Facebook posted its slowest growth in quarterly revenue in two years and higher spending on research and development ate into profits, according to its latest quarterly results released last night.
Facebook has warned of heavy investments in 2015 as it steps up efforts to expand a collection of products.
These include messaging service WhatsApp, photo-sharing service Instagram and virtual reality headset maker Oculus Rift.
As a result, Facebook's operating expenses rose 83% in the first quarter as R&D costs jumped 133% and marketing and sales spending nearly doubled.
However, Facebook said monthly active users grew 13% over a year ago to 1.44 billion, with 87% of them accessing its service on smartphones and other mobile devices.
The company offered assurances that it has a handle on spending, saying it now expects expenses to increase by about 55-65% this year, a slight decrease at the top end from its previous forecast of 55-70%.
It said foreign exchange rates due to the strong US dollar would likely cut revenue in the current quarter by more than the 10% it saw in the last quarter.
Facebook's net income fell to $509m, or 18 cents per share, in the three months ended March 31, from $639m, or 25 cents per share, a year earlier. Excluding items, the company earned 42 cents per share.
Revenues rose to $3.54 billion from $2.50 billion. Revenue from advertising was $3.32 billion, up 46% from a year earlier.
Analysts on average had expected a profit of 40 cents per share and revenue of $3.56 billion.
