Q1 2025 Meta Platforms Inc Earnings Call

April 30, 2025

My name is Christa 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. If you would like to ask a question. Please press star one.

On your telephone keypad to withdraw your question I got and press Star One we ask that you limit yourself to one question and this call will be recorded. Thank you very much Ken It's Doral matters director of Investor Relations you may begin.

Ken: Thank you good afternoon, and welcome to <unk> first quarter 2025 earnings Conference call.

Joining me today.

Mark Zuckerberg: Discuss our results are Mark Zuckerberg, CEO and Susan Li CFO.

Mark Zuckerberg: Our remarks today will include forward looking statements, which are based on assumptions as of today.

Mark Zuckerberg: <unk> results may differ materially as a result of various factors, including those set forth in todays earnings press release and in our annual report on Form 10-K filed with the SEC.

Mark Zuckerberg: We undertake no obligation to update any forward looking statement.

Mark Zuckerberg: 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.

Mark Zuckerberg: The earnings press release, and an accompanying investor presentation are available on our website at Investor Dot App meta dotcom.

Mark Zuckerberg: And now I'd like to turn the call over to Mark.

Mark Zuckerberg: Alright, Thanks, Ken Thanks, everyone for joining today, we've had a strong start to the year our community keeps growing with more than three 4 billion people now.

Mark Zuckerberg: Now using at least one of our apps each day.

Mark Zuckerberg: Our business is also performing very well.

Mark Zuckerberg: And I think we're well positioned to navigate to the macroeconomic uncertainty.

Mark Zuckerberg: The major theme right now of course is how AI is transforming everything we do.

Mark Zuckerberg: And you know as we continue to increase our investments and focus more of our resources on AI.

Mark Zuckerberg: I thought it would be useful today to lay out the five major opportunities that we're focused on are those are improved advertising more engaging experiences business messaging meta AI and AI devices.

Mark Zuckerberg: And these are each long term investments that are downstream from us building.

Mark Zuckerberg: General intelligence, and leading AI models and infrastructure.

Mark Zuckerberg: Even with our significant investments, we don't need to succeed in all of these areas to have a good ROI.

Mark Zuckerberg: But if we do then I think that we will be wildly happy with the investments that we're making.

Operator: Thanks, everyone, for joining today. We've had a strong start to the year. Our community keeps growing with more than 3.4 billion 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.

Mark Zuckerberg: The first opportunity is improved advertising.

Krista: My name is Krista, and I will be your conference operator today.

We've had a strong start to the year, our community keeps growing with more than three 4 billion people now using at least one of our apps each day.

Mark Zuckerberg: Our goal is to make it 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 of.

Krista: 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.

Operator: 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 speaker's remarks, there will be a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. To withdraw your question, again, press star one. We ask that you limit yourself to one question, and this call will be recorded. Thank you very much. Kenneth Dorell, Meta's Director of Investor Relations, you may begin.

Our business is also performing very well.

Krista: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. To withdraw your question, again, press star 1. We ask that you limit yourself to one question, and this call will be recorded.

Mark Zuckerberg: Businesses used to have to generate their own AD creative and defined 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.

We're well positioned to navigate to the macroeconomic uncertainty.

Mark Zuckerberg: The major theme right now, of course, is how AI is transforming everything we do. And 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 Even with our significant investments, we don't need to succeed in all of these areas to have a good ROI.

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.

Krista: Thank you very much.

Mark Zuckerberg: Now AI is generating better accretive options for many businesses as well.

Kenneth Dorell: Kenneth Dorell, META's Director of Investor Relations. You may begin. Thank you.

Thought it would be useful today to lay out the five major opportunities that we're focused on.

Mark Zuckerberg: I think that this is really redefining what advertising is into an AI agent that delivers measurable business results at scale.

Kenneth Dorell: Thank you. Good afternoon and welcome to Meta's first quarter 2025 earnings conference call. Joining me today to discuss the results are Mark Zuckerberg, CEO, and Susan Li, 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-K 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. Now, I'd like to turn the call over to Mark.

Kenneth Dorell: Good afternoon and welcome to META's first quarter 2025 earnings conference call. Joining me today to discuss our results are Mark Zuckerberg, CEO, and Susan Li, 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-K filed with the SEC. We undertake no obligation to update any forward-looking statement.

Those are improved advertising more engaging experiences business messaging meta AI and AI devices.

Mark Zuckerberg: And if we deliver on this vision that.

And these are each long term investments that are downstream from us building General intelligence.

Mark Zuckerberg: But 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.

Telegent 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.

Mark Zuckerberg: And just the last quarter, we were testing a new adds recommendation model for Reals, 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.

Mark Zuckerberg: But if we do, then I think that we will be wildly happy with the investments that we are making.

But if we do then I think that we will be wildly happy with the investments that we're making.

Kenneth Dorell: 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.

Mark Zuckerberg: 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.

The first opportunity is improved advertising.

Mark Zuckerberg: The second opportunity is more engaging experiences.

Our goal is to make it that any business can basically tell us what objectives. They are 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 of our.

Mark Zuckerberg: This will come in two forms a better recommendations for existing content types and better new types of content.

Kenneth Dorell: The earnings press release and an accompanying investor presentation are available on our website at investor.appmeta.com.

Mark Zuckerberg: 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.

Mark Zuckerberg: And now I'd like to turn the call over to Mark. All right. Thanks, Ken. Thanks, everyone, for joining today. We've had a strong start to the year. Our community keeps growing with more than 3.4 billion 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.

Businesses used to have to generate their own AD creative and defined what audiences. They wanted to reach but.

Mark Zuckerberg: All right. Thanks, Ken. Thanks, everyone, for joining today. We've had a strong start to the year. Our community keeps growing, with more than 3.4 billion 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. 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. These are each long-term investments that are downstream from us building general intelligence and leading AI models and infrastructure.

But AIG 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.

Mark Zuckerberg: Threads now also has more than 350 million monthly actives and continues to be on track to become our next major social app.

And now AI is generating better accretive 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.

Mark Zuckerberg: In addition to better recommendations for existing content types.

Mark Zuckerberg: 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're testing a new ads recommendation model for Reels, which has already increased conversion rates by 5%.

Mark Zuckerberg: AI is also enabling the creation of better content as well.

Mark Zuckerberg: Some of this will be helping people produce better content to share themselves.

Mark Zuckerberg: And 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.

And if we deliver on this vision that.

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.

Mark Zuckerberg: Some of this will be a I generating content directly for people that is personalized for them. Some of this will be an 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 overtime.

And just the last quarter, we were testing a new adds recommendation model for Reals, 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.

Mark Zuckerberg: And we're seeing 30% more advertisers are using AI creative tools in the last The second opportunity is more engaging experience.

Mark Zuckerberg: Our feeds started mostly with text and then became mostly photos when we all got mobile phones with cameras.

The second opportunity is more engaging experiences.

Mark Zuckerberg: And then became mostly video when mobile networks became fast enough to handle that well.

Mark Zuckerberg: 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 million monthly actives and continues to be on track to become our next major social app.

Mark Zuckerberg: Even with our significant investments, we don't need to succeed in all of these areas to have a good ROI. 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. We just do the rest. Businesses used to have to generate their own ad creative and define what audiences they wanted to reach. 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.

Even with our significant investments, we don't need to succeed in all of these areas to have a good ROI. 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. We just do the rest. Businesses used to have to generate their own ad creative and define what audiences they wanted to reach. 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.

This will come in two forms a better recommendations for existing content types and better new types of content.

Mark Zuckerberg: We are now in the video Europe, 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.

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.

Rather than you're just watching it.

Mark Zuckerberg: Over the long term as AI unlocks more productivity in the economy.

Mark Zuckerberg: 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.

Threads now also has more than 350 million monthly actives and continues to be on track to become our next major social app.

Mark Zuckerberg: 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.

In addition to better recommendations for existing content types.

Mark Zuckerberg: The third opportunity is business messaging.

Mark Zuckerberg: Right now.

AI is also enabling the creation of better content as well.

Mark Zuckerberg: The vast majority of our business is advertising in feed ads on Facebook and Instagram.

Some of this will be helping people produce better content to share themselves.

Mark Zuckerberg: But whatsapp now has more than 3 billion monthly actives with more than 100 million people in the U S and growing quickly there.

Some of this will be a I generating content directly for people that is personalized for them. Some of this will be an existing formats like photos and videos and some of it will be increasingly interactive.

Mark Zuckerberg: AI is now 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. 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%. 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.

AI is now 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. 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%. 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.

Messenger is also used by more than 1 billion people each month and they're now as many messages sent each day on Instagram as there are on messenger.

Mark Zuckerberg: So business messaging should be the next pillar of our business in.

Often talked about this long term trend of content, becoming richer over time.

Mark Zuckerberg: In countries like Thailand, and Vietnam.

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 Europe, but I don't think that this is the end of the line.

Mark Zuckerberg: Where there was a low cost of labor.

Mark Zuckerberg: We see many businesses conduct commerce through our messaging apps.

Mark Zuckerberg: There was actually so much business through messaging that those countries are both in our top 10 or 11 by revenue even though they were ranked in the thirties and global GDP.

Mark Zuckerberg: 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 going to have content in our feeds that you can interact with and that it'll interact back with you rather than you just watch.

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're just watching it.

Mark Zuckerberg: This phenomenon hasnt, 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.

Mark Zuckerberg: 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.

Mark Zuckerberg: The second opportunity is more engaging experience. 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 million 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.

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.

Mark Zuckerberg: So in the next few years.

Mark Zuckerberg: I expect that just like every business today has an email address social media accounts and website.

Which will create an even larger opportunity to create more engaging experiences across all of these apps.

We'll also have an AI business agent that can do customer support and sales.

Mark Zuckerberg: 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 million 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.

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 million 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.

Mark Zuckerberg: The third opportunity is business messaging. Right now, the vast majority of our business is advertising and feeds on Facebook. But WhatsApp now has more than 3 billion monthly actives with more than 100 million people in the U.S. and growing quickly. 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... in countries like Thailand and Vietnam. where there is a low cost of labor. We see many businesses conduct commerce through our.

The third opportunity is business messaging.

Mark Zuckerberg: 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.

Right now the vast majority of our business is advertising in feed ads on Facebook and Instagram.

Mark Zuckerberg: I'm going to have more.

Mark Zuckerberg: To share on upcoming calls about our progress in this area.

But what's up now has more than 3 billion monthly actives with more than 100 million people in the U S and growing quickly their.

Mark Zuckerberg: The fourth opportunity is meta AI.

Mark Zuckerberg: Across our apps there are now almost 1 billion monthly actives using meta AI our focus for this year is deepening the experience in making AI, the leading personal AI with an emphasis on personalization voice conversations.

Messenger is also used by more than 1 billion people each month and they're 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.

Mark Zuckerberg: And entertainment.

In countries like Thailand, and Vietnam.

Mark Zuckerberg: 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.

Mark Zuckerberg: I think that we're all going to have an AI that we talked to you throughout the day.

Where there was a low cost of labor.

Mark Zuckerberg: Now while were browsing content on our phones, but eventually as we're going through our days with glasses and I think that this is going to be one of the most important and valuable services that.

We see many businesses conduct commerce through our messaging apps.

Mark Zuckerberg: 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 30s in global 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.

There was actually so much business through messaging that those countries are boosting our top 10 or 11 by revenue even though they were ranked in the third parties in global GDP.

That has ever been created.

Mark Zuckerberg: In addition to building meta AI into our apps.

Mark Zuckerberg: Our feeds started mostly with text, 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 do not think that this is the end of the line. In the near future, I think that we are going to have content in our feeds that you can interact with and that it will 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 third opportunity is business messaging.

Our feeds started mostly with text, 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 do not think that this is the end of the line. In the near future, I think that we are going to have content in our feeds that you can interact with and that it will 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 third opportunity is business messaging.

This phenomenon hasnt, 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.

Mark Zuckerberg: We just released our first meta AI Standalone app.

Mark Zuckerberg: It is personalized so you can talk to it about interests that you've shown while browsing reals, a or different content across our apps and.

I expect that just like every business today has an email address social media accounts and website.

Mark Zuckerberg: And we built a social feed into it. So you can discover entertaining ways that others are using about AI.

Mark Zuckerberg: In the near future, I think that we're going to 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.

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.

Mark Zuckerberg: And initial feedback on the App has been good so far.

Mark Zuckerberg: Over time, I expect that the business opportunity for meta AI to follow our normal product development playbook.

Mark Zuckerberg: And we're going to have more to share on upcoming calls about our progress in this area.

We're going to have more.

Mark Zuckerberg: First we build and scale the product and then once it is at scale.

To share on upcoming calls about our progress in this area.

Mark Zuckerberg: 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.

The fourth opportunity is meta AI.

Mark Zuckerberg: And we focus on revenue in this case I think that there will be a large opportunity to show product recommendations, our ads as well as a premium service for people, who want to unlock more compute for additional functionality or intelligence.

Across our apps there are now almost 1 billion monthly actives using meta AI our focus for this year is deepening the experience in making AI, the leading personal AI with an emphasis on personalization voice conversations.

Mark Zuckerberg: The third opportunity is business messaging. Right now, the vast majority of our business is advertising in feeds on Facebook and Instagram. But WhatsApp now has more than 3 billion monthly actives with more than 100 million people in the U.S. 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.

Mark Zuckerberg: Right now, the vast majority of our business is advertising and feeds on Facebook and Instagram. WhatsApp now has more than 3 billion monthly actives, with more than 100 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. 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 30s in global GDP.

Right now, the vast majority of our business is advertising and feeds on Facebook and Instagram. WhatsApp now has more than 3 billion monthly actives, with more than 100 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. 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 30s in global GDP.

Mark Zuckerberg: 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.

In entertainment.

Mark Zuckerberg: I think that we're all going to 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 going to be one of the most important and valuable services that has ever been created.

I think that we're all going to have an AI that we talk to you throughout the day.

All were browsing content on our phones and eventually as we're going through our days with glasses.

Mark Zuckerberg: The fifth opportunity is AI devices, which is increasingly how we were thinking about our work on the next generation of computing platforms.

And I think that this is gonna be one of the most important and valuable services that has ever been created.

Mark Zuckerberg: 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 30s 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.

Mark Zuckerberg: Glasses are the ideal form factor for both AI and the met averse.

Mark Zuckerberg: 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.

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 reals, a or different content across our apps and.

Mark Zuckerberg: They enable you to let an a I see what you see here what you hear.

Mark Zuckerberg: And talk to you throughout the day.

Mark Zuckerberg: And they let you blend the physical and digital worlds together with holograms.

Mark Zuckerberg: More than 1 billion people worldwide wear glasses today and it seems highly likely that these will become a eyeglasses over the next five to 10 years.

And we built a social feed into it. So you can discover entertaining ways that others are using about AI.

Mark Zuckerberg: 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. 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. We're going to have 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.

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. 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. We're going to have 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.

And initial feedback on the App has been good so far.

Mark Zuckerberg: Building the devices that that people used to experience our services lets.

Mark Zuckerberg: Over time, I expect that the business opportunity for MetaAI 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 going to be largely focused on scaling and deepening engagement for at least the next year before we'll really be ready to start building out.

Over time, I expect that the business opportunity for meta AI to follow our normal product development playbook.

Mark Zuckerberg: 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 platform.

Mark Zuckerberg: Lets us deliver the highest quality AI and social experiences.

First we build and scale the product and then once it is at scale.

Mark Zuckerberg: 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.

Then we focus on revenue in this case I think that there will be a large opportunity to show product recommendations, our 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 going to be largely focused on scaling and deepening engagement for at least the.

Mark Zuckerberg: Ray ban met a eyeglasses have tripled in sales in the last year.

Mark Zuckerberg: People, who have them are using them a lot.

Mark Zuckerberg: And we're gonna have more to share on upcoming calls about our progress in this area.

Speaker Change: We've got some exciting new launches with our partner Essilor Luxottica later this year as well that should expand that category and add some new technological capabilities to the glasses on quest. We were also seeing deeper engagement as quest three S. Makes V are accessible to more people and more people are creating experiences and horizon.

Mark Zuckerberg: 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.

Next year before we'll really be ready to start building out the business here.

Mark Zuckerberg: The fifth opportunity is AI devices, which is increasingly how we're thinking about our work on the next generation of computing. 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 people use to experience our services lets us deliver the highest quality AI and social experiences.

The fifth opportunity.

Mark Zuckerberg: 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 going to 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. I think that this is going to 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. We built a social feed into it, so you can discover entertaining ways that others are 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 going to 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. I think that this is going to 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. We built a social feed into it, so you can discover entertaining ways that others are using Meta AI.

Is AI devices, which is increasingly how we were thinking about our work on the next generation of computing platforms.

Mark Zuckerberg: And with AI tools.

Glasses are the ideal form factor for both AI and the met averse.

Now everything that I've talked about today is built on top of our AI models and our infrastructure.

They enable you to let an a I see what you see here, what you hear and.

Mark Zuckerberg: We released the first of all I'm a four models earlier this month.

And talk to you throughout the day and they let you blend the physical and digital worlds together with hologram.

And there are some of the most intelligent best.

Mark Zuckerberg: Best multimodal lowest latency and most efficient models that anyone who has built.

More than 1 billion people worldwide wear glasses today and it seems highly likely that these will become a eyeglasses over the next five to 10 years.

Mark Zuckerberg: 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.

Mark Zuckerberg: We have more models on the way, including the massive Lama for Behemoth model.

Mark Zuckerberg: 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 b piece of progress across the industry and the opportunities ahead for us are staggering.

Building the devices that that people used to experience our services.

Lets us deliver the highest quality AI and social experiences.

Mark Zuckerberg: And this will serve as an amplifier on unlocking some new opportunities as well. Ray-Ban Meta-AI glasses have tripled in sales in the last year. We have some exciting new launches with our partner Estelor Luxottica later this year as well that should expand that category and add some new technological capabilities to the glass. On Quest, we are also seeing deeper engagement as Quest 3S makes VR accessible to more people, and more people are creating experiences in Horizon with AI. Now, everything that I've talked about today is built on top of our AI models and our We released the first LLaMA 4 models earlier this month.

And this will serve as an amplifier lock.

Blocking some new opportunities as well.

Mark Zuckerberg: 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, 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. I expect that we're going to 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.

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, 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. I expect that we're going to 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.

Ray ban meta AI glasses have tripled in sales in the last year.

Mark Zuckerberg: I want to make sure that we're working aggressively and efficiently.

Mark Zuckerberg: Over time, I expect that the business opportunity for MetaAI 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 going to 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.

Mark Zuckerberg: And I also want to make sure that we're 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 it.

It's an exciting new launches with our partner Essilor Luxottica later this year as well that should expand that category and add some new technological capabilities to the glasses on quest. We're also seeing deeper engagement as quest three S makes V are accessible to more people and.

Mark Zuckerberg: Increased our planned investment for this year.

More people are creating experiences in horizon with AI tools.

Mark Zuckerberg: More broadly.

Mark Zuckerberg: 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.

Now everything that I've talked about today is built on top of our AI models and our infrastructure. We released the first Lama for models earlier this month.

Mark Zuckerberg: Continue to think that this year is gonna be a pivotal moment for our industry.

Mark Zuckerberg: and they are some of the most intelligent, best multimodal, lowest latency, and most efficient models that anyone has built. Overall, we are focused on building full general intelligence. All of the opportunities that I've discussed today are downstream. The pace of progress across the industry and the opportunities ahead for us are staggering. I want to make sure that we're working aggressively and efficiently. And I also want to make sure that we are building out the leading infrastructure and teams that we need to achieve our goal. We hope to be able to launch 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 year.

Mark Zuckerberg: The fifth opportunity is AI devices, which is increasingly how we're 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 people use to experience our services lets us deliver the highest quality AI and social experiences.

There are some of the most intelligent best.

Mark Zuckerberg: And I am grateful for everyone, who was working so hard at the company.

Best multimodal lowest latency and most efficient models that anyone who has built.

Mark Zuckerberg: 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.

We are.

Mark Zuckerberg: 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. They let you blend the physical and digital worlds together with holograms. More than 1 billion people worldwide wear glasses today, and it seems highly likely that these will become AI glasses over the next 5 to 10 years. Building the devices that people use to experience our services lets us deliver the highest quality AI and social experiences. 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.

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. They let you blend the physical and digital worlds together with holograms. More than 1 billion people worldwide wear glasses today, and it seems highly likely that these will become AI glasses over the next 5 to 10 years. Building the devices that people use to experience our services lets us deliver the highest quality AI and social experiences. 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.

Overall, we are focused on building full general intelligence all of the opportunities that I've discussed today are downstream.

