Meta reported the best first quarter in its history, with revenue hitting $56.3 billion — up 33% year-over-year, its fastest growth since 2021. Net income landed at $26.8 billion.
But just after the report’s release, Meta’s stock fell about 7% in extended trading.
A week before the earnings report, Meta had notified roughly 8,000 employees that they were losing their jobs. And six weeks before that, it had quietly granted six senior executives stock packages that could be worth as much as $921 million each — if Meta becomes the most valuable company of all time.
For now, those options pay nothing.
The Numbers
The $56.3 billion was the most Meta had ever made in three months. More than $55 billion of that Q1 total came from ads, with a 19% rise in ad impressions and a 12% jump in the average price per ad.
However, $8.03 billion of the net income was a one-time tax benefit tied to the One Big Beautiful Bill Act. Take that out, and adjusted earnings were $7.31 per share — still above the $6.79 analysts expected, but not a 61% boost in the actual business.
What rattled investors was the spending forecast. Meta now expects capital expenditures of $125 billion to $145 billion for the year, up from an earlier estimate of $115 billion to $135 billion — almost twice what it spent last year. Most of that money is going into AI chips, data centers, and infrastructure.
The Executive Bonuses
Six weeks before Q1 earnings, SEC filings disclosed a new stock option plan for six senior executives. Each executive got 653,865 stock options — Meta’s first executive option grant since its 2012 IPO.
The payout depends on the stock price hitting a series of milestones, from $1,116 on the low end to $3,727 on the high end. If the stock never gets to $1,116 by 2031, the executives get nothing. If it reaches the top target, each option package would be worth $625.6 million. With added restricted stock grants for certain executives, their total potential payout rises to $921 million each.
To hit the top payout, Meta’s market value would have to reach $9.5 trillion — a level no company has ever touched.
The Job Cuts
On April 23, Meta’s chief people officer sent a memo announcing that about 10% of the company’s 77,986 employees — roughly 8,000 people — would lose their jobs. Meta also cut 6,000 open roles and moved about 7,000 employees into newly created AI-focused teams.
The cuts were part of Meta’s effort “to run the company more efficiently and to allow us to offset the other investments we’re making,” according to the memo.
CEO Mark Zuckerberg had hinted at the thinking in January: “We’re starting to see projects that used to require big teams now be accomplished by a single, very talented person.”
What This Means
If you own Meta stock, you are making the same bet the executives are making. The company says it will spend $125 billion to $145 billion on capex in 2026, and that money is going out whether the AI payoff materializes fast or not.
The Family of Apps is still doing the heavy lifting: Q1 ad revenue came in at $55 billion, up about 33% from last year. The question is whether all that AI spending eventually produces enough growth to justify the bill.
Meta is not the only company making cuts. Amazon, Salesforce, and Snap all made significant cuts this year, each citing the need to become more efficient with AI.
The Bottom Line
Meta reported a record $56.3 billion quarter and then cut 8,000 jobs. Six weeks before the layoffs, it granted six senior executives stock options that could be worth up to $921 million each if the stock hits top targets. The company plans to spend $125 billion to $145 billion on AI infrastructure this year. Investors are concerned about the spending, and the stock fell 7% after earnings.
