Meta posts $56.3bn revenue in Q1, as as AI bet accelerates

Meta Platforms has reported a strong first quarter for 2026, posting milestone performance as revenue rose sharply by 33 percent year-on-year to $56.3 billion.

The growth was mainly driven by higher advertising earnings across Facebook, Instagram, and WhatsApp, alongside rising investment in artificial intelligence infrastructure.

Mark Zuckerberg, chief executive officer, Meta, said the results reflected broad strength across Meta’s apps and early progress from its AI development efforts.

Zuckerberg pointed to the company’s first model released under Meta Superintelligence Labs, describing it as part of a long-term push to build advanced AI systems.

According to him, Meta remains focused on what he described as personal superintelligence, aimed at eventually delivering advanced AI tools to billions of users globally.

The company’s core apps business generated $55.9 billion in revenue during the quarter, up from $41.9 billion in the same period last year. Advertising remained the dominant driver, contributing $55 billion, also up 33 percent year-on-year.

Read also: Meta penalty slashed as Nigeria opts for reform over revenue

Despite the strong financial performance, Meta reported a slight decline in daily active users across its platforms. The company attributed this to temporary disruptions in some regions, including internet outages in Iran and restrictions affecting WhatsApp services in Russia. It marked the first quarterly fall in daily users across its apps.

To support its growing AI ambitions, Meta increased its capital expenditure forecast for 2026. The company now expects to spend between $125 billion and $145 billion, up from its earlier projection of $115 billion to $135 billion. The revision reflects rising costs for computing components and a broader push to expand AI infrastructure.

Meta’s spending plans place it in line with other major technology companies aggressively investing in artificial intelligence. Alphabet is expected to spend around $185 billion, while Microsoft is projecting capital expenditure of about $190 billion.

Zuckerberg defended Meta’s aggressive investment strategy during an earnings call, saying the company is still developing how its AI products will evolve. He acknowledged that Meta does not yet have a very precise plan for every product, but insisted the direction was clear.

“We are building the infrastructure and models first, and the applications will follow as capabilities improve,” he said in effect during the call.

However, not all parts of the business performed strongly. Meta’s Reality Labs division, which focuses on virtual reality and augmented reality projects linked to its metaverse ambitions, continued to operate at a loss. The unit recorded an operating loss of $4 billion, while revenue fell slightly to $402 million, down about 2.4 percent.

The results highlight ongoing challenges in Meta’s long-term metaverse strategy, which has yet to deliver significant commercial returns despite heavy investment.

Looking ahead, Meta maintained its overall full-year expense outlook of between $162 billion and $169 billion. However, the company warned of increasing regulatory pressure in both the United States and the European Union, particularly around youth-related issues. It cautioned that ongoing legal proceedings could result in “material loss” depending on outcomes.

Read also: Meta shifts to monetisation strategy with WhatsApp Plus subscription 

At the same time, Meta is undergoing significant internal restructuring linked to its AI strategy. Reports from Bloomberg indicate the company is planning to lay off around 8,000 employees, representing roughly 10 per cent of its workforce.

Susan Li, Meta’s chief financial officer, confirmed the restructuring plans during the earnings call, noting that further workforce reductions could follow later in the year as the company adapts to rapid changes in AI development.

“We don’t really know what the optimal size of a company will be in the future. There is a lot of change right now, with AI capabilities advancing rapidly,” Li said.

The combination of strong revenue growth, aggressive AI investment, workforce cuts, and regulatory uncertainty reflects a pivotal moment for Meta as it tries to balance short-term profitability with long-term technological transformation.