Susan: Thanks, Mark and good afternoon, everyone.

Mark Zuckerberg: Let's begin with our consolidated results.

Mark Zuckerberg: All comparisons are on a year over year basis, unless otherwise noted.

The pace of progress across the industry and the opportunities ahead for us are staggering.

Mark Zuckerberg: Q1, total revenue was $42 $3 billion up 16% or 19% on a constant currency basis.

I want to make sure that we're working aggressively and efficiently and.

And I also want to make sure that we're building out the leading infrastructure and teams that we need to achieve our goals.

Mark Zuckerberg: Q1, total expenses were $24 $8 billion up 9% compared to last year.

Mark Zuckerberg: 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 Essilor Luxottica later this year as well that should expand that category and add some new technological capabilities to the glass. On Quest, we are also seeing deeper engagement as Quest 3S makes VR accessible to more people, and more people are creating experiences in Horizon with AI tools.

City 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.

Mark Zuckerberg: In terms of the specific line items cost of revenue increased 14%, driven primarily by higher infrastructure costs and payments to partners.

Mark Zuckerberg: Partially offset by a benefit from the previously announced extension of server useful lives.

Spend for this year.

Mark Zuckerberg: 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 going to be a pivotal moment for our industry. And I am grateful for everyone who is working so hard at the company to deliver all this amazing technology and new experiences.

More broadly.

This has been a good start to what I expect will continue to be an intense year.

Mark Zuckerberg: R&D increased 22%, mostly due to higher employee compensation and infrastructure costs.

Mark Zuckerberg: We've got some exciting new launches with our partner EssilorLuxottica 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 3S 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 4 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 Llama 4 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.

We've got some exciting new launches with our partner EssilorLuxottica 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 3S 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 4 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 Llama 4 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.

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.

Mark Zuckerberg: Marketing and sales increased 8% driven mainly by an increase in professional services related to our ongoing platform integrity efforts.

And I am grateful for everyone, who was 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.

Mark Zuckerberg: G&A decreased 34% driven primarily by lower legal related costs.

Mark Zuckerberg: As always, thank you all for being on this journey with us.

Mark Zuckerberg: Now, everything that I've talked about today is built on top of our AI models and our infrastructure. We released the first LLaMA 4 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 LLaMA 4 behemoth model. Overall, we 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.

Mark Zuckerberg: We ended Q1 with over 76800 employees.

Good morning, everyone.

Susan Li: Let's begin with our consolidated results. All comparisons are on a year-over-year basis unless otherwise. $2.3 billion, up 16% or 19% on a constant currency basis. 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. R&D increased 22% mostly due to higher employee compensation and infrastructure costs. increase in professional services related to our ongoing platform integrity efforts.

Let's begin with our consolidated results all comparisons are on a year over year basis unless otherwise.

Mark Zuckerberg: Up 4% quarter over quarter.

Mark Zuckerberg: First quarter operating income was $17 $6 billion, representing a 41% operating margin.

$2 $3 billion up 16% or 19% on a constant currency basis.

Mark Zuckerberg: 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.

10% compared to last year.

Mark Zuckerberg: Net income was $16 $6 billion or $6.43 per share.

In terms of the specific line items cost of revenue increased 14%, driven primarily by higher infrastructure costs and payments to partners.

Mark Zuckerberg: The pace of progress across the industry and the opportunities ahead for us are staggering. I want to make sure that we're working aggressively and efficiently, and I also want to make sure that we are building out the leading infrastructure and teams that we need to achieve our goals. 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. 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.

The pace of progress across the industry and the opportunities ahead for us are staggering. I want to make sure that we're working aggressively and efficiently, and I also want to make sure that we are building out the leading infrastructure and teams that we need to achieve our goals. 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. 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.

Mark Zuckerberg: Capital expenditures, including principal payments on finance leases were $13 $7 billion driven by investments in servers data centers and network infrastructure.

Mark Zuckerberg: I want to make sure that we're working aggressively and efficiently, and I also want to make sure that we are building out the leading infrastructure and teams that we need to achieve our goals. 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. 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.

Firstly offset by a benefit.

R&D increased 22%, mostly due to higher employee compensation and infrastructure costs.

Mark Zuckerberg: Free cash flow was $10 $3 billion.

We repurchased $13 $4 billion of our class a common stock and paid $1.3 billion in dividends to shareholders.

The increase in professional services related to our ongoing platform integrity efforts.

Mark Zuckerberg: Ending the quarter with $72 billion in cash and marketable securities and $28 $8 billion in debt.

Susan Li: GNA 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 $17.6 billion, representing a 41% operating margin. as we recognized excess tax benefits from share-based compensation due to the increase in our share price versus prior periods. were $13.7 billion driven by investments in servers, data centers, and network infrastructure.

G&A decreased 34% driven primarily by lower legal related costs.

We ended Q1 with over 76800 employees.

Mark Zuckerberg: Moving now to our segment results.

Mark Zuckerberg: 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 going to be a pivotal moment for our industry. And I am grateful for everyone who is working so hard at the company to deliver all this amazing technology and new experiences.

Mark Zuckerberg: I'll begin with our family of apps segment.

Up 4% quarter over quarter.

Mark Zuckerberg: I continue to think that this year is going to 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. Now, Susan.

I continue to think that this year is going to 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. Now, Susan.

Mark Zuckerberg: Our community across the family of apps continues to grow and we estimate more than 3.4 billion people used at least one of our family of apps on a daily basis in March.

First quarter operating income was $17 $6 billion, representing a 41% operating margin.

Mark Zuckerberg: As always, thank you all for being on this journey with us.

As we recognized excess tax benefits from share based compensation due to the increase in our share price versus prior periods.

Mark Zuckerberg: Q1 total family of apps revenue was $41 $9 billion up 16% year over year.

Susan Li: Thanks, Mark, and good afternoon, everyone.

Susan Li: 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 $42.3 billion, up 16%, or 19% on a constant currency basis. Q1 total expenses were $24.8 billion, 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&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&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 $17.6 billion, representing a 41% operating margin.

Susan Li: Let's begin with our consolidated results. All comparisons are on a year-over-year basis unless otherwise noted. Q1 total revenue was $42.3 billion, up 16% or 19% on a constant currency basis. Q1 total expenses were $24.8 billion, 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 life. R&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 effort.

Mark Zuckerberg: Q1 family of apps and revenue was $41 $4 billion up 16% or 20% on a constant currency basis.

Many.

Mark Zuckerberg: Within AD revenue the online commerce vertical was the largest contributor to year over year growth.

Chris: Chris were $13 $7 billion, driven by investments in servers data centers and network infrastructure.

Mark Zuckerberg: On a user geography basis AD revenue growth was strongest in rest of world and North America at 19% and 18% respectively.

Chris: Bruce.

Susan Li: We repurchased $13.4 billion of our Class A common stock and paid $1.3 billion in dividends to shareholders, ending the quarter with $70.2 billion in cash and marketable securities and $28.8 billion in debt.

Chris: We repurchased $13 $4 billion of our class a common stock and <unk>.

Mark Zuckerberg: Europe, and Asia Pacific grew 14% and 12%.

Chris: Paid $1.3 billion in dividends to shareholders, ending the quarter with $70.2 billion in cash and marketable securities and $28 $8 billion in them.

Mark Zuckerberg: In Q1, the total number of AD impressions served across our services increased 5% and the average price per AD increased 10%.

Mark Zuckerberg: Impression growth was mainly driven by Asia Pacific.

Susan Li: Moving now to our segment results. I'll begin with our family of app sites. Our community across the family of apps continues to grow and we estimate more than 3.4 billion people used at least one of our family of apps on a daily basis in March. Q1 total Family of Apps revenue was $41.9 billion, up 16% year-over-year. Q1 Family of Apps ad revenue was $41.4 billion, 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 19% and 18% respectively.

Chris: Moving now to our segment results.

Mark Zuckerberg: Pricing growth benefited from increased advertiser demand in part driven by improved AD performance.

Chris: I'll begin with our family of apps segment.

Chris: Our community across the family of apps continues to grow and we estimate more than 3.4 billion people used at least one of our family of apps on a daily basis in March.

Mark Zuckerberg: This was partially offset by impression growth, particularly from lower monetizing regions and surfaces.

Susan Li: GNA 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 $17.6 billion, 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 income was $16.6 billion, or $6.43 per share. Capital expenditures, including principal payments on finance leases, were $13.7 billion, driven by investments in servers, data centers, and network infrastructure. Free cash flow was $10.3 billion.

Mark Zuckerberg: [noise] family of apps other revenue was $510 million up 34% driven mostly by business messaging revenue growth from our Whatsapp business platform as well as men are verified subscriptions.

Chris: Q1 total family of apps revenue was $41 $9 billion up 16% year over year.

Chris: Q1 family of apps and revenue was $41 $4 billion up 16% or 20% on a constant currency basis.

Mark Zuckerberg: We continue to direct the majority of our investments toward the development and operation of our family of apps in Q1 family of apps expenses were $21 billion, representing 81% of our overall expenses.

Chris: Within AD revenue the online commerce vertical was the largest contributor to year over year growth.

Susan Li: 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 income was $16.6 billion, or $6.43 per share. Capital expenditures, including principal payments on finance leases, were $13.7 billion, driven by investments in servers, data centers, and network infrastructure. Free cash flow was $10.3 billion. We repurchased $13.4 billion of our Class A common stock, and paid $1.3 billion in dividends to shareholders. Ending the quarter was $70.2 billion in cash and marketable securities, and $28.8 billion 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 3.4 billion people used at least one of our family of apps on a daily basis in March.

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 income was $16.6 billion, or $6.43 per share. Capital expenditures, including principal payments on finance leases, were $13.7 billion, driven by investments in servers, data centers, and network infrastructure. Free cash flow was $10.3 billion. We repurchased $13.4 billion of our Class A common stock, and paid $1.3 billion in dividends to shareholders. Ending the quarter was $70.2 billion in cash and marketable securities, and $28.8 billion 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 3.4 billion people used at least one of our family of apps on a daily basis in March.

Chris: On a user geography basis AD revenue growth was strongest in rest of world and North America at 19% and 18% respectively.

Mark Zuckerberg: Family of apps expenses were up 10%, mainly due to growth in employee compensation and infrastructure costs, which were partially offset by lower legal related expenses.

Susan Li: Europe and Asia-Pacific grew 14% and 12%. In Q1, 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.

Chris: Europe, and Asia Pacific grew 14% and 12%.

Chris: In Q1, the total number of AD impressions served across our services increased 5% and the average price per AD increased 10%.

Mark Zuckerberg: Family of apps operating income was 21 $8 billion, representing a 52% operating margin.

Within our reality lab segment Q1 revenue was $412 million.

Chris: Impression growth was mainly driven by Asia Pacific pre.

Chris: Pricing growth benefited from increased advertiser demand in part driven by improved AD performance.

Mark Zuckerberg: One 6% year over year due to lower met of quest sales, which were partially offset by increased sales of Ray ban meta AI glasses.

Chris: This was partially offset by impression growth, particularly from lower monetizing regions and surfaces.

Mark Zuckerberg: Reality labs expenses were $4 $6 billion up 8% year over year, driven primarily by higher employee compensation.

Susan Li: Family of Apps Other Revenue was $510 million, up 34%, driven mostly by business messaging revenue growth from our WhatsApp business platform, as well as Meta Verified. We continue to direct the majority of our investments toward the development and operation of our family of apps. In Q1, Family of Apps expenses were $20.1 billion, representing 81% of our overall expenses. Family of Apps 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 $21.8 billion, representing a 52% operating margin.

Chris: Family of apps other revenue was $510 million up 34% driven mostly by business messaging revenue growth from our Whatsapp business platform as well as net of verified subscriptions.

Mark Zuckerberg: Reality labs operating loss was $4 $2 billion.

Susan Li: Moving now to our segment results.

Susan Li: I'll begin with our family of apps segment. Our community across the family of apps continues to grow, and we estimate more than 3.4 billion people used at least one of our family of apps on a daily basis in March. Q1 total family of apps revenue was $41.9 billion, up 16% year over year. Q1 Family of Apps ad revenue was $41.4 billion, 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 19% and 18%, respectively.

Mark Zuckerberg: Turning now to the business outlook.

Mark Zuckerberg: 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.

Chris: We continue to direct the majority of our investments toward the development and operation of our family of apps in.

Chris: In Q1 family of apps expenses were $20 $1 billion, representing 81% of our overall expenses.

Susan Li: Q1 total family of apps revenue was $41.9 billion, up 16% year over year. Q1 family of apps ad revenue was $41.4 billion, 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 19% and 18%, respectively. Europe and Asia-Pacific grew 14% and 12%. In Q1, 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.

Q1 total family of apps revenue was $41.9 billion, up 16% year over year. Q1 family of apps ad revenue was $41.4 billion, 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 19% and 18%, respectively. Europe and Asia-Pacific grew 14% and 12%. In Q1, 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.

Mark Zuckerberg: 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.

Chris: Family of apps expenses were up 10%, mainly due to growth in employee compensation and infrastructure costs, which were partially offset by lower legal related expenses.

Mark Zuckerberg: I'll start with our family of apps.

Mark Zuckerberg: In the first quarter, we saw strong growth in video consumption across both Facebook and Instagram, particularly in the U S where video time spent grew double digits year over year.

Chris: Yeah.

Chris: Family of apps operating income was 21 $8 billion, representing a 52% operating margin.

Mark Zuckerberg: This growth continues to be driven primarily by ongoing enhancements to our recommendation systems and we see opportunities to deliver further gains this year.

Chris: Within our reality lab segment Q1 revenue was $412 million down 6% year over year due to lower met of quest sales, which were partially offset by increased sales of Ray ban meta AI glasses.

Susan Li: Europe and Asia-Pacific grew 14% and 12%. In Q1, 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.

Mark Zuckerberg: We're also progressing on longer term efforts to develop innovative new approaches to recommendations.

Susan Li: Reality Lab's expenses were $4.6 billion, up 8% year-over-year, driven primarily by higher employee compensation. Reality Lab's operating loss was $4.2 billion.

Chris: Reality labs expenses were $4 $6 billion up 8% year over year, driven primarily by higher employee compensation.

Mark Zuckerberg: 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.

Chris: Reality labs operating loss was $4 $2 billion.

Susan Li: 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.

Chris: Turning now to the business outlook.

There are promising techniques, we're working on that will incorporate the innovations from L. O M model architectures to achieve this.

Chris: 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.

Mark Zuckerberg: Another area that is showing early promise is integrating <unk> technology into our content recommendation system.

Susan Li: Family of Apps Other Revenue was $510 million, 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 Q1, Family of Apps' expenses were $20.1 billion, representing 81% of our overall expenses. Family of Apps 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 $21.8 billion, representing a 52% operating margin.

Susan Li: Family of apps other revenue was $510 million, 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 Q1, family of apps expenses were $20.1 billion, representing 81% of our overall expenses. Family of apps 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 $21.8 billion, representing a 52% operating margin. Within our Reality Labs segment, Q1 revenue was $412 million, 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 $4.6 billion, up 8% year over year, driven primarily by higher employee compensation.

Family of apps other revenue was $510 million, 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 Q1, family of apps expenses were $20.1 billion, representing 81% of our overall expenses. Family of apps 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 $21.8 billion, representing a 52% operating margin. Within our Reality Labs segment, Q1 revenue was $412 million, 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 $4.6 billion, up 8% year over year, driven primarily by higher employee compensation.

Chris: 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.

Mark Zuckerberg: 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.

Susan Li: 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 U.S., where video time spent grew double digits year over year. This growth continues to be driven primarily by ongoing enhancements to our recommendation system. 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.

Chris: I'll start with our family of apps.

Chris: In the first quarter, we saw strong growth in video consumption across both Facebook and Instagram, particularly in the U S where video time spent grew double digits year over year.

Mark Zuckerberg: We began testing using Mama and threads recommendation systems at the end of last year, given the apps text based content and have already seen a 4% lift in time spent from the first launch.

Chris: This growth continues to be driven primarily by ongoing enhancements to our recommendation systems and we see opportunities to deliver further gains this year.

Mark Zuckerberg: 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.

Chris: We're also progressing on longer term efforts to develop innovative new approaches to recommendations.

Mark Zuckerberg: 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 threats.

Chris: 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.

Susan Li: Within our Reality Lab segment, Q1 revenue was $412 million, down 6% year-over-year due to lower MetaQuest sales, which were partially offset by increased sales of Ray-Ban Meta AI glasses. Reality Lab's expenses were $4.6 billion, up 8% year-over-year, driven primarily by higher employee compensation. Reality Lab's operating loss was $4.2 billion.

Susan Li: There are promising techniques we're working on that will incorporate the innovations from LLM model architectures to achieve. Another area that is showing early promise is integrating LLM technology into our content recommendations. 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 LLaMA 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.

Chris: There are promising techniques, we're working on that will incorporate the innovations from L. O M model architectures to achieve this.

Mark Zuckerberg: 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.

Chris: Another area that is showing early promise is integrating <unk> technology into our content recommendation systems.

Chris: 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.

Mark Zuckerberg: We are already seeing this leads 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 meta AI app in the U S and Canada.

Susan Li: Reality Labs operating loss was $4.2 billion. 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.

Reality Labs operating loss was $4.2 billion. 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.

Susan Li: 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.

Mark Zuckerberg: We're also continuing to focus on helping people connect over contact.

Chris: We began testing using lama and threads recommendation systems at the end of last year, given the apps text based content and have already seen a 4% lift in time spent from the first launch.

Mark Zuckerberg: In Q1, we launched a new experience on Instagram in the U S that consists of a feed of content. Your friends have left a note on or light and we're seeing good results.

Susan Li: 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 app. 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 Meta AI app in the U.S.

Chris: It remains early here, but a big focus this year will be unexplored, how we can deploy this for other content types, including photos and videos.

Susan Li: 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 U.S., 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.

Mark Zuckerberg: We also just launched blend which is an opt in experience and direct messages that enables you to blend your reels algorithm with your friends to spark conversations over each other's interests.

Chris: 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 threats.

Mark Zuckerberg: These features all lean into Instagram is positioned at the intersection of entertainment and social connection.

Mark Zuckerberg: 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're connected to or follow up.

Chris: 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.

Susan Li: 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 Llama in Threads 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.

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 Llama in Threads 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.

Mark Zuckerberg: Today, there are tens of billions of views and status posts on Whatsapp, each day, and we continue to invest in the updates tab as it place people can go to do more.

Chris: 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 meta AI app in the U S and Canada.

Mark Zuckerberg: Creators remain another big focus for us and we're investing in tools to help them produce the best original content on our platforms.

Susan Li: 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 system. 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 LLaMA 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.

Susan Li: and Canada.

Mark Zuckerberg: Last week, we launched our Standalone added FAP.

Susan Li: We're also continuing to focus on helping people connect over content. In Q1, we launched a new experience on Instagram in the U.S. 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.

Chris: We're also continuing to focus on helping people connect over content in Q1, we launched a new experience on Instagram in the U S. That consists of a feed of content. Your friends have left a note on or light and we're seeing good results.

Mark Zuckerberg: Which supports the full creative process for video creators from inspiration and creation to performance insights.

<unk> 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.

Chris: We also just launched blend which is an opt in experience and direct messages that enables you to blend your reels algorithm with your friends to spark conversations over each other's interests.

Moving to reality labs, we're seeing very strong traction with Ray ban meta AI classes 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.

Chris: These features all lean into Instagram position at the intersection of entertainment and social connection.

Susan Li: 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.

Chris: Whatsapp remains at its core a private messaging app.

Susan Li: 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 Meta AI app in the US and Canada. We're also continuing to focus on helping people connect over content.

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 Meta AI app in the US and Canada. We're also continuing to focus on helping people connect over content.

Susan Li: 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 video. 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 Threats. Earlier this year, we began testing the ability for MetaAI to better personalize its responses by remembering certain details from people's prior queries and considering what that person engages with on our app. We are already seeing this lead to deeper engagement with people we've rolled it out to.

Chris: But it has evolved to also become a place people come to get updates from accounts they are connected to or follow up.

Mark Zuckerberg: 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're speaking to someone in one of these languages, you'll hear what they say and your preferred language through the glasses in real time.

Chris: 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.

Chris: Creators remain another big focus for us and we're investing in tools to help them produce the best original content on our platforms.

Mark Zuckerberg: Now to the second driver of our revenue performance increase.

Mark Zuckerberg: Increasing monetization efficiency.

Chris: Last week, we launched our Standalone added SAP, which supports the full creative process for video creators from inspiration and creation to performance insights.

Mark Zuckerberg: The first part of this work is optimizing the level of ads within organic engagement.

