The company beat revenue estimates and posted strong profit growth, but an upgraded capital expenditure outlook rattled investors
Meta $META announced a revised capital expenditure outlook Wednesday, lifting the projected full-year range to $125 billion to $145 billion from a previous estimate of $115 billion to $135 billion alongside a first-quarter earnings beat.
Meta stock fell in extended trading following the announcement.
Revenue for the quarter reached $56.31 billion, up 33% from the same period a year earlier. Net income was $26.77 billion, or $10.44 per diluted share. That figure included an $8.03 billion income tax benefit tied to U.S. Treasury guidance on the Corporate Alternative Minimum Tax. Without it, diluted earnings per share would have been $3.13 lower, or $7.31, the company said. Analysts had projected revenue of $55.45 billion and earnings of $6.79 per share, according to Variety.
CFO Susan Li cited two drivers behind the upward revision: anticipated rises in the cost of components and, to a lesser degree, additional spending on data center infrastructure to accommodate demand in future years. The company's overall expense guidance for the year was left intact, with full-year costs still expected to land between $162 billion and $169 billion.
For the second quarter, Meta guided revenue of $58 billion to $61 billion. Analysts had projected $59.5 billion, according to CNBC.
Across Meta's apps, 3.56 billion people were active on a daily basis in the first quarter, a 4% improvement from the prior year. Analysts had anticipated the figure would reach 3.62 billion, according to CNBC. The company linked the sequential pullback to a pair of regional factors: an internet blackout in Iran and blocked access to WhatsApp in Russia.
Advertising revenue totaled $55.02 billion, up 33% year-over-year. Ad impressions rose 19% and the average price per ad increased 12% over the same period. Reality Labs, Meta's hardware and virtual reality unit, posted revenue of $402 million and an operating loss of $4.03 billion.
"We had a milestone quarter with strong momentum across our apps and the release of our first model from Meta Superintelligence Labs," CEO Mark Zuckerberg said in a statement. "We're on track to deliver personal superintelligence to billions of people."
The spending increase comes as Meta is simultaneously cutting about 10% of its workforce, or roughly 8,000 jobs, with layoffs effective May 20. Alongside the job cuts, roughly 6,000 unfilled positions will go unheeded. The reductions are intended to streamline operations and free up resources to fund the company's broader investment priorities, according to Meta's chief people officer. The current round of cuts is the largest companywide restructuring since Zuckerberg's 2022–2023 "Year of Efficiency" campaign that eliminated about 21,000 positions.
Meta has also been expanding its AI infrastructure through a series of major compute commitments. The company signed a multibillion-dollar agreement with Amazon $AMZN Web Services earlier this month to deploy tens of millions of AWS Graviton processors. Meta has additionally signed agreements with CoreWeave, Nebius, Google $GOOGL, Nvidia $NVDA, AMD $AMD, and Broadcom $AVGO, according to CNBC and Bloomberg.
Headcount stood at 77,986 as of March 31, up 1% year-over-year.
Correction: An earlier version of this article misstated details of a deal between Meta and Amazon. Meta signed an agreement with Amazon to deploy tens of millions of AWS Graviton processors, not hundreds of thousands.
