Meta is not saved from the downward trend of technology. In its most recent quarterly report , Mark Zuckerberg’s company reported lower income than expected, which brought a 14% drop in the company’s shares .
According to CNBC analysts, competition from TikTok, Apple’s operating system upgrade, and the high cost of its metaverse-focused division, Reality Labs, has sent Meta into financial decline.
The company reported $300 billion in revenue, $2 billion less than Wall Street expected. In addition, its Reality Labs unit had a drop of almost 50% of its income compared to last year and its loss widened to 36,700 million dollars. So far this year, this vertical has lost $94 billion.
While revenue fell 4% in the third quarter, Meta’s costs rose 19% year over year to $221 billion. And overall net income fell 52% to $440 billion in the third quarter.
“While we face short-term revenue challenges, the fundamentals are there to return to stronger revenue growth. We are heading into 2023 with a focus on prioritization and efficiency that will help us navigate the current environment
and emerge as an even stronger company,” Zuckerberg wrote in his letter to investors.
Meta said it had 197 million daily active users in the United States and Canada, a slight increase from the 196 million it reported a year ago.
Among the culprits pointed out by the company, is the lack of investment in advertising and changes in Apple’s privacy policies, which have also dragged other companies, such as Snap, as the shares of the Snapchat company plummeted 30 % one day after the company reported lower-than-expected revenue.