Meta Earnings: Shares Fall After Hours on User Miss
Meta earnings beat on Q1 revenue and EPS, but weaker user growth and a raised $135-145 billion capex outlook sent shares lower after-hours.
KEY TAKEAWAYS
- Q1 revenue and EPS beat, with revenue $56.3 billion and adjusted EPS $7.31.
- Management raised 2026 capex guidance to $135-145 billion, intensifying capital-allocation scrutiny.
- Reality Labs logged over $4 billion operating loss on $402 million sales, highlighting experimental drag.
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Meta Platforms Inc. (META) reported first-quarter results on April 29, 2026. The company beat revenue and earnings estimates, but shares fell in after-hours trading as investors focused on weaker-than-expected user growth and a raised capital-expenditure outlook for 2026.
Quarterly Financial Results and Reality Labs Losses
Meta posted first-quarter revenue of $56.3 billion, a 33.0% increase year over year, and income from operations of $22.9 billion, according to the company’s press release. Adjusted earnings per share rose to $7.31, while reported EPS was $10.44, both exceeding Street consensus. Net income for the quarter reached $26.8 billion.
Reality Labs, Meta’s experimental-technology unit, generated $402 million in sales but recorded an operating loss exceeding $4 billion for the quarter. The unit’s cumulative losses have surpassed $80 billion since late 2020, continuing to weigh on discussions about Meta’s cash allocation.
Capital Spending Outlook and Market Reaction
Meta raised its full-year 2026 capital-expenditure guidance to a range of $135 billion to $145 billion, driven primarily by investments in AI data centers. This represents a significant increase from the prior midpoint of $125 billion and exceeds Street estimates near $124 billion. The company also guided second-quarter revenue to $58 billion to $61 billion, above or in line with analyst expectations.
First-quarter capital spending came in below Wall Street’s estimate of $27.6 billion. Combined with the user growth miss, this led to a decline in Meta’s shares during after-hours trading. Investors weighed the strong revenue and earnings beats against the user shortfall and the sharply higher spending plan. The raised capex guidance intensified scrutiny over Meta’s capital allocation, especially given the ongoing multibillion-dollar losses in Reality Labs.
The market reaction reflected concerns about whether the expanded AI data-center investments will generate returns quickly enough to offset heavy losses in experimental units, despite strong core financial results.
