Shares of Meta Platforms (META) dropped sharply in extended trading on Wednesday after the company reported mixed first-quarter results. A miss on user growth and lower-than-expected capital expenditures overshadowed a revenue beat, sending the stock down approximately 6% after hours.
Meta reported first-quarter revenue of $56.3 billion, exceeding analyst estimates of $55.45 billion, according to LSEG data. However, user growth fell short of expectations. The company reported daily active people (DAP) of 3.56 billion, up 4% year-on-year but below the 3.62 billion projected by Wall Street. Meta attributed the shortfall to a “slight decline in DAP on a quarter-over-quarter basis” due to “internet disruptions in Iran, as well as a restriction on access to WhatsApp in Russia.”
Capital expenditures for the quarter totaled $19.84 billion, below the $27.57 billion average estimate according to StreetAccount. Despite the lower quarterly spend, Meta raised its full-year capital expenditure guidance to a range of $125 billion to $145 billion, up from a prior outlook of $115 billion to $135 billion. The company cited expectations for higher component costs and additional data center investments to support future capacity.
CEO Mark Zuckerberg has previously indicated that Meta plans to spend hundreds of billions of dollars on AI infrastructure over the coming years. The company has already entered into major agreements with chipmakers, including Nvidia, Advanced Micro Devices, and Broadcom, to secure hardware for its AI initiatives. Meta is building multiple large-scale data centers to support its growing AI workloads, even as rising component prices and supply chain pressures increase costs.
Meta maintained its full-year expense outlook at between $162 billion and $169 billion, indicating continued discipline despite rising investment in infrastructure. The company expects second-quarter revenue to be in the range of $58 billion to $61 billion, compared with analyst expectations of $59.5 billion. Headcount rose 1% year-on-year to 77,986 employees as of March 31.
Meta’s results come amid strong momentum in technology stocks, with the Nasdaq Composite up 14% for the month through Wednesday’s close, marking its best performance since April 2020.
