Facebook Reports First-Ever Revenue Drop
Facebook’s licence to print money has finally expired, with the social network reporting its first-ever decline in revenue for the June quarter.
Facebook reported a 1 per cent drop, to A$41.22 billion, and predicted that the third quarter would see an even sharper decline, to land in the range of A$37.22-$40.8 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,” Facebook CFO David Wehner said.
The profit for parent company, Meta, fell 36 percent to A$9.59 billion, with the Reality Labs division, tasked with building the company’s metaverse offerings, losing A$4 billion over the three months. Facebook anticipates third quarter Reality Labs revenue to be even lower.
Facebook has managed to arrest the dropping user base, however, with daily active users increasing by 3 per cent, to 1.97 billion.
Ad impressions delivered across all apps increased by 15 per cent year-over-year, but this was wiped out by the average price per ad decreased by 14 per cent year-over-year.
“We seem to have entered an economic downturn that will have a broad impact on the digital advertising business,” Mark Zuckerberg said in an earnings call.
“It’s always hard to predict how deep or how long these cycles will be, but I’d say the situation is worse than it was a quarter ago.
“This is a period that demands more intensity. I expect us to get more done with fewer resources.”