Facebook’s parent company, Meta, missed analyst expectations for the three months ending Dec. 31 – citing the ongoing impact of Apple’s iOS privacy updates – and reported stagnated user growth numbers.
Revenue reached US$33.6 billion in Q4, representing 37% year-over-year growth. Nearly all of Meta’a revenue came from advertising, which itself grew 20% year-over-year to US$32.6 billion. By geography, year-over-year ad revenue growth was strongest in Asia Pacific, growing 31%, while North America grew 15%.
There are now 2.91 billion monthly active users on Facebook, which represents a 4% growth year-over-year. The company reported 1.92 billion daily active users, which represents a 5% year-over-year increase, while at the same time represents a drop of about 500,000 daily active users compared to the last quarter. This marks the first time the company has reported a decrease in daily active users. Facebook’s user growth had stalled in North America and Europe over the past several years but previously made up for it by consistently adding users all over the world.
Shares of Facebook’s parent company, Meta, fell 22% on Wednesday after the technology company released its fourth-quarter earnings statements, reports CNBC. Facebook rebranded as Meta in October, with CEO Mark Zuckerberg claiming the Facebook name no longer captured the breadth of what the company offered, which includes Instagram, WhatsApp, blockchain payment system Diem and Oculus VR, as the company made a push for its metaverse offerings.
Critics have suggested the rebrand was in response to the deluge of bad press Facebook received after leaked internal documents, dubbed the “Facebook Papers,” revealed the company’s inability to stop the spread of misinformation, hateful content or the organization of violent movements on its platform, and its unwillingness to adopt measures that could impact growth.
On a call with investors on Wednesday, Zuckerberg pointed to competition from apps like TikTok as one reason for the company’s earnings in Q4.
“People have a lot of choices for how they want to spend their time and apps like TikTok are growing very quickly. And this is why our focus on Reels is so important over the long-term,” he said.
On the advertising front, Zuckerberg also stated that with changes in Apple’s iOS and new regulations in Europe, there’s less data available to deliver personalized ads.
“But people still want to see relevant ads, and businesses still want to reach the right customers. So we’re rebuilding a lot of our ads infrastructure so we can continue to grow and deliver high-quality personalized ads,” he said.
Sheryl Sandberg, the company’s COO, said that the impact of Apple’s iOS 14 update, continues to create challenges for advertisers in terms of decreased accuracy of ad targeting, and difficulties measuring those outcomes.
Sandberg said the company is working to try to improve things for advertisers, by introducing tools such as its Aggregated Events Measurement solution, and that the company expects “the overall targeting and measurement headwinds to moderately increase from Apple’s changes and from regulatory changes in Q1 and throughout 2022.”