Mark Zuckerberg: We continue to optimize and supply across each service to better deliver ads at the time and place they are most relevant to people.

Chris: And it 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.

Susan Li: And it is now built into Meta AI across Facebook, Instagram, Messenger, and our new standalone Meta AI app in the US and Canada.

Mark Zuckerberg: We are also starting to introduce ads on on monetize surfaces like threats, which we opened up to all eligible advertisers. This month to reach people in over 30 different markets to start including the U S.

Susan Li: We're also continuing to focus on helping people connect over content. In Q1, we launched a new experience on Instagram in the U.S. 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 and 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.

Susan Li: 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.

Chris: Moving to reality labs, we're seeing very strong traction with Ray ban meta AI classes 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.

Susan Li: In Q1, 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.

In Q1, 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.

Mark Zuckerberg: As we do for any newly monetize surface, we expect to gradually ramp add supply as we optimize the AD formats and ensure they feel native to the app.

Mark Zuckerberg: We don't expect dredge to be a meaningful driver of overall impression or revenue growth in 2025.

Chris: 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 and your preferred language through the glasses in real time.

The second part of increasing monetization efficiency is improving marketing performance.

Mark Zuckerberg: We're continuing to improve our ads just finished by developing new modeling technologies to more efficiently predict the right AD to show.

In Q1, we introduced our new generative adds recommendation model or Jen for ads ranking.

Susan Li: Now to the second driver of our revenue performance. Increasing Monetization Efficient. 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. We are also starting to introduce ads on unmonetized surfaces, 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 service, we expect to gradually ramp ad supply as we optimize the ad formats and ensure they feel native to the app.

Chris: Now to the second driver of our revenue performance.

Chris: Increasing monetization efficiency.

Mark Zuckerberg: 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.

Chris: 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.

Mark Zuckerberg: This efficiency gain enabled us to significantly scale up the amount of compute we use for model training with Gen trained on thousands of Gpus, our largest cluster for ads training to date.

Susan Li: Creators remain another big focus for us, and we're investing in tools to help them produce the best original content on our platform. Last week, we launched our standalone Edits app, which supports the full creative process for video creators, from inspiration and creation to performance insight. 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.

Susan Li: 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.

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.

Chris: We are also starting to introduce ads on on monetize surfaces like threats, which we opened up to all eligible advertisers. This month to reach people in over 30 different markets to start including the U S.

Mark Zuckerberg: We began testing the new model for ads recommendations on Facebook wheels 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.

As we do for any newly monetize surface, we expect to gradually ramp add supply as we optimize the AD formats and ensure they feel native to the app.

Mark Zuckerberg: On the ads product side, we're seeing continued momentum with our advantaged plus suite of AI powered solutions.

Susan Li: 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 Q1, we introduced our new Generative Ads Recommendation Model, or GEM, 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.

Chris: We don't expect rents to be a meaningful driver of overall impression or revenue growth in 2025.

Mark Zuckerberg: 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.

Chris: The second part of increasing monetization efficiency is improving marketing performance.

Chris: We're continuing to improve our AD systems by developing new modeling technologies to more efficiently predict the right ad to shell.

Mark Zuckerberg: In April we rolled this out to more advertisers and expect to complete the global rollout later this year.

Mark Zuckerberg: We're also seeing strong adoption of advantage plus creative this.

Chris: In Q1, we introduced our new generative adds recommendation model or gem for ads ranking.

Mark Zuckerberg: This week, we are broadening access a video expansion to Facebook wheels 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.

Susan Li: 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.

Chris: 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.

Susan Li: 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 surfaces like Threads, 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.

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 surfaces like Threads, 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.

Chris: This efficiency gain enabled us to significantly scale up the amount of compute we used for model training with Gen trained on thousands of Gpus, our largest cluster for ads training to date.

Mark Zuckerberg: 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 Jenny I took place clothing on virtual models, helping customers visualize how an item may look and fit.

Susan Li: With GEM trained on thousands of GPUs, our largest cluster for ads training today. 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 conversion. We're now rolling it out to additional services across our 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+, 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.

Susan Li: 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 U.S. As we do for any newly monetized service, we expect to gradually ramp ad supply as we optimize the ad formats and ensure they feel native to the app.

Chris: We began testing the new model for ads recommendations on Facebook Reals earlier, this year and have seen up to a 5% increase in AD conversions.

Chris: We're now rolling it out to additional services across our apps.

Mark Zuckerberg: Last we continue to evolve our ads platform to drive results that are optimized for each business's objectives and the way they measure value.

Chris: On the ads product side, we're seeing continued momentum with our advantage plus suite of AI powered solutions.

Mark Zuckerberg: One example of this is our incremental attribution feature.

Chris: 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.

Mark Zuckerberg: Which enables advertisers to optimize for driving incremental conversions or conversions. We believe would not have occurred without an ad being shown.

Mark Zuckerberg: We're seeing strong results in testing, so far with advertisers using incremental attribution in cash.

Chris: In April we rolled this out to more advertisers and expect to complete the global rollout later this year.

Chris: Yeah.

Susan Li: 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 in fashion. Last, we continue to evolve our ads platform to drive results that are optimized for each business's objectives and the way they measure value.

Chris: We're also seeing strong adoption of advantage plus creative.

Mark Zuckerberg: Seeing an average of 46% lift in incremental conversions compared to their business as usual approach.

Susan Li: 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 Q1, we introduced our new generative ads recommendation model, or GEM, 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 GEM 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 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 Q1, we introduced our new generative ads recommendation model, or GEM, 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 GEM 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.

Chris: This week, we are broadening access a video expansion to Facebook wheels 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.

Mark Zuckerberg: We expect to make this available to all advertisers in the coming weeks.

Speaker Change: 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 priority.

Chris: 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 Jenny I to place clothing on virtual models, helping customers visualize how an item may look and fit.

Speaker Change: Starting with head count our hiring continues to be targeted at technical roles within our company priorities and.

Speaker Change: In the first quarter the significant majority of the roughly 2800 employees. We added we're just support our priorities of monetization infrastructure generative AI regulation and compliance and reality lives.

Chris: Last we continue to evolve our ads platform to drive results that are optimized for each business's objectives and the way they measure value.

Susan Li: With GEM 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 ad's 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+, 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.

Susan Li: One example of this is our incremental attribution. 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.

Chris: One example of this is our incremental attribution feature.

Speaker Change: On infrastructure, we have two primary focuses to meet the growing compute needs of our services and AI initiatives.

Chris: Which enables advertisers to optimize for driving incremental conversions or conversions. We believe would not have occurred without an ad being shown.

Speaker Change: The first way is by significantly scaling up our infrastructure footprint.

Susan Li: We're now rolling it out to additional surfaces across our apps. On the ads product side, we're seeing continued momentum with our Advantage+ 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+ 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+ 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're now rolling it out to additional surfaces across our apps. On the ads product side, we're seeing continued momentum with our Advantage+ 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+ 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+ 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.

Chris: We're seeing strong results in testing, so far with advertisers using incremental attribution in tests seeing an average of 46% lift in incremental conversions compared to their business as usual approach.

Speaker Change: Our capex growth this year is going toward both generative AI and core business needs with the majority of overall capex supporting the core.

Speaker Change: 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.

Susan Li: We expect to make this available to all advertisers in the coming 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 priority. 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.

Chris: We expect to make this available to all advertisers in the coming weeks.

Chris: 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.

Speaker Change: 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.

Susan Li: 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's objectives and the way they measure value.

Chris: Starting with head count or.

Chris: Our hiring continues to be targeted at technical roles within our company priorities.

The second way, we're meeting our compute needs is by increasing the efficiency of our workloads.

Chris: In the first quarter the significant majority of the roughly 2800 employees. We added we're just support our priorities of monetization infrastructure generative AI regulation and compliance and reality lives.

Speaker Change: 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.

Susan Li: 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's 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.

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's 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.

Chris: On infrastructure, we have two primary focuses to meet the growing compute needs of our services and AI initiatives.

Speaker Change: For example, we shared on the Q3 2024 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.

Susan Li: 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 business needs. 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.

Chris: The first waves by significantly scaling up our infrastructure footprint.

Chris: Our capex growth this year is going toward both generative AI and core business needs with the majority of overall capex supporting the core.

Speaker Change: Since then we've been able to deliver similar gains in just six months time with improvements to our AI recommendations, delivering 7% and 6% time spent games on Facebook and Instagram respectively.

Susan Li: 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.

Chris: 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.

Speaker Change: 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.

Chris: 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.

Susan Li: We expect to make this available to all advertisers in the coming weeks.

Speaker Change: A strong position to navigate a variety of outcomes.

Susan Li: The second way we're meeting our compute needs is by increasing the efficiency of our work. In fact, many of the innovations coming out of our ranking work are focused on increasing the efficiency of our... This emphasis on efficiency is helping us deliver consistently strong returns from our core AI initiatives. For example, we shared on the Q3 2024 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 7% and 6% time spent gains on Facebook and Instagram, respectively.

Chris: 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.

Susan Li: 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.

Speaker Change: Moving to our financial outlook.

Speaker Change: We expect second quarter 2025, total revenue to be in the range of 42, and a half to 45 and a half billion dollars.

Susan Li: 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.

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.

Speaker Change: Our guidance assumes foreign currency is an approximately 1% tailwind to year over year total revenue growth based on current exchange rates.

Chris: <unk>.

Chris: For example, we shared on the Q3 2024 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.

Speaker Change: Turning now to the expense outlook, we expect full year 2025 total expenses to be in the range of $113 billion to $118 billion.

Speaker Change: Lowered from our prior outlook of $114 billion to $119 billion.

Chris: Since then we've been able to deliver similar gains in just six months time with improvements to our AI recommendations, delivering 7% and 6% time spent games on Facebook and Instagram respectively.

Speaker Change: Turning now to the Capex outlook, we anticipate our full year 2025 capital expenditures, including principal payments on finance leases will be in the range of $64 billion to $72 billion.

Susan Li: 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.

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.

Susan Li: 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.

Speaker Change: Increased from our prior outlook of $60 billion to $65 billion.

Speaker Change: 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.

Susan Li: 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.

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.

Positioned to navigate a variety of outcomes.

Speaker Change: The majority of our Capex in 2025, we will continue to be directed to our core business.

Susan Li: Moving to our Financial Outlook. We expect second quarter 2025 total revenue to be in the range of $42.5 to $45.5 billion. Our guidance assumes foreign currency is an approximately 1% tailwind to year-over-year total revenue growth based on current exchange rates.

Chris: Moving to our financial outlook.

Chris: We expect second quarter 2025, total revenue to be in the range of 42, and a half to 45 $5 billion.

Speaker Change: Onto tax.

Speaker Change: Absent any changes to our tax landscape, we expect our full year 2025 tax rate to be in the range of 12% to 15%.

Chris: Our guidance assumes foreign currency is an approximately 1% tailwind to year over year total revenue growth based on current exchange rates.

Speaker Change: In addition, we continue to monitor and active regulatory landscape, including legal and regulatory headwinds in the EU and the U S that could significantly impact our business and our financial results.

Susan Li: 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 Q3 2024 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 7% and 6% time spent gains on Facebook and Instagram, respectively.

Susan Li: Turning now to the Expense Outlook. We expect full year 2025 total expenses to be in the range of $113 to $118 billion, lowered from our prior outlook of $114 to $119 billion.

Chris: Turning now to the expense outlook, we expect full year 2025 total expenses to be in the range of $113 billion to $118 billion lowered from our prior outlook of $114 billion to $119 billion.

Speaker Change: The European Commission recently announced its decision that our subscription for no ads model is not compliant with the DNA base.

Susan Li: Turning now to the CapEx outlook, we anticipate our full year 2025 capital expenditures, including principal payments on finance leases, will be in the range of $64 to $72 billion. increased from our prior outlook of $60 to $65 billion. 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.

Chris: Turning now to the Capex outlook, we anticipate our full year 2025 capital expenditures, including principal payments on finance leases will be in the range of $64 billion to $72 billion.

Speaker Change: Based on feedback from the European Commission in connection with the DNA, We expect we will need to make some modifications to our model, which could result in a materially worst user experience for European users and a significant impact to our European business and revenue as early as the third quarter of 2025.

Susan Li: For example, we shared on the Q3 2024 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 7% and 6% 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.

For example, we shared on the Q3 2024 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 7% and 6% 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.

Chris: Increased from our prior outlook of $60 billion to $65 billion.

Speaker Change: We will appeal the commission's DMA decision, but any modifications to our model may be imposed before or during the appeal process.

Chris: 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.

Speaker Change: 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.

Chris: The majority of our Capex in 2025, we will continue to be directed to our core business.

Susan Li: On2Tac. 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 U.S. that could significantly impact our business and our financial results.

Chris: On to tax.

Chris: Absent any changes to our tax landscape, we expect our full year 2025 tax rate to be in the range of 12% to 15%.

Speaker Change: And with that Krista, let's open up the call for questions.

Chris: In addition, we continue to monitor and active regulatory landscape, including legal and regulatory headwinds in the EU and the U S that could significantly impact our business and our financial results.

Speaker Change: Thank you we will now open the lines for a question and answer session to ask a question. Please press star one on your Touchtone phone to withdraw your question again Press Star one please limit yourself to one question. Please pickup your handset before asking your question to ensure clarity. If you were Australia in today's call. Please mute your.

Susan Li: Moving to our financial outlook. We expect second quarter 2025 total revenue to be in the range of $42.5 to $45.5 billion. Our guidance assumes foreign currency is an approximately 1% tailwind to year-over-year total revenue growth based on current exchange rates.

Susan Li: Moving to our financial outlook, we expect second quarter 2025 total revenue to be in the range of $42.5 to 45.5 billion. 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 to 118 billion, lowered from our prior outlook of $114 to 119 billion. Turning now to the CapEx outlook, we anticipate our full year 2025 capital expenditures, including principal payments on finance leases, will be in the range of $64 to 72 billion, increased from our prior outlook of $60 to 65 billion. 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.

Moving to our financial outlook, we expect second quarter 2025 total revenue to be in the range of $42.5 to 45.5 billion. 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 to 118 billion, lowered from our prior outlook of $114 to 119 billion. Turning now to the CapEx outlook, we anticipate our full year 2025 capital expenditures, including principal payments on finance leases, will be in the range of $64 to 72 billion, increased from our prior outlook of $60 to 65 billion. 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.

Susan Li: 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 2025. We will appeal the Commission's DMA decision, but any modifications to our model may be imposed before or during the appeal process.

Chris: The European Commission recently announced its decision that our subscription for no ads model is not compliant with the DNA base.

Chris: Based on feedback from the European Commission in connection with the DNA, We expect we will need to make some modifications to our model, which could result in a materially worst user experience for European users and a significant impact to our European business and revenue as early as the third quarter of 2025.

Speaker Change: Your computer speakers and your first question comes from the line of Brian Nowak with Morgan Stanley. Please go ahead.

Susan Li: Turning now to the expense outlook, we expect full year 2025 total expenses to be in the range of $113 to $118 billion, lowered from our prior outlook of $114 to $119 billion. Turning now to the CapEx outlook, we anticipate our full year 2025 capital expenditures, including principal payments on finance leases, will be in the range of $64 to $72 billion. increased from our prior outlook of $60 to $65 billion. 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.

Brian Nowak: Great. Thanks for taking my questions I have two the first one is on on Lama Mark can you.

Speaker Change: Oh and 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 behemoths in next versions of Lama to come.

We will appeal the commission's DMA decision, but any modifications to our model may be imposed before or during the appeal process.

Susan Li: 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.

Chris: 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.

Brian Nowak: And then the second one on unmet AI.

Brian Nowak: Almost 1 billion users globally any help on sort of how you're seeing U S traction there and the types of recurring user behaviors that you're seeing in the early met AI use cases.

Operator: With that, Krista, let's open up the call for questions. Thank you.

Chris: With that Krista, let's open up the call for questions.

Brian Nowak: Sure I can talk about the Oems on the met a I usage I'm not sure. If we have more stats to share on that now.

Susan Li: 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 2025.

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 2025.

Operator: We will now open the lines for a question and answer session. To ask a question, please press star 1 on your touchtone phone. To withdraw your question, again, press star 1.

Susan Li: On2Tac. Absent any changes to our tax landscape, we expect our full year 2025 tax rate to be in the range of 12 to 15 percent. In addition, we continue to monitor an active regulatory landscape, including legal and regulatory headwinds in the EU and the U.S. that could significantly impact our business and our financial results.

Brian Nowak:

Brian Nowak: Yeah.

Operator: Please limit yourself to one question. Please pick up your handset before asking your question to ensure clarity.

Brian Nowak: And I'll I'll defer to Susan on if there's anything that we're that we're ready on that on the O M. Yeah, Theres a lot of progress being made and you know.

Operator: If you are streaming today's call, please mute your computer speakers.

Chris: Your computer speakers.

Brian Nowak: 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 LLaMA. Mark, can you, the LLM landscape continues to sort of evolve and be somewhat competitive.

Brian Nowak: A lot of different dimensions, and the reason why we want to build this out.

Speaker Change: And your first question comes from the line of Brian Nowak with Morgan Stanley. Please go ahead.

Is one is that we think it's important that for kind of how critical this is for a business that we.

Speaker Change: Great. Thanks, Thanks for taking my questions I have two the first one's on Lama Mark can you Oh and 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 you sort of think about behemoths in next versions of law.

Brian Nowak: Sort of have control of our own destiny in or not depending on on another company for something so critical but too.

Mark Zuckerberg: 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 behemoths and next versions of LLaMA to come? And then the second one on Meta-AI, almost a billion users globally. Any help on sort of how you're seeing U.S. traction there and the types of recurring user behaviors that you're seeing in the early Meta-AI use cases? Thanks.

We want to make sure that we can shape the development too.

Brian Nowak: Be optimized for our infrastructure and the use cases that we want so to that end Lama for.

Speaker Change: Pharma to come.

Brian Nowak: The shape of the model with 17 billion parameters per expert was designed specifically for the infrastructure that we have in order to provide low latency.

Speaker Change: And then the second one on unmet AI.

Speaker Change: Almost 1 billion users globally any help on sort of how you're seeing U S traction there and the types of recurring user behaviors that you're seeing in the early met AI use cases.

Brian Nowak: 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 latencies that way when you're having a conversation with it there is a large gap between when you stop speaking and it started it starts.

Susan Li: 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, Krista, let's open up the call for questions. Thank you. We will now open the lines for a question and answer session. To ask a question, please press star one on your touch-tone phone. To withdraw your question, again, press star one. Please limit yourself to one question. Please pick up your handset before asking your question to ensure clarity. If you are streaming today's call, please mute your computer speakers.

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, Krista, let's open up the call for questions.

Mark Zuckerberg: Sure, I can talk about the LLMs. On the meta-AI usage, I'm not sure if we have more stats to share on that now. Yeah, I mean, I'll defer to Susan on if there's anything that we're on the LLM. Yeah, there's a lot of progress being made in, you know, a lot of different dimensions. And the reason why we want to build this out is, one, is that we think it's important that 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 another company for something so critical.

Speaker Change: Sure I can talk about the EMS on the met a I usage I'm not sure. If we have more stats to share on that now.

Brian Nowak:

Brian Nowak: 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.

Speaker Change:

Speaker Change: Yeah.

Speaker Change: And I'll I'll defer to Susan on if there's anything that we're that we're ready on that on the oil Hum.

Brian Nowak: Similarly, another thing that we focused on was context window lengths and some of our models. We have really were 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 their.

Speaker Change: Yeah, there's a lot of progress being made in a.

Krista: And with that, Krista, let's open up the call for questions. Thank you.

Speaker Change: Lot of different dimensions, and the reason why we want to build this out.

Operator: Thank you. We will now open the lines for a question and answer session. To ask a question, please press star one on your touch-tone phone. To withdraw your question, again, press star one. Please limit yourself to one question. Please pick up your handset before asking your question to ensure clarity. If you are streaming today's call, please mute your computer speakers.

Krista: We will now open the lines for a question and answer session. To ask a question, please press star one on your touchtone phone. To withdraw your question, again, press star one. Please limit yourself to one question. Please pick up your handset before asking your question to ensure clarity.

Speaker Change: Is.

Brian Nowak: There are different ways that you can put a personalized personalization context into some in.

Speaker Change: One is that we think it's important that for kind of how critical this is for a business that we are.

Speaker Change: Sort of have control of our own destiny in or out depending on another company for something so critical but two.

Brian Nowak: In L O M, but one of the ways to do it is to include some of that context in the context window.

