This ranking evaluates how Fortune 500 companies are deploying AI, and how technology leaders value those investments relative to industry peers.

Fortune AIQ 75

The companies on the Global 500 employ 70.2 million people, and their revenue represents more than one-third of the world’s GDP.

Fortune Global 500

With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

AI is a major force shaping this year’s list—but it’s far from the only story.

World's Most Admired Companies

Fortune AIQ 50

The corporations on our annual list of the world's 500 largest companies combined to generate $41.7 trillion in revenue over the past year.

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

Meta Platforms leaped eight spots to No.&nbsp;22 as its revenue rose 22% year over year, powered by advertising on Facebook and Instagram. Profits topped $62&nbsp;billion, even as Meta spent prodigiously on AI development.

The 300 companies on this year’s list brought in over $12.6 trillion in revenue for the latest 12 months, with the median revenue figure at $22 billion.

America's Most Innovative Companies

Leaders in all industries rely more than ever on Big Tech—and appreciate the giants that deliver, at scale, without drama.

These 50 companies exemplify the innovation, progress, and potential of AI.

AI Innovators 2025-Meta

Fortune 50 AI Innovators

The corporations on our annual list posted aggregate revenues of $41 trillion for the second year in a row.

Industries included in the sector are computers, internet services, IT services, semiconductors, and software companies.

Fortune Sector Leaders: Technology

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The 26th edition of the list shows how much esteem Big Tech giants command among other business leaders.

The 25th Fortune World’s Most Admired Companies list suggests that tech giants’ peers respect them as much as ever.

The corporations on our annual list of the world’s largest companies delivered a record $41 trillion in aggregate revenues.

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The 300 companies on this list are transforming industries from the inside out.

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

F500 2023-Meta

The social media giant and metaverse pioneer formerly named Facebook posted a 1% decline in revenues in 2022, the first such decline in its history as a public company; it still brought in nearly $117 billion. 
<ul> 
 	<li>With a round of layoffs announced in late 2022 and another in spring 2023, Meta cut about 21,000 jobs, or roughly a quarter of its workforce. CEO Mark Zuckerberg described 2023 as a “year of efficiency” in which a leaner Meta can execute its highest priorities more quickly.</li> 
 	<li>Meta pivoted some of its attention and resources from the metaverse to generative A.I. In February 2023, the company announced an A.I. language model called LLaMA that it would use in its chatbots to compete with Google and Microsoft.</li> 
 	<li>In May 2023, the U.S. Federal Trade Commission accused Meta’s core Facebook platform of violating an earlier agreement in which the company had pledged to protect the data of users of its Messenger Kids app. The FTC proposed modifying the agreement to forbid Meta from monetizing minors’ data in any way. The company strongly objected to the proposal, calling it a “political stunt.”</li> 
 	<li>Later in May, the European Union ordered Meta to stop sending Europeans’ personal data to the U.S., and imposed a $1.3 billion fine on the company for its past data transfers, which it said violated European privacy laws.</li> 
</ul>

Aggregate sales hit $37.8 trillion last year—an increase of 19%, the highest annual growth rate in the list’s history.

This year’s Fortune 500 marks the 68th running of the list.

F500 2022 Meta

The company formerly known as Facebook climbed seven spots on this year’s Fortune 500; its revenue grew 37.2% in 2021, to $118 billion, and it generated nearly $40 billion in profit. But the name change to Meta Platforms, announced by CEO Mark Zuckerberg in October 2021, is a sign of some of the challenges the company now faces. Meta Platforms’ core social media product, Facebook itself, saw its number of daily active users decline for the first time over the last three months of 2021. Meta also acknowledged that recent changes in privacy settings on Apple’s iOS apps were hurting Facebook’s ad-sales revenue. That changing landscape adds momentum to Meta’s new commitment to the metaverse, the digital and virtual world that Citi predicts will be worth $13 trillion in 2030. In December, Meta disclosed that it had already spent $10 billion on metaverse-related projects. The company admits those will take a long time to pay off, however, and Wall Street is concerned: The company’s share price fell almost 40% over the first four months of 2022.

Total revenue for the world’s biggest companies fell 4.8% to $31.7 trillion this year—the first decline in half a decade.

