Meta reported revenues on Wednesday, beating Wall Street’s expectations for yet another quarter, even though it’s making billions of dollars gorgeous with artificial intelligence.
Meta recorded revenue of $423.2 billion in the first quarter of 2025, breaking both its own high-end, quarterly revenue target of $41.8 billion and its $413.8 billion Wall Street expectations.
The company also reported earnings per share of $6.43, beating Wall Street forecasts at $5.27. Stocks jumped to trading outside of business hours.
“We’ve got a strong start in a crucial year. Our community continues to grow and our business is working very well,” said Mark Zuckerberg, CEO of Meta. “We are making good progress with AI glasses and meta AI. We currently have around 1 billion active monthly.”
On an investor’s call, Zuckerberg said the company is working well, its platform is growing and it is “suitable to navigate” macroeconomic uncertainty.
“We continue to believe this year will be a pivotal moment in our industry,” he said.
This continues a meta streak that beats Wall Street expectations over the past few quarters. However, it is unclear whether it will be sufficient to quell investor concerns. Analysts were disappointed by the first quarter revenue outlook shared at the end of 2024. The company plans to spend between $64 million and $72 billion on capital expenditures, including the cost of building AI infrastructure, and has also updated its outlook for next year. This is up from $65 billion. The company initially expected it to spend in 2025. Total expenses and expenses for the first quarter were already $24.76 billion, an increase of 9% year-on-year. Donald Trump’s drastic tariff uncertainty could still smash the advertising market and cloud the company’s financial outlook for the near future quarter.
emarketer Senior analyst Minda Smiley said the company’s “optimistic second quarter guidance shows that the company does not expect a big dip in advertising revenue as a result of tariffs.” But they don’t expect Meta to escape the recession in the long term.
“On the other hand, companies can benefit from economic instability. Advertisers will allocate more ad dollars to proven and sophisticated networks such as Facebook and Instagram, navigating uncertainty and pulling back spending on smaller social platforms,” Smiley says. “On the other hand, a small but substantial portion of Meta’s revenues have been advertised by Chinese retailers like Temu and Shein Advertising to US shoppers, whose costs are beginning to dry up as a result of changes in trade and tariffs.”
Meta’s spending also “continues to weigh on investors,” according to analyst Debra Aho Williamson, founder and chief analyst of Sonata Insights. “However, Meta has resisted direct monetization of AI this year, focusing instead on building AI usage among developers using app users, advertisers and llamas,” says Williamson.
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In the weeks leading up to the revenue report, Meta has been mixed with AI-related news, including the launch of a standalone AI app that will serve as a competitor to ChatGPT. However, the WSJ report exposes existing chatbots integrated into the company’s various products, including Facebook and Instagram, giving it the ability to perform “romantic role-plays” even for teen users on the platform. Executives from the company that repeatedly promote around 1 billion users of AI chatbots have also allowed many of these users to access chatbots through acquisitions that are difficult to avoid search bars on WhatsApp, Instagram and Facebook. The company does not detail how many interactions they have with chatbots or how deep their interactions need to be in order to consider with AI chatbot users.
In conjunction with Meta’s ongoing antitrust trials – the company claims it has built an illegal social media monopoly through its acquisition of Instagram and WhatsApp – adds to concerns that some analysts suffer from Meta’s finances despite what it looks like on paper.
“Meta’s revenue calls come at a time when the future of the company is literally being discussed in court, and the outcome could fundamentally change the social media landscape.” “Meta is wise to direct more resources to improve threads and Facebook, because they could be the only apps the company has left behind. It’s also worth noting that Meta has fired many employees in the Reality Labs division, a leaky bucket for the meta, which is a continuous and growing leaky bucket.”