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META's Q1 Earnings Beat Estimates on Ad Growth and AI Momentum
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Key Takeaways
META posted Q1'26 EPS of $7.31 on revenues of $56.31B, both above consensus.
Ad impressions rose 19% and average price per ad gained 12%, pushing advertising revenues up 33% to $55.02B.
META lifted 2026 capex view to $125B-$145B and sees Q2 revenues of $58B-$61B with tailwind.
Meta Platforms (META - Free Report) delivered first-quarter 2026 earnings of $7.31 per share, which rose 13.7% year over year and beat the Zacks Consensus Estimate by 8.94%. Revenues surged 33.1% year over year to $56.31 billion, topping the consensus mark by 1.47%. At constant currency (cc), revenues soared 29% year over year.
The reported quarter reflected sturdy demand across Meta’s ad ecosystem and healthy usage trends, with Family daily active people (DAP) averaging 3.56 billion in March 2026. Management also highlighted progress in artificial intelligence (AI), including the release of its first model from Meta Superintelligence Labs.
META’s Ad Business Remains the Core Growth Engine
Family of Apps continued to do the heavy lifting. Revenues from Family of Apps (99.3% of total revenues), which includes Facebook, Instagram, Messenger, WhatsApp and other services, increased 33.4% year over year to $55.91 billion. Advertising revenues were $55.02 billion in the first quarter, up 33%, while Family of Apps' other revenues jumped 73.5% year over year to $885 million.
The advertising results were supported by improving monetization fundamentals. Ad impressions delivered across the Family of Apps increased 19% year over year. Average price per ad rose 12%, indicating that Meta Platforms is capturing both higher volume and better pricing across its surfaces.
Meta Platforms, Inc. Price, Consensus and EPS Surprise
META’s Engagement Gains Support the Monetization Stack
Meta Platforms pointed to ongoing traction from recommendation and ranking work across its apps. On Instagram, the company said ranking improvements in the reported quarter drove a 10% lift in reel time spent, underscoring the importance of short-form video engagement as a usage driver.
Facebook also showed notable momentum in video consumption. Meta Platforms said total video time on Facebook increased more than 8% globally in the quarter, marking the largest quarter-over-quarter gain in four years. Management stated these improvements were the product of deeper data signals and faster indexing of new posts, which helps the platform recommend content more quickly after it is published.
META’s Investment Profile Shows Up in Expense Mix
Meta Platforms’ first-quarter costs and expenses jumped 35.1% year over year to $33.44 billion. The company attributed the year-over-year rise primarily to infrastructure costs and employee compensation, with infrastructure pressure tied to higher depreciation, data center operating costs and third-party cloud spend.
Even with that step-up in spending, Meta Platforms remained highly profitable at the operating line. Income from operations jumped 30.3% year over year to $22.87 billion, while operating margin contracted 90 basis points to 40.6%, reflecting the company’s ability to scale revenues alongside elevated investment levels.
META’s Cash Flow Supports Large Infrastructure Plans
Meta Platforms’ capital intensity remained elevated as it builds compute capacity for AI and product initiatives. Capital expenditures, including principal payments on finance leases, totaled $19.84 billion in the first quarter.
Still, cash generation stayed solid. Cash flow from operating activities was $32.23 billion and free cash flow was $12.39 billion in the quarter.
As of March 31, 2026, cash & cash equivalents and marketable securities were $81.18 billion compared with $81.59 billion as of Dec. 31, 2025. Long-term debt was $58.75 billion as of March 31, 2026.
META’s Outlook Reflects AI Spending and Growth Visibility
For second-quarter 2026, Meta Platforms expects total revenues between $58 billion and $61 billion. The company said its outlook assumes foreign currency will be about a 2% tailwind to year-over-year total revenue growth based on current exchange rates.
Meta Platforms kept its 2026 expense outlook unchanged at $162 billion to $169 billion, but raised its capital expenditure forecast. The company now expects 2026 capital expenditures, including principal payments on finance leases, in the range of $125 billion to $145 billion (previous guidance was $115-$135 billion), citing higher component pricing and incremental data center costs to support future capacity.
Zacks Rank & Stocks to Consider
Currently, Meta Platforms carries a Zacks Rank #3 (Hold).
Sandisk is set to report its third-quarter fiscal 2026 results on April 30. Fabrinet is set to report its third-quarter fiscal 2026 results on May 4. Reddit is set to report its first-quarter 2026 results on April 30.
Year to date (YTD), shares of Sandisk and Fabrinet have jumped 348.3% and 41.3%, respectively. Reddit shares have dropped 35.7% YTD.
