The parent company of Facebook, Meta, reported a bleak mix of a sharper-than-expected decline in profit, a reduction in users, and risks to its ad revenue on Wednesday, sending shares down 22% in after-hours trade.
Already nervous markets have penalized pandemic-era darlings like Netflix for poor performance, and Meta has had a taste of it when its $10.3 billion quarterly earnings and daily user growth fell short of forecasts.
However, over the last two quarters of 2021, the signature Facebook platform lost around one million daily users globally — a little number in an app with nearly two billion daily users, but a potentially troubling sign of stagnation.
User growth has been hampered by “headwinds,” according to CFO Dave Weiner, including disproportionate growth in Asia-Pacific during the pandemic, which has moderated, and an increase in mobile data prices in India.
“In addition to these factors, we believe competitive services are negatively impacting growth, particularly with younger audiences,” Weiner added.
While they are facing multiple probes and charges of abuse of dominance, the company’s management have often mentioned competition from TikTok as well as other networks.
