On Thursday, shares of Facebook’s parent company, Meta, dropped by more than 26 percent in extended trading after the company reported disappointing earnings, gave weak guidelines, and stated that user growth has started to decline in Q4 2021.
The company also forecasted weaker-than-expected revenue growth in the next quarter and is also taking a big hit from Apple’s privacy changes, showing the first quarterly decline in daily active users ever recorded.
Meta’s stock finished with biggest one-day drop in US history. In July 2018, the company witnessed a 19% plunge in shares value. The recent drop shaved over $230 billion from the market cap, reducing it to about $660 billion.
According to a Refinitiv survey of analysts, Meta released the earnings under its new name for the first time with a new reporting structure, with the following results:
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Earnings per Share: $3.67 vs $3.84 expected
Revenue: $33.67 billion vs $33.4 billion expected
Refinitiv claims that the company’s revenue forecast of $27 billion to $29 billion for the first quarter fell below the expected $30.15 billion.
According to StreetAccount, Facebook also missed estimates with user numbers:
Daily Active Users (DAUs): 1.93 billion vs. 1.95 billion
Monthly Active Users (MAUs): 2.91 billion vs 2.95 billion expected
Average Revenue per User (ARPU): $11.57 vs $11.38 expected
Apple’s iPhone privacy changes, which impact the company’s ad-targeting and measuring policies, are expected to result in a $10 billion revenue hit this year. Macroeconomic challenges such as inflation and disruptions in the supply chain are also said to have a huge impact on advertiser budgets.
