Meta Platforms-owned Facebook reported its first-ever quarterly decline in global daily users, leading to its stock price plummeting and wiping out nearly $200 billion in market value.
The company’s ad growth during the quarter also fell below market estimates. The stock drop shows that the company’s corporate rebrand hasn’t been enough to distract investors from teething problems in its core social media business.
Meta Platforms reported nearly flat user growth across Facebook, WhatsApp, and Instagram. More worryingly for the company, the main app — Facebook — lost a million daily users in North America alone — a region where it has historically made the most money from advertising. The decline led to an overall decrease in daily Facebook users across the globe.
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Meta doesn’t provide a breakup of Instagram users, but daily users across its apps hit 2.82 billion, adding just 10 million users sequentially.
Globally, Facebook’s daily active users fell to 1.929 billion from 1.930 billion on a sequential basis. However, the company was quick to put the blame for its declining user base on privacy changes in Apple’s operating system, making it difficult for brands to target and measure ads on Instagram and Facebook, and competition from rivals YouTube and TikTok. It also cited issues such as supply-chain disruptions.
However, despite the decline in user base, Meta Platforms remains profitable — total revenue, most of which comes from ads, rose to $33.67 billion from $28.07 billion a year ago.
Meta Platforms forecast first-quarter revenue between $27 billion and $29 billion, much lower than estimates of $30.15 billion. Chief Financial Officer Dave Wehner said during an analyst call that the impact of Apple’s privacy policy change could be “in the order of $10 billion” during 2022, Reuters reported.
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The company also reported losses of $10.2 billion last year on revenues of $2.3 billion on Reality Labs, the Quest VR headset, VR software, AR glasses, and metaverse-related initiatives division.
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