Meta Platforms significantly improved its financial performance in the first quarter. Net profit rose 61% year-on-year to $26.8 billion, roughly CZK 560 billion. The company behind Facebook, Instagram and WhatsApp also exceeded market expectations for both profit and revenue.
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Advertising drives the strongest growth since 2021
The company’s revenue increased 33% year-on-year to $56.3 billion. Analysts had expected an average of $55.4 billion. Earnings per share reached $10.44, compared with the market forecast of $6.67.
According to Portu analyst Marek Malina, the results were strongly supported by the better use of artificial intelligence tools in the advertising business. More precise ad targeting and higher prices led to the fastest revenue growth since 2021. The average ad price rose 12% year-on-year, while ad impressions increased by 19%.
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AI investments put pressure on margins
The strong performance of the advertising segment was partly overshadowed by a decline in the number of users and further increases in spending on AI infrastructure. Meta plans to raise capital expenditures this year from the previously expected $115–135 billion to $125–145 billion.
According to Malina, rising investments in artificial intelligence are causing concern among investors because they reduce the company’s profitability. At the same time, Meta has recently shifted more focus toward AI and scaled back development of the virtual world known as the metaverse, which CEO Mark Zuckerberg had previously described as the company’s future.
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Source: ČTK
