Platforms Inc., the owner of Facebook and Instagram, crushed Wall Street expectations Wednesday, though its transition to become an AI company remains an expensive one, and legal threats around social media addiction and other issues pose potential risks.

“We had a milestone quarter with strong momentum across our apps and the release of our first model from Meta Superintelligence Labs,” said Mark Zuckerberg, Meta founder and CEO in a statement. “We’re on track to deliver personal superintelligence to billions of people.”

Meta had revenue of $56.3 billion in Q1, up 33 percent from the same quarter a year ago. Income from operations rose by 30 percent to $22.9 billion, with net income soaring by 61 percent to $26.8 billion.

But with Meta, all eyes are on the future. The company has spent a fortune to build out an AI lab, and earlier this month told employees about a plan to lay off around 10 percent of its employee base to shift resources toward new investments.

The company said Wednesday that its full-year expense guidance remains unchanged at $162 billion-$169 billion, with AI being the main driver of that.

And then there are the legal issues, with a number of social media addiction and youth safety lawsuits still inding their way through the court system. Meta warns that legal and regulatory matters “could significantly impact our business and financial results.”

“For example, 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,” it adds.

Daily Active People, which represents those using its family of apps, was 3.56 billion on average for March 2026, an increase of 4 percent year-over-year. Ad impressions were up 19 percent year-over-year, with the price per ad rising by 12 percent year over year.