G500-2021-086-Facebook

Facebook, it appears, can’t be hurt—not by major ad buyers boycotting its service, not by state and federal investigations, and not even by a pandemic. Despite the impact of COVID-19 on its ad sales, Facebook impressed Wall Street all year by beating expectations. The company ended 2020 with almost $86 billion in revenues, up 22% year over year, and with $29 billion in profits, up nearly 58%. But Facebook faced major backlash for lax handling of hate on its service, including from former President Donald Trump, whom the service eventually barred after the U.S. Capitol riot. And this year, Facebook risks a big financial hit owing to Apple’s new privacy controls that let users limit tracking of their data.

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-34-Facebook

Collectively, the ranked companies produced a three-year average shareholder return of 33%, vs. 19% for the S&P 500.

FGC-2021-Facebook

100 Fastest-Growing Companies

For an astounding 13th straight year, Apple claims the top spot in Fortune’s annual ranking of corporate reputation, based on a survey of almost 3,800 executives, directors, and analysts.

This year's Fortune Global 500 generated $33.3 trillion in revenues and $2.1 trillion in profits.

G500-2020-144-Facebook

Facebook was the focus of increased government scrutiny in 2019. Regulators at the state, federal, and international level reviewed the ways the company has handled user data and permitted the dissemination of misinformation—investigations that sometimes led to hefty fines or other penalties. Despite the mounting heat, Facebook continued to rake in revenue in 2019. The company, led by CEO Mark Zuckerberg, had $70.7 billion in sales, up nearly 27% from the previous year. But 2020 will be a particularly challenging one for Facebook as it tries to proactively remove misinformation about the coronavirus pandemic while policing bad actors on its platform during the upcoming U.S. presidential election.

Explore this year's ranking of the 50 companies with the best long-term growth potential.

Future-50-2020-Facebook

Last but not least, the social media player’s underlying business remains strong. And new business opportunities continue to emerge: A global e-commerce strategy (including WhatsApp Pay) shows signs of promise, for example. Analysts project 17% to 20% future, long-term growth. At the same time, reputational risk is high—as is the very real threat of regulatory crackdowns across different regions, including the United States. Perhaps even more ominous, the Facebook core product is seeing declining engagement levels with younger demographics. In short: There is a reason the social network is on this list, but also a reason it comes in at No. 50.

The Future 50

This year's Fortune 500 marks the 66th running of the list.

F500-2020-046-Facebook

Facebook was the focus of increased government scrutiny in 2019. Regulators at the state, federal, and international level reviewed the ways the company has handled user data and permitted the dissemination of misinformation—investigations that sometimes led to hefty fines or other penalties. But despite the mounting heat, Facebook continued to rake in revenue in 2019. The company, led by CEO Mark Zuckerberg, had $70.7 billion in sales, up nearly 27% from the previous year, which helped it rise nearly a dozen ranks in the Fortune 500. But 2020 will be particularly challenging one for Facebook as it tries to proactively remove misinformation about the coronavirus pandemic while policing bad actors on its platform during the upcoming U.S. presidential election.

Collectively, the ranked companies produced a three-year average shareholder return of 19%, vs. 11% for the S&P 500.

Fastest Growing Companies 2020-52-Facebook

Here are the World's Most Admired Companies for 2019 as ranked in their industries. See who made the list.

This year's Fortune Global 500 generated $27.7 trillion in revenues and $1.5 trillion in profits.

Fortune's proprietary methodology allows us to zero in on the 50 global firms that are best poised to deliver—and continue delivering—above average gains.

This year's Fortune 500 marks the 65th running of the list.

Everybody loves an up-and-comer: 2019's top three-year performers in revenues, profits, and stock returns.

Here are the World's Most Admired Companies for 2018 as ranked in their industries. See who made the list.

Welcome to the inaugural Fortune Future 50, our new ranking of companies best positioned for breakout growth.

This year's Fortune 500 marks the 64th running of the list.

Everybody loves an up-and-comer: 2018's top three-year performers in revenues, profits, and stock returns.

Here are the World's Most Admired Companies for 2017 as ranked in their industries. See who made the list.

This year's Fortune 500 marks the 63rd running of the list.

Everybody loves an up-and-comer: 2017's top three-year performers in revenues, profits, and stock returns.

Here are the World's Most Admired Companies for 2016 as ranked in their industries. See who made the list.

This year's Fortune 500 marks the 62nd running of the list.

Too fast to be stopped: 2016's top three-year performers in revenue, profits, and stock returns.

Business insiders have spoken: Asked which companies they most admire, more than 4,100 executives, directors, and analysts chose these top 50 All-Stars.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Nike, Cisco, MasterCard, SABMiller, Vodafone, Google—and 45 other companies that are doing well by doing good.

