Meta has surprised Wall Street with better-than-expected earnings for the first quarter of 2025. The tech giant also shared a positive revenue outlook for the second quarter, easing worries about a possible slowdown in advertising due to global tariff tensions.
Meta’s Q1 Performance Exceeds Expectations
On Wednesday, Meta reported its earnings for the first quarter of 2025. The company earned $6.43 per share, much higher than analysts’ forecast of $5.25. Its total revenue reached $42.3 billion, topping the expected $41.3 billion.
This marks a strong improvement from the same quarter last year, when Meta reported earnings of $4.71 per share on $36.4 billion in revenue.
Ad Revenue Grows Despite Tariff Worries
Meta’s advertising business continues to perform well. Ad revenue came in at $41.39 billion, beating expectations of $40.5 billion. This growth is notable as some analysts feared that trade tariffs could impact digital ad spending in 2025.
The strong ad numbers suggest businesses still see Meta’s platforms—Facebook, Instagram, and WhatsApp—as valuable places to reach consumers.
Reality Labs Continues to Lose Money
While Meta’s core ad business remains profitable, its Reality Labs division, which develops virtual and augmented reality technology, posted a large loss. The segment lost $4.21 billion in the first quarter.
This is not new for Reality Labs, which has consistently reported losses as Meta invests in building the metaverse. CEO Mark Zuckerberg has said he sees the metaverse as a long-term project.
Capital Spending Will Increase in 2025
Meta also announced it will spend more on technology and data centers this year. The company raised its full-year capital spending forecast to between $64 billion and $72 billion. This is up from a previous estimate of $60 billion to $65 billion.
The higher spending will support Meta’s push into AI, infrastructure, and content moderation. Despite this, the company remains confident in its financial strength and future earnings.
Positive Outlook for Q2 2025
Looking ahead, Meta expects second-quarter revenue between $42.5 billion and $45.5 billion. That range is higher than Wall Street’s prediction of $44 billion. This shows Meta’s management believes its strong momentum will continue.
Investors responded well to the news. Meta’s stock rose more than 4% in after-hours trading following the earnings release.
Meta’s Stock Performance
Meta’s stock has had a mixed performance this year. Since January, the share price has dropped over 7%. However, over the past 12 months, it has climbed by more than 25%. This suggests that despite short-term dips, long-term investor confidence remains high.
What Analysts Are Saying
Market experts say the strong Q1 results show Meta’s strength in digital advertising. Analysts at Bloomberg noted that Meta’s performance was one of the best among tech giants so far this year. The company’s focus on AI, Reels, and monetizing WhatsApp are seen as key growth areas.
Broader Market Context
Meta’s results come at a time of global economic uncertainty. Rising interest rates, inflation, and geopolitical tensions are putting pressure on markets. Concerns about new tariffs between major economies have made advertisers cautious.
Still, Meta’s numbers show that strong brands with large user bases can weather these challenges. With billions of daily active users across its apps, Meta remains one of the world’s most powerful tech companies.
