Meta’s growth comes to screeching halt as company projects first revenue drop

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For the first time in nearly a decade, Meta's explosive growth has come to a halt, as the Facebook parent company forecast its first decline in revenue since it went public.

Meta, in its second-quarter earnings report on Wednesday, said it expects third-quarter revenue of between $26bn and $28.5bn - lower than the $30.52bn analysts predicted.

The disappointing results come as the company faces a generally weak ad market and pushes a complete overhaul of its brand, pivoting from its core social media product to offerings in virtual reality in 2021.

For the second quarter ending 30 June, Meta said total revenue, the bulk of which comes from ads, fell to $28.82bn from $29.08bn a year earlier. Meta shares fell nearly 5% in after hours trading following the rare backslide.

Meta's earnings further underscored an inflation-induced slowdown in the digital ad industry, which has been booming for decades as companies tapped the power of the internet to reach consumers.

Meta has been trying to fend off a string of challenges to its business, including stiff competition from TikTok and Amazon for ads and a revenue hit from Apple's privacy changes to its mobile operating system iOS.

Net income fell to $6.69bn, or $2.46 per share, from $10.39bn or $3.61 per share, a year earlier.