Facebook posts slowest ever sales growth Business

Facebook saw the slowest sales growth in its history even as the number of users of the social media platform exceeded Wall Street forecasts.

Revenue at Meta, Facebook’s parent company, rose just 7% to $27.9bn (£22.2bn) in the first quarter of the year, it revealed last night, the smallest increase since its IPO a decade ago.

Facebook’s daily active users rose 4% to 1.96 billion, slightly above Wall Street expectations of 1.95 billion. Shares jumped more than 12% to $196 after-hours trading.

Profits fell 21% to $7.4 billion.

The company expects to achieve total revenue of between $28 billion and $30 billion in the second quarter of this year as the war in Ukraine affects its performance.

Mark Zuckerberg, CEO of Facebook, said, “More people are using our services today than ever before, and I’m proud of how our products serve people around the world.”

Earlier this year, Meta suffered a record drop in value after revealing its first-ever drop in daily user numbers and unveiling a sharp decline in profits.

Google and Snapchat have both been hit by slowing online ad spending due to inflation fears and the war in Ukraine.

Before last night, Meta had never recorded single-digit revenue growth, with its slowest previous rate, a sales increase of 10.7% last fall.

Mr Zuckerberg, 37, is trying to refocus his business around the “metaverse”, a series of online worlds accessible via virtual reality. He rebranded the company as Meta last year and is spending billions to outpace rivals such as Apple and Microsoft in the new field.

Facebook’s core social media business is being hit hard by the rise of TikTok, especially among younger users. Meanwhile, its lucrative advertising business has been blunted by changes Apple made to the iPhone that made it harder to target ads.

Facebook and Instagram, which Meta also owns, were banned in Russia last month after it relaxed its rules to allow Ukrainian users to call for violence against Russian soldiers. The move led the Kremlin to restrict access and label Meta an extremist organization, although its WhatsApp messaging app remains available.

In February, Meta suffered the biggest drop in the value of a company on record when dismal results sent shares tumbling 26.4%, sending its market capitalization down $230 billion. It revealed at the time that the number of daily users had fallen for the first time since Mr Zuckerberg founded Facebook in 2004, falling by one million by the end of 2021.

The company’s value has more than halved since a peak in November. Mr Zuckerberg, who owns a 13% stake in the company, has seen his net worth plummet to the tune of nearly $60 billion this year.