What happened

Shares of Meta Platforms (META 3.00%) charged sharply higher Thursday morning, climbing as much as 15.3%. By 10:45 a.m. ET, the stock was still up 14.5%.

It's been a brutal year thus far for the social media kingpin, but the company may have reached a turning point, having returned to growth.

So what

After three successive quarters of year-over-year revenue declines, Meta Platforms delivered results that suggest the worst may be in the past. For the first quarter, Meta generated revenue of $28.6 billion, up 3% year over year. The bottom line was still squeezed, as earnings per share (EPS) of $2.20 declined 19%, but profits were markedly improved sequentially.

For context, analysts' consensus estimates were calling for revenue of $27.7 billion and EPS of $2.02, so Meta cleared both bars with plenty of room to spare.

People who visited the company's four social media sites daily topped 3 billion, up 5% year over year, while those dropping by monthly increased to 3.8 billion, also up 5%.

One of the recurring themes of the earnings conference call was artificial intelligence (AI). CEO Mark Zuckerberg noted that roughly 20% of the content recommended on Facebook and 40% on Instagram is recommended by AI. Furthermore, since the company launched Reels, AI has increased time spent on the platform by more than 24%. 

AI is also boosting monetization. "Reels monetization efficiency is up over 30% on Instagram and over 40% on Facebook quarter-over-quarter," Zuckerberg noted. "Daily revenue from Advantage+ Shopping Campaigns is up 7x in the last six months." 

Now what

Given the ongoing economic headwinds, Meta's return to growth came as a surprise, but it gets better. The company is now expecting second-quarter revenue in a range of $29.5 billion to $32 billion, representing growth of about 7% at the midpoint of its guidance.  

Recent cost cuts are also taking hold, as Meta reduced its full-year expense outlook for the second consecutive quarter, to a range of $86 billion to $90 billion, down from $89 billion to $95 billion. 

The combination of increasing revenue and falling expenses should set the company up for future success. Furthermore, at just 4 times next year's sales and 24 times earnings, Meta is still a relative bargain compared to its long-term opportunity.