Meta Platforms (Meta)

Q1 2026 Results

We have reported on Meta on a number of occasions and those reports are here, here and here.

Our most recent report can be found here.

Meta Platforms is well known. its strengths are obvious, well known and extremely impressive.

• Its Family of Apps (FOA) which include Facebook, Instagram and WhatsApp have 3.6 billion daily average users. This is close to 50% of the whole human race!

• Meta has leveraged this scale to improve its product lineup, adding attractive features such as Stories, Reels, and newer products such as Threads.

• The users’ engagement with the apps, measured by time spent on the app, is very high. The company can extract a huge amount data and information about its users. Thus, it is very efficient at targeting advertisements at them.

• Meta allows many types of advertisers of all shapes and sizes to place ads in front of engaged users. It has ridden the general wave away from traditional advertising toward digital. Social media advertising has gained significant share in recent years.

• To bolster its advertising business, Meta has invested heavily to improve its ad targeting algorithms, allowing it to improve its advertisers’ return on ad spending and increasing its average revenue per user over time.

In the last decade, the company has consistently grown revenue at a CAGR of 27%. The equivalent figure for operating profit and operating cash flow growth has been 29.6% and 27%. In the same period, the stock price has risen by a little less (19.7% CAGR) giving investors a 5.7X return over the decade.

Founder, Chairman and CEO Mark Zuckerberg is still only 41 years old. Given the dual share structure at Meta, he has much greater freedom and power than other large tech company CEOs. He has a 13% equity stake but has about 60% of the voting rights. He can pursue his vision for the company relatively unchallenged as he does not have to steer for a consensus view. This can be a strength or a weakness depending on whether he is right or wrong!

Zuckerberg was so strongly committed to the Metaverse, he changed the name of the company from the established Facebook to Meta Platforms. The results have not been pretty: Reality Labs, the division that houses the Metaverse business has achieved modest revenues and very large losses.

In 2025, he spent a lot of his energy on hiring a new team of AI researchers paying huge packages in a bid to catch up in the AI LLM race with Google, OpenAI and Anthropic. Will this bet pay off or will it be another Reality Labs?

A recent article in the Financial Times quoted a former Meta executive who worked closely with Mark Zuckerberg as saying the following:

“Mark Zuckerberg likes to play high-stakes poker. Other people like doing it in Las Vegas. He likes doing it with his company,”

The executive added the following: “Mark has a keen sense of when the market is changing and moving quickly to catch up. Here, he is buying momentum,” the person adds. “I would be wary of betting against his ability to deploy his resources to be successful. Will he ‘win’? I’m not sure. But he will not lose.”

We look at the company again in the light of the Q1 2026 Results.