Mark Zuckerberg: But two, we want to 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, LLaMA 4. The shape of the model with 17 billion parameters per expert was designed specifically for the infrastructure 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, when you're having a conversation with it, there's no large gap between when you stop speaking and it starts.

Krista: If you are streaming today's call, please mute your computer speakers.

And having a long context window that can incorporate a lot of the background that the person is shared across our ops is one way to do that so that's like it kind of is giving you a flavor of.

Speaker Change: We want to make sure that we can shape the development too.

Speaker Change: Be optimized for our infrastructure and the use cases that we want so to that end Lama for.

Brian Nowak: 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.

Susan Li: 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 Llama. Mark, 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 next versions of Llama to come? The second one 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 LLMs. On the Meta AI usage, I'm not sure if we have more stats to share on that now. Yeah.

Your first question comes from the line of Brian Nowak with Morgan Stanley. Please go ahead.

Speaker Change: The shape of the model with 17 billion parameters per expert was designed specifically for the infrastructure that we have in order to provide low latency.

Brian Nowak: The products that we're trying to build and then some specific technical architecture decisions in research prioritization.

Brian Nowak: Great. Thanks for taking my questions. I have two. The first one's on Llama. Mark, 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 next versions of Llama to come? The second one 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.

Mark Zuckerberg: The first one's on LLaMA. 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 behemoths and next versions of LLaMA to come? And then the second one on Meta-AI, almost a billion users globally. Any help on sort of how you're seeing U.S. traction there and the types of recurring user behaviors that you're seeing in the early Meta-AI use cases? Thanks.

Brian Nowak: That we basically.

Brian Nowak: Basically have made in order to deliver the specific experience that were going for.

Speaker Change: 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 latencies that way when you're having a conversation with it there's a large gap between when you stop speaking and it started it starts.

Brian Nowak: I could go on and add and add a lot more.

Brian Nowak: The reason.

Brian Nowak: I think it's also very important to deliver big models like behemoth.

Speaker Change:

Mark Zuckerberg: So everything from the shape of the model to the research that we're doing to the techniques that go into it 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 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.

Brian Nowak: Not because we're going to end up serving them in production, but because of the technique of distilling from larger models, where the Lama for models that we have.

Speaker Change: 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 lengths and.

Brian Nowak: Published so far and the ones that we're using internally and and in some of the ones that will build in the future.

Speaker Change: Some of our models, we have really we're industry, leading on context window lengths 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 a personalized personalization context into.

Mark Zuckerberg: Sure. I can talk about the LLMs. On the Meta AI usage, I'm not sure if we have more stats to share on that now. Yeah.

Brian Nowak: Basically distilled from the Behemoth model in order to.

Mark Zuckerberg: Sure, I can talk about the LLMs. On the Meta-AI usage, I'm not sure if we have more stats to share on that now. Yeah, 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 want to build this out is, one, is that we think it's important that 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 another company for something so critical.

Brian Nowak: Get the 1990, 5% 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 model. So that kind of gives you a flavor for for how we're thinking about the development of this and then of course, the models and the infrastructure that.

Susan Li: I mean, I'll defer to Susan on if there's anything that we're ready on that. On the LLM, yeah, there's a lot of progress being made in a lot of different dimensions. The reason why we want to build this out is, one, we think it's important that for kind of how critical this is for our business, we sort of have control of our own destiny and are not depending on another company for something so critical. Two, we want to make sure that we can shape the development to be optimized for our infrastructure and the use cases that we want. To that end, Llama 4, the shape of the model with 17 billion parameters per expert, was designed specifically for the infrastructure that we have in order to provide low-latency experience to be voice-optimized.

I mean, I'll defer to Susan on if there's anything that we're ready on that. On the LLM, yeah, there's a lot of progress being made in a lot of different dimensions. The reason why we want to build this out is, one, we think it's important that for kind of how critical this is for our business, we sort of have control of our own destiny and are not depending on another company for something so critical. Two, we want to make sure that we can shape the development to be optimized for our infrastructure and the use cases that we want. To that end, Llama 4, the shape of the model with 17 billion parameters per expert, was designed specifically for the infrastructure that we have in order to provide low-latency experience to be voice-optimized.

Speaker Change: And L O M, 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 to that a person is shared across our ops is one way to do that so that's like it kind of is giving you a flavor of.

Brian Nowak: We're building out power all of the the.

Mark Zuckerberg: So that's like 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 add a lot more. The reason, you know, I think it's also very important to deliver big models like Behemoth, not because we're going to end up serving them in production, but because of the technique of distilling from larger models, right, the LLAMA4 models that we've Published so far and the ones that we're using internally and some of the ones that we'll build in the future are basically distilled from the behemoth model in order to get the 90, 95% of the intelligence of the large model in a form factor that is much lower latency and much more efficient.

Brian Nowak: The opportunities that I mentioned before.

The products that we're trying to build and then some specific technical architecture decisions in research prioritization.

Brian Nowak: Brian I'm happy to answer your second question about meta AI them you know the top use case right now for me the AI from a query perspective is really around information gathering as people are using it to search for and understand and analyze information.

Speaker Change: That we basically.

Basically have made in order to deliver the specific experience that were going for.

Mark Zuckerberg: But two, we want to 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, LLaMA 4, the shape of the model with 17 billion parameters per expert, was designed specifically for the infrastructure 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 starts.

Speaker Change: I could go on and add and add a lot more the reason.

Brian Nowak: Followed by social interactions from you know ranging from casual chatting to more in depth discussion or debate.

Speaker Change: I think it's also very important to deliver big models like behemoths I'm not because we're going to end up serving them in production, but because of the technique of distilling from larger models, where the Lama for models that we have.

Brian Nowak: We also see people use it for writing assistance interacting with visual content seeking help.

Brian Nowak: And we see them at a 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 as in one on one French followed by Facebook, which is the second largest driver of meta AI engagement, where we're seeing strong engagement from our feet deep dives integration, but.

Susan Li: One of the key things if you're having a voice conversation with AI is it needs to be low-latency. That way, when you're having a conversation with it, there's no large gap between when you stop speaking and it starts. Everything from the shape of the model to the research that we're doing to the techniques that go into it are kind of fit into that. Similarly, another thing that we focused on was context window length. In some of our models, we have really, we're industry-leading on context window length. Part of the reason why we think that that's important is because we're very focused on providing a personalized experience. There are different ways that you can put personalization context into an LLM, but one of the ways to do it is to include some of that context in the context window.

One of the key things if you're having a voice conversation with AI is it needs to be low-latency. That way, when you're having a conversation with it, there's no large gap between when you stop speaking and it starts. Everything from the shape of the model to the research that we're doing to the techniques that go into it are kind of fit into that. Similarly, another thing that we focused on was context window length. In some of our models, we have really, we're industry-leading on context window length. Part of the reason why we think that that's important is because we're very focused on providing a personalized experience. There are different ways that you can put personalization context into an LLM, but one of the ways to do it is to include some of that context in the context window.

Speaker Change: Published so far and the ones that we're using internally and and some of the ones that will build in the future.

Speaker Change: Our basically distilled from the behemoth model in order to.

Mark Zuckerberg: So everything from the shape of the model to the research that we're doing to the techniques that go into it 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 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.

Speaker Change: Get the 90% 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 kind of gives you a flavor for for how we're thinking about the development of this and then of course the models and the infrastructure that we.

Brian Nowak: Lets people ask about or ask questions about the content that is recommended to them.

Mark Zuckerberg: 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 kind of gives you a flavor for how we're thinking about the development of this and then, of course, the models and the infrastructure that we're building out power all of the The opportunities that I mentioned.

And we're obviously excited about the launch of the meta AI Standalone App.

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

Speaker Change: We're building out power all of the.

Eric Sheridan: Thanks, So much for taking the question maybe following up on Brian's question and coming at it from a different angle and I. Appreciate the color on the use cases, you're seeing today for meta AI, how would you suspect those use cases evolve with the 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.

Speaker Change: Uh huh.

Speaker Change: The opportunities that I mentioned before.

Mark Zuckerberg: 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 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 people engage with Meta AI from several different entry points.

Speaker Change: Brian I'm happy to answer your second question about meta AI them you know the top use case right now for them at a AI from a query perspective is really around information gathering as people are using it to search for and understand and analyze information.

Susan Li: 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. 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 add a lot more. The reason I think it's also very important to deliver big models like Behemoth, not because we're going to end up serving them in production, but because of the technique of distilling from larger models.

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. 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 add a lot more. The reason I think it's also very important to deliver big models like Behemoth, not because we're going to end up serving them in production, but because of the technique of distilling from larger models.

Mark Zuckerberg: So that's like, 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 add a lot more. The reason, you know, I think it's also very important to deliver big models like Behemoth, not because we're going to end up serving them in production, but because of the technique of distilling from larger models, where the LLAMA4 models that we've Publisher.com. And the ones that we're using internally and some of the ones that we'll build in the future are basically distilled from the behemoth model in order to get the 90, 95% of the intelligence of the large model in a form factor that is much lower latency and much more efficient.

Speaker Change: Followed by social interactions from you know ranging from casual chatting to more in depth discussion or debate.

Eric Sheridan: The 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 I guess the competitive landscape today of other <unk>.

Speaker Change: We also see people use it for writing assistance interacting with visual content seeking help.

Eric Sheridan: <unk> alone sort of consumer AI ops. Thank you.

Speaker Change: And we've seen that our 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 as 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.

Eric Sheridan: Yeah, I can talk about that we're going to focus on both integrating it into our family of apps in more ways and building a stand alone experience.

Mark Zuckerberg: 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.

Eric Sheridan:

Eric Sheridan: You know I think some people want faster access to it or a more built out feature set than you can build into an app like whatsapp. So so the standalone app will be valuable for that.

Speaker Change: People ask about questions about the content that is recommended to them.

Susan Li: The Llama 4 models that we've published so far, the ones that we're using internally, and some of the ones that we'll build in the future are basically distilled from the behemoth model in order to get the 90%, 95% of the intelligence of the large model in a form factor that is much lower latency and much more efficient. These things are all very important. Obviously, we wouldn't be able to do that kind of distillation from other closed models. That kind of gives you a flavor for how we're thinking about the development of this. Of course, the models and the infrastructure that we're building out power all of the opportunities that I mentioned before. Brian, I'm happy to answer your second question about Meta AI.

The Llama 4 models that we've published so far, the ones that we're using internally, and some of the ones that we'll build in the future are basically distilled from the behemoth model in order to get the 90%, 95% of the intelligence of the large model in a form factor that is much lower latency and much more efficient. These things are all very important. Obviously, we wouldn't be able to do that kind of distillation from other closed models. That kind of gives you a flavor for how we're thinking about the development of this. Of course, the models and the infrastructure that we're building out power all of the opportunities that I mentioned before.

Eric Sheridan: I also think that the Standalone app is going to be.

Eric Sheridan: And we're obviously excited about the launch of the Meta AI 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?

Eric Sheridan: Particularly important in the United States, because whatsapp as Susan said is the largest surface that people use that AI and which makes sense. If you want to text in NII.

Speaker Change: And we're obviously excited about the launch of the meta AI Standalone.

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

Eric Sheridan: 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 Youtube.

Eric Sheridan: Having that be closely integrated and a good experience in the messaging app that you use makes a lot of sense.

Mark Zuckerberg: 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 kind of gives you a flavor for how we're thinking about the development of this. And then, of course, the models and the infrastructure that we're building out power all of the opportunities that I mentioned before.

Eric Sheridan: But we're while we have no more than 100 million people use whatsapp in the United States that were clearly not the primary messaging app in the United States at this point I messages, we we hope 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.

Eric Sheridan: <unk> frequency your scale relative to what you see inside family of apps today, and how you think about positioning meta AI as a standalone app I guess the competitive landscape today of other stand alone sort of consumer AI ops. Thank you.

Mark Zuckerberg: And how do you think about positioning Meta AI as a standalone app against the competitive landscape today of other standalone sort of consumer AI apps? Thank you.

Susan Li: Brian, I'm happy to answer your second question about Meta AI.

Susan Li: 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 people engage with Meta AI from several different entry points.

Eric Sheridan: Think that the meta AI app as a standalone is going to be particularly important in the United States too.

Susan Li: 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, understand, and analyze information, followed by social interactions ranging from casual chatting to more in-depth discussion or debate. We also see people use it for writing assistance, interacting with visual content, and seeking help. We see 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. We're obviously excited about the launch of the Meta AI standalone app.

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, understand, and analyze information, followed by social interactions ranging from casual chatting to more in-depth discussion or debate. We also see people use it for writing assistance, interacting with visual content, and seeking help. We see 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. We're obviously excited about the launch of the Meta AI standalone app.

Eric Sheridan: Two two establishing leadership in.

Mark Zuckerberg: 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 standalone experience. You know, I think some people want faster access to it or a more built out feature set than you can build into an app like WhatsApp. So, so the standalone app will be valuable for that. I also think that the standalone 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 want to text an AI.

Eric Sheridan: Yeah, I can talk about that we're going to focus on both integrating it into our family of apps in more ways and building a stand alone experience.

Eric Sheridan: Is that the main personally I that people use.

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

Eric Sheridan:

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

Justin Post: Thank you a couple of questions just on the guide in the second quarter. There are reports of potential.

Eric Sheridan: So I think that the Standalone app is going to be a.

Eric Sheridan: Particularly important in the United States, because whatsapp as Susan said is the largest surface that people use that AI and which makes sense. If you want to text and AI.

Susan Li: 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.

Justin Post: Supply issues in E Commerce, how you thought about that in the guide and maybe how youre thinking about it for the back half and then and then a bigger picture question you know your Capex spend is now.

Justin Post: Close to some hyper scaler with very big client basis.

Mark Zuckerberg: Having that be closely integrated and a good experience in the messaging app that you use makes a lot of sense. But while we have more than 100 million people use WhatsApp in the United States, we're clearly not the primary messaging app in the United States at this point, iMessage. We hope 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 I think that the Meta AI app as a standalone is going to be particularly important in the United States to establishing leadership as the main personal AI.

Eric Sheridan: Having that be closely integrated and a good experience in the messaging app that you use makes a lot of sense.

Justin Post: Just help us conceptualize the kind of ecosystem you're building with your Capex I know you gave a lot of helped on the intro, but maybe the ROI works without direct enterprise spend to drive revenues, how youre thinking about that thank you.

Eric Sheridan: But you know where while we have more than 100 million people use whatsapp in the United States. It we're clearly not the primary messaging app in the United States at this point I messages, we we hope 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.

Susan Li: And we're obviously excited about the launch of the Meta AI standalone app.

Eric Sheridan: 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?

Susan Li: 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 standalone sort of consumer AI apps? Thank you. Yeah, I can talk about that.

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

Speaker Change: Thanks, Justin.

Speaker Change: You know on the Q2 guide, there's a uncertainty obviously and how the macro environment will evolve over time, and how that could impact different segments of our business and our Q2 revenue outlook aims to factor that in and partly a that's partly why the $3 billion range reflects the potential for a wider range of outcomes, specifically we have seen.

Eric Sheridan: 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 standalone sort of consumer AI apps? Thank you.

Eric Sheridan: The meta AI app as a standalone is going to be particularly important in the United States to two establishing leadership and.

Mark Zuckerberg: 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 standalone sort of consumer AI apps? Thank you. Yeah, I can talk about that. We're going to focus on both integrating it into our family of apps in more ways and building a standalone experience. You know, I think some people want faster access to it or a more built out feature set than you can build into an app like WhatsApp.

Eric Sheridan: The main personally I that people use.

Speaker Change: Some are do you spend in the U S from Asia based E Commerce exporters, which we believe is in anticipation of the de minimus exemption going away on may 2nd a portion of that spend has been redirected to other markets, but overall spend for those advertisers is below the levels prior to April, but our Q2 outlook reflects that.

Mark Zuckerberg: But we're going to keep on advancing the experiences across the board and all.

Eric Sheridan: But we're going to keep on advancing the experiences across the board in all of these different areas.

Justin Post: Your next question comes from the line of Justin Post with Bank of America. Please go ahead. Great, thank you.

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

Susan Li: A couple questions, just on the guide in the second quarter, there 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.

Justin Post: Thank you a couple of questions just on the guide in the second quarter. There are reports of potential.

Mark Zuckerberg: Yeah, I can talk about that.

Susan Li: We're going to focus on both integrating it into our family of apps in more ways and building a standalone experience. I think some people want faster access to it or a more built-out feature set than you can build into an app like WhatsApp. The standalone app will be valuable for that. I also think that the standalone app is going to be particularly important in the United States because WhatsApp, as Susan said, is the largest surface that people use Meta AI in, which makes sense. If you want to text an AI, having that be closely integrated and a good experience in the messaging app that you use makes a lot of sense. While we have more than 100 million people use WhatsApp in the United States, we're clearly not the primary messaging app in the United States at this point, iMessage is.

We're going to focus on both integrating it into our family of apps in more ways and building a standalone experience. I think some people want faster access to it or a more built-out feature set than you can build into an app like WhatsApp. The standalone app will be valuable for that. I also think that the standalone app is going to be particularly important in the United States because WhatsApp, as Susan said, is the largest surface that people use Meta AI in, which makes sense. If you want to text an AI, having that be closely integrated and a good experience in the messaging app that you use makes a lot of sense. While we have more than 100 million people use WhatsApp in the United States, we're clearly not the primary messaging app in the United States at this point, iMessage is.

Speaker Change: Trends, we're seeing so far in April which has generally been healthy. So it's very early and hard to know how things will play out over the quarter and certainly are certainly harder to know that for the rest of the year.

Susan Li: And then on a bigger picture question, your CapEx spend is now close to some hyperscalers with very big client bases. 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 maybe the ROI works without direct enterprise spend to drive revenues, how you're thinking about that.

Close to some hyper scaler with very big client basis.

Speaker Change: Yeah.

Speaker Change: Your second question is.

Mark Zuckerberg: So, so the standalone app will be valuable for that. I also think that the standalone 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 want to text an AI. Having that be closely integrated and a good experience in the messaging app that you use makes a lot of sense. But while we have more than 100 million people use WhatsApp in the United States, we're clearly not the primary messaging app in the United States at this point.

Justin Post: 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 maybe the ROI works without direct enterprise spend to drive revenues, how youre thinking about that thank you.

Speaker Change: Is about why we are investing more in Capex and you know, we really believe that our ability to build world class infrastructure gives us a meaningful advantage in both developing Billy I, leading AI technology and services over the coming years and there are a lot of opportunities also for us too.

Susan Li: Thank you. You know, on the Q2 guide, there's uncertainty, obviously, in how the macro environment will evolve over time and how that could impact different segments of our business. You know, our Q2 revenue outlook aims to factor that in, and partly, that's partly why the $3 billion range reflects the potential for a wider range of outcomes. Specifically, we have seen some reduced spend in the U.S. from Asia-based e-commerce exporters, which we believe is in anticipation of the de minimis exemption going away on May 2nd. A portion of that spend has been redirected to other markets, but overall spend for those advertisers is below the levels prior to April.

Speaker Change: Thanks, Justin.

Speaker Change: To improve our core business by putting more compute against our ads and recommendation work so even with the capacity that we're bringing online in 2025 I'm. You know we are having a hard time meeting the demand that teams have for compute compute resources across the company. So we are going to continually invest you know meaningfully here.

Speaker Change: Specifically, we have seen some reduced spend in the U S from Asia based E Commerce expertise, which we believe is in anticipation of the de minimus exemption going away on may 2nd a portion of that spend has been redirected to other markets, but overall spend for those advertisers is below the levels prior to April, but our Q2 out.

Mark Zuckerberg: iMessage is. We hope 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 I think that the Meta AI app as a standalone is going to be particularly important in the United States to establishing leadership as the main personal AI that people use. But we're going to keep on advancing the experiences across the board in all of these different areas.

Susan Li: We hope 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. I think that the Meta AI app as a standalone is going to be particularly important in the United States to establishing leadership as the main personal AI that people use. We're going to 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. Great. Thank you. A couple of questions just on the guide in the second quarter, there 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.

We hope 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. I think that the Meta AI app as a standalone is going to be particularly important in the United States to establishing leadership as the main personal AI that people use. We're going to keep on advancing the experiences across the board in all of these different areas.

Speaker Change: Ross your infrastructure footprint, but we are also really looking to build this capacity in a way that gives us the maximum flexibility in how and when we deploy it over the coming years. So we can respond to how the market and technology developed.

Susan Li: But our Q2 outlook, you know, reflects the trends we're seeing so far in April, which have generally been healthy. So, it's very early, hard to know how things will play out over the quarter, and certainly harder to know that for the rest of the year.

Speaker Change: Okay.

