Meta Platforms, Inc.
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Item 1.Business
Overview
Our mission is to build the future of human connection and the technology that makes it possible.
Our products enable people to connect and share through mobile devices, personal computers, virtual reality (VR) headsets, and AI glasses. We are innovating in artificial intelligence (AI) technologies to build transformative experiences and capabilities across our Family of Apps and new platforms, and to advance our vision to deliver personal superintelligence for everyone.
We build technology that helps people connect and share, find and build communities, and grow businesses. We also help people discover and learn about what is going on in the world around them, enable people to share their experiences, ideas, photos, videos, and other content with audiences ranging from their closest family members and friends to the public at large, and stay connected everywhere by accessing our products. Meta is moving our offerings beyond 2D screens toward immersive experiences like augmented and virtual reality to help build the next computing platform. Our vision does not center on any single product, but rather an entire ecosystem of experiences, devices, and new technologies powered by AI. While the metaverse is in the very early stages of its development, we believe it will become the next computing platform and the future of social interaction.
Across our work, we are innovating to build new experiences that help make our platform more social, useful, and immersive. Our AI investments support initiatives across our products and services, helping power the systems that rank content in our apps, our discovery engine that recommends relevant content, the tools advertisers use to reach customers, the development of new generative AI experiences, and the tools that make our product development more efficient and productive. We are also working to develop the next generation of AI models and advance our vision to build superintelligence, which we define as AI that surpasses human intelligence. Although it is inherently difficult to predict when superintelligence may be achieved, we are investing now because we believe this has the potential to begin a new era of individual empowerment, where people can direct superintelligence towards what they value in their own lives.
Family of Apps Products
•Facebook. Facebook helps give people the power to build community and bring the world closer together. It's a place for people to share life's moments and discuss what's happening, nurture and build relationships, discover and connect to people with shared interests, and create economic opportunity. They can do this through Feed, Reels, Stories, Groups, Marketplace, and more.
•Instagram. Instagram brings people closer to the people and things they love. Instagram Feed, Stories, Reels, Live, and messaging are places where people and creators can connect and express themselves through photos, video, and private messaging, and discover and shop from their favorite businesses.
•Messenger. Messenger is a simple yet powerful messaging application for people to connect with friends, family, communities, and businesses across platforms and devices through text, audio, and video calls.
•Meta AI. Meta AI is an assistant that's available across our apps, as a stand-alone app, on our AI glasses, and on the web. It's designed to help people learn, get things done, create content, and connect with others to make the most of every moment.
•Threads. Threads is an application for text-based updates and public conversations, where communities come together to discuss topics of interest. People can connect directly with their favorite creators and others who love the same things or build a loyal following of their own to share their ideas, opinions, and creativity with the world.
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•WhatsApp. WhatsApp is a simple, reliable, and secure messaging application that is used by people and businesses around the world to communicate and transact in a private way. Within WhatsApp we launched WhatsApp Channels, a one-to-many broadcast service designed to help people follow information from people and organizations that are important to them.
Reality Labs Products
Many of our Reality Labs investments are directed toward long-term, cutting edge research and development for products that are not on the market today and may only be fully realized in the next decade. This includes exploring innovations in AI and hardware to help build next-generation interfaces. In the near term, we are continuing to develop products and experiences that help people feel connected, anytime, anywhere.
Our current product offerings in VR include our Meta Quest devices, as well as software and content available through the Meta Horizon Store, which enable a range of social experiences that allow people to defy physical distance while engaging in gaming, fitness, entertainment, and more. To drive greater adoption and acceptance of VR we have introduced passthrough capabilities, which allow users to experience the immersion and presence of VR while still being grounded in the physical world, through our Meta Quest devices.
Our wearables efforts include our AI glasses and long-term AR initiatives. Our current AI glasses include the Ray-Ban Meta and Oakley Meta glasses, which feature Meta AI, our advanced conversational assistant, as well as other features such as hands-free interaction. As we continue our long-term efforts to bring AR glasses to market, in 2024 we also unveiled our Orion prototype, a pair of true AR glasses that overlay content on top of the physical world. It does this with an industry-leading field of view and in glasses form factor for comfortable wear. In 2025, we introduced Meta Ray-Ban Display, which combines our AI glasses with an integrated display built into the lens. It comes with the Meta Neural Band, which is a wrist-worn wearable device that uses electromyography to let people control their AI glasses using neuromuscular signals.
In general, our Reality Labs efforts include shorter-term projects developing specific products and services to go to market, as well as longer-term research and development projects. All of these investments are part of our long-term initiative to help build the next computing platform. In 2026, we expect to spend approximately 70% of our Reality Labs operating expenses on our wearables initiatives, and the remaining 30% on our VR and Horizon initiatives. We apply significant judgment in estimating this expense breakdown as there are certain shared costs across product lines, and our expectations are subject to change, including as the next computing platform and our business strategies evolve. In particular, we regularly evaluate our product roadmaps and make significant changes as our understanding of the technological challenges and market landscape and our product ideas and designs evolve.
