Meta, Facebook's parent company, reports a 4% decline in sales
As Meta's primary social media business reaches a plateau, TikTok is gaining traction. The company reported that its flagship Facebook app had 1.984 billion daily
Variety stated that in the third quarter, Meta suffered from a general decline in ad expenditure, registering a 4% year-over-year revenue drop while missing Wall Street projections on the bottom line due to massive metaverse investments that continued to eat away at earnings.
As Meta's primary social media business reaches a plateau, TikTok is gaining traction. The company reported that its flagship Facebook app had 1.984 billion daily active users on average in Q3, up around 16 million from the previous quarter.
According to Variety, Facebook DAUs had previously decreased by about 1 million in Q4 2021.
Variety reports that for the third quarter, Meta reported total revenue of USD 27.71 billion and net income of USD 4.4 billion, both of which were down 52% year over year and below Wall Street expectations.
Following a 1% loss in Q2, the company's second year-over-year revenue fall as a publicly traded company.
Variety cited Refinitiv data that showed analysts anticipated US$27.38 billion in revenue. Both Snap and Alphabet (the company that owns Google and YouTube) reported Q3 earnings losses, blaming a decline in ad spending for the quarter.
In addition, Meta foresaw a decline in revenue for the fourth quarter, estimating sales of USD 30 billion to USD 32.5 billion, a 3.5%–11% drop from the prior year.
The earnings disappointment and lower-than-expected Q4 revenue estimate caused Meta shares to fall more than 18% in after-hours trade. The stock has dropped more than 68% so far this year.
Mark Zuckerberg, CEO of Meta, said, "Our community continues to grow and I'm thrilled with the great engagement we're seeing driven by development on our discovery engine and products like Reels."
The underpinnings are in place for a return to better revenue growth, despite the short-term problems we have with revenue. With a focus on priority and efficiency, we are moving into 2023 with the intention of navigating the current situation and emerging as an even stronger business, he continued.
The social network titan, now known as Meta, has been pouring billions of dollars into its metaverse initiatives. Most recently, it unveiled the expensive Meta Quest Pro helmet (USD 1,500).
According to Variety, the corporation also revealed that a more affordable, customer-oriented next-generation Quest will debut in 2023. However, Meta's Reality Labs segment, which consists of its wearables, augmented reality, and VR companies, is still years away from making a profit and has hurt overall financial results.
(source : ANI)
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