Key Highlights
- Meta exceeded first quarter 2026 projections with earnings per share of $10.44 versus analyst consensus of $6.67
- Quarterly revenue reached $56.3 billion, representing 33% growth year-over-year
- 2026 capital expenditure forecast increased to $125B–$145B range, elevated from previous $115B–$135B guidance
- Shares declined approximately 8% during premarket hours despite exceeding earnings benchmarks
- The company executed zero share repurchases this quarter; comparatively, it allocated nearly $13B toward buybacks last year
Meta Platforms delivered impressive first-quarter results, yet Wall Street responded negatively. Shares plummeted roughly 8% in premarket trading Thursday following the social media giant’s announcement of elevated capital spending forecasts for the year.
The financial performance itself was undeniably robust. Meta reported earnings of $10.44 per share against revenue totaling $56.31 billion. Analyst projections had called for $6.65 per share with revenue of $55.52 billion. Year-over-year revenue growth registered at 33%.
However, context matters significantly here. The earnings figure benefited substantially from an $8.03 billion tax credit. Excluding this benefit, adjusted earnings per share totaled $7.31 — still comfortably surpassing expectations, though painting a more nuanced financial portrait.
Investor concern centered primarily on capital expenditure projections. Meta elevated its 2026 spending forecast to a range between $125 billion and $145 billion, representing an increase from the previous $115 billion to $135 billion outlook. The midpoint rose to $135 billion from $125 billion.
Meta attributed the escalation to elevated component pricing and expanded data center construction expenses. The Wall Street Journal had previously disclosed that Meta was prolonging the operational lifespan of certain server infrastructure amid memory chip supply constraints.
Increased Spending Constrains Cash Generation
The expanded investment is compressing free cash flow generation. Additionally, Meta abstained from executing any share buybacks throughout the quarter. This represents a meaningful departure — the organization allocated approximately $13 billion toward repurchases throughout 2025.
Truist Securities analyst Youssef Squali said 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 user metrics, Meta’s ecosystem of applications averaged 3.56 billion daily active users during March, climbing 4% year-over-year. The figure experienced a minor sequential decline, which Meta explained as resulting from connectivity challenges in Iran and WhatsApp access limitations in Russia.
Advertising metrics delivered encouraging signals. Meta increased ad impressions by 19% while simultaneously elevating average pricing by 12%. This dual expansion demonstrates its artificial intelligence-powered engagement and precision targeting capabilities generating tangible returns.
CEO Commentary
Mark Zuckerberg characterized the period as a “milestone quarter,” highlighting robust application engagement and the debut model from Meta Superintelligence Labs.
Full-year operating expense guidance remained unchanged at $162 billion to $169 billion. For the second quarter of 2026, Meta projected revenue between $58 billion and $61 billion — with the midpoint marginally trailing analyst consensus of $59.6 billion.
Meta also acknowledged continuing regulatory and legal challenges across both European Union and United States jurisdictions as potential threats to operational performance and financial outcomes.
Second quarter revenue guidance centers at $59.5 billion, narrowly beneath Wall Street expectations.
