Meta Q1 2026 earnings report
Meta Shares fell nearly 7% in extended trading Wednesday after the company reported lower-than-expected capital expenditures, or capex, and missed user growth.
Meta attributed the quarter-to-quarter decline in users partly to “internet outages in Iran.”
Here is the company’s performance compared to the forecasts of analysts participating in the LSEG survey:
- earnings per share: US$7.31, versus an estimated US$6.79
- Revenues: $56.31 billion versus $55.45 billion estimated
Revenue rose 33% from $42.3 billion a year earlier, marking the fastest quarter of growth since 2021. The jump reflects Meta CEO Mark Zuckerberg’s focus on AI investments that don’t yet create new revenue streams but strengthen the company’s core advertising business.
Zuckerberg has spent the past three months continuing the company’s deeper efforts into artificial intelligence, following a strategy shift and talent overhaul he initiated in June with a $14.3 billion investment in Scale AI and the hiring of CEO Alexandr Wang.
The company reported daily active people (DAP) of 3.56 billion in the first quarter; This figure was up 4% from the previous year, but down more than 5% from the fourth quarter. Wall Street predicted DAP would reach 3.62 billion.
Meta said he was responsible for the war in Iran and “restricting access to WhatsApp in Russia.” Meta and three other hyperscalers — Alphabet, Amazon And Microsoft – Full results were released Wednesday, the first updated to investors since the United States began combat operations in Iran in late February.
Capital expenditures came in at $19.84 billion, according to StreetAccount, below the average estimate of $27.57 billion. However, Meta said this year’s capital expenditures will be between $125 billion and $145 billion, down from $115 billion to $135 billion.
“This reflects our expectations for higher component pricing this year and, to a lesser extent, additional data center costs to support capacity next year,” Meta said in an earnings release. he said.
Wall Street is flocking to the tech sector despite concerns that rising oil prices and supply chain disruptions from the war in Iran will lead to rising costs for building AI infrastructure and related data centers. Technology stocks are poised for their best month since April 2020, the early days of the Covid outbreak; The Nasdaq was up 14% for the month as of Wednesday’s close.
Average per capita income in the first quarter was $15.66, according to StreetAccount, beating the average analyst estimate of $15.26. The average revenue figure in the fourth quarter was $16.56.
Meta’s revenue forecast for the second quarter was roughly in line with expectations. The company projects sales of $58 billion to $61 billion, while analysts expect revenue of $59.5 billion. The middle of the range would equal approximately 25% growth.
Net income in the first quarter rose to $26.8 billion, or $10.44 per share, from $16.6 billion, or $6.43 per share, a year earlier. The jump in profits included an $8.03 billion income tax benefit, an adjustment tied to the Trump administration’s tax and spending bill. Without the tax benefit, diluted EPS would have been $3.13 lower, Meta said.
Meta said numerous legal cases involving youth safety “may ultimately result in financial loss.” The company lost two lawsuits in March involving allegations that it misled consumers about the harms of its products.
The number of employees increased by 1% year-on-year to 77,986 as of March 31. Increasing its investment expenditures, Meta is trying to reduce its overall workforce. The company said last week that it would lay off about 10% of its workforce, or 8,000 employees, and that it would no longer hire anyone for 6,000 open positions. These cuts follow layoffs affecting nearly 1,000 people at the company’s Reality Labs unit in January, and another layoff in March targeting hundreds of employees in areas such as Facebook, global operations and sales.
Earlier this month, Meta released the Muse Spark as its first proprietary base model. Investors will now be looking to Zuckerberg to lay out a clearer strategy for making money.
“We had a landmark quarter with strong momentum in our applications and the launch of our first model from Meta Superintelligence Labs,” Zuckerberg said in a statement. he said. “We are on track to deliver personal superintelligence to billions of people.”
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