--- title: "Minutes: Create a personalized Meta AI for everyone" description: "Below is the $Meta Platforms(META.US) Q1 2025 earnings call Minutes. For the earnings review, please refer to "TikTok's loss, Meta's gain, Zuckerberg's AI ambitions soar". 1. Key financial met" type: "topic" locale: "en" url: "https://longbridge.com/en/topics/29279832.md" published_at: "2025-05-01T06:15:29.000Z" author: "[Dolphin Research](https://longbridge.com/en/news/dolphin.md)" --- # Minutes: Create a personalized Meta AI for everyone Below is the $Meta Platforms(META.US) Q1 2025 earnings call Minutes. For financial report analysis, refer to《[TikTok's Loss, Meta's Gain: Zuckerberg's AI Ambitions Expand](https://longportapp.cn/zh-CN/topics/29276284)》 **I. Key Financial Metrics** 1\. Q1 total revenue reached $42.3 billion, up 16% YoY (19% at constant currency). Total expenses were $24.8 billion, a 9% increase YoY. 2\. By category: Cost of revenue rose 14%, primarily driven by higher infrastructure costs and partner payments, partially offset by extended server depreciation periods. 3\. R&D expenses grew 22%, mainly due to increased employee compensation and infrastructure costs. 4\. Marketing and sales expenses increased 8%, primarily from professional service fees related to platform integrity efforts. 5\. G&A expenses decreased 34%, mainly due to lower legal-related costs. 6\. We ended Q1 with 76,800+ employees, up 4% QoQ. Operating profit was $17.6 billion with a 41% margin. 7\. The effective tax rate was 9%, benefiting from excess tax benefits on stock-based compensation due to share price appreciation. 8\. Free cash flow stood at $10.3 billion. We repurchased $13.4 billion of Class A shares and paid $1.3 billion in dividends. Total cash+securities reached $70.2 billion against $28.8 billion debt. 9\. Segment Performance **(1) Family of Apps** Our app ecosystem continues growing, with an estimated 3.4 billion+ people using at least one app daily in March. Q1 Family revenue reached $41.9 billion (+16% YoY), with ad revenue at $41.4 billion (+16% YoY, +20% at constant currency). E-commerce contributed most to ad growth geographically: Rest of World (+19%) and North America (+18%) led, followed by Europe (+14%) and APAC (+12%). Total ad impressions grew 5% while average price per ad rose 10%, driven by APAC volume and improved advertiser demand partially offset by growth in less-monetized regions. Other revenue grew 34% to $510 million, fueled by WhatsApp Business messaging and Meta Verified subscriptions. Family of Apps accounted for 81% of total expenses ($20.1 billion, +10% YoY), delivering $21.8 billion operating profit (52% margin). **(2) Reality Labs** Reality Labs revenue declined 6% to $412 million (Quest sales down, offset by Ray-Ban Meta AI glasses). Expenses grew 8% to $4.6 billion, resulting in $4.2 billion operating loss. **10\. Outlook** **(1) Advertising** Two key drivers: engaging experiences and monetization efficiency. Video watch time grew double-digits YoY in the US, aided by recommendation system improvements. We're innovating with LLMs in recommendations - early Threads tests showed 4% higher engagement. New ad ranking model GEM (Generative Engine for Marketing) doubled efficiency, now scaling across services after showing 5% higher conversion rates in Facebook Reels tests. **(2) Reality Labs** Ray-Ban Meta AI glasses MAUs quadrupled YoY, with live translation now available in English/French/Italian/Spanish. **(3) Capital Allocation** Prioritizing infrastructure and talent. ~2,800 net hires in Q1 focused on monetization, AI, and Reality Labs. Raising 2025 capex guidance to $64-72 billion (from $60-65B) for AI data centers. **(4) Financial Guidance** a. Q2 revenue: $42.5-45.5 billion (1% FX tailwind) b. 2025 expenses: $113-118 billion (prior $114-119B) c. 2025 capex: $64-72 billion d. Tax rate: 12-15% **(5) Regulation** EU's DMA ruling may require ad-free subscription model changes, potentially impacting Q3 European revenue (16% of 2024 total). Appealing the decision. **II. Management Discussion** Mark Zuckerberg highlighted five AI investment areas: 1\. **AI-powered ads**: New short-video ad model boosted conversions by 5%; AI creative tool adoption up 30% QoQ. 2\. **Engagement**: Recommendation improvements drove 7%/6%/35% more time spent on Facebook/Instagram/Threads (now 350M MAUs). 3\. **Business messaging**: Testing AI agents for customer service/sales via WhatsApp/Messenger. 4\. **Meta AI**: Nearly 1B MAUs across apps; standalone app launched for deeper personalization. 5\. **AI devices**: Ray-Ban sales tripled; working with EssilorLuxottica on next-gen smart glasses. Llama 4 models released with industry-leading context windows for personalized AI. "The pace of progress is astonishing - we're ensuring we build the infrastructure needed." **III. Q&A Highlights** **On Llama 4**: Optimized for low-latency voice interactions and personalization via long context windows. Larger "Behemoth" model will inform future efficient models. **On Meta AI**: Primary use cases are information retrieval (search/analysis) and social interaction. WhatsApp shows strongest adoption. **On Q2 guidance**: $3B range reflects uncertainty, including reduced ad spend from Asian e-commerce platforms ahead of US tariff changes. **On capex**: Increased investment provides flexibility for AI/core infrastructure needs. Partnering with AWS/Azure for Llama hosting. **On coding AI**: Still on track for "mid-level engineer" capability this year, scaling through 2026. **On EU DMA**: Potential changes could degrade EU user experience; financial impact unclear (Europe was 16% of 2024 revenue). **On Reality Labs losses**: Continuing investments for scale; targeting "tens of millions" unit sales for AI glasses. **Disclosures**: [**Dolphin Research Disclosures**](https://support.longbridge.global/topics/misc/dolphin-disclaimer) ### Related Stocks - [META.US - Meta Platforms](https://longbridge.com/en/quote/META.US.md) --- > **Disclaimer**: This article is for reference only and does not constitute any investment advice.