Facebook parent Meta reports Q3 revenue decline

Facebook parent Meta has reported that its revenue declined for a second consecutive quarter, hurt by falling advertising revenue amid competition from the wildly popular video app TikTok.

The quarter’s weak results raised fresh questions about whether Meta’s plans to spend 10 billion dollars (£8.6 billion) a year on the metaverse – a concept that does not quite exist yet and possibly never will – is prudent.

Meta’s disappointing results followed weak earnings reports from Google parent Alphabet and Microsoft this week.

Meta earned 4.4 billion dollars (£3.78 billion), or 1.64 dollars per share, in the three-month period that ended on September 30.

Revenue fell 4% to 27.71 billion dollars (£23.83 billion) from 29.01 billion dollars (£24.95 billion).

Analysts were expecting earnings of 1.90 dollars per share on revenue of 27.4 billion dollars (£23.57 billion) in the latest quarter, according to FactSet.

Meta’s stock tumbled 14% in after-hours trading.

Some of the company’s investors are concerned Meta is spending too much money and confusing people with its focus on the metaverse, a virtual, mixed and augmented reality concept that few people understand – while it also grapples with a weakening advertising business.

“Meta has drifted into the land of excess – too many people, too many ideas, too little urgency,” wrote Brad Gerstner, the chief executive of Meta shareholder Altimeter Capital, earlier this week in a letter to Meta chief executive Mark Zuckerberg.

“This lack of focus and fitness is obscured when growth is easy but deadly when growth slows and technology changes.”

Meta also forecast weaker-than-expected revenue for the current quarter, further raising worries that the revenue decline is more of a trend than an aberration.