Change the World

This year's Fastest-Growing Companies marks the 19th running of the list. In our annual list of public companies with the most stellar three-year profit, revenue, and stock growth, Facebook makes its first appearance.

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

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Founded in 2004 as Facebook, Meta operates the world’s largest social media platforms and has heavily influenced the development of the internet over the past two decades through its pioneering use of personal data collection and targeted advertising. Meta’s products include Facebook, image-sharing app Instagram, and messaging platforms Messenger and WhatsApp; together, they enable users to keep in touch, share images and videos, and buy and sell goods. Meta’s Reality Labs segment develops virtual-reality-related consumer hardware and software, while Meta AI develops artificial intelligence tools including language-processing models. Facebook renamed itself Meta in 2021.

Q2 2026

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Meta Platforms (META): Company Profile, Stock Price, News, Rankings

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Meta Platforms

meta platforms

Good afternoon. My name is Krista, and I will be your conference operator today. At this time, I would like to welcome everyone to the Meta First Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.

And this call will be recorded. Thank you very much. Kenneth Dorrell, Meta's Director of Investor Relations, you may begin.

Thank you. Good afternoon and welcome to Meta's first quarter twenty twenty five earnings conference call. Joining me today to discuss our results are Mark Zuckerberg, CEO and Susan Lee, CFO. Our remarks today will include forward looking statements, which are based on assumptions as of today. Actual results may differ materially as a result of various factors, including those set forth in today's earnings press release and in our annual report on Form 10 ks filed with the SEC.

We undertake no obligation to update any forward looking statement. During this call, we will present both GAAP and certain non GAAP financial measures. A reconciliation of GAAP to non GAAP measures is included in today's earnings press release. The earnings press release and an accompanying investor presentation are available on our website at investor.appmeta.com. And now I'd like to turn the call over to Mark.

Alright. Thanks, Ken. Thanks, everyone, for joining today. We've had a strong start to the year. Our community keeps growing with more than 3,400,000,000 people now using at least one of our apps each day.

Our business is also performing very well, and I think we're well positioned to navigate the macroeconomic uncertainty. The major theme right now, of course, is how AI is transforming everything we do. And, you know, as we continue to increase our investments and focus more of our resources on AI, I thought it would be useful today to lay out the five major opportunities that we are focused on. Those are improved advertising, more engaging experiences, business messaging, Meta AI, and AI devices. And these are each long term investments that are downstream from us building general intelligence and leading AI models and infrastructure.

Even with our significant investments, we don't need to succeed in all of these areas to have a good ROI. But if we do, then I think that we will be wildly happy with the investments that we are making. The first opportunity is improved advertising. Our goal is to make it so that any business can basically tell us what objective they're trying to achieve, like selling something or getting a new customer, and how much they're willing to pay for each result, and then we just do the rest. Businesses used to have to generate their own ad creative and define what audiences they wanted to reach, but AI has already made us better at targeting and finding the audiences that will be interested in their products than many businesses are themselves, and that keeps improving.

And now AI is generating better creative options for many businesses as well. I think that this is really redefining what advertising is into an AI agent that delivers measurable business results at scale. And if we deliver on this vision, then over the coming years, I think that the increased productivity from AI, will make advertising a meaningfully larger share of global GDP than it is today. In just the last quarter, we are testing a new ads recommendation model for Reels, which has already increased conversion rates by 5%, and we're seeing 30% more advertisers are using AI creative tools in the last quarter as well. The second opportunity is more engaging experiences.

This will come in two forms, better recommendations for existing content types and better new types of content. In the last six months, improvements to our recommendation systems have led to a 7% increase in time spent on Facebook, a 6% increase on Instagram, and 35% on threads. Threads now, also has more than 350,000,000 monthly actives and continues to be on track to become our next major social app. In addition to better recommendations for existing content types, AI is also enabling the creation of better content as well. Some of this will be helping people produce better content to share themselves.

Some of this will be AI generating content directly for people that is personalized for them. Some of this will be in existing formats like photos and videos, and some of it will be increasingly interactive. I've often talked about this long term trend of content becoming richer over time. Our feeds started mostly with text and then became mostly photos when we all got mobile phones with cameras, and then became mostly video when mobile networks became fast enough to handle that well. We are now in the video era, but I don't think that this is the end of the line.

