The US owner of Facebook saw its shares soar by more than 18% in late trading last night as the number of users exceeded Wall Street forecasts.
The large jump in the value of technology conglomerate Meta came despite it suffering its slowest quarterly sales growth in many years.
The number of daily active Facebook users hit 1.96billion in the first three months of the year - marking a turnaround from last year, when the social network reported a decline in users for the first time.
"More people use our services today than ever before, and I'm proud of how our products are serving people around the world," said Meta boss Mark Zuckerberg, who founded Facebook in 2004.
But Meta - which also owns Instagram and WhatsApp - still reported its slowest revenue growth in at least a decade.
Revenues in the first three months of the year were up just 7% compared to 2021, hitting £22.25billion.
Analysts say businesses are pulling back on advertising as they grapple with rising costs and economic uncertainty, stemming in part from the war in Ukraine.
And, while Google and Facebook have long been the go-to sites for online ads, they are facing more competition as newer platforms such as TikTok draw users and online shopping giant Amazon gets into the business.
The BBC reports Mr Zuckerberg stating that his firm was investing in its video "reels" to compete with TikTok, and he expected ad sales to catch up.
But Meta is also grappling with new privacy rules from Apple, which make it more difficult to target adverts. The company has said the changes could cost it £8billion in lost sales this year.
Meta said it expected revenue in the coming months of £22billion to £24billion - below analyst estimates.
This reflected factors including Russia’s invasion of Ukraine and the potential impact of regulatory changes in Europe.
In March, Russia banned access to Facebook and Instagram as part of its crackdown on independent media.
Mr Zuckerberg has said that the group will invest heavily in artificial intelligence and virtual reality - the so-called Metaverse - for its next phase of growth. But that is costing it dearly for now. Meta's profits in the quarter were £5.95billion - more than analysts had expected, but still down 20% year-on-year.
Jasmine Enberg, principal analyst at Insider Intelligence, told the BBC: "Meta's ad business continues to face some very real challenges.
"Facebook, of course, is no stranger to obstacles, but the (Apple) changes are the first direct threat to its ad business.
"Combined with the rise of TikTok, brand safety concerns, and a shift in social media user behaviour, there's a perfect storm heading straight for Meta's ad revenues. Even so, it's clear that advertisers are still turning to Facebook and Instagram to reach their wide audiences."
FTSE 100
The UK's top share index, the FTSE 100, was up 38 points at 7,464 after trading started this morning. It ended yesterday up 39 points.
Brent crude futures were down nearly 2% earlier today at $103.29 a barrel.
Companies reporting today
- Full-year results: Sainsbury, Whitbread
- First-quarter results: Amazon, Barclay, McDonald's, Standard Chartered
- Second-quarter results: Apple
- Trading statements: Unilever, Weir Group