The tech sector suffers most from inflation and high interest rates – even Facebook’s parent Meta has reported a drop in revenues for the first time ever
Meta Platforms Inc reported financial results for the quarter ending June 30, 2022. The quarterly revenue of $28.8 billion was almost 1% down from last year and slightly below Wall Street expectations.
Besides, the company posted a net profit of $6.7 billion, a decrease of 36% compared to 2021. Meta hasn’t experienced such a decrease since the fourth quarter of 2012.
The social media giant issued a muted outlook on digital advertising. Firstly, the company started facing a negative impact of the economic downturn on demand for advertising. In addition, there’s growing competition in the industry, in particular, from Meta’s Chinese rival TikTok. Other market players such as Google, Snap, or Twitter have either posted a decline or recorded minimal growth levels.
Nevertheless, Meta remains optimistic about improving its ad targeting. The company now concentrates on potentially profitable click-to-message ads, which open a chat with a business whenever a user clicks on the ad.
As for Meta’s virtual reality (VR) and metaverse division Reality Labs, it posted the seventh straight quarter of losses. In Q2 2022, Meta’s expensive initiative registered a $2.8B operating loss. Its CEO Mark Zuckerberg acknowledged the unprofitability might continue for several more years. At the same time, the company doesn’t give up on its ambitious project that presents a “massive opportunity” worth “hundreds of billions of dollars”.