Speaker Change: Look you know reflects the trends we're seeing so far in April which has generally been healthy. So it's very early and hard to know how things will play out over the quarter and certainly are certainly harder to know that for the rest of the year.

Speaker Change: Your next question comes from the line of Doug Anmuth with J P. Morgan. Please go ahead.

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

Doug Anmuth: Taking the questions I just wanted to follow up on Capex and infrastructure spending just on the higher range for Capex can you just help us understand how much of that is tied to the additional data center investments versus the increased hardware costs and really whats driving those higher hardware costs and then.

Justin Post: Your next question comes from the line of Justin Post with Bank of America. Please go ahead. Great, thank you. A couple of questions. Just on the guide in the second quarter, there are reports of potential, you know, 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 on a bigger picture question, you know, your CapEx spend is now close to some hyperscalers with very big client bases. 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 maybe the ROI works with out direct enterprise spend to drive revenues.

Susan Li: Your second question is about why we're investing more in CapEx, and we really believe that our ability to build world-class infrastructure gives us a meaningful advantage in both developing the leading AI technology and services over the coming years. And there are a lot of opportunities also for us to improve our core business by putting more compute against our ads and recommendation work. So even with the capacity that we're bringing online in 2025, we are having a hard time meeting the demand that teams have for compute resources across the company. So we are going to continually invest meaningfully here across our infrastructure footprint, but we are also really looking to build this capacity in a way that gives us the maximum flexibility in how and when we deploy it over the coming years so we can respond to how the market and technology develops.

Speaker Change: Your second question is is about why we are investing more in Capex and you know, we really believe that our ability to build world class infrastructure gives us a meaningful advantage in both developing Billy I, leading AI technology and services over the coming.

Justin Post: Great. Thank you. A couple of questions just on the guide in the second quarter, there 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.

Susan Li: On a bigger picture question, your CapEx spend is now close to some hyperscalers with very big client bases. 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 maybe the ROI works without direct enterprise spend to drive revenues. How you're thinking about that? Thank you. Thanks, Justin. On the Q2 guide, there's uncertainty, obviously, in how the macro environment will evolve over time and how that could impact different segments of our business. Our Q2 revenue outlook aims to factor that in, and that's partly why the $3 billion range reflects the potential for a wider range of outcomes. Specifically, we have seen some reduced spend in the US from Asia-based e-commerce exporters, which we believe is in anticipation of the de minimis exemption going away on 2 May 2024.

Doug Anmuth: Separately, there have been some articles, suggesting that you've been looking to partner to share some of the cost of the AI infrastructure build out.

On a bigger picture question, your CapEx spend is now close to some hyperscalers with very big client bases. 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 maybe the ROI works without direct enterprise spend to drive revenues. How you're thinking about that? Thank you.

Speaker Change: Years, and there are a lot of opportunities also for us to improve our core business by putting more compute against our ads and recommendation work so even with the capacity that we're bringing online in 2025 I'm. You know we are having a hard time meeting the demand that teams have for compute compute resources across the company.

Doug Anmuth: Can you just help us understand your thought process, there and some of the pros and cons of going alone versus partnering.

Doug Anmuth: Thanks, Doug.

Doug Anmuth: So our increased Capex outlook reflects both of those updates.

Susan Li: How you're thinking about that?

Susan Li: Thank you. Thanks, Justin. You know, on the Q2 guide, there's uncertainty, obviously, in how the macro environment will evolve over time, and how that could impact different segments of our business. You know, our Q2 revenue outlook aims to factor that in. And partly, that's partly why the $3 billion range reflects the potential for a wider range of outcomes. Specifically, we have seen some reduced spend in the U.S. from Asia-based e-commerce exporters, which we believe is in anticipation of the Minimis exemption going away on May 2nd. A portion of that spend has been redirected to other markets, but overall spend for those advertisers is below the levels prior to April.

Susan Li: Thanks, Justin. On the Q2 guide, there's uncertainty, obviously, in how the macro environment will evolve over time and how that could impact different segments of our business. Our Q2 revenue outlook aims to factor that in, and that's partly why the $3 billion range reflects the potential for a wider range of outcomes. Specifically, we have seen some reduced spend in the US from Asia-based e-commerce exporters, which we believe is in anticipation of the de minimis exemption going away on 2 May 2024.

Doug Anmuth: With the increased data center spend this year as we have.

Speaker Change: So we are going to continually invest you know meaningfully here across our infrastructure footprint, but we are also really looking to build this capacity in a way that gives us the maximum flexibility in how and when we deploy it over the coming years. So we can respond to how the market and technology developed.

Doug Anmuth: I have made some adjustments to flex our belt strategy that will enable us to really stand up capacity more quickly both in 'twenty five 'twenty six we haven't broken down sort of the exact drivers are the higher costs, we expect to incur for infrastructure hardware. This year really comes from you know suppliers, who source from countries around the world and there's just a lot of them.

Douglas Anmuth: Your next question comes from the line of Doug Anmuth with JPMorgan. Please go ahead. Thanks for taking the questions. I just wanted to follow up on CapEx and infrastructure spending.

Speaker Change: Your next question comes from the line of Doug Anmuth with J P. Morgan. Please go ahead.

Doug Anmuth: Certainty around this given the ongoing trade discussions and so that is both reflected in the wider range that we're giving and we're also working on you know on our end on mitigation by optimizing our supply chain and our outlook is really trying to reflect our best understanding of the potential impact this.

Doug Anmuth: Thanks for taking the questions I just wanted to follow up on Capex and infrastructure spending just on the higher range for Capex can you just help us understand how much of that is tied to the additional data center investments versus the increased hardware costs and really whats driving those higher hardware costs and then.

Susan Li: A portion of that spend has been redirected to other markets, but overall spend for those advertisers is below the levels prior to April. Our Q2 outlook reflects the trends we're seeing so far in April, which have generally been healthy. It's very early. Hard to know how things will play out over the quarter and certainly harder to know that for the rest of the year. Your second question is about why we're investing more in CapEx. We really believe that our ability to build world-class infrastructure gives us a meaningful advantage in both developing the leading AI technology and services over the coming years. There are a lot of opportunities also for us to improve our core business by putting more compute against our ads and recommendation work.

A portion of that spend has been redirected to other markets, but overall spend for those advertisers is below the levels prior to April. Our Q2 outlook reflects the trends we're seeing so far in April, which have generally been healthy. It's very early. Hard to know how things will play out over the quarter and certainly harder to know that for the rest of the year. Your second question is about why we're investing more in CapEx. We really believe that our ability to build world-class infrastructure gives us a meaningful advantage in both developing the leading AI technology and services over the coming years. There are a lot of opportunities also for us to improve our core business by putting more compute against our ads and recommendation work.

Susan Li: Just on the higher range for CapEx, can you just help us understand how much of that is tied to the additional data center investments versus the increased hardware costs and really what's driving those higher hardware costs? And then separately, there have been some articles suggesting that you've been looking to partner to share some of the costs of the AI infrastructure build out. Can you just help us understand your thought process? There and some of the pros and cons of going alone versus partnering. Thanks. Thanks, Doug. You know, so our increased CapEx outlook, you know, reflects both of those updates, the increased data center spend this year as we have made some adjustments to flex our build strategy that will enable us to really stand up capacity more quickly, both in 2025 and 2026.

Susan Li: But our Q2 outlook, you know, reflects the trends we're seeing so far in April, which have generally been healthy. So it's very early, hard to know how things will play out over the quarter, and certainly harder to know that for the rest of the year.

Doug Anmuth: This year, you know across all of that uncertainty.

Doug Anmuth: On the second part of your question.

Doug Anmuth: Separately, there have been some articles, suggesting that you've been looking to partner to share some of the cost of the AI infrastructure build out.

Doug Anmuth:

You know we are you know we're.

Doug Anmuth: Pleased to have partners investing alongside us in bringing Lama to market like AWS and Azure, who are helping us hosts llama.

Susan Li: Your second question is about why we're investing more in CapEx. And, you know, we really believe that our ability to build world-class infrastructure gives us a meaningful advantage in both developing the leading AI technology and services over the coming years. And there are a lot of opportunities also for us to improve our core business by putting more compute against our ads and recommendation work. So even with the capacity that we're bringing online in 2025, you know, we are having a hard time meeting the demand that teams have for compute resources across the company. So we are going to continually invest, you know, meaningfully here across our infrastructure footprint, but we are also really looking to build this capacity in a way that gives us the maximum flexibility in how and when we deploy it over the coming years so we can respond to how the market and technology develops.

Doug Anmuth: Just help us understand your thought process, there and some of the pros and cons of going alone versus partnering.

Doug Anmuth: We're always looking for opportunities to continue deepening our expanding those partnerships are but we are funding the infrastructure that is being used to train Lama and we don't have any expectation that that will change them at this point.

Doug Anmuth: Thanks, Doug.

Doug Anmuth: Our increased Capex outlook reflects both of those updates the increased data center spend this year as we have.

Doug Anmuth: Yes.

Doug Anmuth: <unk> made some adjustments to flex our build strategy that will enable us to really stand up capacity more quickly both in 'twenty five and 26, we haven't broken down sort of the exact drivers are the higher costs, we expect to incur for infrastructure hardware. This year really comes from you know suppliers, who source from countries around the world and there's just a lot of them.

Speaker Change: Your next question comes from the line of Mark Shmulik with Bernstein. Please go ahead.

Susan Li: We haven't broken down sort of the exact drivers. The higher costs we expect to incur for infrastructure hardware this year really comes from, you know, suppliers who source from countries around the world. And there's just a lot of uncertainty around this given the ongoing trade discussions. And so that is both reflected in the wider range that we are giving. And we're also working on, you know, on our end on mitigations by optimizing our supply chain. And our outlook is really trying to reflect our best understanding of the potential impact this year, you know, across all of that uncertainty.

Speaker Change: Yes, thanks for taking the questions Marc in your conversation last night with that Yeah, I think he both discussed a bit around you know Cai.

Susan Li: Even with the capacity that we're bringing online in 2025, we are having a hard time meeting the demand that teams have for compute resources across the company. We are going to continually invest meaningfully here across our infrastructure footprint, but we are also really looking to build this capacity in a way that gives us the maximum flexibility in how and when we deploy it over the coming years so we can respond to how the market and technology develop. Your next question comes from the line of Doug Anmuth with JPMorgan. Please go ahead. Thanks for taking the questions. I just wanted to follow up on CapEx and infrastructure spending.

Even with the capacity that we're bringing online in 2025, we are having a hard time meeting the demand that teams have for compute resources across the company. We are going to continually invest meaningfully here across our infrastructure footprint, but we are also really looking to build this capacity in a way that gives us the maximum flexibility in how and when we deploy it over the coming years so we can respond to how the market and technology develop.

Speaker Change: The portion of codes being written internally by AI.

Speaker Change: Back to some of your previous comments around this being a year, where we might see.

Speaker Change: He kind of the place of a mid level engineer.

Speaker Change: World evolving so quickly can you share some places where you've seen strong traction there and you know are we progressing kind of faster slower as you expected towards this milestone.

Speaker Change: And then Susan with the expense kind of guidance coming down just a touch how should we think about just the overall cadence of expected spending really as it relates to kind of core business performance and that's the reality of the day to day World. We're living in thank you.

Doug Anmuth: Your next question comes from the line of Doug Anmuth with JPMorgan.

Operator: Your next question comes from the line of Doug Anmuth with JPMorgan. Please go ahead.

Doug Anmuth: Uncertainty.

Susan Li: Um, on the second part of your question, um... You know, we are, you know, we're pleased to have partners investing alongside us and bringing LLaMA to market like AWS and Azure who are helping us host LLaMA. We're always looking for opportunities to continue deepening or expanding those partnerships, but we are funding the infrastructure that is being used to train LLaMA, and we don't have any expectation that that will change at this point.

Doug Anmuth: On the second part of your question.

Doug Anmuth: Please go ahead. Thanks for taking the questions. I just wanted to follow up on CapEx and infrastructure spending.

Doug Anmuth: Thanks for taking the questions. I just wanted to follow up on CapEx and infrastructure spending.

Doug Anmuth:

Doug Anmuth: You know we are you know we're pleased to have partners investing alongside us in bringing Lama to market like AWS and Azure, who are helping us hosts llama.

Speaker Change: Yeah.

I can talk about the coding agent work I don't think that there's been any real change in our prediction for the timing of this so I'd say, it's basically still on track for.

Susan Li: Just on the higher range for CapEx, can you help us understand how much of that is tied to the additional data center investment versus the increased hardware costs, and really what's driving those higher hardware costs? Separately, there have been some articles suggesting that you've been looking to partner to share some of the costs of the AI infrastructure build-out. Can you help us understand your thought process there and some of the pros and cons of going alone versus partnering? Thanks. Thanks, Doug. Our increased CapEx outlook reflects both of those updates, the increased data center spend this year as we have made some adjustments to flex our build strategy that will enable us to really stand up capacity more quickly, both in 2025 and 2026. We haven't broken down sort of the exact drivers.

Just on the higher range for CapEx, can you help us understand how much of that is tied to the additional data center investment versus the increased hardware costs, and really what's driving those higher hardware costs? Separately, there have been some articles suggesting that you've been looking to partner to share some of the costs of the AI infrastructure build-out. Can you help us understand your thought process there and some of the pros and cons of going alone versus partnering? Thanks.

Speaker Change: Something around a mid level engineer kind of starting to become possible sometime this year scaling into next year.

Susan Li: And then separately, there have been some articles suggesting that you've been looking to partner to share some of the costs of the AI infrastructure build-out. Can you just help us understand your thought process there and some of the pros and cons of going alone versus partnering? Thanks. Thanks, Doug. You know, so our increased CapEx outlook, you know, reflects both of those updates, the increased data center spend this year as we have made some adjustments to flex our build strategy that will enable us to really stand up capacity more quickly, both in 2025 and 2026. We haven't broken down sort of the exact drivers.

Speaker Change:

Mark Shmulik: Your next question comes from the line of Mark Shmulik with Bernstein. Please go ahead. Yes, thanks for taking the questions. Mark, in your conversation last night with Satya, I think you both discussed a bit around the portion of code being written internally by AI. Back to some of your previous comments around this being the year where we might see AI the place of a mid-level engineer.

Speaker Change: So I'd expect that by the middle to end of next year, Hey, I coating agents are going to be doing a substantial part of.

Speaker Change: Your next question comes from the line of Mark Shmulik with Bernstein. Please go ahead.

Marc Shmulik: Yes, thanks for taking the questions Marc in your conversation last night was that yeah. I think he both discussed a bit around kind of the portion of codes being written internally by AI kind of back to some of your previous comments around this being a year, where we might see.

Speaker Change: Hey, I research and development. So we're focused on that internally. We're also very focused on.

Susan Li: Thanks, Doug. Our increased CapEx outlook reflects both of those updates, the increased data center spend this year as we have made some adjustments to flex our build strategy that will enable us to really stand up capacity more quickly, both in 2025 and 2026. We haven't broken down sort of the exact drivers.

Speaker Change: <unk>.

Speaker Change:

Speaker Change: Hey, I agents or systems that can help.

Speaker Change: AIA kind of the place of a mid level engineer.

Mark Zuckerberg: With the world evolving so quickly, can you share some places where you've seen strong traction there, and are we progressing faster, slower, or as you expected towards this milestone?

Speaker Change: Run different experiments to increase.

Speaker Change: The world evolving so quickly can you share some places where you've seen strong traction there and are we progressing kind of faster slower as you expected towards this milestone.

Speaker Change: Recommendations across our other AI products.

They are the ones that do recommendations across our fields and things like that so I think that if it works should just accelerate our progress in those areas. That's that's the basic bet that we're making.

Susan Li: The higher costs we expect to incur for infrastructure hardware this year really comes from, you know, suppliers who source from countries around the world. And there's just a lot of uncertainty around this given the ongoing trade discussions. And so that is both reflected in the wider range that we are giving. And we're also working on, you know, on our end on mitigations by optimizing our supply chain. And our outlook is really trying to reflect our best understanding of the potential impact this year, you know, across all of that uncertainty.

Susan Li: The higher costs we expect to incur for infrastructure hardware this year really comes from suppliers who source from countries around the world. There's just a lot of uncertainty around this given the ongoing trade discussions. That is both reflected in the wider range that we are giving. We're also working on our end on mitigations by optimizing our supply chain. Our outlook is really trying to reflect our best understanding of the potential impact this year across all of that uncertainty. On the second part of your question, we're pleased to have partners investing alongside us and bringing Llama to market like AWS and Azure, who are helping us host Llama. We're always looking for opportunities to continue deepening or expanding those partnerships. We are funding the infrastructure that is being used to train Llama.

The higher costs we expect to incur for infrastructure hardware this year really comes from suppliers who source from countries around the world. There's just a lot of uncertainty around this given the ongoing trade discussions. That is both reflected in the wider range that we are giving. We're also working on our end on mitigations by optimizing our supply chain. Our outlook is really trying to reflect our best understanding of the potential impact this year across all of that uncertainty. On the second part of your question, we're pleased to have partners investing alongside us and bringing Llama to market like AWS and Azure, who are helping us host Llama. We're always looking for opportunities to continue deepening or expanding those partnerships. We are funding the infrastructure that is being used to train Llama.

Susan Li: And then, Susan, with the expense guidance coming down just a touch, how should we think about just the overall cadence of expected spending really as it relates to kind of core business performance and the realities of the day-to-day world we're living in? Thank you.

Speaker Change: And then Susan with the expense guidance coming down just a touch how should we think about just the overall cadence of expected spending really as it relates to kind of core business performance and the realities of the day to day World. We're living in thank you.

Speaker Change: On your second question about our lowered expense outlook, you know really we are four months into the year.

Mark Zuckerberg: Let's talk about the coding agent work. I don't think that there's been any real change in our prediction for the timing of this. So I'd say it's basically still on track for Something around a mid-level engineer, kind of starting to become possible sometime this year, scaling into next year. So I'd expect that by the middle to end of next year, AI coding agents are going to be doing a substantial part of. AI research and development. So we're focused on that. Internally, we're also very focused on building AI agents or systems that can help, you know, run different experiments to increase recommendations across our other AI products, like the ones that do recommendations across our feeds and things like that.

Speaker Change: I can talk about the coding agent work I don't think that there's been any real change in our prediction for the timing of this so I'd say, it's basically still on track for.

Speaker Change: The lowered outlook reflects more refined forecasts, including updated expectations for both employee compensation as well as some other non head count related operating expenses. This year, and that's partially offset by higher expected infrastructure costs related to our increased capex outlook as well as a higher expected reality labs cost.

Speaker Change: Something.

Susan Li: On the second part of your question, You know, we are, you know, we're pleased to have partners investing alongside us and bringing LLaMA to market like AWS and Azure, who are helping us host LLaMA. We're always looking for opportunities to continue deepening or expanding those partnerships, but we are funding the infrastructure that is being used to train LLaMA, and we don't have any expectation that that will change at this point.

Speaker Change: Around a mid level engineer kind of starting to become possible sometime this year scaling into next year.

Speaker Change: So I'd expect that.

Speaker Change: Goods sold.

Speaker Change:

Speaker Change: By the middle to end of next year AI coding agents are going to be doing a substantial part of <unk>.

Speaker Change: And we've maintained our $5 billion range, just given the more dynamic operating environment that we're in.

Speaker Change: And what I would say as you know our investment posture. Today reflects you know the significant opportunities that we see across each of the company and priorities that we're investing in this year.

Speaker Change: Research and development. So we're focused on that internally. We're also very focused on.

Susan Li: We do not have any expectation that that will change at this point. Your next question comes from the line of Mark Schmulik with Bernstein. Please go ahead. Yes, thanks for taking the questions. Mark, in your conversation last night with Satya, I think you both discussed a bit around kind of the portion of code being written internally by AI. Kind of back to some of your previous comments around this being the year where we might see AI kind of in the place of a mid-level engineer. With the world evolving so quickly, can you share some places where you've seen strong traction there? Are we progressing kind of faster, slower, or as you expected towards this milestone?

We do not have any expectation that that will change at this point.

Speaker Change: Building.

Speaker Change:

Speaker Change: AI agents or systems that can help run different experiments to increase our recommendations across our other AI products like the ones that do recommendations across our fields and things like that so I think that if it works should just accelerate our progress.

Operator: Your next question comes from the line of Mark Schmulik with Bernstein. Please go ahead.

Speaker Change: We will obviously continue evaluating depending on how macro conditions more broadly evolve, but we really feel like these are big strategic priorities for us and are critical for us to continue investing in them and in fact, you know I think one of the aims of our efficiency work over the last two years was to put us in.

