI app.

He also pointed out continued development in the company’s AI-powered glasses — “Glasses are the ideal form factor for both AI and the Metaverse,” he said, touting the company’s collaboration with Ray-Ban (EL).

Zuckerberg reaffirmed the company’s commitment to investing in these technologies — as it maintains the strength of its core platforms such as Facebook, Instagram, and WhatsApp. Meta saw continued engagement growth, with daily active people reaching 3.43 billion in March 2025, a 6% increase from a year earlier.

Meta indicated that its updated recommendation system has led to a 7% increase in time spent on Facebook, a 6% increase on Instagram, and a 35% increase on Threads.

With its growing user count, Zuckerberg said that “business messaging should be the next pillar” of the business. He added, “I expect that, just like how every business today has an email address, social media account, and website, they’ll also have an AI business agent that can do customer support and sales.”

The earnings report did have a noticeable dark spot: Losses deepened in Reality Labs, the cash-hemorrhaging division that’s home to Meta’s virtual and augmented reality hardware, software, and metaverse platforms — a $4.21 billion operating loss on $412 million in revenue.

Meta lowered its projected full-year 2025 total expenses to between $113 billion and $118 billion, but increased its yearly capital expenditures to $64 to $72 billion, primarily driven by investments in AI infrastructure, Reality Labs, and other core business costs.

The company has said it plans to invest up to $65 billion in AI infrastructure by 2025 — including building a data center nearly the size of Manhattan — with a strategic focus on building user engagement rather than direct monetization in the short term.