Meta Platforms Q1 2026 Earnings: Ad Revenue Jumps 33% as AI Spending Plans Surge
Meta's Q1 2026 revenue rose 33% to $56.31B on stronger ad pricing and volume, but the company also sharply raised its 2026 AI spending plans and announced major layoffs.
| Q1 2026 | Reported |
|---|---|
| EPS | $10.44 |
| Revenue | $56.31B |
Figures as reported by the company to the SEC for the quarter ended March 31, 2026. Analyst estimates are not part of a filing, so no comparison to expectations is shown.
Key takeaways
- Revenue grew 33% from a year earlier, and management said the increase was driven mainly by advertising — ad impressions across Meta’s apps rose 19% and the average price per ad rose 12%, meaning more ads were shown and each one sold for more.
- Reported earnings per share were boosted by a large one-time item: an $8.03 billion income tax benefit. Excluding that benefit, per-share profit from ongoing operations would have been notably lower, around $7.31, so the headline EPS figure overstates the quarter’s underlying operating profitability.
- Meta’s family of apps reached 3.56 billion daily active people, up 4% year over year, while average revenue per person climbed 27% to $15.66 — meaning existing users are being monetized more effectively rather than user growth being the main driver.
- The company raised its full-year 2026 capital spending forecast to a range of $125 billion to $145 billion, up from the previous $115 billion to $135 billion, citing higher costs for Nvidia GPUs, custom chips, and data center construction needed to support its AI buildout.
- Full-year total expense guidance was held at $162 billion to $169 billion, and management said it expects full-year operating income to come in above 2025 levels despite the higher spending.
- Meta separately announced plans to cut about 8,000 jobs, roughly 10% of its workforce, effective mid-May, a move the company described as freeing up resources to help fund its AI investment priorities.
- CEO Mark Zuckerberg pointed to the first model released by Meta Superintelligence Labs and said daily users of Meta’s AI-enabled glasses roughly tripled year over year, framing the quarter as a step toward broader AI product adoption.
- The company’s trailing-twelve-month gross margin remains high at about 82%, showing the core advertising business stays very profitable, but operating margin (about 38%) and the fact that trailing EPS growth was slightly negative year over year point to how the sharp rise in AI-related spending is weighing on overall profitability even as revenue expands.
- Shares fell in after-hours trading following the report, with investor reaction centered on the size of the capex increase and the concurrent layoff announcement rather than on the quarter’s reported growth.
Q1 2026 in context
| Metric | Mar 2026 | Mar 2025 | Change |
|---|---|---|---|
| Revenue | $56.3B | $42.3B | +33.1% |
| Net income | $26.8B | $16.6B | +60.9% |
| Free cash flow | $13.2B | $11.1B | +19.3% |
| Diluted EPS | $10.44 | $6.43 | +62.4% |
| Gross margin | 81.9% | 82.1% | -0.3 pts |
| Operating margin | 40.6% | 41.5% | -0.9 pts |
| Net margin | 47.5% | 39.3% | +8.2 pts |
Figures for the quarter ended Mar 2026 and the quarter ended Mar 2025, as reported to the SEC.
Each company's quarter ending in calendar Q1 '26, as reported to the SEC. A peer that reported no revenue figure for that quarter is left out.
How the stock took it
Meta Platforms, Inc. closed at $669.12 on Apr 29, 2026, the last session before the report, and at $608.75 on May 1, 2026, the first session after it — -9.0% across the report.
| Earlier report | Close before | Close after | Change |
|---|---|---|---|
| Oct 30, 2025 | $751.67 | $648.35 | -13.8% |
| Jul 31, 2025 | $695.21 | $750.01 | +7.9% |
Closes from the market's daily record. Each figure spans the report date — from the last session that closed before it to the first that closed after — because a company may report before the open or after the close.
Sources: company report · TradingView · earnings call · Yahoo Finance