Meta, Facebook’s parent company, on Wednesday reported a second straight quarter of declining sales as the company grapples with a widespread decline in online ad spend and rising competition from TikTok.
Additionally, an Apple iOS privacy update last year that limits advertisers’ ability to target users continued to weigh on ad sales, which are at the heart of Meta’s business.
Revenue fell 4% year over year, the earnings report showed. That slump topped the 1% year-over-year decline in the previous quarter.
Meta’s shares are down more than 10% in after-hours trading immediately after the announcement.
Meanwhile, the company reported 2.93 billion daily active users of its family of apps, which includes Facebook, Instagram, WhatsApp and Messenger. That number includes a 4% year-over-year growth, consistent with the increase in daily users reported in the previous quarter.
The company’s stock price has fallen about 60% in 2022, more than double the tech-heavy NASDAQ.
The continued revenue decline is the latest in a series of challenges for Meta this year, including the announcement in June that Chief Operating Officer Sheryl Sandberg will be leaving the company and the difficulty in raising revenue from its multi-billion dollar investment in his to achieve Metaverse project.
Meta declined to respond to a request for comment.
The company has recently come under fire from some investors for its large investment in its Metaverse project, which has yet to deliver any meaningful returns.
Brad Gerstner, whose fund holds hundreds of millions of dollars in Altimeter Capital Meta stock, slammed the company’s strategy in an open letter this week.
“Meta has drifted into the land of excess – too many people, too many ideas, too little urgency,” Gerstner wrote. “That lack of focus and fitness is masked when growth is easy but deadly when growth slows and technology changes.”
Gerstner called on the company to cut staff costs by 20% and limit spending on its Metaverse project to $5 billion a year. “Meta needs to get his mojo back,” he wrote.
Meta’s report comes a day after Microsoft and Google parent Alphabet announced lackluster quarterly results.
Microsoft’s revenue grew at its slowest pace in five years, causing the company’s shares to plummet 6%. Alphabet, meanwhile, announced that its advertising sales were at their lowest level in nearly a decade.