Meta reported Q1 2025 revenue of $42.3 billion, up 16% year-over-year or 19% on a constant currency basis, as the company continues to see strong growth from its advertising business while accelerating investments in artificial intelligence infrastructure.
Facebook and Instagram’s parent company posted operating income of $17.6 billion, representing a 41% operating margin. Net income reached $16.6 billion, or $6.43 per share, with a tax rate of 9% for the quarter, primarily due to excess tax benefits from share-based compensation.
“We’ve had a strong start to the year,” stated CEO Mark Zuckerberg. “Our community keeps growing with more than 3.4 billion people now using at least one of our apps each day. Our business is also performing very well — and I think we’re well-positioned to navigate the macroeconomic uncertainty.”
Advertising Growth and AI Transformation
Meta’s Family of Apps ad revenue reached $41.4 billion, up 16% year-over-year or 20% on a constant currency basis. The company reported a 5% increase in ad impressions served across its services and a 10% increase in average price per ad.
“In just the last quarter, we’re testing a new ads recommendation model for Reels, which has already increased conversion rates by 5%,” Zuckerberg noted. “And we’re seeing 30% more advertisers are using AI creative tools in the last quarter as well.”
CFO Susan Li highlighted that the online commerce vertical was the largest contributor to year-over-year growth in ad revenue, with the strongest regional growth coming from Rest of World (19%) and North America (18%), followed by Europe (14%) and Asia-Pacific (12%).
Increased Capital Expenditures for AI Infrastructure
Meta announced an increase in its planned capital expenditures for 2025 to $64-72 billion, up from its previous outlook of $60-65 billion. The company attributes this to additional investments in data centers, which support its AI efforts, and increased costs of infrastructure hardware.
“We’re accelerating some of our efforts to bring capacity online more quickly this year, as well as some longer-term projects that will give us the flexibility to add capacity in the coming years,” said Zuckerberg.
Platform Growth and AI Integration
The company reported significant increases in engagement across its platforms, noting that improvements to its recommendation systems led to a 7% increase in time spent on Facebook, a 6% increase on Instagram, and a 35% increase on Threads over the last six months. Threads now has more than 350 million monthly active users.
Meta AI has reached nearly one billion monthly active users across the company’s apps. The company also recently released its first Meta AI standalone app and introduced the Llama 4 models, which Zuckerberg described as “some of the most intelligent, best multimodal, lowest latency, and most efficient models that anyone has built.”
Business Outlook
For the second quarter of 2025, Meta expects total revenue to be in the range of $42.5-45.5 billion, with foreign currency providing an approximately 1% tailwind to year-over-year growth based on current exchange rates.
The company lowered its full-year 2025 total expense outlook to $113-118 billion from its prior forecast of $114-119 billion, while acknowledging potential headwinds from regulatory challenges, particularly in the European Union related to the Digital Markets Act (DMA).
“We continue to feel good about the fundamental drivers of revenue growth and believe the past work we’ve done to streamline our operations and cost profile puts us in a strong position to navigate a variety of outcomes,” Li stated.
In April, Zuckerberg took the witness stand in an antitrust trial where the Federal Trade Commission (FTC) alleges the tech giant illegally monopolized the social media market through its acquisitions of Instagram and WhatsApp. The trial could force Meta to divest from these platforms, which it purchased over a decade ago.