Revenue and Investments
We report financial results for two segments: Family of Apps (FoA) and Reality Labs (RL). Currently, we generate substantially all of our revenue from selling advertising placements on our family of apps to marketers, which is reflected in FoA. Ads on our platform enable marketers to reach people across a range of marketing objectives, such as generating leads or driving awareness. Marketers purchase ads that can appear in multiple places including on Facebook, Instagram, Messenger, Threads, and WhatsApp, as well as third-party applications and websites. RL generates revenue from sales of consumer hardware products, software, and content.
We invest in our business based on our company priorities. In 2026, we intend to focus on several key investment areas: AI, Reels and our discovery engine, wearables, monetization of our products and services, youth, platform integrity and community support, and infrastructure capacity.
The majority of our investments are directed toward developing our family of apps. In 2025, 82% of our total costs and expenses were recognized in FoA and 18% were recognized in RL. Our FoA investments were $96.29 billion in 2025 and include expenses relating to headcount, data centers and technical infrastructure as part of our efforts to develop our apps and our advertising services. We are also making significant investments in our RL efforts, including developing virtual and augmented reality devices, software for social platforms, neural interfaces, and other foundational technologies. Our total RL investments were $21.40 billion in 2025 and include expenses relating to headcount and technology development across these efforts. These are fundamentally new technologies that we expect will evolve as the next computing platform develops, and many products may only be fully realized in the next decade. Although it is inherently difficult to predict when and how the next computing platform will develop, we expect our RL segment to continue to operate at a loss for the foreseeable future,
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and our ability to support our efforts to build the next computing platform is dependent on generating sufficient profits from other areas of our business. We expect this will be a complex, evolving, and long-term initiative. We are investing now because we believe this is the next chapter of the internet and will unlock monetization opportunities for businesses, developers, and creators, including around advertising, hardware, and digital goods.
Competition
Our business is characterized by innovation, rapid change, and disruptive technologies. We compete with companies providing connection, sharing, discovery, and communication products and services to users online, as well as companies that sell advertising to businesses looking to reach consumers and/or develop tools and systems for managing and optimizing advertising campaigns. We face significant competition in every aspect of our business, including, but not limited to, companies that facilitate the ability of users to create, share, communicate, and discover content and information online or enable marketers to reach their existing or prospective audiences. We compete to attract, engage, and retain people who use our products, to attract and retain businesses that use our free or paid business and advertising services, and to attract and retain developers who build compelling applications that integrate with our products. We also compete with companies in the development and application of AI, particularly with respect to the development of frontier AI models, as well as the development and delivery of consumer hardware and augmented and virtual reality products and services. We also expect to face additional competition as we introduce or acquire new products, as our existing products evolve, or as other companies introduce new products and services, including as part of efforts to innovate through the development and application of AI and other new technologies as well as efforts to develop the metaverse.
Technology
Our product development philosophy centers on continuous innovation in creating and improving products that are social by design, which means that our products are designed to place people and their social interactions at the core of the product experience. Historically, the increases in our computing needs have been driven by growth in our user base as well as engagement with products like video and VR. Our increased efforts toward building frontier AI models have driven a significant further expansion in our computing needs and we expect our computing needs to continue to expand as a result. We have designed and built our own data centers and key portions of our technical infrastructure, and a substantial portion of our technical infrastructure is also provided by third parties. Our ability to provide and continue to innovate our products and services depends on the continued availability of components, power, and network capacity.
We make significant investments in technology both to improve our existing products and services and to develop new ones, as well as for our marketers and developers. We are also investing in protecting the security, privacy, and integrity of our platform by investing in both people and technology to strengthen our systems against abuse. Across all of these efforts, we are making significant investments in AI initiatives, including generative AI and superintelligence, to, among other things, recommend relevant content across our products through our AI-powered discovery engine, enhance our advertising tools and improve our ad delivery, targeting, and measurement capabilities, and to develop new products as well as new features for existing products.
We have a history of open-sourcing in AI, including releasing our Llama foundation models as well as other models and tools, and continue to believe in the power of open source innovation. By sharing these resources, we aim to accelerate AI research, improve our products, and foster innovation across the tech community. We have not released everything we have developed historically and expect to continue training a combination of open and closed models going forward.
Sales and Operations
The majority of our marketers use our self-service ad platform to launch and manage their advertising campaigns. We also have a global sales force that is focused on attracting and retaining advertisers and providing support to them throughout the stages of the marketing cycle from pre-purchase decision-making to real-time optimizations to post-campaign analytics. We work directly with these advertisers, as well as through advertising agencies and resellers. We operate offices in more than 90 cities around the globe, the majority of which have a sales presence. We also invest in and rely on self-service tools to provide direct customer support to our users and partners.
For our RL products, our sales efforts utilize third-party sales channels such as retailers, resellers, and distribution partners, and our direct-to-consumer channel, Meta.com, and several Meta stores. These efforts are focused on driving consumer and enterprise sales and adoption of our Meta Quest portfolio of products and AI glasses.
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Marketing
Historically, our communities have generally grown organically with people inviting their friends to connect with them, supported by internal efforts to stimulate awareness and interest. In addition, we have invested and will continue to invest in marketing our products and services to grow our brand and help build community around the world.
