Despite missing first quarter revenue estimates, shares of Facebook parent company Meta surged roughly 13% on Thursday after reporting solid user growth, which bounced back from a small decline in the previous quarter.
Meta was up 13% on Thursday morning to around $197 per share, as investors cheered the company’s increase in daily active users in the first quarter, from 1.93 billion to 1.96 billion.
User growth, which declined for the first time in the company’s history during the fourth quarter of 2021, bounced back and topped analyst expectations in the first quarter.
Despite solid user growth, Meta reported lackluster revenue ($27.9 billion versus $28.2 billion expected), with sales growing just 7% from a year ago—its first time as a public company that revenue only grew in single digits.
Total costs and expenses of $19.4 billion, meanwhile, surged 31% from last year in a dramatic increase—but the company forecasts lower expenses for the full year, reducing its spending estimate by roughly $3 billion.
The company projects revenue for the second quarter to come in between $28 billion and $30 billion, which falls short of the $30.7 billion forecast by Wall Street analysts—though Meta blamed part of the weaker guidance on the war in Ukraine and lost subscribers in Russia.
Before the stock’s rally on Thursday, Meta shares were down nearly 50% so far in 2022, hard-hit by the wider sell-off in tech shares that has gone on this year as investors worry about aggressive interest rate hikes from the Federal Reserve.