Meta posts $42.3B in revenue and grows user base to 3.43 billion, while warning of potential EU headwinds and rising AI-related capital expenditures
Meta Platforms (META) kicked off 2025 with a robust first-quarter earnings report, signaling strong momentum in both user growth and revenue. The company reported Q1 revenue of $42.31 billion, a 16% increase year-over-year, driven by solid performance in advertising and ongoing expansion of its global user base.
“We’ve had a strong start to an important year,” said Meta CEO Mark Zuckerberg. “Our community continues to grow and our business is performing very well. We’re making good progress on AI glasses and Meta AI, which now has almost 1 billion monthly actives.”
Meta’s core metrics continue to impress. Family Daily Active People (DAP) reached 3.43 billion in March 2025, marking a 6% increase from a year earlier. Ad impressions grew by 5%, while the average price per ad rose 10%—a clear signal that advertiser demand remains robust.
The company also remains a cash-generating machine, reporting $24.03 billion in cash flow from operations and $10.33 billion in free cash flow. Meta returned $14.7 billion to shareholders in the quarter, including $13.4 billion in stock buybacks and $1.33 billion in dividends.
However, rising costs are accompanying Meta’s AI ambitions. Total expenses rose 9% year-over-year to $24.76 billion, and capital expenditures surged to $13.69 billion. The company now expects full-year 2025 capital expenditures to fall between $64 billion and $72 billion—up from its prior forecast—driven by intensified data center investments to support AI development and growing infrastructure hardware costs.
Despite these growing investments, Meta’s CFO signaled a reduction in its full-year total expense outlook to $113 billion–$118 billion, slightly down from the previous range. Revenue for Q2 is expected to land between $42.5 billion and $45.5 billion, with foreign exchange offering a 1% tailwind.
Yet, while the financials remain solid, regulatory risks—particularly in Europe—are casting a shadow. The European Commission recently ruled Meta’s “subscription for no ads” model violates the Digital Markets Act (DMA). Meta plans to appeal, but acknowledges that any imposed changes could negatively affect user experience and significantly impact its European revenue as early as Q3 2025.
“In addition to regulatory headwinds in the U.S., we’re closely monitoring the evolving landscape in the EU,” the company stated. “Modifications to our model may be required during or before the appeal process, with potentially material consequences.”
Looking forward, Meta is walking a strategic tightrope—balancing aggressive AI-driven expansion and product innovation with growing regulatory pressures abroad. For now, strong earnings and capital discipline are fueling investor optimism, but all eyes will be on how the company navigates looming policy challenges in the months ahead.
Read original press release here
You might like this article:Qualcomm Tops Q2 Expectations but Cautions on Trade Risks and Smartphone Demand