Mark Shmulik: Your next question comes from the line of Mark Shmulik with Bernstein. Please go ahead. Yes, thanks for taking the questions. Mark, in your conversation last night with Satya, I think you both discussed a bit around the portion of code being written internally by AI. Back to some of your previous comments around this being a year where we might see AI the place of a mid-level engineer.

Mark Shmulik: Yes, thanks for taking the questions. Mark, in your conversation last night with Satya, I think you both discussed a bit around kind of the portion of code being written internally by AI. Kind of back to some of your previous comments around this being the year where we might see AI kind of in the place of a mid-level engineer. With the world evolving so quickly, can you share some places where you've seen strong traction there? Are we progressing kind of faster, slower, or as you expected towards this milestone?

Mark Zuckerberg: So I think that, if it works, should just accelerate our progress in those areas.

Speaker Change: And in those areas. That's that's the basic bet that we're making.

Speaker Change: A stronger financial position. So that we can continue investing in key priorities through tougher financial cycles.

Susan Li: That's the basic. Your second question about our lowered expense outlook, you know, really, we are four months into the year. The lowered outlook reflects more refined forecasts, including updated expectations for both employee compensation, as well as some other non-headcount-related operating expenses this year. And that's partially offset by higher expected infrastructure costs related to our increased CapEx outlook, as well as higher expected Reality Lab's cost of goods sold. And we've maintained our $5 billion range, just given the more dynamic operating environment that we're in. And what I would say is, you know, our investment posture today reflects, you know, the significant opportunities that we see across each of the company and priorities that we're investing in this year.

Speaker Change: On your second question about our lowered expense outlook, you know really we are four months into the year.

Speaker Change: Your next question comes from the line of Ross Sandler with Barclays. Please go ahead.

Speaker Change: Great.

Susan Li: Then, Susan, with the expense guidance coming down just a touch, how should we think about just the overall cadence of expected spending, really as it relates to core business performance and the realities of the day-to-day world we're living in? Thank you. I can talk about the coding agent work. I don't think that there's been any real change in our prediction for the timing of this. So I'd say it's basically still on track for Something around a mid-level engineer kind of starting to become possible sometime this year, scaling into next year. So I'd expect that by the middle to end of next year, AI coding agents are going to be doing a substantial part of AI research and development.

Mark Zuckerberg: Mark Yes.

Susan Li: Susan, with the expense guidance coming down just a touch, how should we think about just the overall cadence of expected spending, really as it relates to kind of core business performance and the realities of the day-to-day world we're living in? Thank you. I can talk about the coding agent work. I don't think that there's been any real change in our prediction for the timing of this. I'd say it's basically still on track for something around a mid-level engineer kind of starting to become possible sometime this year, scaling into next year. I'd expect that by the middle to end of next year, AI coding agents are going to be doing a substantial part of AI research and development. We're focused on that.

Susan, with the expense guidance coming down just a touch, how should we think about just the overall cadence of expected spending, really as it relates to kind of core business performance and the realities of the day-to-day world we're living in? Thank you.

Mark Zuckerberg: One of your many kind of a podcast or.

Speaker Change: Keynote presentations you had mentioned.

Like a bunch of projects.

Mark Zuckerberg: <unk>.

Mark Zuckerberg: Want to required to do our kind of bottleneck by the AI.

Speaker Change: The goods sold.

Mark Zuckerberg: I can talk about the coding agent work. I don't think that there's been any real change in our prediction for the timing of this. I'd say it's basically still on track for something around a mid-level engineer kind of starting to become possible sometime this year, scaling into next year. I'd expect that by the middle to end of next year, AI coding agents are going to be doing a substantial part of AI research and development. We're focused on that.

Speaker Change:

Speaker Change: And we've maintained our $5 billion range, just given the more dynamic operating environment that we're in.

Mark Zuckerberg: For the.

Mark Zuckerberg: Susan just talked about earlier.

Mark Zuckerberg: Even some of the testing that the AD ranking team wants to run just giving kind of delayed so.

Mark Zuckerberg: Yes.

Mark Zuckerberg: Now either this year next year whenever when do you kind of see some of this constraint being eased back and more broadly.

Susan Li: We will obviously continue evaluating depending on how macro conditions more broadly evolve. But we really feel like these are big strategic priorities for us and are critical for us to continue investing in. And in fact, you know, I think one of the aims of our efficiency work over the last two years was to put us in a stronger financial position so that we can continue investing in key priorities through tougher financial cycles.

Mark Zuckerberg: Three years past.

Mark Zuckerberg:

Speaker Change: <unk> impact to your business, So where do you where do you think we are in terms of just the overall improvements to the AD ranking system.

Susan Li: So we're focused on that. Internally, we're also very focused on. building AI agents or systems that can help run different experiments to increase recommendations across our other AI products, like the ones that do recommendations across our feeds and things like that. So I think that if it works, should just accelerate our progress in those areas. That's the basic bet that we're making.

Susan Li: Internally, we're also very focused on building AI agents or systems that can help run different experiments to increase recommendations across our other AI products, like the ones that do recommendations across our feeds and things like that. I think that, if it works, should just accelerate our progress in those areas. That's the basic bet that we're making. Your second question about our lowered expense outlook. Really, we are four months into the year. The lowered outlook reflects more refined forecasts, including updated expectations for both employee compensation, as well as some other non-headcount-related operating expenses this year. That's partially offset by higher expected infrastructure costs related to our increased CapEx outlook, as well as higher expected Reality Labs cost of goods sold. We've maintained our $5 billion range, just given the more dynamic operating environment that we're in.

Internally, we're also very focused on building AI agents or systems that can help run different experiments to increase recommendations across our other AI products, like the ones that do recommendations across our feeds and things like that. I think that, if it works, should just accelerate our progress in those areas. That's the basic bet that we're making.

Speaker Change: A stronger financial position. So that we can continue investing in key priorities through tougher financial cycles.

Speaker Change: Roy that you guys are able to deliver.

Speaker Change: And like what inning are we in on that.

Ross Sandler: Your next question comes from the line of Ross Sandler with Barclays. Please go ahead. Great.

Speaker Change: Your next question comes from the line of Ross Sandler with Barclays. Please go ahead.

Speaker Change: In your opinion, thank you very much.

I can take a shot at both of those and Mark you can obviously chime in on.

Mark Zuckerberg: Mark, yesterday in one of your many kind of podcasts or keynote presentations, you had mentioned that like a bunch of projects that your teams want to or aspire to do are kind of bottlenecked by the AI capacity, which, you know, Susan just talked about earlier, and that even, you know, some of the testing that the ad ranking team wants to run is just getting kind of delayed. So, I guess looking out either, you know, this year, next year, whenever, when do you kind of see some of this constraint being eased back? And, you know, more broadly, you know, we're kind of three years past the IDFA impact to your business.

Speaker Change: Great.

Speaker Change: On the first question you know the cap the capacity landscape. We are in is pretty dynamic both in terms of the many moving parts in terms of us bringing capacity online, but also in terms of the the demand from different product groups in our company whether they are in the journey I teams or whether they're doing more of the core AI work around.

Speaker Change: Yesterday, and one of your many kind of a podcast or.

Speaker Change: <unk> presentation, you had mentioned.

Susan Li: Your second question about our lowered expense outlook. Really, we are four months into the year. The lowered outlook reflects more refined forecasts, including updated expectations for both employee compensation, as well as some other non-headcount-related operating expenses this year. That's partially offset by higher expected infrastructure costs related to our increased CapEx outlook, as well as higher expected Reality Labs cost of goods sold. We've maintained our $5 billion range, just given the more dynamic operating environment that we're in.

Susan Li: Your second question about our lowered expense outlook, you know, really, we are four months into the year, the lowered outlook reflects more refined forecasts, including updated expectations for both employee compensation, as well as some other non-headcount-related operating expenses this year, and that's partially offset by higher expected infrastructure costs related to our increased CapEx outlook, as well as higher expected Reality Labs cost of goods sold. Thank you. And we've maintained our $5 billion range, just given the more dynamic operating environment that we're in. And what I would say is, you know, our investment posture today reflects, you know, the significant opportunities that we see across each of the company and priorities that we're investing in this year.

Speaker Change: A bunch of projects that youre teams.

Speaker Change: Want to aspire to do our kind of bottleneck by.

Speaker Change: AI capacity.

Speaker Change: Which Susan just talked about earlier.

Speaker Change: And recommendation so both the supply and demand you know are quite fluid and so we don't have a sort of a fixed answer in terms of you know when we expect that that we will sort of have enough supply to meet all demand, but that's something that we are working very hard to alleviate and it's part of why we accelerated brings.

Speaker Change: And that even.

Speaker Change: Some of the testing that the AD ranking team wants to run just giving kind of delayed.

Speaker Change: No.

Speaker Change: I guess looking out either this year next year whenever when do you kind of see some of this constraint being eased back.

Speaker Change: And more broadly.

Speaker Change: More data center space online this.

Speaker Change: We're kind of three years past.

Speaker Change: This year and also we're very focused on increasing the efficiency of our workloads over the course of the year.

Susan Li: What I would say is our investment posture today reflects the significant opportunities that we see across each of the company and priorities that we're investing in this year. We will obviously continue evaluating depending on how macro conditions more broadly evolve. We really feel like these are big strategic priorities for us and are critical for us to continue investing in. In fact, I think one of the aims of our efficiency work over the last two years was to put us in a stronger financial position so that we can continue investing in key priorities through tougher financial cycles. Your next question comes from the line of Ross Sandler with Barclays. Please go ahead. Great.

Speaker Change: Yes.

What I would say is our investment posture today reflects the significant opportunities that we see across each of the company and priorities that we're investing in this year. We will obviously continue evaluating depending on how macro conditions more broadly evolve. We really feel like these are big strategic priorities for us and are critical for us to continue investing in. In fact, I think one of the aims of our efficiency work over the last two years was to put us in a stronger financial position so that we can continue investing in key priorities through tougher financial cycles.

Speaker Change: <unk> impact to your business, So where do you where do you think we are in terms of just the overall improvements to the AD ranking system. The ROI that you guys are able to deliver.

Susan Li: So, where do you, you know, where do you think we are in terms of just the overall improvements to the ad ranking system, the ROI that you guys are able to deliver, and like what inning are we in on that, in your opinion? Thank you very much.

Speaker Change: On your second question about you know ads performance ads ranking.

Speaker Change: You know we have <unk>.

Speaker Change: And for many years and continue to invest in driving AD performance improvements year over year conversion growth remained strong and in fact, we continue to see conversions grow at a faster rate than AD impressions in Q1, so reflecting increased conversion rates.

Speaker Change: And like what inning are we in on that.

Speaker Change: In your opinion, thank you very much.

Susan Li: I can take a shot at both of those, and Mark, you can obviously chime in. On the first question, you know, the capacity landscape we are in is pretty dynamic, both in terms of the many moving parts in terms of us bringing capacity online, but also in terms of the demand from different product groups in our company, whether they are in the Gen-AI teams or whether they're doing more of the core AI work around ranking and recommendations. So both the supply and demand, you know, are quite fluid, and so we don't have a sort of fixed answer in terms of, you know, when we expect that we will sort of have enough supply to meet all demand, but that's something that we are working very hard to alleviate, and it's part of why we accelerated bringing more data center space online this year, and also we're very focused on increasing the efficiency of our workloads over the course of the year.

Speaker Change: I can take a shot at both of those and Mark you can obviously chime in on.

Speaker Change: The first question you know the cap the capacity landscape. We are in is pretty dynamic both in terms of the many moving parts in terms of us bringing capacity online, but also in terms of the the demand from different product groups in our company whether they are in the journey I teams or whether they're doing more of the core AI work around.

Speaker Change: And you know ads ranking and modeling improvements are a big driver of overall performance gains we have a lot of innovations and model architecture in both the ads retrieval and ranking stages of the ads delivery process to serve more relevant ads to people.

Ross Sandler: Your next question comes from the line of Ross Sandler with Barclays. Please go ahead. Great.

Operator: Your next question comes from the line of Ross Sandler with Barclays. Please go ahead.

Ross Sandler: Great.

Mark Zuckerberg: Mark, yesterday in one of your many kind of podcasts or keynote presentations, you had mentioned that like a bunch of projects that your teams want to or aspire to do are kind of bottlenecked by the AI capacity, which Susan just talked about earlier, and that even some of the testing that the ad ranking team wants to run is just getting kind of delayed. So I guess looking out either this year, next year, whenever, when do you kind of see some of this constraint being eased back? And more broadly, we're kind of three years past the IDFA impacts your business.

And recommendation so both the supply and demand you know are quite fluid and so we don't have a sort of a fixed answer in terms of you know when we expect that that we've all sort of have enough supply to meet all demand, but that's something that we are working very hard to alleviate and it's part of why we accelerated bringing.

Susan Li: Mark, yesterday in one of your many kind of podcast or keynote presentations, you had mentioned that a bunch of projects that your teams want to or aspire to do are kind of bottlenecked by the AI capacity, which Susan just talked about earlier, and that even some of the testing that the ad ranking team wants to run is just getting kind of delayed. I guess looking out either this year, next year, whenever, when do you kind of see some of this constraint being eased back? More broadly, we're kind of three years past the IDFA impact your business. Where do you think we are in terms of just the overall improvements to the ad ranking system, the ROI that you guys are able to deliver, and what ending are we in on that, in your opinion? Thank you very much.

Mark, yesterday in one of your many kind of podcast or keynote presentations, you had mentioned that a bunch of projects that your teams want to or aspire to do are kind of bottlenecked by the AI capacity, which Susan just talked about earlier, and that even some of the testing that the ad ranking team wants to run is just getting kind of delayed. I guess looking out either this year, next year, whenever, when do you kind of see some of this constraint being eased back? More broadly, we're kind of three years past the IDFA impact your business. Where do you think we are in terms of just the overall improvements to the ad ranking system, the ROI that you guys are able to deliver, and what ending are we in on that, in your opinion? Thank you very much.

Speaker Change: And we talked about the introduction of the new Jama adds a recommendation model in Q1, and we have talked about some of the prior model architecture improvements like lettuce and Andromeda in past quarters for US. We really you know believe first and foremost that advertising is a relative.

Speaker Change: More data center space online this.

Speaker Change: <unk> performance game, and that's especially.

Speaker Change: This year and also we're very focused on increasing the efficiency of our workloads over the course of the year.

Speaker Change: Important for us because the vast majority of our business is direct response advertising. So we are we feel good about how the prior investments are paying off and we continue to.

Susan Li: On your second question about ads performance, ads ranking, we have invested for many years and continue to invest in driving ad performance improvements. Year-over-year conversion growth remains strong. And in fact, we continue to see conversions grow at a faster rate than ad impressions in Q1. So reflecting increased conversion rates. and you know ads ranking and modeling improvements are a big driver of overall performance gains. We have a lot of innovations in model architecture in both the ads retrieval and ranking stages of the ads delivery process to serve more relevant ads to people. We talked about the introduction of the new GEM ads recommendation model in Q1 and we have talked about some of the prior model architecture improvements like Lattice and Andromeda in past quarters.

Speaker Change: On your second question about you know ads performance ads ranking them.

Speaker Change: You know we have invested for many years and continue to invest in driving AD performance improvements year over year conversion growth remained strong and in fact, we continue to see conversions grow at a faster rate than AD impressions in Q1, so reflecting increased conversion rates.

Speaker Change: Invest in a lot of different work to constantly improve our ads ranking and recommendations performance.

Speaker Change: Your next question comes from the line of Kenneth <unk> with Wells Fargo. Please go ahead.

Susan Li: So where do you think we are in terms of just the overall improvements to the ad ranking system, the ROI that you guys are able to deliver, and like what inning are we in on that, in your opinion? Thank you very much.

Thank you so much two for me please first.

Speaker Change: I mean mark.

Speaker Change: How should we think about the timing of AI capabilities necessary to drive whatsapp for business adoption and higher cost higher labor.

Susan Li: I can take a shot at both of those. Mark, you can obviously chime in. On the first question, the capacity landscape we are in is pretty dynamic, both in terms of the many moving parts in terms of us bringing capacity online, but also in terms of the demand from different product groups in our company, whether they are in the GenAI teams or whether they're doing more of the core AI work around ranking and recommendations. Both the supply and demand are quite fluid. We don't have a sort of fixed answer in terms of when we expect that we will sort of have enough supply to meet all demand, but that's something that we are working very hard to alleviate. It's part of why we accelerated bringing more data center space online this year.

Speaker Change: Cost labor markets. What is met are doing to accelerate that adoption and do you see this as mostly incremental.

Speaker Change: The SME AD spend that you are already capturing and then our first Susan one please.

Speaker Change: The new gum adds a recommendation model in Q1, and we have talked about some of the prior model architecture improvements like lettuce, and Andromeda in past quarters for US, we really believe first and foremost that advertising is a relative performance game that's a special.

Speaker Change: Wouldn't the revised Capex outlook for this year for 25 mean about future years, it doesn't mean anything.

Susan Li: For us we really you know believe first and foremost that advertising is a relative performance game that's especially important for us because the vast majority of our business is direct response advertising. So we we feel good about how the prior investments are paying off and we continue to invest in a lot of different work to constantly improve our ads ranking and recommendations performance.

Speaker Change: Or.

Speaker Change: You talked about this being an acceleration.

Speaker Change: And your revised outlook statement should we think about this as a new starting point for to think about 26 and beyond or should we just start fresh in 'twenty six and think about the that Nathan and capacity at that point. Thank you.

Speaker Change: <unk>.

Speaker Change: Important for us because the vast majority of our business is direct response advertising.

Speaker Change: So we are we feel good about how the prior investments are paying off and we continue to.

Invest in a lot of different work to constantly improve our ads ranking and recommendations performance.

Speaker Change: Sure.

Speaker Change: I'm I'm I'm happy to take all I'll I'll go ahead and take both of those and Mark you should feel free to chime in on wherever you are with like.

Susan Li: We're very focused on increasing the efficiency of our workloads over the course of the year. On your second question about ads performance, ads ranking, we have invested for many years and continue to invest in driving ad performance improvements. Year-over-year conversion growth remains strong. In fact, we continue to see conversions grow at a faster rate than ad impressions in Q1, reflecting increased conversion rates. Ads ranking and modeling improvements are a big driver of overall performance gains. We have a lot of innovations in model architecture in both the ads retrieval and ranking stages of the ads delivery process to serve more relevant ads to people. We talked about the introduction of the new GEM ads recommendation model in Q1, and we have talked about some of the prior model architecture improvements like Lattice and Andromeda in past quarters.

We're very focused on increasing the efficiency of our workloads over the course of the year. On your second question about ads performance, ads ranking, we have invested for many years and continue to invest in driving ad performance improvements. Year-over-year conversion growth remains strong. In fact, we continue to see conversions grow at a faster rate than ad impressions in Q1, reflecting increased conversion rates. Ads ranking and modeling improvements are a big driver of overall performance gains. We have a lot of innovations in model architecture in both the ads retrieval and ranking stages of the ads delivery process to serve more relevant ads to people. We talked about the introduction of the new GEM ads recommendation model in Q1, and we have talked about some of the prior model architecture improvements like Lattice and Andromeda in past quarters.

Kenneth Gawrelski: Your next question comes from the line of Kenneth Gawrelski with Wells Fargo. Please go ahead. Thank you so much. Two for me, please.

Kenneth: Your next question comes from the line of Kenneth <unk> with Wells Fargo. Please go ahead.

Susan Li: On your second question about, you know, ads, performance, ads ranking, you know, we have invested for many years and continue to invest in driving ad performance improvements. Year-over-year conversion growth remains strong, and in fact, we continue to see conversions grow at a faster rate than ad impressions in Q1, so reflecting increased conversion rates. And, you know, ads ranking and modeling improvements are a big driver of overall performance gains. We have a lot of innovations in model architecture in both the ads retrieval and ranking stages of the ads delivery process to serve more relevant ads to people.

Speaker Change: Yeah, So mark talk a little bit about our general vision that every business will soon have an AI that is an expert on their business for their customers to talk to you in the same way that today, they've got email and websites and social media presence is et cetera. We are currently testing business a eyes with a limited set of businesses in the U S.

Kenneth: Thank you so much two for me please first.

Susan Li: First, Amy and Mark, how should we think about the timing of AI capabilities necessary to drive WhatsApp for business adoption in higher cost labor markets? What is Meta doing to accelerate that adoption? And do you see this as mostly incremental to SME ad spend that you're already capturing?

Mark.

Speaker Change: How should we think about the timing of AI capabilities necessary to drive whatsapp for business adoption and higher costs.

Speaker Change: Labor cost.

