Social media giant Meta’s stocks rose on Wednesday after the company reported stronger-than-expected earnings during the first quarter.
The parent company of Facebook and Instagram saw a 16% increase in revenue and a 37% increase in earnings per share compared to the first quarter of 2024. The company also reported a 3% increase in operating margin.Analysts polled by LSEG Data expected the company to post revenues of $41.4 billion and an earning per share of $5.28, according to CNBC. The company reported actual revenues of $42.31 billion and an earnings per share of $6.43.
Meta said that the number of “family daily active people” on its platforms increased 16%, totaling over 3.4 billion users. Ad impressions increased 5% as prices increased 10% on average, the company reported.
“We’ve had a strong start to an important year, our community continues to grow and our business is performing very well,” Meta founder and CEO Mark Zuckerberg said in a statement.
Meta stock rose in after-hours trading following the release, hovering around a 4.1% improvement.
Meta expects revenues to grow in Q2
Meta said that it expects revenues in the second quarter to be in the range of $42.5 billion to $45.5 billion.
The company also raised guidance on its capital expenditures for the year, expecting to spend between $64 billion to $72 billion.
“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 company said.
EU regulations raise concerns
The company warned that a decision by the European Commission would “significantly” impact the business as soon as the third quarter of this year.
The commission found that Meta’s “consent or pay” advertising model ran afoul of the European Union’s requirement that a platform provide an option for users to provide less personal data without charge. The commission hit Meta was a €200 million fine earlier this month.
“Based on feedback from the EC … we expect we will need to make some modifications to our model, which could result in a materially worse user experience for European users,” the company said.
This article originally appeared on USA TODAY: Meta stocks up as company’s Q1 earnings beat expectations
