Revenue for Facebook, Instagram, WhatsApp and Messenger fell 1% to $28.8 billion. Profits down 36%. It weighs the contraction of advertising spend and the transition to the metaverse. Zuckerberg: "The situation is getting worse, we will have to do more with less." A reduction in hiring plans is looming 28 Jul 2022 Domenico Aliperto
Meta's quarterly revenue declined year-over-year for the first time ever, with profits down more than a third from a year ago. "We will have to do more with less," said Meta number one Mark Zuckerberg, commenting on the negative performance. Mainly – but not only – due to competition from other platforms such as TikTok and cuts in advertisers' budgets, the revenue of the group that includes Facebook, Instagram, WhatsApp and Messenger decreased by 1% in the second quarter of 2022, standing at 28.8 billion dollars, while net profit fell to 6.7 billion. That's down 36 percent from $10.39 billion (or $3.61 per share) in the same period a year ago. Analysts, on average, were expecting earnings of $2.54 per share on revenue of $28.91 billion, according to a FactSet survey. Following the disclosure of the data, Meta shares fell $6.88, or 4.1%, to $162.70, in after-hour trading. Index of topics • The analysis of top management • And the Federal Trade Commission sues the group The analysis of top management "The situation looks worse than it was three months ago," Zuckerberg acknowledged speaking to analysts, estimating that he is slowing the pace of investment and thinking about a "reduction in staff growth next year."
Meta has 84,000 employees worldwide, 32% more than a year ago. Facebook still increased the number of daily active users to 1.97 billion, but lost 2 million monthly users. As of June 30, 3.65 billion people worldwide used at least one of the group's four channels each month. "We are investing more energy and focusing on our key business priorities that unlock both short- and long-term opportunities for Meta and for the people and businesses that use our services," Zuckerberg said. "This outlook reflects the continued environment of weak advertising demand that we experienced during the second quarter, which we believe is driven by broader macroeconomic uncertainty," Chief Financial Officer David Wehner said in a statement. But beyond the economic recession, Meta also faces other very delicate challenges, including the upcoming departure of CHIEF Operating Officer Sheryl Sandberg, the deus ex machina to whom much of the success of the company's advertising activity is owed. Meta announced wehner's promotion to Chief Strategy Officer, a role through which he will oversee the company's strategy and business development. Susan Li, currently vice president, will replace him as CFO. "The year-over-year decline in quarterly revenue indicates how quickly Meta's business has deteriorated," said Insider Intelligence analyst Debra Aho Williamson. "Prior to these results, we predicted that Meta's worldwide ad revenue would increase by 12.4% this year, to nearly $130 billion. Now, it's unlikely to reach that figure." The expert added that the good news, if you can call it that, is that Meta's competitors are also experiencing slowdowns. Meta's real problem is that it's in the midst of a business transformation that, he says, will take years to complete. And the Federal Trade Commission sues the group But even with respect to growth on the metaverse front, Mark Zuckerberg's group faces new grits: the US Federal Trade Commission has sued the company. The goal is to prevent the acquisition – announced last October – of Within Unlimited, a company specialized in the production of products for virtual and augmented reality. According to the commission Meta should not acquire Within and its Supernatural application as it is "already a key player within the augmented reality industry". The request for a preliminary injunction in a California federal court was approved by the commission with three votes in favor and two against. The commission accuses Meta founder Mark Zuckerberg of attempting to monopolize the industry by buying the Oculus VR headset in 2014 and seven studios to develop augmented reality applications. "Instead of competing in a healthy way, Meta is attempting to buy an already established reality within the industry," said john Newman, deputy director of the commission's competition department. But according to Meta, the FTC's measure represents "speculation based on ideological assessments: the idea that the operation could determine anti-competitive dynamics in such a large space is simply not credible".