Meta Platforms CEO Mark Zuckerberg is crying over dwindling revenue growth this year as it faces up to increased competition from rivals including TikTok, with the company delivering a gloomy outlook in its first earnings since undergoing a major rebrand in late 2021.
Meta Platforms executives used its Q4 2021 earnings call to predict slower growth as younger audiences spend less time on its platforms in favour of short-form video apps. To stem the tide, Zuckerberg indicated the company would focus heavily on its Instagram Reels service, something of a TikTok clone, but added this was harder to reap revenue from than its other core platforms.
“People have a lot of choices for how they want to spend their time and apps like TikTok are growing very quickly,” said Zuckerberg.
Meta Platforms also bemoaned privacy changes by Apple, stating these made it harder to track users and deliver personalised ads, which it expects will cost it around $10 billion this year.
It further warned of lower advertising spend due to inflation, foreign currency effects and supply chain disruption, which are impacting budgets.
Meta Platforms’ caution was not well met by investors, as its share price plummeted more than 20 per cent in pre-market trading, wiping a potential $200 billion from its valuation.
Revenue for Q4 2021 hit $33.7 billion, up 20 per cent year-on-year, although its net income dropped 8 per cent to $10.3 billion, the first decline since 2019.
Its monthly active user base was up 4 per cent, to 2.9 billion, with daily active users rising 5 per cent to 1.9 billion.
As part of its push into metaverse, Meta Platforms also detailed numbers for its VR and AR business Reality Labs for the first time, revealing a loss of $3.3 billion as it invests heavily in its future vision.
