Meta reports first-ever revenue decline
Washington (US), July 28: The parent company of Facebook and Instagram, Meta, reported a 1% drop in revenue for the second quarter, marking the company's first-ever yearly decline.
According to The Hollywood Reporter, the firm also saw net income fall by 36 per cent, landing at USD 6.7 billion for the second quarter, while total costs and expenses rose by 22 per cent to hit USD 20.5 billion. Executives highlighted a "weak advertising demand environment" that is expected to continue into Q3, according to Meta's earnings release.
Meta is forecasting revenue between USD 26-28.5 billion for the quarter.
"We seem to have entered an economic downturn that will have a broad impact on the digital advertising business," said Meta CEO Mark Zuckerberg.
"Given the more recent revenue trajectory that we're seeing, we're slowing the pace of (our) investments and pushing some expenses that would have come in the next year or two off to a somewhat longer timeline," he added during the company's earnings call.
The company would be slowing down its "headcount growth over the next year," the top executive added.
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"Many teams are going to shrink so that we can shift energy to other areas inside the company, and I want to give our leaders the ability to decide within their teams where to double down, where to double down, where to backfill attrition, and where to restructure teams while minimizing (the impact) to the long-term initiatives," Zuckerberg stated.
Following the report, the company's stock experienced a modest decline in after-hours trading. Additionally, a larger decrease in the digital advertising market, which is affecting rivals like Alphabet and Snap, was closely followed by the results.
In the meantime, The Verge reported that Meta is revamping Facebook and Instagram to put more of an emphasis on short videos and posts that its system recommends to users in an effort to compete with TikTok.
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-PTC News