Speaker Change: Cost labor markets. What is met are doing to accelerate that adoption and do you see this as mostly incremental.

Speaker Change: A few additional countries on Whatsapp messenger and on ads on Facebook and Instagram, we've been starting with small businesses and focusing first on helping them sell their goods and services with business a eyes.

Speaker Change: SME AD spend that you are already capturing and then our first Susan one please.

Susan Li: And then for Susan, one, please. What is the revised CapEx outlook for this year, for 25, mean about future years? Does it mean anything? Or you talked about this being an acceleration in your revised outlook statement. Should we think about this as a new starting point to think about 26 and beyond? Or should we just start fresh in 26 and think about the needs and capacity at that point? Thank you.

Speaker Change: Wouldn't the revised Capex outlook for this year for 25 mean about future years does it mean anything or.

Speaker Change: But ultimately we are working on tools to support businesses at every stage of the customer funnel from lead generation to order management and customer service and a core area that we're addressing right now is really the ability for businesses to customize and control the agent to achieve the outcome that they want.

Speaker Change: Or.

You talked about this being an acceleration.

Speaker Change: And your revised outlook statement should we think about this as a new starting point for the to think about 26 and beyond or should we just start fresh in 'twenty, six and think about it that Nathan and capacity at that point. Thank you.

Susan Li: We talked about the introduction of the new GEM ads recommendation model in Q1, and we have talked about some of the prior model architecture improvements like Lattice and Andromeda in past quarters. For us, we really, you know, believe first and foremost that advertising is a relative performance game. That's especially important for us because the vast majority of our business is direct response advertising, so we feel good about how the prior work to constantly improve our ads ranking and recommendations performance.

Speaker Change:

Speaker Change: We've launched a new agent management experience and dashboard that makes it easier for businesses to train their AI based on existing information on their website or whatsapp profile or their Instagram and Facebook pages.

Susan Li: For us, we really believe first and foremost that advertising is a relative performance game. That's especially important for us because the vast majority of our business is direct response advertising. We feel good about how the prior investments are paying off, and we continue to invest in a lot of different work to constantly improve our ads ranking and recommendations performance. Your next question comes from the line of Kenneth Greloski with Wells Fargo. Please go ahead. Thank you so much. Two for me, please. First, maybe, Mark, how should we think about the timing of AI capabilities necessary to drive WhatsApp for business adoption in higher cost labor markets? What is Meta doing to accelerate that adoption? Do you see this as mostly incremental to SME ad spend that you're already capturing? For Susan, one, please.

For us, we really believe first and foremost that advertising is a relative performance game. That's especially important for us because the vast majority of our business is direct response advertising. We feel good about how the prior investments are paying off, and we continue to invest in a lot of different work to constantly improve our ads ranking and recommendations performance.

Speaker Change: Okay.

Speaker Change: I'm I'm I'm happy to take of all Al I'll go ahead and take both of those and Mark you should feel free to chime in on wherever you would like.

Susan Li: I'll go ahead and take both of those, and Mark, you should feel free to chime in wherever you would like. So Mark talked a little bit about our general vision that every business will soon have an AI that is an expert on their business for their customers to talk to in the same way that today they've got email and websites, social media presences, et cetera. We are currently testing business AIs with a limited set of businesses in the U.S. and a few additional countries on WhatsApp Messenger and ads on Facebook and Instagram. We've been starting with small businesses and focusing first on helping them sell their goods and services with business AIs, but ultimately we are working on tools to support businesses at every stage of the customer funnel from lead generation to order management and customer service.

Speaker Change: And we're starting with the ability for businesses to activate AI in their catch with customers.

Speaker Change: Yeah, So mark talked a little bit about our general vision that every business will soon have an AI that is an expert on their business for their customers to talk to you in the same way that today, they've got email and websites and social media presence is et cetera. We are currently testing business as with a limited set of businesses in the U S.

Speaker Change: We are also testing business AI is on Facebook and Instagram ads that you can ask about product and return policies or assist you in making them a purchase within our N that pressure. So again the ultimate vision is to build an experience that serves customers across all of these different services and apps.

Kenneth Gawrelski: Your next question comes from the line of Kenneth Gawrelski with Wells Fargo.

Operator: Your next question comes from the line of Kenneth Greloski with Wells Fargo. Please go ahead.

Speaker Change: And no matter, where you engage with the business AI. It should be one agent that we're calls your history and your preferences and we're hearing encouraging feedback, particularly that adopting these a's are saving the businesses that we're testing with a lot of time and helping to determine which conversations makes sense for them to spend more time on.

Susan Li: Please go ahead. Thank you so much. Two for me, please. First, Amy and Mark, how should we think about the timing of AI capabilities necessary to drive WhatsApp for business adoption in higher cost labor markets? What is Meta doing to accelerate that adoption? And do you see this as mostly incremental to SME ad spend that you're already capturing?

Kenneth Garwelski: Thank you so much. Two for me, please. First, maybe, Mark, how should we think about the timing of AI capabilities necessary to drive WhatsApp for business adoption in higher cost labor markets? What is Meta doing to accelerate that adoption? Do you see this as mostly incremental to SME ad spend that you're already capturing? For Susan, one, please.

Speaker Change: But ultimately we are working on tools to support businesses at every stage of the customer funnel from lead generation to order management and customer service.

And then your second question right was about.

Speaker Change: 2026, Capex, you know infrastructure as I alluded to earlier, just as a very dynamic planning area. Given the continued advances in AI and also for US. The fact that we continue to find a lot of good use cases to put capacity toward in our core AI ranking and recommendations work so I would say.

Susan Li: And a core area that we're addressing right now is really the ability for businesses to customize and control the agent to achieve the outcome that they want. So we've launched a new agent management experience and dashboard that makes it easier for businesses to train their AI based on existing information on their website or WhatsApp profile or their Instagram and Facebook pages. And we're starting with the ability for businesses to activate AI in their chats with customers. We are also testing business AIs on Facebook and Instagram ads that you can ask about product and return policies or assist you in making a purchase within our in-app browser.

Speaker Change: In our core area that we're addressing right now is really the ability for businesses to customize and control the agent to achieve the outcome that they want so.

Susan Li: And then, first, Susan, one, please. What does the revised CapEx Outlook for this year, for 25, mean about future years? Does it mean anything? Or you talked about this being an acceleration in your revised Outlook statement.

Susan Li: What does the revised CapEx outlook for this year for '25 mean about future years? Does it mean anything? You talked about this being an acceleration in your revised outlook statement. Should we think about this as a new starting point to think about '26 and beyond, or should we just start fresh in '26 and think about the needs and capacity at that point? Thank you. I'm happy to take—I'll go ahead and take both of those. Mark, you should feel free to chime in wherever you would like. Mark talked a little bit about our general vision that every business will soon have an AI that is an expert on their business for their customers to talk to in the same way that today they've got email, websites, social media presences, etc.

What does the revised CapEx outlook for this year for '25 mean about future years? Does it mean anything? You talked about this being an acceleration in your revised outlook statement. Should we think about this as a new starting point to think about '26 and beyond, or should we just start fresh in '26 and think about the needs and capacity at that point? Thank you.

It's too early to discuss plans beyond 2025.

Susan Li: Should we think about this as a new starting point for, to think about 26 and beyond? Or should we just start fresh in 26 and think about the needs and capacity at that point? Thank you.

Youssef Squali: Your next question comes from the line of Youssef Squali with Truest Securities. Please go ahead.

Speaker Change: We are also testing business a is on Facebook and Instagram ads that you can ask about product and return policies or assist you in making them a purchase within our in App browser. So again the ultimate vision is to build an experience that serves customers across all of these different services and apps.

Youssef Squali: Great. Thank you guys for taking the questions so mark.

Youssef Squali: In a world, where we are we now have maybe 5% top line, including AI on our smartphones doing virtually the same thing.

Susan Li: So again, the ultimate vision is to build an experience that serves customers across all of these different services and apps. No matter where you engage with the business AI, it should be one agent that recalls your history and your preferences.

Susan Li: I'm happy to take, I'll go ahead and take both of those, and Mark, you should feel free to chime in wherever you would like. You know, so Mark talked a little bit about our general vision that every business will soon, you know, have an AI that is an expert on their business for their customers to talk to in the same way that today they've got email and websites, social media presences, etc. We are currently testing business AIs with a limited set of businesses in the U.S. and a few additional countries on WhatsApp Messenger and on ads on Facebook and Instagram.

Susan Li: I'm happy to take—I'll go ahead and take both of those. Mark, you should feel free to chime in wherever you would like. Mark talked a little bit about our general vision that every business will soon have an AI that is an expert on their business for their customers to talk to in the same way that today they've got email, websites, social media presences, etc.

Speaker Change: Do you think that is.

Speaker Change: Market much like search where the winner takes most or is it likely to be much more fragmented, but in either case, what would you say are the top two or three competitive advantages.

Speaker Change: No matter, where you engage with the business AI it should be one agent that recalls your history and your preferences and we're hearing encouraging feedback, particularly that adopting these a's are saving the businesses that we're testing with a lot of time and helping to determine which conversations makes sense for them to spend more time on.

Susan Li: And we're hearing encouraging feedback, particularly that adopting these AIs are saving the businesses that we're testing with a lot of time and helping to determine which conversations make And then your second question, right, was about 2026 CapEx. You know, infrastructure, as I alluded to earlier, just is a very dynamic planning area given the continued advances in AI. And also for us, the fact that we continue to find a lot of good use cases to put capacity toward in our core AI ranking and recommendations work. So I would say it's too early to discuss plans beyond 2025.

Speaker Change: And then Susan on the EU decision in connection with the DMA, what kind of expectations will you need to make to the absolute can you maybe just help us gauge the potential financial fallout understanding that he needs to obviously be too early thank you.

Susan Li: We are currently testing business AIs with a limited set of businesses in the US and a few additional countries on WhatsApp, Messenger, and ads on Facebook and Instagram. We've been starting with small businesses, focusing first on helping them sell their goods and services with business AIs. Ultimately, we are working on tools to support businesses at every stage of the customer funnel, from lead generation to order management and customer service. A core area that we're addressing right now is really the ability for businesses to customize and control the agent to achieve the outcome that they want. We've launched a new agent management experience and dashboard that makes it easier for businesses to train their AI based on existing information on their website, WhatsApp profile, or their Instagram and Facebook pages.

We are currently testing business AIs with a limited set of businesses in the US and a few additional countries on WhatsApp, Messenger, and ads on Facebook and Instagram. We've been starting with small businesses, focusing first on helping them sell their goods and services with business AIs. Ultimately, we are working on tools to support businesses at every stage of the customer funnel, from lead generation to order management and customer service. A core area that we're addressing right now is really the ability for businesses to customize and control the agent to achieve the outcome that they want. We've launched a new agent management experience and dashboard that makes it easier for businesses to train their AI based on existing information on their website, WhatsApp profile, or their Instagram and Facebook pages.

Speaker Change: And then your second question right was about a 2026 Capex you know infrastructure as I alluded to earlier just is a very dynamic planning area. Given the continued advances in AI and also for US. The fact that we continue to find a lot of good use cases to put.

Speaker Change: Yeah.

Speaker Change: Yeah on unmet or I mean, I think that they're going to be a number of different agents that people use just like people use different apps for different things.

Susan Li: We've been starting with small businesses and focusing first on helping them sell their goods and services with business AIs, but ultimately we are working on tools to support businesses at every stage of the customer funnel from lead generation to order management and customer service. And a core area that we're addressing right now is really the ability for businesses to customize and control the agent to achieve the outcome that they want. So we've launched a new agent management experience and dashboard that makes it easier for businesses to train their AI based on existing information on their website or WhatsApp profile or their Instagram and Facebook pages.

Speaker Change: I'm not sure that people are going to use multiple.

Speaker Change: Capacity toward in our core AI ranking and recommendations work. So I would say, it's too early to discuss plans beyond 2025.

Speaker Change: Agents for the same exact things, but I would imagine that something that is more focused on kind of enterprise productivity might be different from something that is somewhat more optimized for personal productivity and that might be somewhat different from something that is optimized for for entertainment and social.

Youssef Squali: Your next question comes from the line of Youssef Squali with Truist Securities. Please go ahead. Great, thank you guys for taking the question.

Speaker Change: Your next question comes from the line of Youssef Squali with Truest Securities. Please go ahead great.

Speaker Change: Great. Thank you guys for taking the questions so mark.

Mark Zuckerberg: So, Mark, in a world where we now have maybe five to 10 chatbots, including Meta AI on our smartphones doing virtually the same thing, do you think this is a market much like search where the winner takes most? Or is it likely to be much more fragmented? But in either case, what would you say are the top two or three competitive advantages of Meta AI?

Speaker Change: In a world where we are we now have maybe five to 10 chat lines, including data AI on our smartphones doing virtually the same thing.

Speaker Change: Activities so.

Speaker Change: I know there'll be there'll be different experiences.

Speaker Change: Yeah.

Speaker Change: One of the trends that I think we're starting to see now is personalization across the across the us.

Speaker Change: Do you think this is mark.

Susan Li: And we're starting with the ability for businesses to activate AI in their chats with customers. We are also testing business AIs on Facebook and Instagram ads that you can ask about product and return policies or assist you in making a purchase within our in-app browser. So, again, the ultimate vision is to build an experience that serves customers across all of these different services and apps. And no matter where you engage with the business AI, it should be one agent that recalls your history and your preferences. And we're hearing encouraging feedback, particularly that adopting these AIs are saving the businesses that we're testing with a lot of time and helping to determine which conversations make sense for them to spend more time on.

Susan Li: We're starting with the ability for businesses to activate AI in their chats with customers. We are also testing business AIs on Facebook and Instagram ads that you can ask about product and return policies or assist you in making a purchase within our in-app browser. Again, the ultimate vision is to build an experience that serves customers across all of these different services and apps. No matter where you engage with the business AI, it should be one agent that recalls your history and your preferences. We're hearing encouraging feedback, particularly that adopting these AIs are saving the businesses that we're testing with a lot of time and helping to determine which conversations make sense for them to spend more time on. Your second question, right, was about 2026 CapEx.

Speaker Change: Much like search where the winner takes most or is it likely to be much more fragmented, but in either case, what would you say are the top two or three competitive advantages.

We're starting with the ability for businesses to activate AI in their chats with customers. We are also testing business AIs on Facebook and Instagram ads that you can ask about product and return policies or assist you in making a purchase within our in-app browser. Again, the ultimate vision is to build an experience that serves customers across all of these different services and apps. No matter where you engage with the business AI, it should be one agent that recalls your history and your preferences. We're hearing encouraging feedback, particularly that adopting these AIs are saving the businesses that we're testing with a lot of time and helping to determine which conversations make sense for them to spend more time on. Your second question, right, was about 2026 CapEx.

Speaker Change: It right now.

Speaker Change: If the experiences on personalized then you can kind of just go to different apps and get you know.

Susan Li: And then, Susan, on the EU decision connection with the DMA, what kind of modifications will you need to make to the apps? And can you maybe just help us gauge the potential financial fallout, understanding that it may still obviously be too early? Thank you. Yeah, on Meta AI, I mean, I think that there are going to be a number of different agents that people use, just like people use different apps for different things. I'm not sure that people are going to use multiple agents for the same exact things, but I'd imagine that something that is more focused on kind of enterprise productivity might be different from something that is somewhat more optimized for personal productivity.

Speaker Change: Reasonably similar answers to different questions, but once NII starts getting to know you and what you care about in context and can build up memory from the conversations that you've had with it over time I.

Speaker Change: And then Susan on the EU decision in connection with the DMA, what kind of modifications will you need to make to the App and can you maybe just help us gauge the potential financial fallout understanding that he needs to obviously be too early thank.

Speaker Change: I think that will start to become somewhat more of a differentiator.

Speaker Change: Thank you.

Speaker Change: So that's one thing that we think will matter and then of course, there's all the different modalities being able to not just answer questions about and text, but being able to do voice and multimodal and be able to produce images and videos and understand all those things and have good conversations about that I think there's going to be.

Speaker Change: Yeah on unmet AI, I mean, I think that they're going to be a number of different agents that people use just like people use different apps for different things.

Speaker Change: Hum.

Speaker Change: I'm not sure that people are going to use multiple.

Susan Li: And then your second question, right, was about 2026 CapEx. You know, infrastructure, as I alluded to earlier, just is a very dynamic planning area given the continued advances in AI. And also for us, the fact that we continue to find a lot of good use cases to put capacity toward in our core AI ranking and recommendations work. So I would say it's too early to discuss plans beyond 2025.

Speaker Change: Important overall so.

Speaker Change:

Speaker Change: Yeah, I mean, I think that AI is as well positioned but we have a lot of work to do in order to make it the leading personal AI.

Susan Li: Infrastructure, as I alluded to earlier, just is a very dynamic planning area given the continued advances in AI. Also for us, the fact that we continue to find a lot of good use cases to put capacity toward in our core AI ranking and recommendations work. I would say it's too early to discuss plans beyond 2025. Your next question comes from the line of Yusef Squali with Truist Securities. Please go ahead. Great. Thank you, guys, for taking the question. Mark, in a world where we now have maybe five to 10 chatbots, including Meta AI on our smartphones doing virtually the same thing, do you think this is a market much like Search where the winner takes most, or is it likely to be much more fragmented?

Infrastructure, as I alluded to earlier, just is a very dynamic planning area given the continued advances in AI. Also for us, the fact that we continue to find a lot of good use cases to put capacity toward in our core AI ranking and recommendations work. I would say it's too early to discuss plans beyond 2025.

Youssef Squali: And Youssef on your second question you know it is really too early to speak about what those changes could be because we are in the process of engaging with the European Commission.

Mark Zuckerberg: And that might be somewhat different from something that is optimized for entertainment and social connectivity. So I think that there will be different experiences. One of the trends that I think we're starting to see now is personalization across the use. Right now. If the experience is unpersonalized, then you can kind of just go to different apps. get, you know, reasonably similar answers to different questions. But once an AI starts getting to know you and what you care about and context and can build up memory from the conversations that you've had with it over time, I think that will start to become somewhat more of a differentiator.

Speaker Change: Activity so.

Youssef Squali: I think maybe the most a useful sort of metric I could give you is just that our advertising revenue in the European economic area in Switzerland, which would be the geographies impacted here was 16% of our worldwide total revenue in 2024.

Speaker Change: And then there'll be there'll be different experiences.

Operator: Your next question comes from the line of Yusef Squali with Truist Securities. Please go ahead.

Speaker Change: One of the trends that I think we're starting to see now is personalization across the across the us.

Youssef Squali: Your next question comes from the line of Youssef Squali with Truist Securities.

Speaker Change: Right now.

Youssef Squali: Please go ahead. Great. Thank you, guys, for taking the question.

Speaker Change: If the experiences on personalized then you can kind of just go to different apps and get you know reasonably.

Youssef Squali: Great. Thank you, guys, for taking the question. Mark, in a world where we now have maybe five to 10 chatbots, including Meta AI on our smartphones doing virtually the same thing, do you think this is a market much like Search where the winner takes most, or is it likely to be much more fragmented?

Youssef Squali: We are continuing to engage actively with the European Commission further on this so we hope to have more clarity by next quarter's call.

Mark Zuckerberg: So, Mark, in a world where we now have maybe five to ten chatbots, including Meta AI on our smartphones doing virtually the same thing, do you think this is a market-much-like search where the winner takes most, or is it likely to be much more fragmented? But in either case, what would you say are the top two or three competitive advantages of Meta AI?

Speaker Change: Reasonably similar answers to different questions, but once and AI starts getting to know you and what you care about in context and can build up memory from the conversations that you've had with it over time.

Youssef Squali: Yeah.

Speaker Change: Krista, we have time for one last question.

Speaker Change: Your last question comes from the line of Mark Mahaney with Evercore ISI. Please go ahead.

Speaker Change: I think that will start to become somewhat more of a differentiator.

Susan Li: In either case, what would you say are the top two or three competitive advantages of Meta AI? Susan, on the EU decision connection with the DMA, what kind of modifications will you need to make to the apps? Can you maybe just help us gauge the potential financial fallout, understanding that it may still obviously be too early? Thank you. Yeah. On Meta AI, I mean, I think that there are going to be a number of different agents that people use, just like people use different apps for different things. I'm not sure that people are going to use multiple agents for the same exact things, but I'd imagine that something that is more focused on kind of enterprise productivity might be different from something that is somewhat more optimized for personal productivity.

In either case, what would you say are the top two or three competitive advantages of Meta AI? Susan, on the EU decision connection with the DMA, what kind of modifications will you need to make to the apps? Can you maybe just help us gauge the potential financial fallout, understanding that it may still obviously be too early? Thank you.

