Key Takeaways
- Meta delivered Q1 2026 earnings per share of $10.44, crushing the $6.67 consensus estimate
- Quarterly revenue reached $56.3 billion, marking a 33% year-over-year increase
- 2026 capital expenditure forecast elevated to $125B–$145B range, up from prior $115B–$135B outlook
- Shares declined approximately 8% during premarket hours despite surpassing earnings projections
- Company paused share repurchases this quarter after spending close to $13B on buybacks in 2025
Meta Platforms delivered impressive first-quarter results, yet investors responded with a sharp selloff. Shares tumbled roughly 8% in early Thursday trading following the social media giant’s announcement of significantly higher capital spending 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 $6.65 per share on $55.52 billion in sales. The top line climbed 33% versus the year-ago period.
However, context matters. The earnings figure benefited substantially from an $8.03 billion income tax advantage. When accounting for this, the adjusted earnings per share settles at $7.31 — still comfortably above expectations, but offering a more grounded perspective than the raw figure suggests.
The primary concern for market participants centered on capital spending projections. Meta disclosed updated expectations to deploy between $125 billion and $145 billion throughout 2026, representing an increase from the previously communicated $115 billion to $135 billion range. The updated midpoint reaches $135 billion versus the earlier $125 billion target.
Meta attributed the escalation to rising component costs and expanded data center construction expenses. Prior to the earnings release, The Wall Street Journal reported that Meta had been prolonging the operational lifespan of certain server infrastructure due to memory chip supply constraints.
Free Cash Flow Under Strain From Elevated Spending
The expanded investment program is creating pressure on free cash flow generation. Additionally, Meta abstained from share buyback activity during the quarter. This represents a meaningful departure — the technology company allocated nearly $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 application ecosystem attracted 3.56 billion daily active users in March, reflecting 4% growth year-over-year. The figure experienced a modest sequential decline, which Meta linked to internet connectivity issues in Iran and WhatsApp service limitations in Russia.
Advertising metrics delivered encouraging signals. Meta increased ad impressions shown to users by 19% while simultaneously achieving a 12% improvement in average ad pricing. This dual achievement suggests the company’s artificial intelligence-powered engagement and ad targeting capabilities are beginning to generate meaningful returns.
CEO Commentary
Chief Executive Mark Zuckerberg characterized the period as a “milestone quarter,” highlighting robust application engagement and the debut release from Meta Superintelligence Labs.
Full-year operating expense projections remain anchored between $162 billion and $169 billion. Looking toward Q2 2026, Meta provided revenue guidance spanning $58 billion to $61 billion — with the midpoint landing marginally below Wall Street’s $59.6 billion forecast.
Meta also acknowledged continuing legal and regulatory challenges across both European Union and United States jurisdictions as potential risk factors affecting business operations and financial performance.
The second-quarter revenue guidance midpoint lands at $59.5 billion, slightly trailing analyst consensus expectations.
