Meta Reports First Drop in Revenue and 36% Profit Drop

For years, Facebook’s sales have steadily grown and continued to rise, defying the laws of gravity, even when the company was torn apart by scandals around Confidentiality as well as disinformation.

Not anymore.

On Wednesday, Meta, formerly known as Facebook, reported a 1% drop in quarterly revenue from a year earlier. Since then, the social media giant’s earnings have fallen for the first time. became public a decade ago, when he faced increased regulatory scrutiny and a volatile economy while trying to build a new frontier of digital communications.

Meta’s second-quarter revenue was $28.82 billion, up from $29.07 billion a year earlier. Profit was $6.69 billion, down 36 percent from a year earlier. According to data compiled by FactSet, Wall Street analysts had forecast earnings of $7.04 billion on revenue of $28.9 billion.

The results exacerbated what had been a dismal day for the Meta, who was also sued Wednesday by the Federal Trade Commission on the acquisition of virtual reality company Within. The lawsuit hits right on ambition Mark Zuckerbergfounder and CEO of Meta, which spends billions of dollars to create an immersive world of social interaction in “Metaverse” which is a combination of virtual and augmented reality that will be linked by commerce and online relationships.

mr. Zuckerberg has told investors, technologists and others that his metaverse vision will take years to materialize and that the effort will be costly. Some investors are skeptical that the effort will pay off in the long run.

However, there were some bright spots in Meta’s earnings report. The company said its daily active people had increased to 2.88 billion, up 4 percent from a year ago. This beat analysts’ expectations that the company was losing visitors. The Facebook app also saw a rise in users in the United States, where some felt they were oversaturated.

mr. Zuckerberg said he was encouraged by other areas of Meta’s business that drive growth and engagement, such as Product Video Rules, a feature on Instagram similar to the TikTok video offer. Investment in AI recommender algorithms has also encouraged more people to use the service for longer, the company said.

“It was great to see the positive trajectory of our engagement trends this quarter thanks to products like Reels and our investment in artificial intelligence,” he said in a statement. “We are focusing more on our company’s key priorities, which offer both short- and long-term opportunities for Meta and for the people and businesses that use our services.”