Meta lost 20 million users in Q1
▼ Summary
– Meta’s “Family daily active people” dropped by 20 million this quarter, which the company attributes to internet disruptions in Iran and restricted WhatsApp access in Russia.
– Meta plans to increase its 2026 capital expenditure forecast to $125-145 billion, driven by higher component pricing and additional data center costs.
– Meta’s revenue grew 33% year-over-year to $56.3 billion, its fastest growth since 2021.
– Meta’s Reality Labs unit reported an operating loss of $4.03 billion for the quarter, following two waves of layoffs since January.
– Meta’s stock price fell by more than 7% after the earnings release.
Despite reporting a sharp growth in revenue, Meta acknowledged a notable drop in its user base during the first quarter of the year. The company is now planning to pour billions more into AI investments, even as 20 million users have apparently drifted away from its ecosystem.
During Wednesday’s earnings call, Meta disclosed that its “Family daily active people” metric,a combined tally of users across Facebook, Instagram, WhatsApp, and Messenger,fell by 20 million compared to the previous quarter. The company attributed this decline to “internet disruptions in Iran, as well as a restriction on access to WhatsApp in Russia.” Whether or not you accept that explanation is your call. By lumping all platform stats together, Meta makes it impossible to determine which specific app is losing ground. If your goal was to obscure a potential exodus from a flagship social platform, that aggregation strategy would be a logical choice.
This user drop comes as Meta raises its projected capital expenditures for 2026 to a range of $125 billion to $145 billion, an increase of $10 billion from earlier estimates. CFO Susan Li explained during the investor call that the higher spending is driven by expectations for pricier components and, “to a lesser extent,” additional costs for future data center capacity. She also acknowledged a miscalculation, stating that Meta had “underestimated our compute demand in the past.”
On the revenue front, Meta posted its fastest growth since 2021, with a 33 percent jump from $42.3 billion in the same quarter last year to $56.3 billion this time around. However, not all divisions are thriving. The Reality Labs unit, which develops wearables and virtual reality devices, reported an operating loss of $4.03 billion for the three-month period. That follows two waves of layoffs that hit Reality Labs employees since January.
As of this writing, Meta’s stock price has fallen more than 7 percent compared to its level before the earnings release, signaling investor unease despite the revenue surge.
(Source: The Verge)
