TLDR
- META drops after hours despite 33% revenue surge and strong profit growth
- Rising AI costs and capital spending pressure margins and stock reaction
- Ad impressions jump 19% while ad prices rise 12% boosting revenue growth
- Net income climbs 61% with EPS up 62% supported by tax benefit adjustment
- Daily active users reach 3.56B but dip slightly due to regional access limits
Meta Platforms (META) stock fell sharply in extended trading after reporting strong quarterly results with solid revenue and profit growth. The stock closed at $669.12, then dropped to $623.50 in after-hours activity. The decline reflected market reaction despite improved financial performance and rising advertising demand.
Strong Revenue Growth and Profit Expansion
Meta reported first quarter revenue of $56.31 billion, rising 33% compared to the same period last year. The company also recorded operating income of $22.87 billion, reflecting a 30% annual increase. Meanwhile, net income reached $26.77 billion, marking a strong 61% jump year over year.
Diluted earnings per share rose to $10.44, up 62% from the previous year. Earnings included a significant tax benefit linked to regulatory adjustments in the United States. Excluding this benefit, earnings per share would have been lower by $3.13.
Operating margins remained stable at 41%, showing consistent profitability despite rising costs. Expenses increased 35% to $33.44 billion, driven by infrastructure and artificial intelligence investments. Consequently, the cost growth slightly outpaced revenue expansion during the quarter.
Advertising and User Metrics Support Performance
Meta’s advertising business showed continued strength with strong demand across its platforms. Ad impressions increased by 19% year over year, reflecting higher user engagement and expanded ad delivery. At the same time, the average price per ad rose by 12%, supporting overall revenue growth.
The company reported 3.56 billion daily active people across its platforms in March 2026. This figure represented a 4% increase compared to the previous year. However, the metric declined slightly from the previous quarter due to regional disruptions and access limitations.
Meta maintained strong cash generation with operating cash flow reaching $32.23 billion. Free cash flow totaled $12.39 billion, supporting continued investments and shareholder returns. The company also paid $1.35 billion in dividends during the quarter.
Rising Investments and Market Reaction Weigh on Stock
Meta increased capital expenditures to $19.84 billion, reflecting heavy spending on data centers and artificial intelligence infrastructure. These investments aim to support long-term growth and advanced computing capabilities. Higher spending raised concerns about near-term margins.
Total cash and marketable securities stood at $81.18 billion at the end of the quarter. This strong liquidity position supports ongoing expansion and operational flexibility. Headcount also increased slightly to 77,986 employees, reflecting controlled workforce growth.
The stock declined sharply after the earnings release. Market participants reacted to rising costs and future investment plans. As a result, the after-hours drop highlighted concerns over profitability trends despite solid financial performance.
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