Intellectual Property
To establish and protect our proprietary rights, we rely on a combination of patents, trademarks, copyrights, trade secrets, including know-how, license agreements, confidentiality procedures, non-disclosure agreements with third parties, employee disclosure and invention assignment agreements, and other contractual rights. In addition, to further protect our proprietary rights, from time to time we have purchased patents and patent applications from third parties. We do not believe that our proprietary technology is dependent on any single patent or copyright or groups of related patents or copyrights. We believe the duration of our patents is adequate relative to the expected lives of our products.
Government Regulation
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Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
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Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion of our financial condition and results of operations in conjunction with our condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q and with our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the Securities and Exchange Commission. In addition to our historical condensed consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Quarterly Report on Form 10-Q, particularly in Part II, Item 1A, "Risk Factors." For a discussion of limitations in the measurement of our Family metrics, see the section entitled "Limitations of Key Metrics and Other Data" in this Quarterly Report on Form 10-Q.
To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with generally accepted accounting principles in the United States (GAAP), we present revenue on a constant currency basis, which is a non-GAAP financial measure. Revenue on a constant currency basis is presented in the section entitled "—Revenue—Foreign Exchange Impact on Revenue." To calculate revenue on a constant currency basis, we translated revenue for the three months ended March 31, 2026 using the prior year's monthly exchange rates for our settlement or billing currencies other than the U.S. dollar.
This non-GAAP financial measure is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. This measure may be different from non-GAAP financial measures used by other companies, limiting its usefulness for comparison purposes. Moreover, presentation of revenue on a constant currency basis is provided for year-over-year comparison purposes, and investors should be cautioned that the effect of changing foreign currency exchange rates has an actual effect on our operating results. We believe this non-GAAP financial measure provides investors with useful supplemental information about the financial performance of our business, enables comparison of financial results between periods where certain items may vary independent of business performance, and allows for greater transparency with respect to key metrics used by management in operating our business.
Executive Overview of First Quarter Results
Our mission is to build the future of human connection and the technology that makes it possible.
Our financial results and key Family metrics for the first quarter of 2026 are set forth below. Total revenue for the first quarter of 2026 was $56.31 billion, an increase of 33% compared to the first quarter of 2025, due to an increase in advertising revenue. Revenue on a constant currency basis would have increased 29% compared to the first quarter of 2025. Ad impressions delivered across our Family of Apps in the first quarter of 2026 increased 19% year-over-year, and our average price per ad in the first quarter of 2026 increased 12% year-over-year.
Income from operations for the first quarter of 2026 was $22.87 billion, an increase of $5.32 billion, or 30%, compared to the first quarter of 2025, driven by an increase in advertising revenue, partially offset by an increase in costs and expenses. The increase in costs and expenses was mainly due to increases in infrastructure costs and employee compensation.
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Consolidated and Segment Results
We report our financial results for our two reportable segments: Family of Apps (FoA) and Reality Labs (RL). FoA includes Facebook, Instagram, Messenger, WhatsApp, and other services. RL includes our virtual and augmented reality related consumer hardware, software, and content.
| Family of Apps | Reality Labs | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended March 31, | % change | Three Months Ended March 31, | % change | Three Months Ended March 31, | % change | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (in millions, except percentages) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue | $ | 55,909 | $ | 41,902 | 33% | $ | 402 | $ | 412 | (2)% | $ | 56,311 | $ | 42,314 | 33% | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Costs and expenses | 29,009 | 20,137 | 44% | 4,430 | 4,622 | (4)% | 33,439 | 24,759 | 35% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income (loss) from operations | $ | 26,900 | $ | 21,765 | 24% | $ | (4,028) | $ | (4,210) | 4% | $ | 22,872 | $ | 17,555 | 30% | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating margin | 48 | % | 52 | % | (1,002) | % | (1,022) | % | 41 | % | 41 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||
•Net income was $26.77 billion, with diluted earnings per share (EPS) of $10.44 for the three months ended March 31, 2026.
•Capital expenditures, including principal payments on finance leases, were $19.84 billion for the three months ended March 31, 2026.
•Dividend and dividend equivalent payments were $1.35 billion for the three months ended March 31, 2026.
•Cash, cash equivalents, and marketable securities were $81.18 billion as of March 31, 2026.
•Effective tax rate was (23)% for the three months ended March 31, 2026. This rate reflects an income tax benefit of $8.03 billion related to the U.S. Corporate Alternative Minimum Tax transitional relief under Treasury Notice 2026-7. Excluding this tax benefit, the effective tax rate would have been 14%.
•Headcount was 77,986 as of March 31, 2026, an increase of 1% year-over-year.
Family of Apps Metrics
•Family daily active people (DAP) was 3.56 billion on average for March 2026, an increase of 4% year-over-year.
•Ad impressions delivered across our Family of Apps in the first quarter of 2026 increased by 19% year-over-year.
•Average price per ad in the first quarter of 2026 increased by 12% year-over-year.
Developments in Advertising
Substantially all of our revenue is currently generated from advertising on Facebook and Instagram. We rely on targeting and measurement tools that incorporate data signals from user activity on websites and services that we do not control, as well as signals generated within our products, in order to deliver relevant and effective ads to our users. Our advertising revenue has been, and we expect will continue to be, adversely affected by reduced marketer spending as a result of limitations on our ad targeting and measurement tools arising from changes to the regulatory environment and third-party mobile operating systems and browsers.
