A：AI is transforming the advertising industry by enabling businesses to set objectives and desired outcomes, and to better target and find audiences interested in their products, including generating ad creative. It is redefining advertising as an AI agent that delivers measurable business results at scale.

A：The five major opportunities that Meta is focusing on are improved advertising, more engaging experiences, business messaging, Meta AI, and AI devices.

A：The recommendation systems on Meta's platforms have led to a 7% increase in time spent on Facebook, a 6% increase on Instagram, and a 35% increase onThreads over the last six months, which signifies a better experience for users and more engagement on the platform.

A：AI is expected to change content creation by enabling people to produce better content and to generate personalized content for users. User interaction will become increasingly interactive, with content in feeds that can be two-way interactive rather than passive watching.

A：Business messaging is a key area for Meta's platforms, with WhatsApp having over 3 billion monthly actives and Messenger used by over a billion people each month. The potential of business messaging is significant, especially in countries with low labor costs, and with AI, the cost issues are expected to be solved, allowing businesses to conduct commerce through messaging.

A：The plans for Meta AI include deepening the user experience and making AI the leading personal AI with an emphasis on personalization, voice conversations, and entertainment. The current focus is on scaling and improving the engagement with Meta AI before focusing on revenue generation.

A：Meta plans to monetize Meta AI by initially building and scaling the product and then focusing on revenue once it is at scale. In the near future, there will be a large opportunity to show product recommendations or ads and offer a premium service for additional compute and intelligence.

A：AI devices are increasingly seen as the ideal form factor for the next generation of computing platforms, as they enable users to blend the physical and digital worlds together with holograms. Glasses in particular are highlighted as the best form factor for AI and the metaverse, which will allow for deeply integrated AI experiences.

A：Meta has released the first LMA 4 models, which are some of the most intelligent, multimodal, lowest latency, and most efficient models. With more models on the horizon, including the LaLama 4 model, Meta is signaling its commitment to leading in AI technology and the development of full general intelligence, which will underpin all of its opportunities.

A：We ended Q1 with over 76,800 employees, up 4% quarter over quarter.

A：Our tax rate for the quarter was 9%, due to the recognition of excess tax benefits from share-based compensation from the increase in our share price versus prior periods.

A：All expenditures, including principal payments on finance leases, were $13.7 billion, driven by investments in servers, data centers, and network infrastructure.

A：Q1 total family of apps revenue was $41.9 billion, up 16% year over year, and we estimate that more than 3.4 billion people used at least one of our family of apps on a daily basis in March.

A：Q1 family of apps ad revenue was $41.4 billion, up 16% or 20% on a constant currency basis. The online commerce vertical was the largest contributor to year-over-year growth. Ad revenue growth was strongest in the Rest of World and North America at 19% and 18%, respectively. Europe and Asia Pacific grew 14% and 12% in Q1.

A：Family of apps expenses were $20.1 billion, representing 81% of overall expenses, up 10% mainly due to growth in employee compensation and infrastructure costs, partially offset by lower legal related expenses. Family of apps operating income was $21.8 billion, representing a 52% operating margin within the reality lab segment.

A：Family of apps Other revenue was $510 million, up 34%, driven mostly by business messaging. The company continues to direct the majority of its investments toward the development and operation of its family of apps.

A：The business outlook indicates that there are two primary factors that drive revenue performance: the ability to deliver engaging experiences for the community and effectiveness at monetizing that engagement over time. The company is focusing on enhancing its core family of apps and building the next generation of devices and experiences through Reality Labs.

A：New features include a focus on video consumption growth across both Facebook and Instagram, especially in the US, enhancing recommendation systems, and testing the integration of AI into content recommendation systems. Instagram's new experience in the US includes a feed of content friends have interacted with, and Blend in DM to spark conversations over interests. Meta AI is being used to remember details from users' prior queries and consider their engagement across apps for better personalization.

A：Ray-Ban Meta AI Glasses have seen a 4x increase in monthly actives from a year ago, and the number of users using voice commands is growing. Live translations have been fully rolled out to all markets for English, French, Italian, and Spanish.

A：WhatsApp remains a private messaging app but has evolved to include updates from accounts users follow. It has tens of billions of status views daily, and the updates tab is a focus for investment. The company launched Standalone Edits to support video creators with features like a high-resolution camera, generative AI tools, and more.

A：The company is optimizing the level of ads within organic engagement, improving ad supply across each service, and introducing ads on unmonitored surfaces like Threads. The focus is on increasing monetization efficiency and improving marketing performance through new ad formats and the introduction of generative Ads recommendation models for ads ranking.

A：New tools and features include incremental attribution to optimize for incremental conversions, a streamlined campaign creation flow for sales app and lead campaigns, and expanded access to video expansion and image generation for ads. Meta is also seeing strong adoption of Advantage Plus creative and is working on a new virtual try-on feature using AI.

A：The two primary focuses for meeting growing compute needs are significantly scaling up the infrastructure footprint and increasing the efficiency of workloads.

A：The improvements to the AI-driven feed and video recommendations have led to a roughly 8% lift in time spent on Facebook and a 6% lift on Instagram over the first nine months of the previous year, with similar gains of 7% and 6% time spent on Facebook and Instagram, respectively, achieved in just six months.

A：The projected range for second-quarter 2025 total revenue is $42.5 to $45.5 billion.

