Meta Stock Plunges 20% as Facebook User Growth Stalls for First Time
Meta reports disappointing fourth-quarter earnings and weak first-quarter guidance, causing shares to tumble over 20%. Facebook experiences its first-ever quarterly decline in daily active users amid privacy changes and shifting user habits.
Meta shares tumble more than 20% in extended trading after the company reports disappointing fourth-quarter earnings and weak first-quarter guidance. The tech giant earns $3.67 per share on revenue of $33.67 billion, missing analyst expectations for profit. Furthermore, Meta provides a bleak first-quarter revenue forecast of $27 billion to $29 billion, which falls significantly short of the $30.15 billion analysts anticipate.
The most alarming detail in the report is the stagnation of Facebook's user base, as the platform experiences its first-ever quarterly decline in daily active users. Facebook reports 1.93 billion daily active users and 2.91 billion monthly active users, both of which miss Wall Street estimates. This historic drop signals a major turning point for the social network that has grown continuously for nearly two decades.
Meta blames this lower-than-expected growth on a combination of macroeconomic challenges and specific industry shifts. Apple's iOS privacy changes continue to disrupt the company's ad targeting capabilities, while inflation and supply chain issues put pressure on advertisers' budgets. Additionally, users are spending more time watching Reels, a video format that currently generates less revenue compared to the traditional News Feed and Stories.