• by Colin Kirkland , Yesterday

In its first performance report of 2026, Meta lost daily active users for the first time in over 20 years, while showing sizable increases in revenue and ad impressions as the tech giant continues to invest heavily in artificial intelligence (AI).

Meta reported 3.56 billion users across its family of digital platforms including Instagram, Facebook, Threads, WhatsApp, Messenger, and Meta AI, marking a slight decline from the 3.58 billion DAUs the company reported in fourth-quarter 2025.

While Meta's user base actually grew by 4% year-over-year, the company equates its quarter-to-quarter decline in DAUs to “internet disruptions in Iran, as well as a restriction on access to WhatsApp in Russia.”

Not mentioned in the report are the national bans on social media for younger users that have also impacted major social media companies’ user bases -- especially in Australia, the first country in the world to implement a nationwide ban on social-media platforms for users under 16 years of age.

In the first days of Australia's ban, Meta blocked around 550,000 accounts on Instagram and Facebook.

Despite losing around 20 million DAUs, Meta boosted its revenue intake by 33% year-over-year, reporting $56.31 billion for the quarter.

For Q2, Meta expects to deliver further increases in revenue, between $58 and $61 billion.

As Meta continues to invest in AI -- spending on data center infrastructure, competitive hiring, strategic acquisitions and partnerships, and the development of its AI-powered tools and chatbot -- the company reported spending $33.44 billion in Q1, a 35% increase year-over-year.

By the end of 2026, Meta expects to spend between $162 and $169 billion.

However, following the loss of two major trials regarding the exploitation of children, Meta warns investors about ongoing legal and regulatory matters “significantly” impacting its business and financial results.

“We continue to see scrutiny on youth-related issues and have additional trials scheduled for this year in the U.S., which may ultimately result in a material loss,” the report warns.

As for Meta's ad business, ad impressions increased by 19% year-over-year, with average ad prices increasing by 12% year-over-year.

In Meta's earnings call, Meta's CFO Susan Li explained that ad impressions were driven primarily by growth in engagement and users, as well as ad load optimizations.

Li mentioned the increased deployment of AI across the company’s ad systems and tools to improve monetization efficiency, as well as expanded coverage of Meta’s adaptive ranking model to support off-platform conversions.

Overall, over 8 million advertisers are using at least one of Meta's generative AI ad creative tools, specifically among small and medium sized brands.