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Meta Platforms met expectations but saw its total revenues fall in the second quarter amid a downturn in the economy and increased competition for digital advertisers.
Total revenue for Meta was $28.8 billion in the second quarter ending June 30, according to the earnings report released Wednesday, down 1 percent from the second quarter in 2021.
The social media and tech company also reported total costs and expenses of $20.4 billion, a 22 percent increase year over year.
Meta expects even lower revenue in the third quarter of the year and is forecasting total costs tor 2022 to reach up to $88 billion.
Meta Chief Operating Officer Sheryl Sandberg said during an earnings call that the company was struggling to increase digital advertising revenue amid wider economic uncertainties in the U.S. and competition with other social media platforms and online spaces.
“We’re in a more challenging environment,” Sandberg said. “These continue to be turbulent times for the global economy. Many of the macro factors having an impact on our revenue are continuations of things we’ve seen in previous quarters, such as the continued impact of the war in Ukraine.
“But there are also new challenges of rising inflation and uncertainty around a looming recession,” she added.
The earnings report forecasts the first signs of trouble for Meta after it beat expectations for user growth in the first quarter of the year and saw stock shares jump.
User growth climbed in the second quarter. Daily users on Meta’s family of apps, which includes Instagram, Facebook, WhatsApp and Messenger, jumped to 2.88 billion in June, a 4 percent increased compared to last year.
Slight increases were also seen for monthly users on the family of apps, while Facebook daily users rose 3 percent compared to the second quarter of last year.
Meta’s Reality Labs, the sector of the company that focuses on artificial intelligence and the metaverse, brought in just $452 million in the second quarter.
Meta CEO Mark Zuckerberg on Wednesday said during the earnings call that the metaverse is a “massive opportunity” and a key investment in the future.
Meta is also pushing ahead with a focus on Reels, which are short videos on Instagram and Facebook similar to TikTok.
While some users have complained that Reels takes away from the photo-sharing component of the social media app, Meta saw a 30 percent increase with Reels this quarter.
Zuckerberg said he expects the company’s investments to give it a “comparative advantage” over the long term that will help it push through the uncertainty.
“I think we’re on track here and we just need to push through this one,” Zuckerberg said. “These are long-term things, but the same principles basically still apply for how you want to build a company and stay ahead, and I think that’s going to be the sustainable advantage.”