Key Takeaways
- Meta delivered Q1 2026 EPS of $10.44, significantly surpassing the $6.67 consensus forecast
- Quarterly revenue reached $56.3 billion, marking a 33% increase from the prior year
- 2026 capital expenditure outlook elevated to $125B–$145B range, up from previous $115B–$135B projection
- Shares declined approximately 8% during premarket hours following the announcement
- The company paused share repurchases this quarter after spending roughly $13B on buybacks in 2025
Meta Platforms delivered impressive first-quarter results, yet investors responded with skepticism. Shares tumbled roughly 8% in early Thursday trading following the company’s announcement of elevated infrastructure investment plans for the year ahead.
The financial performance itself was undeniably robust. Meta reported earnings of $10.44 per share alongside revenue totaling $56.31 billion. Analysts had projected earnings of $6.65 per share on $55.52 billion in sales. Year-over-year revenue climbed 33% compared to the corresponding period last year.
However, context matters. The earnings figure received a substantial lift from an $8.03 billion tax benefit related to income taxes. Excluding this advantage, the adjusted earnings per share stands at $7.31 — still comfortably above analyst expectations, but presenting a more nuanced financial reality.
The primary catalyst for investor concern centered on infrastructure spending projections. Meta revised its 2026 capital expenditure forecast to a range of $125 billion through $145 billion, representing an increase from the earlier $115 billion to $135 billion guidance. The updated midpoint sits at $135 billion versus the previous $125 billion target.
The social media giant attributed the spending increase to elevated component costs and expanded data center construction expenses. The Wall Street Journal had previously reported that Meta was extending server equipment lifecycles to navigate a shortage of memory chips.
Rising Infrastructure Costs Impact Cash Generation
The escalated spending trajectory is creating pressure on available cash flow. Additionally, Meta abstained from share repurchase activity throughout the quarter. This represents a meaningful departure from recent practice — the company allocated nearly $13 billion toward stock buybacks during 2025.
Truist Securities analyst Youssef Squali noted that Meta “continues to earn the right to invest as long as it delivers faster top line growth for longer near-term and higher free cash flows long-term.”
Regarding platform engagement, Meta’s portfolio of applications recorded an average of 3.56 billion daily active users during March, representing a 4% annual increase. The figure experienced a modest sequential decline, which Meta explained was due to connectivity disruptions in Iran and limited WhatsApp availability in Russia.
Advertising metrics demonstrated strength. The company served users 19% more advertisements while simultaneously achieving a 12% increase in average pricing. This dual achievement suggests Meta’s artificial intelligence-powered engagement systems and precision targeting capabilities are generating meaningful returns.
CEO Commentary and Forward Outlook
Mark Zuckerberg characterized the period as a “milestone quarter,” highlighting robust application performance and the debut model from Meta Superintelligence Labs.
Full-year operating expenses remain projected at $162 billion through $169 billion. Looking ahead to Q2 2026, Meta provided revenue guidance of $58 billion to $61 billion — the midpoint landing just below Wall Street’s $59.6 billion consensus forecast.
The company also highlighted persistent legal and regulatory challenges across both European Union and United States jurisdictions as potential threats to operations and financial performance.
The second quarter revenue guidance midpoint reaches $59.5 billion, marginally below analyst expectations.
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