In particular, legislative and regulatory developments such as the General Data Protection Regulation, including its evolving interpretation through decisions of the Court of Justice of the European Union, ePrivacy Directive, European Digital Services Act, Digital Markets Act, and U.S. state privacy laws have impacted our ability to use data signals in our ad products, and an increasing number of laws have been introduced limiting or prohibiting the provision of our services to younger users. We expect these and other developments will have further impact in the future. As a result, we have implemented, and we will continue to implement, whether voluntarily or otherwise, changes to our products and user data practices, which reduce our ability to effectively target and measure ads and may negatively impact our advertising revenue and user engagement. For example, in response to regulatory developments in Europe, we announced our plans to change the legal basis for behavioral advertising on Facebook and Instagram in the European Union, European Economic Area, and Switzerland from "legitimate interests" to "consent," and began offering users in the region a "subscription for no ads" alternative. We subsequently began offering users in the region who elect to continue using our services free-of-charge, supported by ads, an option to see less personalized ads, which are less relevant and effective than our premium ad offerings.
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We are engaging with regulators on our consent model. In addition, mobile operating system and browser providers, such as Apple and Google, have implemented product changes and/or announced plans to limit the ability of websites and application developers to collect and use these signals to target and measure advertising. For example, in 2021, Apple made certain changes to its products and data use policies in connection with changes to its iOS operating system that reduce our and other iOS developers' ability to target and measure advertising, which has negatively impacted, and we expect will continue to negatively impact, the size of the budgets marketers are willing to commit to us and other advertising platforms.
To mitigate these developments, we are continually working to evolve our advertising systems to improve the performance of our ad products. We are developing privacy enhancing technologies to deliver relevant ads and measurement capabilities while reducing the amount of personal information we process, including by relying more on anonymized or aggregated third-party data. In addition, we are developing tools that enable marketers to share their data into our systems, as well as ad products that generate more valuable signals within our apps. More broadly, we also continue to innovate our advertising tools to help marketers prepare campaigns and connect with consumers, including developing growing formats such as Reels ads and our business messaging ad products. Across all of these efforts, we are making significant investments in artificial intelligence (AI), including generative AI, to improve our delivery, targeting, and measurement capabilities. Further, we are focused on driving onsite conversions in our business messaging ad products by developing new features and scaling existing features.
We are also engaging with others across our industry to explore the possibility of new open standards for the private and secure processing of data for advertising purposes. We believe our ongoing improvements to ad targeting and measurement are continuing to drive improved results for advertisers. However, we expect that some of these efforts will be long-term initiatives, and that the legislative, regulatory and platform developments described above will continue to adversely impact our advertising revenue for the foreseeable future.
In addition, we maintain advertising policies to protect the security and integrity of our platform and comply with global content, security, and integrity obligations. Our ongoing efforts to enhance enforcement against ads and marketers which violate our advertising policies adversely affect our revenue, and we expect that the continued enhancement of such efforts will have an impact on our revenue in the future, which may be material.
Other Business and Macroeconomic Conditions
Other global and regional business, macroeconomic, and geopolitical conditions also have had, and we believe will continue to have, an impact on our user growth and engagement and advertising revenue. In particular, we believe advertising budgets have been pressured from time to time by factors such as inflation, economic policies and international trade, high interest rates, and related market uncertainty, which has led to reduced marketer spending. We are currently subject to increased business, macroeconomic, and geopolitical uncertainty, including as a result of the conflict in the Middle East and volatility around international trade, which could impact our financial results in future periods.
In addition, competitive products and services have reduced some users' engagement with our products and services. We are investing in Reels and in AI initiatives across our products, including our AI-powered discovery engine to recommend relevant content, which we have already seen results in improved user engagement and monetization of our products. However, we continue to face competition from other products and services within certain demographics, in particular younger users. In addition, while Reels is growing in usage, it monetizes at a lower rate than our Feed and Stories products and we expect it will continue to monetize at a lower rate for the foreseeable future. We also have seen fluctuations and declines in the size of our active user base in one or more regions from time to time due to geopolitical conditions, which have adversely affected our user growth and engagement. These trends have adversely affected our advertising revenue and we expect will continue to adversely affect our advertising revenue in the foreseeable future.
Although we regularly evaluate a variety of sources to understand trends in our advertising revenue, we do not have perfect visibility into the factors driving advertiser spending decisions and our assessments involve complex judgments about what is driving advertising decisions across a large and diversified advertiser base across the globe. Trends impacting advertising spend are also dynamic and interrelated. As a result, it is difficult to identify with precision which advertiser spending decisions are attributable to which trends, and we are unable to quantify the exact impact that each trend had on our advertising revenue during the periods presented.
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Investment Philosophy
We remain focused on operating efficiently while investing in significant opportunities. In the three months ended March 31, 2026, 87% of our total costs and expenses were recognized in FoA and 13% were recognized in RL. Our FoA investments include expenses relating to headcount, data centers, and technical infrastructure as part of our efforts to develop our apps and our advertising services. These efforts include significant investments in AI initiatives, including generative AI and superintelligence, to, among other things, recommend relevant content across our products, enhance our advertising tools, develop new products, and develop new features for existing products. In particular, we have significantly increased our infrastructure investments in connection with our AI initiatives, including third-party cloud capacity arrangements and investments in servers, data centers, and network infrastructure, and expect our investments to continue to increase. Further, as we continue to make significant investments, we also continue to evaluate our workforce and other needs across our business to optimize for our business and strategic priorities.