In the near future, I think that we're gonna have content in our feeds that you can interact with and that it'll interact back with you, rather than you just watching it. Over the long term, as AI unlocks more productivity in the economy, I also expect that people will spend more of their time on entertainment and culture, which will create an even larger opportunity to create more engaging experiences across all of these apps. The the third opportunity is business messaging. Right now, the vast majority of our business is advertising and feeds on Facebook and Instagram. But WhatsApp now has more than 3,000,000,000 monthly actives with more than a hundred million people in The US and growing quickly there.

Messenger is also used by more than a billion people each month, and there are now as many messages sent each day on Instagram as there are on Messenger. So business messaging should be the next pillar of our business. In countries like Thailand and Vietnam, where there is a low cost of labor, we see many businesses conduct commerce through our messaging apps. There's actually so much business through messaging that those countries are both in our top 10 or 11 by revenue even though they're ranked in the thirties in global GDP. This phenomenon hasn't yet spread to developed countries because the cost of labor is too high to make this a profitable model before AI, but AI should solve this.

So in the next few years, I expect that just like every business today has an email address, social media account, and website, they'll also have an AI business agent that can do customer support and sales, and they should be able to set that up very easily given all the context that they've already put into our business platforms. And we're gonna

more to share on upcoming calls about our progress in this area. The fourth opportunity is Meta AI. Across our apps, there are now almost a billion monthly actives using Meta AI. Our focus for this year is deepening the experience and making AI the leading personal AI with an emphasis on personalization, voice conversations, and entertainment. I think that we're all gonna have an AI that we talk to throughout the day while we're browsing content on our phones and eventually as we're going through our days with glasses.

And I think that this is gonna be one of the most important and valuable services that has ever been created. In addition to building Meta AI into our apps, we just released our first Meta AI standalone app. It is personalized, so you can talk to it about interests that you've shown while browsing reels or different content across our apps. And we built a social feed into it so you can discover entertaining ways that others are using Meta AI, and initial feedback on the app has been good so far. Over time, I expect that the business opportunity for Meta AI to follow our normal product development playbook.

First, we build and scale the product, and then once it is at scale, then we focus on revenue. In this case, I think that there will be a large opportunity to show product recommendations or ads as well as a premium service for people who want to unlock more compute for additional functionality or intelligence. But I expect that we're gonna be largely focused on scaling and deepening engagement for at least the next year before we'll really be ready to start building out the business here. The fifth opportunity is AI devices, which is increasingly how we are thinking about our work on the next generation of computing platforms. Glasses are the ideal form factor for both AI and the metaverse.

They enable you to let an AI see what you see, hear what you hear, and talk to you throughout the day, and they let you blend the physical and digital worlds together with holograms. More than a billion people worldwide wear glasses today, and it seems highly likely that these will become AI glasses over the next five to ten years. Building the devices that that people use to experience our services lets us deliver the highest quality AI and social experiences. And this will serve as an amplifier on all of the opportunities I've mentioned so far as well as unlocking some new opportunities as well. Ray Ban Meta AI glasses have tripled in sales in the last year, and the people who have them are using them a lot.

We've got some exciting new launches with our partner, SLR Luxottica, later this year as well that should expand that category and add some new technological capabilities to the glasses. On Quest, we are also seeing deeper engagement as Quest three s makes VR accessible to more people, and more people are creating experiences in Horizon with AI tools. Now everything that I've talked about today is built on top of our AI models and our infrastructure. We released the first Llama four models earlier this month, and they are some of the most intelligent, best multimodal, lowest latency, and most efficient models that anyone has built. We have more models on the way, including the massive LAMA four behemoth model.

Overall, we are focused on building full general intelligence. All of the opportunities that I've discussed today are downstream of delivering general intelligence and doing so efficiently. The pace of progress across the industry and the opportunities ahead for us are staggering. I wanna make sure that we're working aggressively and efficiently, and I also wanna make sure that we are building out the leading infrastructure and teams that we need to achieve our goals. So to that end, we are accelerating some of our efforts to bring capacity online more quickly this year as well as some longer term projects that will give us the flexibility to add capacity in the coming years as well, and that has increased our planned investment for this year.

More broadly, this has been a good start to what I expect will continue to be an intense year. We've got a lot more exciting work in the pipeline that I'm looking forward to sharing soon. I continue to think that this year is gonna be a pivotal moment for our industry, and I am grateful for everyone who is working so hard at the company to deliver all of this amazing technology and new experiences. As always, thank you all for being on this journey with us. And now, Susan.

