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Meta's user growth rebounds after decline amid Russia-Ukraine crisis, competition from TikTok

Facebook daily active users (DAU) - a key metric for advertisers, were 1.96 billion, slightly higher than the estimate of 1.95 billion, according to IBES data from Refinitiv.

April 28, 2022 / 02:17 PM IST

Facebook rebounded from a drop in users early this year and its parent company Meta posted a profit ahead of Wall Street targets, defying low expectations from investors.

Meta's profit beat Wall Street targets at $2.72 per share, compared with an average analyst estimate of $2.56, according to IBES data from Refinitiv. The earning beats were tempered by Meta recording its slowest revenue growth in a decade.

Also Read: Meta: Facebook pivots from metaverse to TikTok

Facebook daily active users (DAU) - a key metric for advertisers, were 1.96 billion, slightly higher than the estimate of 1.95 billion, according to IBES data from Refinitiv. The monthly active users came in at 2.94 billion, missing Wall Street estimates by 30 million.

Meta CEO Mark Zuckerberg said that the company would scale back costs and was investing in artificial intelligence (AI) tools to improve recommendations and ads, according to Reuters.

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Meta has lost about half of its value since the start of the year, after a poor February earnings report when Facebook's DAU declined for the first time and it forecast a dismal quarter, due to factors such as Apple's privacy changes and increasing competition from platforms such as ByteDance's TikTok.

Earlier in the year, the Meta CEO told employees to focus on expanding short-video product like Instagram reels and spoke about “facing unprecedented level of competition” from the hugely popular video-sharing platform TikTok, Bloomberg had reported.

Total revenue - the bulk of which comes from ad sales, rose seven percent to $27.91 billion in the first quarter, but missed analysts' estimates of $28.20 billion, according to IBES data from Refinitiv.

Chief Financial Officer Dave Wehner cited factors including a slowdown in ecommerce after rapid growth during the COVID-19 pandemic, as well as a loss of revenue in Russia and reduced ad demand amid the global economic uncertainty.

Russia banned Facebook and Instagram in March, finding Meta guilty of "extremist activity" amid Moscow's crackdown on social media during its invasion of Ukraine. Meta has also barred advertisers in Russia from creating and running ads anywhere in the world.

Meta forecast second-quarter revenue between $28 billion and $30 billion. Analysts on average were expecting current-quarter revenue of $30.63 billion. The tech giant said its outlook reflected factors including the Russia Ukraine war and said it was monitoring the potential impact of the regulatory moves in Europe.

[With inputs from agencies]
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first published: Apr 28, 2022 02:41 pm
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