Facebook and Instagram’s parent company has posted its first revenue decline in history.
Meta was hit by a drop in advertising spending as the US economy falters — and as competition from rival TikTok intensifies.
The company’s stock dropped slightly in after-hours trading following the results, suggesting Wall Street was largely expecting the weak earnings report.
The results also largely followed a broader decline in the digital advertising market that is affecting rivals such as Alphabet and Snap. Google’s parent company reported its slowest quarterly growth in two years on Tuesday.
Meta also faces some unique challenges, including the looming departure of its chief operating officer Sheryl Sandberg, the chief architect of the company’s massive advertising business.
Meta earned profits of 6.69 billion dollars (€6.55 billion), or 2.46 dollars per share, in the April-June period. That is down 36 per cent from 10.39 billion dollars, or 3.61 dollars per share, in the same period a year ago.
Revenue was 28.82 billion dollars, down one per cent from 29.08 billion a year earlier.
Analysts, on average, were expecting earnings of 2.54 dollars per share on revenue of 28.91 billion, according to a poll by FactSet.
“The year-over-year drop in quarterly revenue signifies just how quickly Meta’s business has deteriorated,” said Insider Intelligence analyst Debra Aho Williamson.
“Prior to these results, we had forecast that Meta’s worldwide ad revenue would increase 12.4 per cent this year, to nearly 130 billion dollars. Now, it’s unlikely to reach that figure.”
She added that the good news — if it could be called that — is that Meta’s competitors are also experiencing slowdowns.
Shares of Meta Platforms fell 58 cents to 169 dollars in after-hours trading.