Thanks, Mark, and good afternoon, everyone. Let's begin with our consolidated results. All comparisons are on a year over year basis unless otherwise noted. Q1 total revenue was $42,300,000,000 up 16% or 19% on a constant currency basis. Q1 total expenses were $24,800,000,000 up 9% compared to last year.

In terms of the specific line items, cost of revenue increased 14% driven primarily by higher infrastructure costs and payments to partners, partially offset by a benefit from the previously announced extension of server useful lives. R and D increased 22%, mostly due to higher employee compensation and infrastructure costs. Marketing and sales increased 8% driven mainly by an increase in professional services related to our ongoing platform integrity efforts. G and A decreased 34% driven primarily by lower legal related costs. We ended Q1 with over 76,800 employees, up 4% quarter over quarter.

First quarter operating income was $17,600,000,000 representing a 41% operating margin. Our tax rate for the quarter was 9% as we recognized excess tax benefits from share based compensation due to the increase in our share price versus prior periods. Net All expenditures, including principal payments on finance leases, were $13,700,000,000 driven by investments in servers, data centers, and network infrastructure. Free cash flow was $10,300,000,000 We repurchased $13,400,000,000 of our Class A common stock and paid $1,300,000,000 in dividends to shareholders, ending the quarter with $70,200,000,000 in cash and marketable securities and 28,800,000,000 in debt. Moving now to our segment results.

I'll begin with our Family of Apps segment. Our community across the Family of Apps continues to grow, and we estimate more than 3,400,000,000 people used at least one of our Family of Apps on a daily basis in March. Q one total Family of Apps revenue was $41,900,000,000 up 16% year over year. Q one Family of Apps ad revenue was $41,400,000,000 up 16% or 20% on a constant currency basis. Within ad revenue, the online commerce vertical was the largest contributor to year over year growth.

On a user geography basis, ad revenue growth was strongest in rest of world and North America at 1918% respectively. Europe and Asia Pacific grew fourteen percent and twelve percent. In q one, the total number of ad impressions served across our services increased 5%, and the average price per ad increased 10%. Impression growth was mainly driven by Asia Pacific. Pricing growth benefited from increased advertiser demand in part driven by improved ad performance.

This was partially offset by impression growth, particularly from lower monetizing regions and surfaces. Family of apps other revenue was $510,000,000, up 34%, driven mostly by business messaging revenue growth from our WhatsApp business platform as well as Meta Verified subscriptions. We continue to direct the majority of our investments toward the development and operation of our family of apps. In q one, family of apps expenses were $20,100,000,000 representing 81% of our overall expenses. Family of expenses were up 10% mainly due to growth in employee compensation and infrastructure costs, which were partially offset by lower legal related expenses.

Family of Apps operating income was $21,800,000,000 representing a 52% operating margin. Within our Reality Labs segment, q one revenue was $412,000,000 down 6% year over year due to lower Meta Quest sales, which were partially offset by increased sales of Ray Ban Meta AI glasses. Reality Labs expenses were $4,600,000,000 up 8% year over year driven primarily by higher employee compensation. Reality Labs operating loss was $4,200,000,000. Turning now to the business outlook.

There are two primary factors that drive our revenue performance, our ability to deliver engaging experiences for our community and our effectiveness at monetizing that engagement over time. On the first, we're focused both on enhancing our core family of apps today and building the next generation of devices and experiences through Reality Labs. I'll start with our family of apps. In the first quarter, we saw strong growth in video consumption across both Facebook and Instagram, particularly in The US where video time spent grew double digits year over year. This growth continues to be driven primarily by ongoing enhancements to our recommendation systems, and we see opportunities to deliver further gains this year.

We're also progressing on longer term efforts to develop innovative new approaches to recommendations. A big focus of this work will be on developing increasingly efficient recommendation systems so that we can continue scaling up the complexity and compute used to train our models while avoiding diminishing returns. There are promising techniques we're working on that will incorporate the innovations from LLM model architectures to achieve this. Another area that is showing early promise is integrating LLM technology into our content recommendation systems. For example, we're finding that LLM's ability to understand a piece of content more deeply than traditional recommendation systems can help better identify what is interesting to someone about a piece of content leading to better recommendations.

We began testing using LaMa in Thread's recommendation systems at the end of last year given the app's text based content and have already seen a 4% lift in time spent from the first launch. It remains early here, but a big focus this year will be on exploring how we can deploy this for other content types, including photos and videos. We also expect this to be complementary to Meta AI as it can provide more relevant responses to people's queries by better understanding their interests and preferences through their interactions across Facebook, Instagram, and threads. Earlier this year, we began testing the ability for Meta AI to better personalize its responses by remembering certain details from people's prior queries and considering what that person engages with on our apps. We are already seeing this lead to deeper engagement with people we've rolled it out to, and it is now built into Meta AI across Facebook, Instagram, Messenger, and our new standalone MetaAI app in The US and Canada.

