Meta Platforms' Q1 Earnings and Revenues Surpass Estimates, Rise Y/Y

Meta Platforms META reported first-quarter 2025 earnings of $6.43 per share, beating the Zacks Consensus Estimate by 23.18%. The figure surged 36.5% year over year.

Revenues of $42.31 billion beat the Zacks Consensus Estimate by 2.61% and increased 16.1% year over year. At constant currency (cc), revenues soared 19% year over year.

META’s Top-Line Growth Rides on Strong User Base

Revenues from Family of Apps (99% of total revenues), which includes Facebook, Instagram, Messenger, WhatsApp and other services, increased 16.3% year over year to $41.9 billion.

Family Daily Active People or DAP, defined as a registered and logged-in user who visited at least one of the Family products (Facebook, Instagram, Messenger and/or WhatsApp) on a given day, was 3.43 billion, up 5.9% year over year.
 

Meta Platforms, Inc. Price, Consensus and EPS Surprise

Meta Platforms, Inc. price-consensus-eps-surprise-chart | Meta Platforms, Inc. Quote

Geographically, revenues from the United States & Canada, Asia-Pacific, Europe and the Rest of the World (RoW) surged 17.6%, 12.8%, 14.1% and 19.8% on a year-over-year basis, respectively.

META’s Advertising Revenues Jump Y/Y

Advertising revenues (98.8% of Family of Apps revenues) increased 16.2% year over year to $41.39 billion and accounted for 97.8% of first-quarter revenues. At cc, revenues increased 20% year over year.

Advertising revenues from the United States & Canada, Asia-Pacific, Europe and the RoW surged 18.2%, 12.1%, 14.4% and 19.1% on a year-over-year basis, respectively.

Ad impressions delivered across Family of Apps increased 5% year over year, and the average price per ad jumped 10% in the reported quarter. Impression growth from Asia-Pacific, the RoW, the United States & Canada and Europe was 9%, 1%, 4% and 5%, respectively.

Family of Apps’ other revenues soared 34.2% year over year to $510 million.

Reality Labs’ revenues (1% of total revenues) decreased 6.4% year over year to $412 million.

META Expands Operating Margin Despite Higher Costs

In the first quarter of 2025, total costs and expenses increased 9.4% year over year to $24.76 billion. As a percentage of revenues, total costs and expenses were 58.5%, down 360 basis points (bps) year over year. 

In the reported quarter, Family of Apps expenses were $20.1 billion, accounting for 81% of Meta Platforms’ overall expenses. FoA expenses were up 10% year over year, primarily due to higher infrastructure and headcount-related costs. 

Reality Labs’ expenses were $4.6 billion, up 8% year over year.

As a percentage of revenues, marketing & sales expenses decreased 50 basis points (bps), while general & administrative expenses fell 410 bps on a year-over-year basis.

Research & development expenses, as a percentage of revenues, were 28.7%, up 130 bps on a year-over-year basis.

Meta Platforms’ employee base was 76,834 at the end of the first quarter, up 11% year over year.

Operating income of $17.56 billion jumped 27% year over year. The operating margin was 41.5%, expanding 360 bps year over year.

Family of Apps’ operating income surged 23.2% year over year to $21.77 billion. Reality Labs reported a loss of $4.2 billion compared with the year-ago quarter’s loss of $3.85 billion.

META’s Balance Sheet Remains Strong

As of March 31, 2025, cash & cash equivalents and marketable securities were $70.23 billion compared with $77.82 billion as of Dec. 31, 2024.

Long-term debt was $28.83 billion as of March 31, 2025, unchanged from the figure reported as of Dec. 31, 2024. 

Capital expenditures were $13.69 billion in the first quarter, while free cash flow was $10.33 billion.

META Offers Positive Guidance

Meta Platforms expects total revenues between $42.5 billion and $45.5 billion for the second quarter of 2025. 

The Zacks Consensus Estimate for revenues is pegged at $43.33 billion, indicating 10.9% growth from the figure reported in the year-ago quarter. The consensus estimate for earnings is pegged at $5.49 per share, suggesting 6.4% growth from the figure reported in the year-ago quarter. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

For 2025, META anticipates total expenses between $113 billion and $118 billion. 

META expects 2025 capital expenditure to be in the range of $64-$72 billion.

Zacks Rank & Stocks to Consider

Currently, Meta Platforms carries a Zacks Rank #3 (Hold). 

Affirm AFRM, Criteo CRTO and InterDigital IDCC are some better-ranked stocks in the broader Zacks Computer & Technology sector. Each of the three stocks sport a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Affirm is scheduled to report its first-quarter 2025 results on May 8. Criteo is set to report first-quarter 2025 results on May 2, while InterDigital is scheduled to report its first-quarter 2025 results on May 1.

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This article originally published on Zacks Investment Research (zacks.com).

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