A：The updated outlook for full year 2025 total expenses is in the range of $113 to $118 billion, and the CapEx outlook is in the range of $64 to $72 billion, which is an increase from the prior outlook of $60 to $65 billion.

A：The company faces legal and regulatory headwinds in the EU and the US, with the European Commission's decision that the company's subscription for No Ads model is not compliant with the DMA. This could result in a materially worse user experience for European users, a significant impact to the European business, and revenue as early as the third quarter of 2025. The company will appeal the decision but modifications may be imposed before or during the appeal process.

A：The advancements emphasized in the development of Lama Mark include control over the company's destiny, optimization for their specific infrastructure and use cases, low latency experiences, voice optimization, industry-leading context window length, and personalization through context incorporation. The development also involves research and technical architecture decisions aimed at delivering a specific experience.

A：People are engaging with Meta AI for information gathering, social interactions ranging from casual chatting to in-depth discussions, writing assistance, interacting with visual content, and seeking help. Meta AI is being used across various entry points, with strong engagement seen in WhatsApp and Facebook.

A：The decision to create a standalone Meta AI app aims to provide faster access and a more built-out feature set than could be included in an existing app like WhatsApp. It is particularly important in the United States, where Meta AI is the largest surface of use, and the company hopes to establish leadership in personal AI usage. The standalone app will also continue to advance experiences across all areas.

A：There have been reports of potential supply issues in e-commerce, and the company has acknowledged uncertainty in the macro environment's evolution and its impact on different segments of their business. The Q2 revenue outlook aims to factor in these uncertainties, and they have seen reduced spend in the US from Asia-based e-commerce exporters, which they believe is in anticipation of a de minimis exemption going away. A portion of that spend has been redirected to other markets, but overall spend is below prior levels. The Q2 outlook reflects the healthy trends seen in April, which are deemed very early to predict outcomes for the whole quarter or year.

A：The company is investing more in CapEx because they believe it provides a meaningful advantage in developing leading AI technology and services, as well as improving their core business by using more compute resources for ads and recommendations. They are having difficulty meeting the demand for compute resources across the company and plan to continually invest meaningfully in their infrastructure footprint for flexibility and to respond to market and technological developments.

A：The higher hardware costs are driven by suppliers who source from countries around the world, and there's uncertainty due to ongoing trade discussions. The company is working on mitigations by optimizing their supply chain to handle the increased costs and is trying to reflect the potential impact across all uncertainties in their outlook.

A：The company has partners investing alongside them, like AWS and Azure, who help host Llama. They are always looking for opportunities to deepen or expand those partnerships. However, they are funding the infrastructure used to train LMA and have no expectation that will change at this point.

A：The company believes AI coding agents are on track to start doing a substantial part of AI research and development, potentially by the middle to end of the next year. These agents are focused on increasing recommendations across other AI products like those that do feed recommendations. If successful, it is expected to accelerate progress in those areas.

A：The lowered expense outlook reflects more refined forecasts including updated expectations for employee compensation and non-headcount operating expenses. The increased CapEx outlook and higher expected Reality Labs cost of goods sold also contribute to the outlook. Despite a dynamic operating environment, the company is maintaining a $5 billion range. Investments reflect significant opportunities across company priorities, and they aim to continue investing in key priorities through financial cycles, having strengthened their financial position over the last two years through efficiency work.

A：The company is working hard to alleviate constraints in AI capacity and has accelerated the bringing of data center space online. The demand landscape is dynamic, and while they do not have a fixed answer for when supply will meet all demand, they are focused on increasing workload efficiency. As for ads performance and ranking, conversion growth remains strong, driven by improvements in ads ranking and modeling. The company is investing in innovations to serve more relevant ads and believes it is making progress in this area.

A：The revised CapEx outlook for the current year and the upcoming years indicates an acceleration in spending. The company suggests that this should be considered a new starting point for thinking about future needs and capacity, starting from 2023 onwards.

A：The vision for AI integration in business is that every business will soon have an AI that is an expert on their business for customers to communicate with, similar to having email, websites, and social media presences.

A：The company has received encouraging feedback, particularly that adopting these Business AIs is saving the businesses time by helping them determine which conversations make sense for them to focus on.

A：The company finds infrastructure planning to be dynamic due to ongoing AI advancements and continues to identify new use cases for capacity in core AI ranking and recommendations work. It is too early to discuss plans beyond 2025.

A：Mark believes that there will be a variety of agents used for different purposes, such as enterprise productivity, personal productivity, and entertainment, each with a distinct experience. Personalization, where AI gets to know users and their preferences, and the ability to understand and respond to multimodal inputs like voice, images, and videos, will be differentiators.

A：The modifications to the apps are still unclear as the company is engaged with the European Commission. However, the impact on advertising revenue in the impacted geographies is expected to be 16% of worldwide total revenue in 2024. The company is actively engaged with the European Commission and hopes to have more clarity by the next quarter's call.

A：The losses in Reality Labs are primarily due to the upfront costs associated with developing AI glasses and other leading consumer electronics products. The company is focused on doing the work more efficiently and investing in the distribution and growth of these products. The long-term plan includes scaling beyond the initial products, achieving a sufficient scale for monetization, and building an efficient business. Some parts of the work are becoming more efficient, and the company is optimistic about the results, especially in AI glasses.

A：Gaming and politics were the advertising verticals that experienced weakness, with year-over-year growth in gaming being negative and a sharp decrease in year-over-year growth in the government and politics vertical.