Menlo Park The Facebook group Meta has severely disappointed investors with its figures for the past quarter. The stock fell more than 20 percent at times in an early reaction in after-hours trading on Wednesday. One of the unusual developments in the final quarter of 2021 was that the number of daily active users on Facebook fell slightly within three months: from 1.93 to 1.929 billion. In the same quarter of the previous year, it had grown by 25 million. Facebook also missed the analysts’ expectations, which had assumed 1.95 billion users.
Meanwhile, consolidated sales grew year-on-year by a fifth to just under $33.7 billion (around €29.8 billion). The bottom line is that profits fell by eight percent to almost 10.3 billion dollars.
In the past few months, Facebook had been hit, among other things, by Apple’s measures for more privacy on the iPhone. App providers like Facebook have had to ask users since last year if they can track their behavior across different services and websites for advertising purposes. Very many iPhone customers rejected this. This makes it difficult for Facebook to tailor ads to individual users, its central business model.
Meta also released more detailed information about its virtual reality business for the first time. Over time, this should result in the digital world of Metaverse, in which Facebook founder Mark Zuckerberg sees the future of the group. In the most recent quarter, Reality Labs revenue increased to $837 million from $717 million year over year. At the same time, the operating loss rose from around 2.1 to 3.3 billion dollars. In the fourth quarter, sales increased compared to the same period last year by 20 percent to $ 33.67 billion, as the social media group announced on Wednesday. In the first quarter of this year, Meta expects sales to increase by three to eleven percent to between 27 and 29 billion dollars – analysts had, however, expected an increase of up to 30.15 billion.
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Meta anticipates continued headwinds from increasing competition for user time and their increasing use of video reels, which have lower monetization rates. In addition, Apple’s new data protection rules make business more difficult for the company. The new operating system for Apple’s iPhone makes it harder to personalize ads, making them less effective.
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