Facebook revenue drops for 1st time in its history, poor growth ahead

San Francisco: Facebook has reported loss in revenue in the June quarter for the first time since going public in 2007, predicting that growth in the third quarter could fall even more. Facebook reported a 1 per cent drop in revenue to $28.8 billion, a 1 per cent decrease from $29.07 billion in the second quarter […]

San Francisco: Facebook has reported loss in revenue in the June quarter for the first time since going public in 2007, predicting that growth in the third quarter could fall even more.

Facebook reported a 1 per cent drop in revenue to $28.8 billion, a 1 per cent decrease from $29.07 billion in the second quarter of 2021.

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The shares dropped 3.8 per cent in extended trading late on Wednesday.

Overall, Meta’s profit fell 36 per cent to $6.7 billion in the quarter.

The Reality Labs division behind the Metaverse dream project lost $2.8 billion in the April-June period,

“It was good to see a positive trajectory on our engagement trends this quarter coming from products like Reels and our investments in AI,” said Mark Zuckerberg, Meta founder and CEO.

“We’re putting increased energy and focus around our key company priorities that unlock both near and long term opportunities for Meta and the people and businesses that use our services,” he announced.

Outgoing COO Sheryl Sandberg blamed the revenue loss on the decreasing value of the Euro.

“Foreign exchange trends had a significant impact in Q2, in particular the depreciation of the Euro relative to the dollar,” Sandberg told analysts during the earnings call.

“On a constant currency basis, we would have seen 3% revenue growth year over year.”

The company expects third quarter 2022 total revenue to be in the range of $26-28.5 billion.

“This outlook reflects a continuation of the weak advertising demand environment we experienced throughout the second quarter, which we believe is being driven by broader macroeconomic uncertainty,” Meta informed.

Facebook reported daily active users (DAUs) at 1.97 billion on average for June, an increase of 3 per cent year-over-year.

The monthly active users (MAUs) were 2.93 billion, an increase of 1 per cent.

Meta now has 83,553 employees, an increase of 32 per cent year-over-year.

The social network said that from November 1, current Chief Financial Officer David Wehner will take on a new role as Meta’s first Chief Strategy Officer, where he will oversee the company’s strategy and corporate development.

Susan Li, Meta’s current Vice President of Finance, will be promoted and serve as Meta’s Chief Financial Officer.