We are also making significant investments in our RL efforts, including developing virtual and augmented reality devices, software for social platforms, neural interfaces, and other foundational technologies. Our RL investments include expenses relating to technology development across these efforts. Many of our RL investments are directed toward long-term, cutting-edge research and development for products that may only be fully realized in the next decade. During the three months ended March 31, 2026, our RL segment reduced our overall operating profit by approximately $4.03 billion, and we expect our full-year 2026 RL operating losses to remain similar to 2025.
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Trends in Our Revenue by User Geography
We calculate our revenue by user geography based on our estimate of the geography in which ad impressions are delivered, virtual and digital goods are purchased, or consumer hardware products are shipped. The geography of our users affects our revenue and financial results. Our revenue in regions such as United States & Canada and Europe is relatively higher primarily due to the size and maturity of those online and mobile advertising markets, and ad impression growth is primarily in geographies that monetize at lower rates, such as Asia-Pacific. In the first quarter of 2026, revenue increased by 29% in United States & Canada, 39% in Europe, 29% in Asia-Pacific, and 40% in Rest of World, in each case relative to the same period in 2025.
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Ad Revenue | Non-Ad Revenue | |||||||||||||||||||||||||||||||||||||||||||
Note: Non-advertising revenue includes RL revenue generated from the delivery of consumer hardware products and FoA Other revenue, which consists of revenue from paid messaging from WhatsApp, Meta Verified subscriptions, and revenue from various other sources.
Our revenue by user geography in the charts above is geographically apportioned based on our estimation of the geographic location of our users when they perform a revenue-generating activity. This allocation differs from our revenue disaggregated by geography disclosure in Note 2 — Revenue in our condensed consolidated financial statements included in Part I, Item 1, "Financial Statements" where revenue is geographically apportioned based on the addresses of our customers.
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Trends in Our Family Metrics
The numbers for our key Family metrics, our DAP and average revenue per person (ARPP), do not include users on our other products unless they would otherwise qualify as DAP based on their other activities on our Family products.
Trends in the number of people in our community affect our revenue and financial results by influencing the number of ads we are able to show, the value of our ads to marketers, as well as our expenses and capital expenditures. Substantially all of our daily active people (as defined below) access our Family products on mobile devices.
•Daily Active People (DAP). We define a daily active person as a registered and logged-in user of Facebook, Instagram, Messenger, and/or WhatsApp (collectively, our "Family" of products) who visited at least one of these Family products through a mobile device application or using a web or mobile browser on a given day. We do not require people to use a common identifier or link their accounts to use multiple products in our Family, and therefore must seek to attribute multiple user accounts within and across products to individual people. Our calculations of DAP rely upon complex techniques, algorithms, and machine learning models that seek to estimate the underlying number of unique people using one or more of these products, including by matching user accounts within an individual product and across multiple products when we believe they are attributable to a single person, and counting such group of accounts as one person. As these techniques and models require significant judgment, are developed based on internal reviews of limited samples of user accounts, and are calibrated against user survey data, there is necessarily some margin of error in our estimates. We view DAP as a measure of engagement across our products. For additional information, see the section entitled "Limitations of Key Metrics and Other Data" in this Quarterly Report on Form 10-Q.
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Note: We report the numbers of DAP as specific amounts, but these numbers are estimates of the numbers of unique people using our products and are subject to statistical variances and errors. While we expect the error margin for these estimates to vary from period to period, we estimate that such margin generally will be approximately 3% of our worldwide DAP. At our scale, it is very difficult to attribute multiple user accounts within and across products to individual people, and it is possible that the actual numbers of unique people using our products may vary significantly from our estimates, potentially beyond our estimated error margins. For additional information, see the section entitled "Limitations of Key Metrics and Other Data" in this Quarterly Report on Form 10-Q. The slight decline in DAP in the first quarter of 2026 was driven by internet disruptions in Iran, as well as a restriction on access to WhatsApp in Russia.
Worldwide DAP increased 4% to 3.56 billion on average during March 2026 from 3.43 billion during March 2025.
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•Average Revenue Per Person (ARPP). Our Family of Apps (FoA) revenue represents the substantial majority of our total revenue. We define ARPP as our FoA revenue during a given quarter, divided by the average of the number of DAP at the beginning and end of the quarter.
| ARPP: | $11.20 | $11.89 | $12.29 | $14.25 | $12.36 | $13.65 | $14.46 | $16.56 | $15.66 |
During the first quarter of 2026, worldwide ARPP was $15.66, an increase of 27% from the first quarter of 2025.
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Trends in Our Ad Impressions and Average Price Per Ad
•Ad Impressions. Our advertising revenue is generated by displaying ad products on Facebook, Instagram, Messenger, and third-party mobile applications. Impressions are considered delivered when an ad is displayed to a user.
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Note: Our ad impressions growth by user geography in the charts above is geographically apportioned based on our estimation of the geographic location of our users when an ad impression is delivered.
