Facebook owner Meta Platforms recorded its first ever quarterly drop in revenue on Wednesday, after reporting mixed results for user growth.
The US company said it expects third-quarter revenue to fall between $26 billion and $28.5 billion, a second successive year-over-year decline. Analysts were expecting $30.52 billion, according to IBES data from Refinitiv.
Total revenue, which consists almost entirely of ad sales, fell 1% to $28.8 billion in the second quarter ended June 30, from $29.1 billion last year.
Shares of the Menlo Park, California-based company were down about 4.6% in extended trading.
Monthly active users on flagship social network Facebook came in slightly under analyst expectations at 2.93 billion in the second quarter, an increase of 1% year over year, while daily active users beat estimates at 1.97 billion.
Strong Dollar Crimps Revenue
Meta is facing revenue pressure from the strong US dollar, as sales in foreign currencies amount to less in dollar terms.
The company said it expected a 6% revenue growth headwind in the third quarter, based on current exchange rates.
Results also suggest that fortunes in Facebook online ad sales may be diverging between search and social media players, with the latter affected more severely as ad buyers reel in spending.
Meta reported $218 million in non-ad revenue, which includes payments fees and sales of devices like its Quest virtual reality (VR) headsets, down from $497 million last year.
Its Reality Labs unit, which is responsible for developing metaverse oriented technology such as the VR headsets, reported sales of $452 million, down from $695 million in the first quarter.
- Reuters, with additional editing by George Russell