For the first time, Meta reported a decline in revenue on an annual basis. Profits are also collapsing in the face of ever higher expenses and fewer advertising revenues.
For the first time in its history, Meta reported a drop in revenues : during the second quarter of 2022 the giant recorded revenues of 28.8 billion dollars, slightly down on an annual basis. Profits also fell, standing at 6.7 billion dollars. If the first is a figure that is only marginally subdued – it is -1% on an annual basis -, the second announces a catastrophe: it is 36% less than a year ago.
The collapse depends above all on the increase in the expenses of the American giant. Facebook’s parent company spent $ 20.4 billion. Then there are the 2.8 billion losses recorded by the Reality Labs division , the one that deals with virtual reality and the metaverse.
To this we must then add the decline in advertising revenue , which is explained by the increasingly fierce competition from rival platforms, such as TikTok. The advertising budget is not increasing, on the contrary, but now there are many more companies competing for slices of the same cake.
But there is also more encouraging news: Facebook’s daily active users have increased, now at 1.97 billion. In this way, the social network has reversed the negative trend observed in recent years.
In light of all this, it is much easier to understand some of Meta’s recent moves. From the decision to freeze all new hires, to the catastrophic email sent by Chris Cox to all employees of the company. “We will have to do more with less budget,” the manager anticipated.