Meta Revenue Falls Short as Net Income Drops 36 Percent
Meta reports its first-ever annual revenue decline alongside a massive plunge in net income, missing analyst expectations for the second quarter. The social media giant also provides a weak Q3 forecast amid broader advertising headwinds.
Meta releases its second-quarter earnings report and misses analyst expectations across the board. The social media giant reports $28.8 billion in revenue, falling just short of the expected $28.9 billion, while earnings per share land at $2.46 against an expected $2.54. This quarter marks the first year-over-year revenue decline in the company's history, and net income plummets by 36 percent.
The company provides a disappointing Q3 revenue forecast of $26 billion to $28.5 billion, well below the $30.32 billion Wall Street anticipates. While Facebook sees a slight increase in daily active users, monthly active users drop by two million compared to the previous quarter. CEO Mark Zuckerberg attributes this decline to internet disruptions caused by the war in Ukraine and ongoing privacy changes from Apple.
Meta faces additional pressure outside of its financial results as the Federal Trade Commission seeks an injunction to block the company's acquisition of virtual reality fitness app Within. The FTC argues that Meta already possesses the capabilities to compete in the VR fitness market and accuses the company of trying to buy market position illegally. These regulatory challenges compound the difficulties Meta experiences as the broader digital advertising industry slows down due to inflation and rising interest rates.