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•Average Price Per Ad. We calculate average price per ad as total advertising revenue divided by the number of ads delivered.
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Note: Our average price per ad growth by user geography in the charts above is geographically apportioned based on our estimation of the geographic location of our users when an ad impression is delivered.
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Components of Results of Operations
Revenue
Family of Apps (FoA)
Advertising. We generate substantially all of our revenue from advertising. Our advertising revenue is generated by displaying ad products on Facebook, Instagram, Messenger, and third-party mobile applications. Marketers pay for ad products either directly or through their relationships with advertising agencies or resellers, based on the number of impressions delivered or the number of actions, such as clicks, taken by users.
We recognize revenue from the display of impression-based ads in the contracted period in which the impressions are delivered. Impressions are considered delivered when an ad is displayed to a user. We recognize revenue from the delivery of action-based ads in the period in which a user takes the action the marketer contracted for. The number of ads we show is subject to methodological changes as we continue to evolve our ads business and the structure of our ads products. In particular, the ads we show may vary by product (for example, our video and Reels products are not currently monetized at the same rate as our Feed or Stories products), and from time to time we increase or decrease the number or frequency of ads we show as part of our product and monetization strategies. We calculate average price per ad as total advertising revenue divided by the number of ads delivered, representing the average price paid per ad by a marketer regardless of their desired objective such as impression or action. For advertising revenue arrangements where we are not the principal, we recognize revenue on a net basis.
Other revenue. Other revenue consists of revenue from paid messaging from WhatsApp, Meta Verified subscriptions, and revenue from various other sources.
Reality Labs (RL)
RL revenue is generated from the delivery of consumer hardware products, such as Meta Quest and AI glasses, and related software and content.
Cost of Revenue and Operating Expenses
Cost of revenue. Our cost of revenue consists of expenses associated with the delivery and distribution of our products. These mainly include expenses related to the operation of our data centers and technical infrastructure, such as depreciation expense from servers, network infrastructure and buildings, employee compensation which includes payroll, share-based compensation and benefits for employees on our operations teams, energy and bandwidth costs, as well as third-party cloud costs. Cost of revenue also consists of processing fees and traffic acquisition costs, which include credit card and other fees related to processing customer transactions; RL inventory costs, which consist of cost of products sold and estimated losses on non-cancelable contractual commitments; and content and creator costs, which include payments to content creators from whom we license content for distribution, as well as incentive payments made to creators based on engagement.
Research and development. Research and development expenses consist mostly of employee compensation which includes payroll, share-based compensation and benefits for our employees on our engineering and technical teams who are responsible for developing new technologies and products; infrastructure expenses, including third-party cloud costs; RL technology development costs; and facilities-related costs.
Marketing and sales. Marketing and sales expenses consist mostly of employee compensation which includes payroll, share-based compensation and benefits for our employees engaged in sales, sales support, marketing, business development, and customer service functions; professional services to support our community and product operations; and marketing and promotional expenses.
General and administrative. General and administrative expenses consist primarily of employee compensation which includes payroll, share-based compensation and benefits for certain of our executives as well as our legal, finance, human resources, corporate communications and policy, and other administrative employees; legal-related costs, which include estimated fines, settlements, or other losses in connection with legal and related matters, as well as other legal fees; other taxes, such as digital services taxes and other non-income-based tax levies; and professional services.
40
Results of Operations
The following table sets forth our condensed consolidated statements of income data (in millions):
| Three Months Ended March 31, | ||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||
| Revenue | $ | 56,311 | $ | 42,314 | ||||||||||||||||
| Costs and expenses: | ||||||||||||||||||||
| Cost of revenue | 10,218 | 7,572 | ||||||||||||||||||
| Research and development | 17,699 | 12,150 | ||||||||||||||||||
| Marketing and sales | 2,908 | 2,757 | ||||||||||||||||||
| General and administrative | 2,614 | 2,280 | ||||||||||||||||||
| Total costs and expenses | 33,439 | 24,759 | ||||||||||||||||||
| Income from operations | 22,872 | 17,555 | ||||||||||||||||||
| Interest and other income (expense), net | (1,120) | 827 | ||||||||||||||||||
| Income before income taxes | 21,752 | 18,382 | ||||||||||||||||||
| Provision (benefit) for income taxes | (5,021) | 1,738 | ||||||||||||||||||
| Net income | $ | 26,773 | $ | 16,644 | ||||||||||||||||
The following table sets forth our condensed consolidated statements of income data (as a percentage of revenue)(1):
| Three Months Ended March 31, | ||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||
| Revenue | 100 | % | 100 | % | ||||||||||||||||
| Costs and expenses: | ||||||||||||||||||||
| Cost of revenue | 18 | 18 | ||||||||||||||||||
| Research and development | 31 | 29 | ||||||||||||||||||
| Marketing and sales | 5 | 7 | ||||||||||||||||||
| General and administrative | 5 | 5 | ||||||||||||||||||
| Total costs and expenses | 59 | 59 | ||||||||||||||||||
| Income from operations | 41 | 41 | ||||||||||||||||||
| Interest and other income (expense), net | (2) | 2 | ||||||||||||||||||
| Income before income taxes | 39 | 43 | ||||||||||||||||||
| Provision (benefit) for income taxes | (9) | 4 | ||||||||||||||||||
| Net income | 48 | % | 39 | % | ||||||||||||||||
____________________________________
(1)Percentages have been rounded for presentation purposes and may differ from unrounded results.
