The healthy financial results from Facebook parent Meta Platforms, has eased investor concerns over the impact of Donald Trump’s tariff war.

Meta posted better than expected financials that included a 35 percent rise in profits, and a 16 percent rise in revenues, as the firm reaped the benefits from strong advertising revenues that were also enhanced by its AI tools.

Earlier this week it was revealed that Meta had laid off an unspecified number of staff at its loss-making Reality Labs division, which makes wearable devices such as the Oculus headset range and other wearable devices.

Q1 financials

Prior to that, late last month Mark Zuckerberg and Meta Platforms were rebuked over a controversial policy change implemented in January this year.

The sharp rebuke came from Meta’s Oversight Board, after Mark Zuckerberg confirmed the platform in January the platform was ending its third party fact-checking program in the US that it had begun back in 2016, and was moving to a Community Notes model utilised by Elon Musk’s X (formerly Twitter).

Despite these issues, Meta continues to perform well, at least on the financial side.

For the first quarter ending 31 March, Meta posted a net profit of $16.6bn (£12.5bn) from $12.4bn (£9.3bn) in the same year-ago quarter.

First quarter revenues meanwhile rose to $42.3bn ($31.8bn) from $36.5bn ($27.4bn) in first quarter of 2024.

“We’ve had a strong start to an important year, our community continues to grow and our business is performing very well,” said Mark Zuckerberg. “We’re making good progress on AI glasses and Meta AI, which now has almost 1 billion monthly actives.”

Other operational highlights include family daily active people (DAP) coming in at 3.43 billion on average for March 2025, an increase of 6 percent year-over-year.

Tariff worries

The platform of course makes most of its money from advertising, and ad impressions during Q1 increased by 5 percent year-over-year; with average price per ad increasing by 10 percent year-over-year.

Meta boosted its 2025 capital expenditure plans to between $64 billion and $72 billion.

Despite the layoffs, Meta ended 31 March 2025 with a total headcount of 76,834, an increase of 11 percent year-over-year.

Meta’s strong advertising performance came despite concerns that the tariff chaos unleashed by US President Donald Trump in early April could hamper advertising spend on the platform.

But Meta did caution investors about the geopolitical challenges its faces, stating “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 (EC) recently announced its decision that our subscription for no ads model is not compliant with the Digital Markets Act (DMA),” Meta stated. “Based on feedback from the EC 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 EC’s DMA decision but any modifications to our model may be imposed before or during the appeal process.”