META 2026 Q1

Facebook total video time grew more than 8% globally in Q1, described by management as the largest quarter-over-quarter gain in four years, driven by ranking and content-understanding improvements.

“total video time increased more than 8% globally in Q1, the largest quarter-over-quarter gain in four years”— Susan Li, Chief Financial Officer

Total family daily active people declined slightly quarter over quarter for the first time noted, due to internet outages in Iran and a WhatsApp access restriction in Russia, though underlying growth would have been positive absent these disruptions.

“declined slightly from December due to Internet disruptions in Iran and a restriction on access to WhatsApp in Russia”— Susan Li, Chief Financial Officer

Instagram Reels time spent rose 10% following Q1 ranking improvements, an incremental engagement lift attributed specifically to new recommendation system changes.

“the ranking improvements that we made in Q1 drove a 10% lift in Reels time spent”— Susan Li, Chief Financial Officer

Business AI conversational tools expanded into new markets this quarter, including Latin America, Indonesia, and Asia Pacific, with further country expansion planned in Q2 as part of scaling the business agent strategy.

“we expanded business AIs on WhatsApp to SMBs across Latin America and Indonesia as well as on Messenger in Asia Pacific”— Susan Li, Chief Financial Officer

Weekly conversations with early business AI agents grew 10 times since the start of the year, rising from about 1 million to over 10 million weekly conversations, indicating rapid early adoption of the new agentic product.

“weekly conversations have grown 10 times since the start of this year”— Mark Elliot Zuckerberg, Chief Executive Officer

The value optimization ad suite's annual revenue run rate surpassed $20 billion, more than doubling year over year, reflecting accelerating advertiser adoption after recent performance improvements.

“the annual revenue run rate of our value optimization suite now over $20 billion, more than doubling year over year”— Susan Li, Chief Financial Officer

Partnership ads revenue run rate more than doubled year over year to $10 billion, signaling accelerating growth in creator-driven commerce advertising.

“its revenue run rate more than doubling year over year in Q1 to $10 billion”— Susan Li, Chief Financial Officer

Engagement with Meta AI accelerated week over week with each new iteration of the Muse Spark model, producing double-digit percentage increases in sessions per user after the broad rollout.

“we saw meaningful engagement gains that accelerated week over week with each new iteration of the model”— Susan Li, Chief Financial Officer

Reality Labs revenue declined 2% year over year as Quest headset sales fell, though this was partially offset by continued strong growth in AI glasses revenue, marking a shift in product mix within the segment.

“Q1 revenue was $402 million, down 2% year over year due to lower Quest headset sales”— Susan Li, Chief Financial Officer

AI glasses sales are shifting from the prior Ray-Ban Meta generation to the newest generation, reflecting demand for improved battery life and higher-resolution video capture versus earlier models.

“we are seeing sales shift from the prior generation of Ray-Ban Metas to the latest generation”— Susan Li, Chief Financial Officer

Management noted strong new consumer interest in Meta Ray-Ban display glasses with the Neural band, an early signal that display glasses could become the next major growth vector beyond current AI glasses.

“we see strong interest now in the Meta Ray-Ban displays with the Meta Neural band”— Susan Li, Chief Financial Officer

Meta plans to reduce the size of its employee base in May 2026, a newly disclosed workforce reduction intended to help offset substantial infrastructure investment and enable a leaner operating model.

“we recently shared internally that we plan to reduce the size of our employee base in May”— Susan Li, Chief Financial Officer

Management flagged escalating regulatory risk, noting additional youth-related legal trials scheduled for 2026 in the US that could result in a material loss, an intensification versus prior standing risk disclosures.

“we continue to see scrutiny on youth-related issues and have additional trials scheduled for this year in the US”— Susan Li, Chief Financial Officer

Full-year 2026 capex guidance was raised to $125-$145 billion from the prior $120-$135 billion range, driven primarily by higher component costs, particularly memory pricing, and additional data center costs for future capacity.

“increased from our prior range of $120 to $135 billion”— Susan Li, Chief Financial Officer

Multiyear cloud deals and infrastructure purchase agreements signed this quarter drove a $107 billion increase in contractual commitments, a significant new step-up in future infrastructure spending obligations.

“these multiyear cloud deals and our infrastructure purchase agreements drove a $107 billion step up in our contractual commitments this quarter”— Susan Li, Chief Financial Officer

Management said the company has repeatedly underestimated its compute needs even while ramping capacity aggressively, and now expects compute to become even more central to the business going forward than previously assumed.

“we have continued to underestimate our compute needs even as we have been ramping capacity significantly”— Susan Li, Chief Financial Officer

Management cited better macro conditions in Q1 2026 versus Q1 2025 as a contributor to the 12% year-over-year increase in average ad pricing, indicating an improved macro backdrop compared to the prior year.

“better macro conditions versus Q1 of last year”— Susan Li, Chief Financial Officer