Meta reports strong revenue, shrugs off trade war jitters as advertising, AI investment surge
Advertising, which accounts for roughly 98 percent of Meta’s revenue, remains the company’s financial engine and critical to funding its expansion into AI.
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Meta Platforms, Inc. reported financial results for the quarter ended March 31, 2025. The company reported stronger-than-expected first-quarter revenue on Wednesday, easing concerns over the potential drag from the US administration’s ongoing trade disputes and signaling a continued ramp-up in spending, particularly on artificial intelligence.
The tech giant, which owns Facebook, Instagram and WhatsApp, posted revenue of $42.3 billion for the quarter ending March 31. The company also projected that revenue for the current quarter would meet market expectations, despite growing uncertainty tied to global trade tensions.
"We've had a strong start to an important year, our community continues to grow and our business is performing very well," said Mark Zuckerberg, Meta founder and CEO. "We're making good progress on AI glasses and Meta AI, which now has almost 1 billion monthly actives."
Advertising, which accounts for roughly 98 percent of Meta’s revenue, remains the company’s financial engine and critical to funding its costly expansion into AI. Meta is increasingly relying on artificial intelligence to improve ad targeting and customize user content across its platforms, while also investing billions to keep pace with rivals like OpenAI and Alphabet’s Google in developing large language models and conversational bots.
Meta now expects to spend between $64 billion and $72 billion this year.
Zuckerberg has previously signaled that Meta would pour “hundreds of billions” into AI in the coming years. That commitment appears intact, even as economic volatility grows and international competitors push forward.
"The pace of progress across the industry and the opportunities ahead for us are staggering. I want to make sure that we're working aggressively and efficiently, and I also want to make sure that we are building out the leading infrastructure and teams," Zuckerberg told investors on a call after publishing results.
Meta executives emphasized that the bulk of the company’s capital expenditures is being directed toward bolstering its core business — primarily the computing infrastructure needed to support advertising, rather than toward the development of generative AI technologies. To expand the reach of its AI offerings, Meta also introduced a standalone chatbot app, Meta AI, aimed at competing with services like OpenAI’s ChatGPT.
First Quarter 2025 Operational and Other Financial Highlights
-Family daily active people (DAP) – DAP was 3.43 billion on average for March 2025, an increase of 6% year-over-year.
-Ad impressions – Ad impressions delivered across Family of Apps increased by 5% year-over-year.
-Average price per ad – Average price per ad increased by 10% year-over-year.
Revenue – Revenue was $42.31 billion, an increase of 16% year-over-year. Revenue on a constant currency basis would have increased 19% year-over-year.
-Costs and expenses – Total costs and expenses were $24.76 billion, an increase of 9% year-over-year.
-Capital expenditures – Capital expenditures, including principal payments on finance leases, were $13.69 billion.
Capital return program – Share repurchases of our Class A common stock were $13.40 billion and total dividend and dividend equivalent payments were $1.33 billion.
-Cash, cash equivalents, and marketable securities – Cash, cash equivalents, and marketable securities were $70.23 billion as of March 31, 2025. Cash flow from operating activities was $24.03 billion and free cash flow was $10.33 billion.(1)
-Headcount – Headcount was 76,834 as of March 31, 2025, an increase of 11% year-over-year.
CEO Outlook on regulatory landscape
"...we continue to monitor an active regulatory landscape, including legal and regulatory headwinds in the EU and the U.S. that could significantly impact our business and our financial results. The European Commission (EC) recently announced its decision that our subscription for no ads model is not compliant with the Digital Markets Act (DMA). Based on feedback from the EC in connection with the DMA, we expect we will need to make some modifications to our model, which could result in a materially worse user experience for European users and a significant impact to our European business and revenue as early as the third quarter of 2025. We will appeal the EC's DMA decision but any modifications to our model may be imposed before or during the appeal process."
