Facebook’s Meta reports first ever revenue drop

Facebook’s Meta reports first ever revenue drop
# 28 July 2022 09:24 (UTC +04:00)

Meta Platforms issued a gloomy forecast after recording its first-ever quarterly drop in revenue on Wednesday, with a global recession looming and competitive pressures weighing on its digital ads sales, APA reports citing New York Post.

Shares of Menlo Park, a California-based company, were down about 3.4% in extended trading.

The company said it expects third-quarter revenue of between $26 billion and $28.5 billion. Analysts were expecting $30.52 billion, according to IBES data from Refinitiv.

Total revenue, which consists almost entirely of ad sales, fell 1% to $28.8 billion in the second quarter ended June 30, from $29.1 billion last year. The figure slightly missed Wall Street’s projections of $28.9 billion, according to Refinitiv.

The company reported mixed results for user growth.

Monthly active users on flagship social network Facebook came in slightly under analyst expectations at 2.93 billion in the second quarter, an increase of 1% year over year. Daily active users handily beat estimates at 1.97 billion.

Like many global companies, Meta is facing some revenue pressure from the strong dollar, as sales in foreign currencies amount to less in dollar terms. Based on current exchange rates, meta said it expected a 6% revenue growth headwind in the third quarter.

Still, the Meta results also come as fortunes in online ads sales appear to be diverging between search and social media players, with the latter impacted more severely as ad buyers reeling in spending.

Alphabet, the world’s largest digital ad platform, reported a rise in quarterly revenue on Tuesday, with sales from its biggest moneymaker – Google search – topping investor expectations.

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