We're also continuing to focus on helping people connect over content. In q one, we launched a new experience on Instagram in The US that consists of a feed of content your friends have left a note on or liked, and we're seeing good results. We also just launched Blend, which is an opt in experience in direct messages that enables you to blend your Reels algorithm with your friends to spark conversations over each other's interests. These features all lean into Instagram's position at the intersection of entertainment and social connection. WhatsApp remains at its core a private messaging app, but it has evolved to also become a place people come to get updates from accounts they are connected to or follow.

Today, there are tens of billions of views of status posts on WhatsApp each day, and we continue to invest in the updates tab as a place people can go to do more. Creators remain another big focus for us, and we're investing in tools to help them produce the best original content on our platforms. Last week, we launched our standalone edits app, which supports the full creative process for video creators from inspiration and creation to performance insights. Edits has an ultra high resolution short form video camera and includes generative AI tools that enable people to remove the background of any video or animate still images with more features coming soon. Moving to Reality Labs, we're seeing very strong traction with Ray Ban Meta AI glasses with over four times as many monthly actives as a year ago, and the number of people using voice commands is growing even faster as people use it to answer questions and control their glasses.

This month, we fully rolled out live translations on Ray Ban Meta AI glasses to all markets for English, French, Italian, and Spanish. Now when you are speaking to someone in one of these languages, you'll hear what they say in your preferred language through the glasses in real time. Now to the second driver of our revenue performance, increasing monetization efficiency. The first part of this work is optimizing the level of ads within organic engagement. We continue to optimize ad supply across each service to better deliver ads at the time and place they are most relevant to people.

We are also starting to introduce ads on unmonetized services like Threats, which we opened up to all eligible advertisers this month to reach people in over 30 different markets to start, including The US. As we do for any newly monetized surface, we expect to gradually ramp ad supply as we optimize the ad formats and ensure they feel native to the app. We don't expect threads to be a meaningful driver of overall impression or revenue growth in 2025. The second part of increasing monetization efficiency is improving marketing performance. We're continuing to improve our ad systems by developing new modeling technologies to more efficiently predict the right ad to show.

In q one, we introduced our new generative ads recommendation model or JEM for ads ranking. This model uses a new architecture we developed that is twice as efficient at improving ad performance for a given amount of data and compute. This efficiency gain enabled us to significantly scale up the amount of compute we use for model training with JEM trained on thousands of GPUs, our largest cluster for ads training to date. We began testing the new model for ads recommendations on Facebook Reels earlier this year and have seen up to a 5% increase in ad conversions. We're now rolling it out to additional services across our apps.

On the ads product side, we're seeing continued momentum with our Advantage Plus suite of AI powered solutions. We've been encouraged by the initial tests of our streamlined campaign creation flow for sales, app, and lead campaigns, which starts with Advantage Plus turned on from the beginning for advertisers. In April, we rolled this out to more advertisers and expect to complete the global rollout later this year. We're also seeing strong adoption of Advantage Plus Creative. This week, we are broadening access of video expansion to Facebook reels for all eligible advertisers, enabling them to automatically adjust the aspect ratio of their existing videos by generating new pixels in each frame to optimize their ads for full screen surfaces.

We also rolled out image generation to all eligible advertisers. And this quarter, we plan to continue testing a new virtual try on feature that uses GenAI to place clothing on virtual models, helping customers visualize how an item may look and fit. Last, we continue to evolve our ads platform to drive results that are optimized for each business' objectives and the way they measure value. One example of this is our incremental attribution feature, which enables advertisers to optimize for driving incremental conversions or conversions we believe would not have occurred without an ad being shown. We're seeing strong results in testing so far with advertisers using incremental attribution in tests seeing an average 46% lift in incremental conversions compared to their business as usual approach.

We expect to make this available to all advertisers in the coming weeks. Next, I would like to discuss our approach to capital allocation. Our primary focus remains investing capital back into the business with infrastructure and talent being our top priorities. Starting with headcount, our hiring continues to be targeted at technical roles within our company priorities. In the first quarter, the significant majority of the roughly 2,800 employees we added were to support our priorities of monetization, infrastructure, generative AI, regulation and compliance, and Reality Labs.