41
Revenue
The following table sets forth our revenue by source and by segment:
| Three Months Ended March 31, | |||||||||||||||||||||||||||||||
| 2026 | 2025 | % change | |||||||||||||||||||||||||||||
| (in millions, except percentages) | |||||||||||||||||||||||||||||||
| Advertising | $ | 55,024 | $ | 41,392 | 33 | % | |||||||||||||||||||||||||
| Other revenue | 885 | 510 | 74 | % | |||||||||||||||||||||||||||
| Family of Apps | 55,909 | 41,902 | 33 | % | |||||||||||||||||||||||||||
| Reality Labs | 402 | 412 | (2) | % | |||||||||||||||||||||||||||
| Total revenue | $ | 56,311 | $ | 42,314 | 33 | % | |||||||||||||||||||||||||
Family of Apps
FoA revenue in the three months ended March 31, 2026 increased $14.01 billion, or 33%, compared to the same period in 2025. The increase was almost entirely driven by advertising revenue.
Advertising
Advertising revenue in the three months ended March 31, 2026 increased $13.63 billion, or 33%, compared to the same period in 2025, due to increases in ad impressions delivered and average price per ad. During the three months ended March 31, 2026, ad impressions delivered increased by 19%, year-over-year, as compared with an increase of 5% in the same period in 2025. Ad impressions delivered during the three months ended March 31, 2026 grew in all regions, especially in Asia-Pacific, which was driven by increases in users and their engagement as well as the frequency of ads shown on our products. During the three months ended March 31, 2026, the average price per ad increased by 12%, year-over-year, as compared with an increase of 10% in the same period in 2025. The increase in average price per ad in the three months ended March 31, 2026 was driven by an increase in advertising demand, which we believe is mostly due to ongoing improvements to our ad performance from our ad targeting and measurement tools, and a favorable foreign currency exchange impact. This increase was partially offset by a higher number of ad impressions delivered, especially in geographies and in products, such as Reels, that monetize at lower rates. Other factors are discussed in the section entitled "—Executive Overview of First Quarter Results." In addition, the online commerce vertical was the largest contributor to the increase in advertising revenue in the three months ended March 31, 2026 compared to the same period in 2025. We anticipate that future advertising revenue will be driven by a combination of price and ad impressions delivered.
Other revenue
FoA other revenue in the three months ended March 31, 2026 increased $375 million, or 74%, compared to the same period in 2025. The increase was mostly driven by paid messaging from WhatsApp and Meta Verified subscriptions.
Reality Labs
RL revenue in the three months ended March 31, 2026 decreased $10 million, or 2%, compared to the same period in 2025. The decrease was driven by lower Meta Quest sales, offset by an increase in sales of AI glasses.
Foreign Exchange Impact on Revenue
Changes in foreign exchange rates had a favorable impact on our revenue in the three months ended March 31, 2026 compared to the same period in 2025. To calculate revenue on a constant currency basis, we translated revenue using the prior year's monthly exchange rates for our settlement or billing currencies other than the U.S. dollar. Using these constant rates for the three months ended March 31, 2026, our total revenue and advertising revenue would have been $54.56 billion and $53.29 billion, which were $1.75 billion and $1.73 billion lower than actual total revenue and advertising revenue, respectively.
42
Cost of revenue
| Three Months Ended March 31, | |||||||||||||||||||||||||||||||
| 2026 | 2025 | % change | |||||||||||||||||||||||||||||
| (in millions, except percentages) | |||||||||||||||||||||||||||||||
| Cost of revenue | $ | 10,218 | $ | 7,572 | 35 | % | |||||||||||||||||||||||||
| Percentage of revenue | 18 | % | 18 | % | |||||||||||||||||||||||||||
Cost of revenue in the three months ended March 31, 2026 increased $2.65 billion, or 35%, compared to the same period in 2025. The increase was primarily due to higher operational expenses related to our data centers and technical infrastructure.
Research and development
| Three Months Ended March 31, | |||||||||||||||||||||||||||||||
| 2026 | 2025 | % change | |||||||||||||||||||||||||||||
| (in millions, except percentages) | |||||||||||||||||||||||||||||||
| Research and development | $ | 17,699 | $ | 12,150 | 46 | % | |||||||||||||||||||||||||
| Percentage of revenue | 31 | % | 29 | % | |||||||||||||||||||||||||||
Research and development expenses in the three months ended March 31, 2026 increased $5.55 billion, or 46%, compared to the same period in 2025. The increase was primarily due to increases in employee compensation, mainly driven by an increase in share-based compensation expense, as well as higher infrastructure costs for research and development, including our AI initiatives.
