Meta Q1 2025 slides: revenue tops $42B, shares jump on earnings beat

Meta Platforms Inc (NASDAQ:META) reported first-quarter 2025 results that exceeded analyst expectations, driving shares up 5.72% in after-hours trading to $580.40, according to the company’s latest earnings presentation.

Quarterly Performance Highlights

The social media giant posted total revenue of $42.31 billion for Q1 2025, representing a 16% year-over-year increase from $36.46 billion in Q1 2024. Net income reached $16.64 billion, up 34.6% from $12.37 billion in the same period last year, while diluted earnings per share rose to $6.43, a 36.5% increase from $4.71 in Q1 2024.

Meta’s advertising business, which accounts for the vast majority of its revenue, generated $41.39 billion in the quarter, up 16.2% year-over-year. The company’s user metrics also showed continued growth, with Family Daily Active People (DAP) reaching 3.43 billion, a 5.9% increase from the previous year.

As shown in the following chart of Meta’s quarterly net income growth:

Detailed Financial Analysis

Meta’s operating margin expanded significantly to 41% in Q1 2025, up from 25% in Q1 2023, demonstrating the company’s focus on operational efficiency. The Family of Apps segment, which includes Facebook, Instagram, Messenger, and WhatsApp, generated $21.77 billion in operating income, while Reality Labs continued to operate at a loss of $4.21 billion.

The following segment results table provides a comprehensive breakdown of Meta’s business performance:

Geographically, the United States and Canada remained Meta’s largest market, contributing $18.61 billion to total revenue, followed by Europe ($9.68 billion), Asia-Pacific ($8.44 billion), and Rest of World ($5.59 billion). All regions showed solid year-over-year growth.

The company’s revenue by user geography is illustrated in this chart:

Meta’s efficiency initiatives are evident in its expense structure, with expenses as a percentage of revenue declining across several categories. General & Administrative expenses, in particular, decreased from 11% to 5% over the past two years, contributing to the improved operating margin.

The following chart shows Meta’s expenses as a percentage of revenue:

Another notable financial development was the significant decrease in Meta’s effective tax rate, which fell to 9% in Q1 2025 from 22% in Q1 2023. This reduction contributed substantially to the company’s net income growth.

As illustrated in this table of Meta’s effective tax rate:

Strategic Initiatives

Meta’s capital expenditures more than doubled year-over-year to $13.69 billion in Q1 2025, compared to $6.72 billion in Q1 2024, signaling the company’s aggressive investment in infrastructure, particularly for AI development. This increase aligns with CEO Mark Zuckerberg’s previously stated focus on AI as a strategic priority.

The following chart illustrates the dramatic increase in capital expenditures:

Despite these heavy investments, Meta generated $10.33 billion in free cash flow during the quarter, up from $6.91 billion in Q1 2023, demonstrating the company’s ability to fund significant infrastructure expansion while maintaining strong cash generation.

User Metrics and Monetization

Meta’s user engagement continued to grow, with Family Daily Active People reaching 3.43 billion in Q1 2025. The company’s ability to monetize its user base also improved, with Family Average Revenue Per Person (ARPP) increasing to $12.36, up 10.4% year-over-year.

The following chart shows Meta’s consistent growth in daily active users:

Meta’s ARPP growth is illustrated in this chart:

The company’s advertising business showed interesting trends, with ad impressions delivered increasing by 5% year-over-year worldwide, down from 20% growth in Q1 2024. However, this was offset by a 10% increase in average price per ad, indicating Meta’s strong pricing power in the digital advertising market.

The following charts show the year-over-year percentage changes in ad impressions and average price per ad:

Market Reaction and Outlook

Meta’s stock rose 5.72% in after-hours trading following the earnings release, reaching $580.40. The company’s shares have been trading near their 52-week high of $740.91, reflecting investor confidence in Meta’s growth strategy and execution.

The Q1 2025 results exceeded the company’s previous guidance of $39.5 billion to $41.8 billion in revenue, as mentioned in Meta’s Q4 2024 earnings call. The strong performance, particularly in advertising revenue and operating margin, suggests that Meta’s investments in AI and platform improvements are yielding positive results.

While the company continues to invest heavily in Reality Labs, which posted an operating loss of $4.21 billion, the strong performance of the Family of Apps segment more than compensated for these ongoing investments in future technologies.

Meta’s ability to maintain strong revenue growth while improving profitability positions the company well for continued success in the competitive digital advertising and social media landscape.

Full presentation:

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