On infrastructure, we have two primary focuses to meet the growing compute needs of our services and AI initiatives. The first way is by significantly scaling up our infrastructure footprint. Our CapEx growth this year is going toward both generative AI and core business needs with the majority of overall CapEx supporting the core. We expect the significant infrastructure footprint we are building will not only help us meet the demands of our business in the near term, but also provide us an advantage in the quality and scale of AI services we can deliver. We continue to build this capacity in a way that grants us maximum flexibility in how and when we deploy it to ensure we have the agility to react to how the technology and industry develop in the coming years.

The second way we're meeting our compute needs is by increasing the efficiency of our workloads. In fact, many of the innovations coming out of our ranking work are focused on increasing the efficiency of our systems. This emphasis on efficiency is helping us deliver consistently strong returns from our core AI initiatives. For example, we shared on the q three twenty twenty four call that improvements to our AI driven feed and video recommendations drove a roughly 8% lift in time spent on Facebook and a 6% lift on Instagram over the first nine months of last year. Since then, we've been able to deliver similar gains in just six months' time with improvements to our AI recommendations delivering 76% time spent gains on Facebook and Instagram respectively.

Before moving to our financial guidance, I want to acknowledge the dynamic macro environment and note that our range reflects the potential for a wider set of outcomes. We continue to feel good about the fundamental drivers of revenue growth and believe the past work we've done to streamline our operations and cost profile puts us in a strong position to navigate a variety of outcomes. Moving to our financial outlook. We expect second quarter twenty twenty five total revenue to be in the range of 42,500,000,000.0 to $45,500,000,000 Our guidance assumes foreign currency is an approximately 1% tailwind to year over year total revenue growth based on current exchange rates. Turning now to the expense outlook.

We expect full year 2025 total expenses to be in the range of 113,000,000,000 to $118,000,000,000 lowered from our prior outlook of $114,000,000,000 to $119,000,000,000 Turning now to the CapEx outlook. We anticipate our full year twenty twenty five capital expenditures, including principal payments on finance leases, will be in the range of $64,000,000,000 to $72,000,000,000 increased from our prior outlook of $60,000,000,000 to $65,000,000,000. This updated outlook reflects additional data center investments to support our AI efforts as well as an increase in the expected cost of infrastructure hardware. The majority of our CapEx in 2025 will continue to be directed to our core business. On to tax.

Absent any changes to our tax landscape, we expect our full year 2025 tax rate to be in the range of 12% to 15%. In addition, we continue to monitor an active regulatory landscape, including legal and regulatory headwinds in The EU and The US that could significantly impact our business and our financial results. The European Commission recently announced its decision that our subscription for no ads model is not compliant with the DMA. Based on feedback from the European Commission in connection with the DMA, we expect we will need to make some modifications to our model, which could result in a materially worse user experience for European users and a significant impact to our European business and revenue as early as the third quarter of twenty twenty five. We will appeal the commission's DMA decision, but any modifications to our model may be imposed before or during the appeal process.

In closing, this was another solid quarter for our business. We believe the investments we're making across our company priorities will position us well in the coming years to continue delivering engaging services for our community, compelling results for advertisers, and strong business performance. With that, Christa, let's open up the call for questions.

Thank you. We will now open the lines for a question and answer session. And your first question comes from the line of Brian Nowak with Morgan Stanley. Please go ahead.

Great. Thanks for taking my questions. I have two. The first one's on LAMA. Mark, can you the LLM landscape continues to sort of evolve and be somewhat competitive.

Can you sort of talk us through some of the key areas of advancement you are most focused on and excited about as we sort of think about Behemoth and and next versions of of LAMA to come? And then the the second one on on Meta AI, almost a billion users globally. Any help on sort of how you're seeing US traction there and the types of recurring user behaviors that you're seeing in the early Meta AI use cases? Thanks.

Sure. I can talk about the the LLMs. On the Meta AI usage, I'm not sure if we have more stats to share on that now. Yeah. It's I mean, I'll I'll defer to Susan on if there's anything that we're that we're ready on that.

On the LLM, yeah, there's a lot of progress being made in in a a lot of different dimensions. And the reason why we wanna build this out is, one, is that we think it's important that for for kind of how critical this is for our business that we sort of have control of our own destiny and are not depending on on another company for something so critical. But two, we wanna make sure that we can shape the development to be optimized for our infrastructure and the use cases that we want. So to that end, LAMA four, the shape of the model with 17,000,000,000 parameters per expert was designed specifically for the infrastructure that that we have in order to provide low latency experience to be voice optimized. One of the key things if you're having a voice conversation with AI is it needs to be low latency.

