Facebook Meta Owners Report Falling Revenue For The First Time Amid Lower Ad Sales And Competition From TikTok | Business Newsletter

Facebook owner Meta reported a drop in revenue for the first time amid lower ad sales and growing competition from TikTok.

The social media giant reported $28.8 billion in revenue for the three months to June, down nearly 1% from $29.08 billion the year before.

This number is lower than the $28.9 billion expected by Wall Street, sending Meta shares fell about 5% in extended trading.

The company, which also owns Instagram and WhatsApp, made a profit of $6.69 billion, or $2.46 per share, for the quarter — down 36% year-over-year, when profit was 10, $39 billion, or $3.61 per share.

Meta has given a hidden forecast for the next quarter – from July to September – with revenue expected to be between $26 billion and $28.5 billion.

This is lower than the $30.5 billion that analysts had expected.

Meta stock has lost about half of its value since the start of the year, reflecting investors’ concerns about its advertising business.

Apple’s iOS security update last year limited Meta’s ability to track and target users, while rising inflation prompted some companies to cut their advertising budgets.

Meta’s rivals Snap and Twitter also reported disappointing results last week, citing similar challenges.

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The reverse has so far proved to be a costly venture for Meta. Its Reality Labs business unit, responsible for developing the metaverse, recorded a loss of $2.8 billion in the second quarter, despite revenue of $452 million.

This division of the company is expected to generate less cash next quarter.

Facebook’s daily active users grew 3% over the past year, reaching 1.97 billion in June.