- Meta Platforms grew revenue 16% yr over yr to $42.31 billion in Q1 2025, in line with an earnings statement. The company beat expectations and expects Q2 revenue within the range of $42.5 billion to $45.5 billion in a “dynamic macro environment.”
- Ad impressions for its family of apps increased by 5% yr over yr, while average price-per-ad increased by 10% yr over yr. Daily energetic people (DAP) increased 6% yr over yr to a median of three.43 billion for March 2025.
- While the net commerce vertical was the most important contributor to year-over-year growth in ad revenue, Asia-based e-commerce firms reduced spend within the U.S., possibly because of this of ongoing battles over trade.
Meta’s ad business stayed strong in Q1, proving that concerns over its pullback on fact-checking didn’t immediately cause advertisers to retreat as a result of brand safety concerns. Despite some shifts in spend as a result of the changes in U.S. trade policy, like the tip of the de minimis exemption, the corporate still saw generally healthy trends in April.
Amid uncertainty in global trade, online commerce was still the most important contributor to year-over-year ad revenue growth, with ad impression growth mainly driven by the Asia-Pacific region. Increased advertiser demand drove pricing growth, partly as a result of improved ad performance. Meta also recently opened promoting on Threads to all advertisers in greater than 30 markets, but still doesn’t expect the platform to be a meaningful driver of impression or revenue growth this yr.
As Meta’s revenue growth slows — revenue grew 21% in Q4 in comparison with 16% in Q1 — the corporate continues working to extend monetization efficiency by improving marketing performance. The company in Q1 introduced the Generative Ads Recommendation Model for ad rating. Early tests in Reels drove as much as a 5% increase in ad conversions, and the model is now being rolled out to additional platforms.
Along with adding features to its Advantage+ suite of artificial intelligence-powered tools, Meta can also be working to assist advertisers drive results. A brand new incremental attribution feature has shown strong ends in testing, with promoting seeing a median 46% lift in incremental conversions in comparison with business-as-usual.
“Our goal is to make it in order that any business can principally tell us what objective they’re trying to attain like selling something or getting a brand new customer and the way much they’re willing to pay for every result, after which we just do the remainder,” CEO Mark Zuckerberg said on a call across the earnings.
AI was a serious topic of the earnings call, which got here a day after Meta’s first-ever AI developer conference, LlamaCon. The company continues to trumpet its investments and developments within the buzzy tech, highlighting improved promoting as a key opportunity within the space. Meta hopes to redefine promoting as “an AI agent that delivers measurable business results at scale,” Zuckerberg said on the decision.
“If we deliver on this vision, then over the approaching years, I feel that the increased productivity from AI will make promoting a meaningfully larger share of worldwide GDP than it’s today,” the manager said, noting a 30% increase in advertisers using AI creative tools within the last quarter.
Despite the continued strength of its ad business and promising early results from its AI investments, Meta still faces legal and regulatory headwinds within the EU and the U.S. that would “significantly impact” its business and future financial performance, said CFO Susan Li. Meta’s ad-free subscription model was recently ruled not compliant with the Digital Markets Act by the European Commission, a call the corporate will appeal.
“We expect we are going to must make some modifications to our model, which could lead to a materially worse user experience for European users and a big impact to our European business and revenue as early because the third quarter of 2025,” Li said.
Meta can also be facing an antitrust case within the U.S. that would potentially split up the corporate, which incorporates its Facebook, Instagram and WhatsApp platforms. The regulatory pressure, uncertain macroeconomic landscape and the continued losses from its Reality Labs division could give investors pause.
“I predict come end of this yr, Meta will shutter its metaverse projects, like Horizon Worlds. This would allow the corporate to present more focus to its AI projects including Llama, Meta AI, and AI glasses,” said Mike Proulx, vice chairman and research director at Forrester, in emailed comments. “Not only has Meta made demonstrable strides with AI, but it’s helping to future proof Meta as a growth company should its family of apps get decimated by the present anti-trust case.”
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