So that way, you know, when you're having a conversation with it, there's no large gap between when you stop speaking and it start and it starts. So everything from the shape of the model to the research that we're doing to the techniques that go into it are are kind of fit into that. Similarly, another thing that we focused on was context window length. And, you know, in some of our models, we have really we're industry leading on context window length. And part of the reason why we think that that's important is because we're very focused on providing a personalized experience.

And there are different ways that you can put personalized personalization context into an LLM, but one of the ways to do it is to include some of that context in the context window. And having a long context window that can incorporate a lot of the background that a person has shared across our apps is one way to do that. So that's like it it kind of is giving you a flavor of the products that we're trying to build and then some specific technical architecture decisions and research prioritization that we basically have made in order to deliver the specific experience that we're going for. I could go on and and add and add a lot more. The reason you know, it's it I think it's also very important to deliver big models like Behemoth, not because we're gonna end up serving them in production, but because of the technique of distilling from larger models.

Right? The LAMA four models that we've published so far and the ones that we're using internally and, and and some of the ones that we'll build in the future are basically distilled from the Behemoth model in order to, get the, you know, 95% of the intelligence of the large model in a form factor that is much lower latency and much more efficient. So these things are all very important. Obviously, we wouldn't be able to do that kind of distillation, from other closed models. So that that kinda gives you a flavor for for how we're thinking about the development of this.

And and then, of course, the models and the infrastructure that we're building out power all of the the the the opportunities that I mentioned before.

Brian, I'm happy to answer your second question about Meta AI. You know, the top use case right now for Meta AI from a query perspective is really around information gathering as people are using it to search for and understand and analyze information, followed by social interactions from you know, ranging from casual chatting to more in-depth discussion or debate. We also see people use it for writing assistance, interacting with visual content, seeking help. And we see meta, people engage with Meta AI from several different entry points. WhatsApp continues to see the strongest Meta AI usage across our family of apps.

Most of that WhatsApp engagement is in one on one threads, followed by Facebook, which is the second largest driver of Meta AI engagement where we're seeing strong engagement from our feed deep dives integration that lets people ask Meta AI questions about the content that's recommended to them. And we're obviously excited about the launch of the Meta AI standalone app.

Your next question comes from the line of Eric Sheridan with Goldman Sachs. Please go ahead.

Thanks so much for taking the question. Maybe following up on Brian's question and coming at it from a different angle, I appreciate the color on the use cases you're seeing today for Meta AI. How would you suspect those use cases evolve with a standalone app? Can you bring us into a little bit the decision process to do a standalone app? What that might change in terms of utility, frequency, or scale relative to what you see inside family of apps today?

And how you think about positioning Meta AI as a standalone app against the competitive landscape today of other, stand alone sort of consumer AI apps? Thank you.

Yeah. I can talk about that. We're gonna focus on both integrating it into our family of apps in more ways and building a stand alone experience. You know, I think some people want faster access to it or or a more built out feature set than you can build into an app like WhatsApp. So so the stand alone app will be valuable for that.

I also think that the stand alone app is going to be particularly important in The United States because WhatsApp, as Susan said, is the largest surface that people use that AI in, which makes sense if you wanna text an an AI, having that be closely integrated and a good experience in the messaging app that you use makes a lot of sense. But, you know, we're while we have, you know, more than a hundred million people use WhatsApp in The United States, it we're clearly not the primary messaging app in The United States at this point. IMessage is. We we hope to to become the leader over time, but we're in a different position there than we are in most of the rest of the world on WhatsApp. So, so I think that the Meta AI app as a stand alone is gonna be particularly important in The United States to to establishing leadership in as as the the main personal AI that people use.

But we're gonna keep on advancing the experiences across the board in all of these different areas.

Your next question comes from the line of Justin Post with Bank of America. Please go ahead.

Just on the guide in the second quarter, are reports of potential supply issues in e commerce. How you thought about that in the guide and maybe how you're thinking about it for the back half? And then a bigger picture question, you know, your CapEx spend is now close to some hyperscalers with with very big client basis. Just help us conceptualize the kind of ecosystem you're building with your CapEx. I know you gave a lot of help on the intro, but but maybe the ROI works without direct enterprise spend to drive revenues.

Meta Platforms (META) Q1 2025 Earnings Call Transcript

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