Facebook owner Meta reports first ever revenue drop amid lower ad sales and competition from TikTok
Apple’s iOS privacy update last year limited Meta’s ability to track and target users, while rising inflation has prompted some companies to cut their ad budgets.
Facebook owner Meta reported its first revenue drop amid lower ad sales and growing competition from TikTok.
The social media giant reported revenue of $28.8 billion in the three months through June, down almost 1% from $29.08 billion a year earlier.
The company, which also owns Instagram and WhatsApp, reported earnings of $6.69 billion, or $2.46 per share, during the quarter, a 36% drop compared to the same period a year ago, when earnings were of $10.39 billion, or $3.61 per share.
Meta issued a dovish forecast for the upcoming quarter, July through September, with revenue expected to be in the range of $26 billion and $28.5 billion. This is lower than the $30.5 billion that analysts had expected.
Meta’s shares have lost about half their value since the beginning of the year, reflecting investor concerns about its advertising business.
Apple’s iOS privacy update last year limited Meta’s ability to track and target users, while rising inflation has prompted some companies to cut their ad budgets.
Meta reports first ever rivals Snap and Twitter also reported disappointing results last week, citing similar challenges.
The metaverse is proving to be an expensive undertaking for Meta so far. Its Reality Labs business unit, which is responsible for developing the metaverse, posted a $2.8 billion loss in its second quarter, despite sales of $452 million.
This part of the business is expected to make less money in the coming quarter.
Facebook saw a 3% increase in its daily active users in the past year, reaching 1.97 billion in June.