MENLO PARK, Calif. — Meta Platforms reported record financial results for the first quarter, posting $56.3 billion in revenue and $26.77 billion in net income, but the company’s aggressive push into artificial intelligence — coupled with sweeping job cuts — triggered investor concern and sent shares lower in after-hours trading.
Revenue rose 33% year over year, marking Meta’s fastest growth since 2021 and exceeding analyst expectations. Adjusted earnings per share came in at $7.31, while diluted EPS reached $10.44, reflecting strong underlying profitability across its advertising-driven business.
However, a significant portion of those profits was driven by a one-time tax benefit tied to recent federal legislation, which added approximately $8 billion to net income. Excluding that adjustment, earnings were materially lower, highlighting the underlying cost pressures associated with Meta’s expanding investment strategy.
Susan Li, Meta’s Chief Financial Officer, emphasized that the company’s increased spending reflects “higher component pricing and additional data center costs” required to support long-term AI capacity, as Meta raised its 2026 capital expenditure outlook to between $125 billion and $145 billion.
That surge in spending is being partially offset by workforce reductions. Meta confirmed it is cutting approximately 8,000 jobs — about 10% of its global workforce — with layoffs set to take effect in May. The company is also eliminating 6,000 previously planned hires, signaling a decisive shift in how it allocates human and financial resources.
The layoffs follow multiple rounds of cuts earlier in the year, as Meta restructures around automation and AI-driven efficiencies across divisions including Reality Labs, recruiting, and core platform operations.
At the same time, the company reported a notable shift in user trends. Daily active users across Meta’s family of apps declined sequentially to 3.56 billion, marking the first drop in its history. Executives attributed the decline in part to geopolitical disruptions, including internet restrictions linked to the ongoing conflict in Iran.
Despite the turbulence, Meta reaffirmed its outlook, guiding second-quarter revenue between $58 billion and $61 billion and maintaining full-year expense projections of up to $169 billion, while committing that operating income will exceed 2025 levels.
The quarter highlights a broader transformation underway across the technology sector. Companies are generating record revenues and profits even as they reduce headcount — redirecting resources toward artificial intelligence infrastructure at an unprecedented scale.
Across Alphabet, Microsoft, Amazon, and Meta, total AI-related capital spending is expected to exceed $600 billion in 2026, reflecting one of the largest coordinated investment cycles in modern corporate history.
For investors, the key question is no longer whether AI will reshape the economy — but how quickly these massive investments will translate into sustainable returns.
Meta’s results make clear that the transition is already underway — and that the cost of staying competitive in the AI era is rising just as rapidly as the opportunity.
JBizNews Desk
