Meta Platforms, the parent company of Facebook, Instagram, and Whatsapp, on Wednesday posted its second quarter results reporting a year-over-year revenue fall.
Total revenues for the social media and tech company were $28.82 billion, a 1 percent drop from $29.07 reported for the second quarter of 2021.
Meta, which describes itself as a business that “builds technologies that help people connect, find communities, and grow businesses,” also reported $20.46 billion in total costs and expenses in the quarter ending June 30, a 22 percent increase year-over-year.
On its subsidiary social media platforms, which Meta calls its “family of apps,” the parent company saw daily active users increase 4 percent to 2.88 billion on average for June 2022.
Overall in the second quarter of 2022, Meta’s family of apps, which includes Facebook, Instagram, Whatsapp, Messenger, and other services, were down $402 million year-over-over to $28.37 billion.
Among these apps, the average price per ad went down 14 percent year-over-over, while ad impressions increased by 15 percent.
Citing macroeconomic uncertainty, Meta Chief Financial Officer David Wehner noted that revenue expectations in the third quarter of 2022 weren’t much better than the second, predicting them to be in the range of $26 to $28.5 billion.
“This outlook reflects a continuation of the weak advertising demand environment we experienced throughout the second quarter, which we believe is being driven by broader macroeconomic uncertainty,” he said.
Meta also expects a lower third quarter revenue for Reality Labs, its augmented and virtual reality arm, posting $452 million in the second quarter, up from $305 million for the same quarter last year.
Reels
In addition to economic pressures, Meta is fighting for users’ time with TikTok, a short-form video-sharing platform based in Beijing.Meta’s answer to TikTok is Instagram and Facebook Reels, which Meta founder and CEO Mark Zuckerberg was pleased to see experiencing upward engagement.
“We’re putting increased energy and focus around our key company priorities that unlock both near and long term opportunities for Meta and the people and businesses that use our services.”
In June, The Verge reported, citing obtained leaked documents, that Facebook was reorienting its user experience to be akin to TikTok, with short-form video “reels” algorithmically chosen. The changes would see Facebook’s “feed” include posts displayed vertically.
Meta’s Instagram app has already morphed to become more like TikTok, featuring and prioritizing Reels over static images. Facebook did this once before by mimicking Snapchat, The Verge reported.
Meta executives told investors that Reels was now generating over $1 billion annually in revenue, Reuters reported.
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