The odds were stacked against Meta Platforms (META 1.10%) going into its first-quarter 2022 earnings report last week, so it wasn't surprising to see the social media giant's numbers turning out to be a mixed bag.

Despite the mixed news, investors liked what they saw, and Meta stock jumped 17% following the report's release. This may seem a tad surprising given that the Facebook parent's revenue fell short of expectations and that the guidance wasn't great either. So, why were Meta investors in a celebratory mood? Let's find out.

Meta Platforms' results weren't as bad as expected

Meta Platforms' first-quarter revenue increased 7% year over year to $27.9 billion, landing at the lower end of its guidance range of $27 billion to $29 billion and falling short of the $28.3 billion Wall Street estimate. A disappointing revenue performance was already in the cards thanks to macroeconomic headwinds that have stifled ad spending so far this year.

Meta Platforms CEO Mark Zuckerberg stands in front of a screen showing a person wearing an Occulus Quest device and looking at the person's hands

Meta Platforms CEO Mark Zuckerberg speaks at the OC6 Conference in 2019. Image source: Meta Platforms.

However, the company's bottom-line performance took investors by surprise. Meta reported adjusted earnings of $2.72 per share, down 18% over the prior year on account of slow revenue growth and a spike in expenses. But the figure was much better than analysts' expectations of $2.56 per share. The growth in Meta's user base was another positive.

The daily active people on Meta's family of apps increased 6% year over year to 3.64 billion at the end of the first quarter. Monthly active users (MAUs) on Facebook also increased 3% over the prior-year period to 2.94 billion, while daily active users (DAUs) on the platform were up 4% to 1.96 billion. Analysts were expecting Facebook to report 1.95 billion DAUs.

Additionally, Meta CEO Mark Zuckerberg said on the earnings conference call that management is "planning to slow the pace of some of our investments" in light of the current business conditions. Surging inflation and geopolitical instability in Europe due to Russia's invasion of Ukraine are weighing on advertisers' budgets and affecting Meta's ad revenue.

So, a conservative approach toward investing in projects such as the metaverse looks like the right thing to do for the time being. As a result, Meta has reduced its 2022 expense outlook to a range of $87 billion to $92 billion as compared to the prior range of $90 billion to $95 billion. The company plans to invest primarily in its family of apps -- Facebook, Instagram, WhatsApp, and Messenger -- this year, while the metaverse-focused Reality Labs segment is lower on the priority list as Meta focuses on profitability.

Tough times aren't over yet

Meta investors may have liked the fact that the company's results weren't as bad as expected, but a look at management's commentary and guidance makes it clear that Meta isn't out of the woods yet.

Meta has guided for $28 billion to $30 billion in revenue for the second quarter, which is short of the consensus estimate of $30.7 billion. Additionally, the midpoint of the revenue guidance indicates that its top line would remain flat year over year. Meta points out that the suspension of its services in Russia, along with weak advertising demand and the challenges it is facing in terms of targeting and measuring advertisements on Facebook and Instagram following Apple's privacy change, would weigh on its growth.

As it turns out, Meta has lost users in Russia following the suspension of its services there, and the company expects the trend to continue in the second quarter as well. Meta forecasts global MAU to remain flat or fall on a sequential basis in the current quarter. Throw in the fact that the average price per ad is taking a hit due to the factors discussed above, and it's easy to see why Meta's top-line growth is expected to come to a screeching halt this quarter.

More specifically, Meta saw an 8% year-over-year decline in average price per ad in the first quarter. A weak pricing environment explains why the company's earnings are expected to drop 22% this quarter to $2.82 per share. The full-year outlook is also gloomy, with the bottom line expected to shrink 11% in 2022.

In all, it is not surprising to see why Meta has decided to rein in its expenses this year. Of course, the company will continue to invest for the future in technologies such as the metaverse -- which it recently started to monetize -- but the near-term challenges have forced it to take its foot off the accelerator.

As such, the post-earnings spike in Meta stock may not be sustainable in the near term, as the company's problems aren't over yet. However, savvy investors may consider taking advantage of any slips in the stock price to accumulate shares for the long run, as Meta Platforms has a few solid catalysts that could help it step on the gas in the future.