Meta revenue increased by 33%, exceeding expectations, but full-year capital expenditures were raised to a maximum of $145 billion, down 7% after hours.

According to Beating Monitoring, Meta released its first-quarter financial report. Revenue was $56.31 billion, up 33% year over year, exceeding Wall Street’s expectations of $55.45 billion. Adjusted earnings per share were $7.31, higher than the expected $6.79. The report’s profit includes a one-time tax benefit of $8.03 billion, coming from new U.S. Department of the Treasury rules this February that simplified the corporate alternative minimum tax, partially offsetting $15.93 billion in taxes from last year’s tax cut legislation.

Both revenue and profit beat expectations, but the stock fell about 7% after hours. The main reason was a renewed increase in capital expenditures. Meta raised its full-year capital expenditure guidance from $115 billion to $135 billion to $125 billion to $145 billion, which is $10 billion higher than the previous period. Actual capital spending for all of 2025 was $72.2 billion, nearly doubling within a year. CFO Susan Li said the increase was due to higher component prices and additional demand for new data center construction, and during the call she said, “So far, we have been underestimating computing power needs.”

User data also weighed on the stock price. Daily active users in its apps were 3.56 billion, up 4% year over year, but below analysts’ forecast of 3.62 billion, and also fell compared with the previous quarter. Meta attributed this to internet disruptions in Iran and restrictions on WhatsApp access in Russia.

Advertising remains the core growth engine. Advertising revenue was $55.02 billion, accounting for more than 98% of total revenue. Ad impressions rose 19% year over year, and the average price per ad increased by 12%.

During the call, CEO Zuckerberg said Muse Spark is “the biggest milestone of the year,” a model launched by Meta’s Superintelligence Lab led by Alexandr Wang. After the release, Meta AI’s sessions per user saw double-digit growth. Zuckerberg also said Meta “doesn’t oppose” building programming tools, but “this is not our main focus.”

Meta also disclosed that it will lay off about 10% of staff in May, affecting about 8,000 employees, and will cancel 6,000 open positions at the same time. CFO Li said the layoffs will help the company “move faster” and offset infrastructure investment. As of the end of March, the total number of employees was 77,986.

Q2 revenue guidance is $58 billion to $61 billion, roughly in line with analysts’ expectations.