The news: Meta reported another strong quarter Wednesday, with revenues up 33% YoY to $56.3 billion, above analyst expectations.

The company also saw notable growth in its ads business:

• Ad revenues: $55.02 billion, +32.93% YoY
• Ad impressions: +19% YoY across Meta’s Family of Apps
• Average price per ad: +12% YoY
• Family daily active people: +4% YoY to 3.56 billion; Meta attributed QoQ declines to internet disruptions in Iran and restricted WhatsApp access in Russia
• Capital expenditures: $19.84 billion for Q1; Meta increased its 2026 estimated capex to be in the range of $125 billion to $145 billion, above previous expectations of $115 billion to $135 billion

Why it matters: Q1 earnings represented a big test for Meta amid an AI push that caused spending in the previous quarter to skyrocket. Meta CEO Mark Zuckerberg previously commented that underinvesting in AI presented a bigger risk than the “couple hundred billion” its AI infrastructure will likely cost. The strong results could play a key role in Meta’s ability to justify these costs by proving that AI spending translates into measurable growth.

Zooming out: Meta’s AI strategy is heavily focused on automation and performance-driven ad tools.

• Its AI-powered Advantage+ suite allows advertisers to fully automate the campaign process and is turned on by default for marketers buying leads, app downloads, or driving sales.
• Meta’s Lattice tool, meanwhile, shifts campaign optimization away from numerous smaller, siloed models and toward a unified AI system. It predicts ad performance across datasets and goals to improve ad ranking and efficiency.
• The company’s Andromeda feature is an AI-powered ads retrieval engine that helps tailor ads to individual users based on their interactions.

The company is positioning these automated tools as proof that AI investment can drive future ad growth: