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Research Alert: Meta Guides Q2 In Line With Views; Tweaks Capex Spend Higher

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CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:

META posted Q1 revenue growth of 33% to $56.31B, beating our 31% forecast, while diluted EPS of $10.44 (+62% Y/Y) and adjusted EPS of $7.31 exceeded consensus of $7.08. Strong advertising fundamentals drove the beat, with ad impressions growing 19% and average price per ad increasing 12%, demonstrating both reach expansion and pricing power across platforms. The robust performance reflects disciplined operating leverage with margins holding steady at 41% despite 35% cost increases, supported by strong cash generation of $32.23B in operating cash flow. Management guided Q2 revenue of $58B-$61B (25% growth), in line with expectations, while maintaining full-year expense guidance of $162B-169B. We note the modest capex guidance increase to $125B-$145B from $115B-$135B, reflecting higher component pricing and data center costs. Reality Labs losses of $4.03B showed improvement from the prior year's $4.21B, suggesting the segment may be approaching peak losses in our view.

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