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META's Q1 Earnings Beat Estimates on Ad Growth and AI Momentum
Key Takeaways
Meta Platforms (META - Free Report) delivered first-quarter 2026 earnings of $7.31 per share, which rose 13.7% year over year and beat the Zacks Consensus Estimate by 8.94%. Revenues surged 33.1% year over year to $56.31 billion, topping the consensus mark by 1.47%. At constant currency (cc), revenues soared 29% year over year.
The reported quarter reflected sturdy demand across Meta’s ad ecosystem and healthy usage trends, with Family daily active people (DAP) averaging 3.56 billion in March 2026. Management also highlighted progress in artificial intelligence (AI), including the release of its first model from Meta Superintelligence Labs.
META’s Ad Business Remains the Core Growth Engine
Family of Apps continued to do the heavy lifting. Revenues from Family of Apps (99.3% of total revenues), which includes Facebook, Instagram, Messenger, WhatsApp and other services, increased 33.4% year over year to $55.91 billion. Advertising revenues were $55.02 billion in the first quarter, up 33%, while Family of Apps' other revenues jumped 73.5% year over year to $885 million.
The advertising results were supported by improving monetization fundamentals. Ad impressions delivered across the Family of Apps increased 19% year over year. Average price per ad rose 12%, indicating that Meta Platforms is capturing both higher volume and better pricing across its surfaces.
Meta Platforms, Inc. Price, Consensus and EPS Surprise
Meta Platforms, Inc. price-consensus-eps-surprise-chart | Meta Platforms, Inc. Quote
META’s Engagement Gains Support the Monetization Stack
Meta Platforms pointed to ongoing traction from recommendation and ranking work across its apps. On Instagram, the company said ranking improvements in the reported quarter drove a 10% lift in reel time spent, underscoring the importance of short-form video engagement as a usage driver.
Facebook also showed notable momentum in video consumption. Meta Platforms said total video time on Facebook increased more than 8% globally in the quarter, marking the largest quarter-over-quarter gain in four years. Management stated these improvements were the product of deeper data signals and faster indexing of new posts, which helps the platform recommend content more quickly after it is published.
META’s Investment Profile Shows Up in Expense Mix
Meta Platforms’ first-quarter costs and expenses jumped 35.1% year over year to $33.44 billion. The company attributed the year-over-year rise primarily to infrastructure costs and employee compensation, with infrastructure pressure tied to higher depreciation, data center operating costs and third-party cloud spend.
Even with that step-up in spending, Meta Platforms remained highly profitable at the operating line. Income from operations jumped 30.3% year over year to $22.87 billion, while operating margin contracted 90 basis points to 40.6%, reflecting the company’s ability to scale revenues alongside elevated investment levels.
META’s Cash Flow Supports Large Infrastructure Plans
Meta Platforms’ capital intensity remained elevated as it builds compute capacity for AI and product initiatives. Capital expenditures, including principal payments on finance leases, totaled $19.84 billion in the first quarter.
Still, cash generation stayed solid. Cash flow from operating activities was $32.23 billion and free cash flow was $12.39 billion in the quarter.
As of March 31, 2026, cash & cash equivalents and marketable securities were $81.18 billion compared with $81.59 billion as of Dec. 31, 2025. Long-term debt was $58.75 billion as of March 31, 2026.
META’s Outlook Reflects AI Spending and Growth Visibility
For second-quarter 2026, Meta Platforms expects total revenues between $58 billion and $61 billion. The company said its outlook assumes foreign currency will be about a 2% tailwind to year-over-year total revenue growth based on current exchange rates.
Meta Platforms kept its 2026 expense outlook unchanged at $162 billion to $169 billion, but raised its capital expenditure forecast. The company now expects 2026 capital expenditures, including principal payments on finance leases, in the range of $125 billion to $145 billion (previous guidance was $115-$135 billion), citing higher component pricing and incremental data center costs to support future capacity.
Zacks Rank & Stocks to Consider
Currently, Meta Platforms carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Computer and Technology sector that are set to report their quarterly results are Sandisk (SNDK - Free Report) , Fabrinet (FN - Free Report) and Reddit (RDDT - Free Report) . Sandisk and Fabrinet sport a Zacks Rank #1 (Strong Buy) each at present, while Reddit has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Sandisk is set to report its third-quarter fiscal 2026 results on April 30. Fabrinet is set to report its third-quarter fiscal 2026 results on May 4. Reddit is set to report its first-quarter 2026 results on April 30.
Year to date (YTD), shares of Sandisk and Fabrinet have jumped 348.3% and 41.3%, respectively. Reddit shares have dropped 35.7% YTD.