Mark Zuckerberg: That's one thing that we think will matter. And then, of course, there's all the different modalities, being able to not just answer questions about in text, but being able to do voice and multimodal and be able to produce images and videos and understand all those things and have good conversations about that, I think. important overall.

Speaker Change: So that's one thing that we think will matter and then of course, there's all the different modalities being able to not just answer questions about and text for being able to do voice and multimodal and be able to produce images and videos and understand all those things and have good conversations about that I think is going to be.

Speaker Change: I will just go into them.

Speaker Change: I think you'd called out the China based retailers as one sort of potentially soft advertising vertical anything else you'd call out.

Speaker Change: Suggest autos is that an area of any softness and then on the reality labs and then the losses associated with reality labs, they've been very consistent whatever 4 billion a quarter for quite some time is there is there light at the end of the tunnel as their recent to think is there is there a factor that would occur that would cause those losses to come down.

Speaker Change: Important overall so.

Mark Zuckerberg: Yeah. On Meta AI, I mean, I think that there are going to be a number of different agents that people use, just like people use different apps for different things. I'm not sure that people are going to use multiple agents for the same exact things, but I'd imagine that something that is more focused on kind of enterprise productivity might be different from something that is somewhat more optimized for personal productivity.

Speaker Change:

Susan Li: Yeah, I mean, I think meta AI is well positioned, but we have a lot of work to do in order to make it the leading personal AI. And, Youssef, on your second question, you know, it is really too early to speak about what those changes could be because we are in the process of engaging with the European Commission. I think maybe the most useful sort of metric I could give you is just that our advertising revenue in the European Economic Area and Switzerland, which would be the geographies impacted here, was 16% of our worldwide total revenue in 2024.

Speaker Change: Yeah, I mean, I think that AI is as well positioned but we have a lot of work to do in order to make it the leading personally I.

Mark Mahaney: Yeah, on Meta AI, I mean, I think that there are going to be a number of different agents that people use, just like people use different apps for different things. I'm not sure that people are going to use multiple agents for the same exact things. But I'd imagine that something that is more focused on kind of enterprise productivity might be different from something that is somewhat more optimized for personal productivity. And that might be somewhat different from something that is optimized for entertainment and social connectivity. So I think that there will be different experiences. One of the trends that I think we're starting to see now is personalization across these.

Speaker Change: And Youssef on your second question you know it is really too early to speak about what those changes could be because we are in the process of engaging with the European Commission.

Speaker Change: And when would that be but but maybe more importantly, what is going to cause those losses to come down. Thank you very much.

Speaker Change: I think maybe the most useful sort of metric I could give you is just that our advertising revenue in the European economic area in Switzerland, which would be the geographies impacted here was 16% of our worldwide total revenue in 2024 again, we are continuing to engage actively with the European Commission further on this so we <unk>.

Mark Zuckerberg: Mark Let me take your first question about other verticals.

Mark Zuckerberg: You know, we generally saw healthy growth in most verticals in Q1, we did see some weakness and gaining in politics, so year over year growth in gaming was negative.

Susan Li: That might be somewhat different from something that is optimized for entertainment and social connectivity. I think there will be different experiences. One of the trends that I think we're starting to see now is personalization across these. Right now, if the experience is unpersonalized, then you can kind of just go to different apps and get reasonably similar answers to different questions. Once an AI starts getting to know you and what you care about and context and can build up memory from the conversations that you've had with it over time, I think that will start to become somewhat more of a differentiator. That's one thing that we think will matter.

That might be somewhat different from something that is optimized for entertainment and social connectivity. I think there will be different experiences. One of the trends that I think we're starting to see now is personalization across these. Right now, if the experience is unpersonalized, then you can kind of just go to different apps and get reasonably similar answers to different questions. Once an AI starts getting to know you and what you care about and context and can build up memory from the conversations that you've had with it over time, I think that will start to become somewhat more of a differentiator. That's one thing that we think will matter.

Susan Li: Again, we are continuing to engage actively with the European Commission further on this, so we hope to have more clarity by next quarter's call.

Speaker Change: To have more clarity by next quarter's call.

Mark Zuckerberg: In Q1, as we lap a period of strong spend from China based advertisers that we're promoting a larger volume of game titles in Q1 of 2024.

Mark Mahaney: Krista, we have time for one last question. Your last question comes from the line of Mark Mahaney with Evercore ISI. Please go ahead. Thanks, I'll just throw in two. I think you called out the China-based retailers as one sort of potentially soft advertising vertical. Anything else you'd call out? And I would just suggest autos. Was that an area of any softness? And then on the reality labs and on the losses associated with reality labs, they've been very consistent, whatever, $4 billion a quarter for quite some time. Is there light at the end of the tunnel?

Speaker Change: Christine we have time for one last question.

Speaker Change: Your last question comes from the line of Mark Mahaney with Evercore ISI. Please go ahead.

Mark Zuckerberg: You know, right now, if the experience is unpersonalized, then you can kind of just go to different apps and get, you know, reasonably similar answers to different questions. But once an AI starts getting to know you and what you care about and context and can build up memory from the conversations that you've had with it over time, I think that will start to become somewhat more of a differentiator. So that's one thing that we think will matter. And then, of course, there's all the different modalities, being able to not just answer questions about in text, but being able to do voice and multimodal and be able to produce images and videos and understand all those things and have good conversations about that, I think is going to be important overall.

Mark Zuckerberg: And then year over year growth in the government and politics vertical dropped sharply as expected with the conclusion of.

Speaker Change: I will just go into.

Speaker Change: I think you'd called out the China based retailers as one sort of potentially soft advertising vertical anything else you'd call out.

Mark Zuckerberg: Of U S. A of U S elections, and but that continues to just be a very small small vertical overall.

Speaker Change: Just suggest autos is that an area of any softness and then on the reality labs and then the losses associated with reality labs, they've been very consistent whatever 4 billion a quarter for quite some time is there is there light at the end of the tunnel as their recent to think is there is there a factor that would occur that would cause those losses to come down.

Mark Zuckerberg: And then your your second question on really lives.

Mark Zuckerberg: I mean, where we're basically focused on doing the work more efficiently, but as the AI glasses have really taken off.

Susan Li: Of course, there's all the different modalities, being able to not just answer questions in text, but being able to do voice and multimodal, and be able to produce images and videos and understand all those things and have good conversations about that, I think, is going to be important overall. Yeah, I mean, I think Meta AI is well-positioned, but we have a lot of work to do in order to make it the leading personal AI. Yusef, on your second question, it is really too early to speak about what those changes could be because we are in the process of engaging with the European Commission.

Of course, there's all the different modalities, being able to not just answer questions in text, but being able to do voice and multimodal, and be able to produce images and videos and understand all those things and have good conversations about that, I think, is going to be important overall. Yeah, I mean, I think Meta AI is well-positioned, but we have a lot of work to do in order to make it the leading personal AI.

Susan Li: Is there reason to think? Is there a factor that would occur that would cause those losses to come down? And when would that be? But maybe more importantly, what is going to cause those losses to come down?

Mark Zuckerberg: <unk> talked about this on a number of calls they're more investments that that I think makes sense to make around making sure that we can distribute this and grow it very quickly I mean, some of the if you look at the.

Speaker Change: And when would that be but maybe more importantly, what what is going to cause those losses to come down. Thank you very much.

Mark Zuckerberg: Thank you very much. Mark, let me take your first question about other verticals. You know, we generally saw healthy growth in most verticals in Q1. We did see some weakness in gaming and politics. So year-over-year growth in gaming was negative in Q1 as we lapped a period of strong spend from China-based advertisers that were promoting a larger volume of game titles in Q1 of 2024. And then year-over-year growth in the government and politics vertical dropped sharply, as expected with the conclusion of U.S. elections, but that continues to just be a very small vertical overall. And then your...

Mark Zuckerberg: Some of the leading consumer.

Mark Zuckerberg: So... Yeah, I mean, I think Meta AI is well positioned, but we have a lot of work to do in order to make it the leading personal AI.

Mark Zuckerberg: Consumer electronics product of other categories by the time, they get to their third generation, they're often selling 10 million units and scaling from their end.

Mark: Mark Let me take your first question about other verticals.

Susan Li: Yusef, on your second question, it is really too early to speak about what those changes could be because we are in the process of engaging with the European Commission.

Mark: You know, we generally saw healthy growth in most verticals in Q1, we did see some weakness and gaining in politics, so year over year growth in gaming was negative in.

Susan Li: And Youssef, on your second question, you know, it is really too early to speak about what those changes could be because we are in the process of engaging with the European Commission. I think maybe the most useful sort of metric I could give you is just that our advertising revenue in the European Economic Area and Switzerland, which would be the geographies impacted here, was 16% of our worldwide total revenue in 2024. Again, we are continuing to engage actively with the European Commission further on this, so we hope to have more clarity by next quarter's call.

Mark Zuckerberg: I'm not sure if we're going to do exactly that but I think that that's like the ballpark of the opportunity that we have and and that's something that I think we're kind of focused on on scaling to that and then scaling beyond that for the generations after that.

Susan Li: I think maybe the most useful sort of metric I could give you is just that our advertising revenue in the European Economic Area and Switzerland, which would be the geographies impacted here, was 16% of our worldwide total revenue in 2024. Again, we are continuing to engage actively with the European Commission further on this, so we hope to have more clarity by next quarter's call. Krista, we have time for one last question. Your last question comes from the line of Mark Mahaney with Evercore ISI. Please go ahead. Thanks. I'll just throw in two. I think you called out the China-based retailers as one sort of potentially soft advertising vertical. Anything else you'd call out? I would just suggest autos. Was that an area of any softness?

I think maybe the most useful sort of metric I could give you is just that our advertising revenue in the European Economic Area and Switzerland, which would be the geographies impacted here, was 16% of our worldwide total revenue in 2024. Again, we are continuing to engage actively with the European Commission further on this, so we hope to have more clarity by next quarter's call.

Mark: In Q1, as we lapped a period of strong spend from China based advertisers that we're promoting a larger volume of game titles in Q1 of 2024.

Mark Zuckerberg: So I think some of the the effort that we're doing is going to we're going to get more efficient in some parts of the work that we do but then as a bunch of the products start to hit and start to to grow even bigger than that then.

Mark: And then year over year growth in the government and politics vertical dropped sharply as expected with the conclusion of.

Mark: Of U S. A of U S elections, and but that continues to just be a very small small vertical overall.

Mark Zuckerberg: The number that I, just said is just sort of like the sort of a near term.

Susan Li: Krista, we have time for one last question. Your last question comes from the line of Mark Mahaney with Evercore ISI. Please go ahead. Thanks. I'll just throw in two. I think you called out the China-based retailers as one sort of potentially soft advertising vertical. Anything else you'd call out? And I would just suggest autos. Was that an area of any softness? And then on the reality labs and on the losses associated with reality labs, they've been very consistent, whatever, $4 billion a quarter for quite some time. Is there light at the end of the tunnel?

Kenneth Dorell: Krista, we have time for one last question.

Mark Zuckerberg: Milestone then.

Mark: And then your your second question on really lives Yeah. I mean, we're basically focused on doing the work more efficiently, but as the AI glasses have really taken off.

Mark Zuckerberg: Second question on Reality Labs, yep. I mean, we're basically focused on doing the work more efficiently, but as the AI glasses have really taken off, I've talked about this on a number of calls, there are more investments that I think make sense to make around making sure that we can distribute this and grow it very quickly. I mean, some of the, if you look at the... Some of the leading consumer electronics products of other categories, by the time they get to their third generation, they're often selling 10 million units and scaling from there. I'm not sure if we're going to do exactly that, but I think that that's the ballpark of the opportunity that we have.

Mark Zuckerberg: Then that I think we'll we'll continue scaling in terms of distribution and then at some point.

Operator: Your last question comes from the line of Mark Mahaney with Evercore ISI. Please go ahead.

Mark Zuckerberg: Just like the other products that we build out.

Mark Mahaney: Thanks. I'll just throw in two. I think you called out the China-based retailers as one sort of potentially soft advertising vertical. Anything else you'd call out? I would just suggest autos. Was that an area of any softness?

Mark Zuckerberg: We will.

Mark Zuckerberg: We feel like we're at a sufficient scale that we're going to primarily focus on making sure that we're monetizing in building inefficient business around it but but.

Mark: Talked about this on a number of calls there are more investments that that I think makes sense to make around making sure that we can distribute this and grow it very quickly I mean, some of the if you look at the.

Mark Zuckerberg: But that's kind of where we're at on it where we're definitely focused on doing the work more efficiently, but also very optimistic about what we're seeing in the results, especially on the eyeglass side.

Susan Li: On the Reality Labs and on the losses associated with Reality Labs, they've been very consistent, whatever, $4 billion a quarter for quite some time. Is there light at the end of the tunnel? Is there reason to think? Is there a factor that would occur that would cause those losses to come down? When would that be? Maybe more importantly, what is going to cause those losses to come down? Thank you very much. Mark, let me take your first question about other verticals. We generally saw healthy growth in most verticals in Q1. We did see some weakness in gaming and politics. Year-over-year growth in gaming was negative in Q1 as we lapped a period of strong spend from China-based advertisers that were promoting a larger volume of game titles in Q1 2024.

On the Reality Labs and on the losses associated with Reality Labs, they've been very consistent, whatever, $4 billion a quarter for quite some time. Is there light at the end of the tunnel? Is there reason to think? Is there a factor that would occur that would cause those losses to come down? When would that be? Maybe more importantly, what is going to cause those losses to come down? Thank you very much.

Mark: Some of the leading consumer.

Mark: Consumer electronics product of other categories by the time, they get to their third generation, they're often selling 10 million units and scaling from their end.

Mark Zuckerberg: Thank you everyone for joining us today excuse me and we look forward to speaking to you again soon.

Mark Zuckerberg: This concludes today's conference call. Thank you for your participation and you may now disconnect.

Mark: I'm not sure if we're going to do exactly that but I think that that's like the ballpark of the opportunity that we have and and that's something that I think we're kind of focused on on scaling to that and then scaling beyond that for the generations after that.

Mark Zuckerberg: That's something that I think we're focused on scaling to that and then scaling beyond that for the generations after that. I think some of the effort that we're doing is going to, we're going to get more efficient in some parts of the work that we do, but then as a bunch of the products start to hit and start to grow even bigger than the number that I just said, it's just sort of a near-term milestone, then I think we'll continue scaling in terms of distribution. Then at some point, just like the other products that we build out, we will.

Susan Li: Mark, let me take your first question about other verticals. We generally saw healthy growth in most verticals in Q1. We did see some weakness in gaming and politics. Year-over-year growth in gaming was negative in Q1 as we lapped a period of strong spend from China-based advertisers that were promoting a larger volume of game titles in Q1 2024.

Susan Li: Mark, let me take your first question about other verticals. You know, we generally saw healthy growth in most verticals in Q1. We did see some weakness in gaming and politics. So year-over-year growth in gaming was negative in Q1 as we lapped a period of strong spend from China-based advertisers that were promoting a larger volume of game titles in Q1 of 2024. And then year-over-year growth in the government and politics vertical dropped sharply, as expected with the conclusion of U.S. elections, but that continues to just be a very small vertical overall.

Mark: So I think some of the the effort that we're that we're doing is going to we're going to get more efficient in some parts of the work that we do but then as a bunch of the products start to hit and start to to grow even bigger than that then.

Mark: The number that I, just said is just sort of like the sort of a near term.

Mark: Milestone then you know.

Mark: Then that I think we'll continue scaling in terms of distribution and then at some point.

Susan Li: Year-over-year growth in the government and politics vertical dropped sharply, as expected, with the conclusion of US elections. That continues to just be a very small vertical overall. Your second question on Reality Labs. Yep. I mean, we're basically focused on doing the work more efficiently. As the AI glasses have really taken off, I've talked about this on a number of calls, there are more investments that I think make sense to make around making sure that we can distribute this and grow it very quickly. I mean, if you look at some of the leading consumer electronics products of other categories, by the time they get to their third generation, they're often selling 10 million units and scaling from there.

Year-over-year growth in the government and politics vertical dropped sharply, as expected, with the conclusion of US elections. That continues to just be a very small vertical overall. Your second question on Reality Labs. Yep.

Mark: Just like the other products that we build out.

Mark: We will.

Mark Zuckerberg: Feel like we're at a sufficient scale that we're going to primarily focus on making sure that we're monetizing and building an efficient business around it. But that's kind of where we're at on it. We're definitely focused on doing the work more efficiently, but also very optimistic about what we're seeing in the results, especially on the AI class.

Mark: We feel like we're at a sufficient scale that we're going to primarily focus on making sure that we're monetizing in building inefficient business around it but but.

Mark: So that's kind of where we're at on it. We're we're we're definitely focused on doing the work more efficiently, but also very optimistic about what we're seeing in the results, especially on the AI glasses side.

Mark Zuckerberg: And then your second question on Reality Labs. I mean, we're basically focused on doing the work more efficiently, but as the AI glasses have really taken off, I've talked about this on a number of calls, there are more investments that I think make sense to make around making sure that we can distribute this and grow it very quickly. I mean, if you look at some of the leading consumer electronics products of other categories, by the time they get to their third generation, they're often selling 10 million units and scaling from there. And I'm not sure if we're going to do exactly that, but I think that that's the ballpark of the opportunity that we have.

Mark Zuckerberg: I mean, we're basically focused on doing the work more efficiently. As the AI glasses have really taken off, I've talked about this on a number of calls, there are more investments that I think make sense to make around making sure that we can distribute this and grow it very quickly. I mean, if you look at some of the leading consumer electronics products of other categories, by the time they get to their third generation, they're often selling 10 million units and scaling from there.

Operator: Thank you everyone for joining us today and we look forward to speaking to you again soon.

Mark: Thank you everyone for joining us excuse me and we look forward to speaking to you again soon.

Mark: Okay.

Susan Li: I'm not sure if we're going to do exactly that, but I think that's the ballpark of the opportunity that we have. That's something that I think we're kind of focused on, scaling to that and then scaling beyond that for the generations after that. I think some of the effort that we're doing is going to—we're going to get more efficient in some parts of the work that we do. Then, as a bunch of the products start to hit and start to grow even bigger, the number that I just said is just sort of like a near-term milestone. I think we'll continue scaling in terms of distribution.

I'm not sure if we're going to do exactly that, but I think that's the ballpark of the opportunity that we have. That's something that I think we're kind of focused on, scaling to that and then scaling beyond that for the generations after that. I think some of the effort that we're doing is going to—we're going to get more efficient in some parts of the work that we do. Then, as a bunch of the products start to hit and start to grow even bigger, the number that I just said is just sort of like a near-term milestone. I think we'll continue scaling in terms of distribution.

Mark Zuckerberg: And that's something that I think we're kind of focused on scaling to that and then scaling beyond that for the generations after that. So, I think some of the effort that we're doing is going to, we're going to get more efficient in some parts of the work that we do, but then as a bunch of the products start to hit and start to grow even bigger than the number that I just said, it's just sort of like a near-term milestone, then I think we'll continue scaling in terms of distribution. And then at some point, just like the other products that we build out, we will I feel like we're at a sufficient scale that we're going to primarily focus on making sure that we're monetizing and building an efficient business around it.

Susan Li: At some point, just like the other products that we build out, we will feel like we're at a sufficient scale that we're going to primarily focus on making sure that we're monetizing and building an efficient business around it. That's kind of where we're at on it. We're definitely focused on doing the work more efficiently, but also very optimistic about what we're seeing in the results, especially on the AI glasses side. Great. Thank you, everyone, for joining us today. Excuse me. We look forward to speaking to you again soon. This concludes today's conference call. Thank you for your participation, and you may now disconnect.

At some point, just like the other products that we build out, we will feel like we're at a sufficient scale that we're going to primarily focus on making sure that we're monetizing and building an efficient business around it. That's kind of where we're at on it. We're definitely focused on doing the work more efficiently, but also very optimistic about what we're seeing in the results, especially on the AI glasses side.

Mark Zuckerberg: But that's kind of where we're at on it. We're definitely focused on doing the work more efficiently, but also very optimistic about what we're seeing in the results, especially on the AI glasses side.

Kenneth Dorell: Great. Thank you, everyone, for joining us today. Excuse me. We look forward to speaking to you again soon.

Krista: Great. Thank you everyone for joining us today, and we look forward to speaking to you again soon.

Operator: This concludes today's conference call. Thank you for your participation, and you may now disconnect.

Krista: This concludes today's conference call. Thank you for your participation, and you may now disconnect.

Q1 2025 Meta Platforms Inc Earnings Call

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