The news: Meta’s watershed Q2 results spell trouble for the social media giant’s future. The company posted its first ever year-over-year revenue decline this quarter, and its business faces existential challenges on every front.
Advertising is everything: Advertising lies at the core of Meta’s business, and Q2’s signs about its health aren’t good.
Analyst take: “The year-over-year drop in quarterly revenue signifies just how quickly Meta’s business has deteriorated,” said principal analyst Debra Aho Williamson. “Prior to these results, we had forecasted that Meta’s worldwide ad revenue would increase 12.4% this year to nearly $130 billion. Now, it’s unlikely to reach that figure, and I expect that quarterly growth in Q3 and Q4 will almost certainly be slower than our previous expectations. The good news, if we can call it that, is that its competitors in digital advertising are also experiencing a slowdown.”
Nowhere to run: As if its ad outlook wasn’t bad enough, Meta is also fighting off challenges from competitors and regulators that threaten its many ventures.
The big takeaway: Meta desperately needs to improve its numbers with young users and develop an advertising solution to reverse its fortunes. But that’s no easy task for a company plagued with scandal, regulatory challenges, and financial hits.
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