Shares of Meta, the owner of Facebook, Instagram, WhatsApp, and more, plunged by 22.01% on Thursday after the third quarter (Q3) earnings report showed net income declined by 52% from $9.194 billion recorded in Q3 2021 to $4.395 billion.
Revenue for the period dropped 4% to $27.714 billion, down from $29.010 billion filed in Q3 of 2021. Costs and expenses grew by 19% to $22.050 billion.
Similarly, income from operations plunged to $5.664 billion, a 46% decline when compared to $10.423 billion achieved in the corresponding period of 2021.
The company’s share dipped by 22.01%, or $28.57 to $101.25 a unit despite family Daily Active People (DAP) growing by 4% year-on-year to 2.93 billion. Also, the metric for family Monthly Active People (MAP) stood at 3.71 billion, a 4% increase from a year ago.
Facebook Daily Active Users (DAUs) continued to expand in the quarter under review, growing by 3% year-on-year to 1.98 billion on average while Monthly Active Users (MAUs) inched higher by 2% year-on-year to 2.96 billion.
The earnings report obtained by Investors King showed ad impressions on the world’s largest social media company increased by 17% year-on-year. Suggesting that traffic is not the issue but spending by advertisers.
This was validated by the average price charged per ad which rose by 18% year-on-year.
As explained by Mark Zuckerberg, Meta founder and chief executive, during the earnings call, Facebook fundamentals remained solid but its revenue will continue to struggle in the near term given global uncertainty and the dropped in spending by top advertisers.
However, shareholders continue to doubt Zuckerberg’s over $10 billion investment in the metaverse would worth it in the long run, especially with how unproven that niche is presently.
“I appreciate the patience and I think that those who are patient and invest with us will end up being rewarded,” he said, arguing that the company was doing “leading work” on the metaverse that would be “of historical importance”.