The parent company of Facebook, Meta, announced $28.8 billion in sales for the three months that ended in June, a 1% decrease from the corresponding quarter of the prior year and its first year-over-year revenue reduction since being public in 2012.
The company’s profit decreased much more dramatically.
A significant contrast to the previous year, when its earnings more than doubled, was the net income for the quarter, which fell 36% year over year to close to $6.7 billion.
The average price per ad dropped by 14 percent year over year according to Meta, which is concerning given the weakening demand for internet advertising brought on by the recent economic crisis.
Additionally, from the first quarter of 2022, the number of monthly active users on the Facebook app decreased marginally, from 2.936 billion to 2.934 billion.
In a Q&A with staff members earlier this month, Meta CEO Mark Zuckerberg stated that the business would reduce plans to hire engineers by at least 30% this year, noting that “this might be one of the worst downturns that we’ve seen in recent history.”
In order to focus on other aspects of the business, many teams will decrease, according to Zuckerberg.
However, the company’s sales downturn is anticipated to last into the next quarter.
The current quarter’s sales are anticipated to range between $26 billion and $28.5 billion, according to Meta. That would be a decrease of 1.76 percent over the previous year, even at the high end.
The advice was cited by Meta as being affected by lower revenue from its VR division, Reality Labs, and persistent weakness in the demand for online advertising brought on by the state of the economy.
According to Meta, its Reality Labs division lost $2.8 billion during the quarter.
After the earnings report, Meta shares dropped as much as 5% in after-hours trade before slightly recovering.
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