Meta Platforms Inc (NASDAQ: META) has put investors at ease with its latest earnings report, with Meta shares up 5% in aftermarket trade.
Meta is the brand behind several major social media platforms, including Facebook, Instagram, and WhatsApp. It boasts more than 3 billion active users per day (that's almost half the planet!).
As well as being a prominent company in our daily lives, it is one of the largest listed companies in the United States. It currently has a market capitalisation of $1.4 trillion. Accordingly, it is a top holding in most US-focused ASX exchange-traded funds (ETFs). For example, it is the fourth largest holding in the Betashares Nasdaq 100 ETF (ASX: NDQ), representing 3.3%.
What did the numbers say?
The social media company reported 16% year-over-year growth in quarterly revenue to $42.3 billion, exceeding analyst estimates of $41.4 billion. Management also noted that current quarter revenue would likely fall in line with market expectations.
Operating income increased 27% to $17.6 billion, and Meta Platform's operating margin widened from 38% a year ago to 41%. Meanwhile, net income jumped an impressive 35% to $16.6 billion.
Daily active users on Meta's platforms were up 6% in March to an average of 3.4 billion, better than expected. Ad impressions across the Group of Apps (Facebook, WhatsApp, Instagram) also lifted 5%, with the average price per ad increasing 10% year over year.
Another closely matched metric was capital spending plans. Management increased its full-year capital spending estimate to between $64 billion and $72 billion (previously between $60 billion and $65 billion).
Commenting on this upgrade, the company noted:
This updated outlook reflects additional data center investments to support our artificial intelligence efforts as well as an increase in the expected cost of infrastructure hardware. The majority of our capital expenditures in 2025 will continue to be directed to our core business.
Back in January, Chief Executive Officer Mark Zuckerberg had signalled that the company would spend hundreds of billions of dollars in an effort to dominate the AI race. Earlier this year, Chinese company DeepSeek rattled markets when it released a competitive model that used cheaper and more efficient chips.
Earlier this week, Meta hosted its Inaugural LlamaCon Conference, which covered developments in artificial intelligence. According to prominent speakers at that conference, Meta's Llama models have been downloaded 1.2 billion times.
What about the trade war?
During the investor call, management addressed the elephant in the room – the US trade war, which has dominated investor concerns for the past month. Given Meta's reliance on advertising spending, there was some concern over the flow-on impact of tariffs.
However, CEO Zuckerberg said the company was well placed to navigate macroeconomic uncertainty. Investors appeared to be satisfied by the numbers and management's commentary, sending the Magnificent Seven company 5% higher in aftermarket trade.
