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Meta Platforms reported its first-quarter 2026 results after the US market closed on April 29, showing strong growth across key financial metrics. However, investors reacted cautiously to the company’s plans to increase AI-related capital expenditure.
Meta’s quarterly revenue rose to $56.31 billion, up 33% year over year. Operating income increased to $33.43 billion, up 35%, with an operating margin of 41%. Net income climbed to $26.77 billion, up 61%, and earnings per share (EPS) were $10.44 versus $6.43 in the year-ago quarter.
Meta said growth was led by its advertising business. During the quarter, advertising impressions increased 19% and the average price per ad rose 12%, bringing total ad revenue to $55.02 billion.
The company also reported daily active users across its ecosystem of 3.56 billion, up 4% year over year.
At quarter end, Meta’s employee count was 77,986, up 1% year over year.
Meta said AI tools are increasingly central to improving advertising efficiency and supporting businesses. It highlighted conversational commerce—where users interact with brands via messaging—as accelerating as companies expand chatbot and AI assistant use to improve conversion rates and reduce operating costs. Meta noted that many AI efficiency metrics are currently internal and not standardized in financial reporting.
The company also continues to expand creator monetization and test affiliate marketing models, including product tagging in content on Facebook and Instagram to capture shopping activity on social platforms.
Despite the strong headline results, Meta’s profitability included a one-off tax benefit of $8.03 billion in the quarter. Excluding that benefit, the company’s underlying earnings growth was described as weaker, suggesting reported growth does not fully reflect core operating performance.
In Reality Labs, revenue was $402 million, while operating losses were close to $4 billion, indicating Meta is continuing to recalibrate its strategy and shift more emphasis toward AI and mobile platforms rather than VR.
Meta is expanding AI solutions for businesses in Vietnam, with a focus on Messenger. With high social network penetration, Facebook and Instagram are positioned as key sales channels for small and medium-sized enterprises. Meta also pointed to changing consumer behavior toward discovery–engagement–purchase on social platforms.
Research and Markets estimates Vietnam social commerce could reach about $5 billion in 2025 and rise to over $10 billion by 2030, with annual growth above 15%. Meta said Messenger AI tools have been rolled out widely for domestic businesses to improve interaction processing and conversion rates.
Meta’s CFO forecast Q2 2026 revenue of $58–$61 billion. The company also said estimated foreign exchange effects could contribute around 2% to year-over-year revenue growth based on current exchange rate levels.
For 2026, Meta kept total cost guidance at $162–$169 billion. It expects operating income in 2026 to be higher than in 2025, and raised 2026 capex—including principal payments on finance leases—to $125–$145 billion from $115–$135 billion. Meta attributed the increase to higher component costs this year and the need for additional data center investment to meet future demand.
If tax policy remains broadly unchanged, Meta expects an effective tax rate in the remaining quarters of 2026 to be between 13–16%. The company also said it will monitor legal and regulatory risks, particularly in the EU and the US, which could materially affect operations and financial results.
Meta’s stock fell more than 7% in after-hours trading after the company raised its 2026 capex guidance to $125–$145 billion, reflecting investor concerns about the pace and cost of AI investment.
Overall, the Q1 2026 results showed solid platform growth, particularly in advertising. The company’s accelerated AI spending, however, raises questions about how effectively it can convert large investments into real business outcomes while maintaining short-term profitability.
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