Social media giant Meta (META) reported its first quarter results after the bell on Wednesday, beating on the top and bottom lines. But the company also raised its full-year capital expenditure estimates to between $64 billion to $72 billion, up from $60 billion to $65 billion.
Despite fears of an advertising slowdown amid tariff uncertainty, Meta says it anticipates Q2 revenue of between $42.5 billion and $45.5 billion, ahead of Wall Street’s expectations of $44 billion.
For the quarter, Meta reported earnings per share (EPS) of $6.43 on revenue of $42.3 billion. Wall Street was expecting EPS of $5.25 on revenue of $41.3 billion, according to Bloomberg consensus estimates. The company saw EPS of $4.71 on revenue of $36.4 billion in Q1 2024.
Advertising revenue topped out at $41.39 billion versus expectations of $40.5 billion, while Meta’s Reality Labs segment saw an operating loss of $4.21 billion.
Meta stock was up more than 4% in after-hours trading following the announcement.
Meta’s stock price is down more than 7% since the start of the year but has gained more than 25% in the past 12 months.
“We attribute weakness to [Meta’s] greater exposure to advertising (no cloud business for [Meta]) and China-based advertisers (>10% exposure for [Meta]) who have reportedly pulled back on ad spend,” Jefferies analyst Brent Thill wrote in an investor note ahead of Meta’s earnings announcement.
Meta’s earnings come as the company is battling the Federal Trade Commission (FTC) in court over claims the social media company holds an illegal monopoly over the “personal social networking.”
The FTC is looking to force Meta to sell off both Instagram and WhatsApp as a remedy. The commission claims Meta originally purchased the apps as part of a “buy-or-bury” campaign to fight off potential competitors.
According to the Wall Street Journal, CEO Mark Zuckerberg offered to settle with the FTC for $450 million. The commission, however, asked for $30 billion. Zuckerberg eventually raised his offer to $1 billion, but the FTC would only go as low as $18 billion.
Zuckerberg has met with President Trump several times over recent months as he seeks to develop a closer relationship with the president. For instance, the CEO attended Trump’s inauguration in January, and Meta donated $1 million to Trump’s inauguration fund.
Also in January, the Wall Street Journal reported that Meta had reached a $25 million settlement with Trump related to the company’s decision to ban him from its platforms following the Jan. 6 attack on the Capitol.
