Meta earnings exceed Wall Street’s Q1 2025 projections, causing shares to surge in after-hours trading. Despite persistent worries about global tariff pressures causing advertising to slow down, Meta is upbeat and provides a strong forecast for Q2.
Financial Highlights for Q1 of 2025
According to Meta, earnings per share (EPS) were $6.43 as opposed to the anticipated $5.25.
- Revenue: $42.3 billion, as opposed to the anticipated $41.3 billion.
- Revenue from advertising: $41.39 billion
- Operating deficit for Reality Labs: $4.21 billion
- Revenue increased from $36.4 billion to $42.3 billion in Q1 2024, while EPS increased from $4.71 to $6.43.
Compared to Q1 2024, revenue rose from $36.4 billion to $42.3 billion, and EPS jumped from $4.71 to $6.43.
Metastock Reaction
Following the earnings release, Meta stock price surged over 5% in after-hours trading. While the stock is down over 7% year-to-date, it has gained more than 25% over the last 12 months.
Forecast and Spending Plans for Q2
Meta took a risk by increasing its 2025 capital expenditure projection from $60 billion to $65 billion to between $64 billion and $72 billion. For Q2, the company projects revenue between $42.5 billion and $45.5 billion, exceeding the $44 billion forecast by analysts.
Challenges to Come
Meta is under increased scrutiny by U.S. officials. The Federal Trade Commission (FTC) is suing the company, alleging an unlawful monopoly that might force it to sell WhatsApp and Instagram.Mark Zuckerberg, the CEO of Meta, has reportedly offered a settlement of up to $1 billion, which is far less than the FTC’s $18 billion claim.
Zuckerberg has also remained close to the government since Meta paid $1 million to Trump’s inauguration fund and settled a $25 million lawsuit over the previous president’s platform ban.
Analyst Analysis
Brent Thill, an analyst at Jefferies, pointed out that Meta’s greater dependence on advertising revenue—particularly from customers in China (more than 10%)—has made it more vulnerable in the face of trade tensions. Nonetheless, resilience and a strategy move toward long-term growth were highlighted during Meta’s Q1 results call.
Source: Yahoo
