Shares of Facebook parent Meta (FB) soared in early trading Thursday on the back of its Q1 earnings report. Shares of the social media giant were up more than 14% despite a miss on revenue expectations, as investors and analysts digested the company’s plans to scale back spending.

On the surface, Meta’s report wasn’t all that great. It missed on revenue estimates, with analysts expecting the company to bring in $28.24 billion rather than the $27.9 billion it reported. But the company saw better adjusted earnings per share than initially projected.

More importantly, though, Meta’s Facebook app is once again adding users, with users increasing 4% to 1.96 billion daily active users after the app lost 1 million last quarter.

“Consistent with our checks, the quarter was below expectations due to geopolitical concerns, continued iOS privacy challenges and transition to Reels,” Mizuho analyst James Lee wrote in a note following the report.

“With that in mind, [Q2 2022] guidance came below the street at flat [year-over-year], as the increasingly uncertain macro outlook magnifies the impact of Facebook’s platform and tech-stack transitions. On the positive side, [daily active user] growth was reversed to positive due to increased engagement from Reels,” Lee wrote.

Meta’s stock is coming off of an incredible downturn following its prior earnings report. Ahead of Wednesday’s report, shares of the company were off as much as 41% over the last three months.

The most positive news for investors, however, came from CEO Mark Zuckerberg, who said that while the company continues to invest in the metaverse under its Reality Labs business — $2.96 billion in Q1 alone — monetizing its family of social apps is still a major priority.

“On the Family of Apps side, I am confident that we can return to better revenue growth rates over time and sustain high operating margins,” Zuckerberg said during Meta’s earnings call.

“In Reality Labs, we're making large investments to deliver the next platform that I believe will be incredibly important both for our mission and business — comparable in value to the leading mobile platforms today. I recognize that it's expensive to build this — it's something that's never been built before and it's a new paradigm for computing and social connection.”

Zuckerberg is plowing forward with his plans for the metaverse, a nascent series of interconnected online worlds. But whether or not the average consumer will dive into the metaverse remains to be seen.

Revenue from Reality Labs, which includes sales of Oculus headsets and software, came in at $695 million for the quarter, a jump from the $534 million the segment brought in the same quarter last year. Meta also recently opened up its first physical store dedicated to its metaverse products.

Still, headsets and the metaverse in general are still far from mainstream among consumers. And whether or not it will ever reach that level of penetration will take years to understand.

Meta also continues to deal with headwinds for its advertising business. The company specifically pointed to the war in Ukraine and its impact on European spending, as well as recent privacy changes to Apple's (AAPL) iOS, which allow consumers to opt out of having apps follow them. Meta says the iOS changes alone will knock $10 billion off revenue in 2022.

Meta isn’t the only company dealing with iOS issues. Alphabet announced during its earnings that YouTube is facing similar problems, but competitors like Snap seem to be less vulnerable to the privacy changes.

That said, Meta’s results were clearly ahead of the basement-level expectations that investors had going into the quarter. If it can continue that kind of performance moving forward, it could be setting itself up for bigger wins in the coming quarters.

More from Dan

• Twitter misses Q1 revenue estimates, posts better than expected user growth

• Why Bezos is worried that a Musk-owned Twitter will cave to China

• Microsoft to report earnings amid rising inflation and big misses by Netflix, Snap

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