Marketing and sales
| Three Months Ended March 31, | |||||||||||||||||||||||||||||||
| 2026 | 2025 | % change | |||||||||||||||||||||||||||||
| (in millions, except percentages) | |||||||||||||||||||||||||||||||
| Marketing and sales | $ | 2,908 | $ | 2,757 | 5 | % | |||||||||||||||||||||||||
| Percentage of revenue | 5 | % | 7 | % | |||||||||||||||||||||||||||
Marketing and sales expenses in the three months ended March 31, 2026 increased $151 million, or 5%, compared to the same period in 2025. The increase was mainly due to increases in marketing and promotional expenses and professional services related to our ongoing platform integrity efforts.
General and administrative
| Three Months Ended March 31, | |||||||||||||||||||||||||||||||
| 2026 | 2025 | % change | |||||||||||||||||||||||||||||
| (in millions, except percentages) | |||||||||||||||||||||||||||||||
| General and administrative | $ | 2,614 | $ | 2,280 | 15 | % | |||||||||||||||||||||||||
| Percentage of revenue | 5 | % | 5 | % | |||||||||||||||||||||||||||
General and administrative expenses in the three months ended March 31, 2026 increased $334 million, or 15%, compared to the same period in 2025. The increase was mainly due to higher legal-related costs, partially offset by a reversal of the Canadian Digital Services Tax liability following the repeal of the law.
See Note 8 — Commitments and Contingencies in the notes to the condensed consolidated financial statements included in Part I, Item 1, of this Quarterly Report on Form 10-Q for additional information regarding legal-related costs.
43
Segment profitability
The following table sets forth income (loss) from operations by segment:
| Three Months Ended March 31, | |||||||||||||||||||||||||||||||
| 2026 | 2025 | % change | |||||||||||||||||||||||||||||
| (in millions, except percentages) | |||||||||||||||||||||||||||||||
| Family of Apps | $ | 26,900 | $ | 21,765 | 24 | % | |||||||||||||||||||||||||
| Reality Labs | (4,028) | (4,210) | 4 | % | |||||||||||||||||||||||||||
| Total income from operations | $ | 22,872 | $ | 17,555 | 30 | % | |||||||||||||||||||||||||
Family of Apps
FoA income from operations in the three months ended March 31, 2026 increased $5.14 billion, or 24%, compared to the same period in 2025. The increase in FoA income from operations was driven by higher advertising revenue which was partially offset by an increase in costs and expenses. The increase in costs and expenses was mainly due to increases in infrastructure costs and employee compensation.
Reality Labs
RL loss from operations in the three months ended March 31, 2026 decreased $182 million, or 4%, compared to the same period in 2025, driven by lower RL costs and expenses. RL costs and expenses decreased primarily due to a decrease in employee compensation.
See Note 11 — Segment Information in the notes to the condensed consolidated financial statements included in Part I, Item 1, of this Quarterly Report on Form 10-Q for additional information regarding segment employee compensation.
Interest and other income (expense), net
| Three Months Ended March 31, | ||||||||||||||||||||||||||||
| 2026 | 2025 | % change | ||||||||||||||||||||||||||
Recent insider activity
| Date | Insider | Role | Action | Shares | Price | Value |
|---|---|---|---|---|---|---|
| 2026-05-11 | Olivan Javier indirect | Chief Operating Officer | Sell | -629 ×4 | $604.57 | -$380,275 |
| 2026-05-11 | Olivan Javier | Chief Operating Officer | Sell | -926 | $604.57 | -$559,832 |
| 2026-05-04 | Olivan Javier indirect | Chief Operating Officer | Sell | -629 ×4 | $607.74 | -$382,268 |
| 2026-05-04 | Olivan Javier | Chief Operating Officer | Sell | -926 | $607.74 | -$562,767 |
| 2026-05-01 | Alford Peggy indirect | Director | Sell | -409 | $614.53 | -$251,343 |
| 2026-04-27 | Olivan Javier indirect | Chief Operating Officer | Sell | -629 ×4 | $670.84 | -$421,958 |
| 2026-04-27 | Olivan Javier | Chief Operating Officer | Sell | -926 | $670.84 | -$621,198 |
Source: SEC Form 4 filings.
Next expected filings
- ~2026-07-30 10-Q expected by 2026-08-08 (in 76 days)
- ~2026-10-29 10-Q expected by 2026-11-07 (in 167 days)
- ~2027-01-28 10-K expected by 2026-09-24 (in 258 days)
- ~2027-04-29 10-Q expected by 2027-05-08 (in 349 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-05-04 8-K Other Events; Financial Statements and Exhibits
- 2026-04-30 10-Q Quarterly Report
- 2026-04-29 8-K Earnings Release; Financial Statements and Exhibits
- 2026-04-16 DEF 14A Proxy Statement
- 2026-04-14 8-K Officer/Director Change
- 2026-01-29 10-K Annual Report
- 2026-01-28 8-K Earnings Release; Financial Statements and Exhibits
- 2026-01-16 8-K Officer/Director Change
- 2025-12-19 8-K Officer/Director Change
- 2025-12-12 8-K Other Events; Financial Statements and Exhibits
- 2025-11-03 8-K Other Events; Financial Statements and Exhibits
- 2025-10-30 10-Q Quarterly Report
- 2025-10-29 8-K Earnings Release; Financial Statements and Exhibits
- 2025-07-31 10-Q Quarterly Report
- 2025-07-30 8-K Earnings Release; Financial Statements and Exhibits