Meta Platforms said it will lower capital expenditures for 2022 to $30-34 billion vs previous guidance of $29-34 billion.
Capex of Meta Platforms was $7.75 billion for the second quarter of 2022, the world’s largest social media company said in a news statement.
The Menlo Park, California-based Meta Platforms has increased the number of employees to 83,553 (+32 percent) as of June 30, 2022.
Meta Platforms said it expects third-quarter revenue to fall to $26 billion and $28.5 billion, which would make it a second year-over-year drop in a row.
Meta Platforms said revenue, which consists almost entirely of ad sales, fell 1 percent to $28.8 billion in the second quarter ended June 30, from $29.1 billion last year.
The company, which operates the world’s largest social media platform, reported mixed results for user growth.
The number of monthly active users on flagship social network Facebook touched 2.93 billion during the second quarter, an increase of 1 percent year over year, while daily active users reached 1.97 billion.
Meta is facing some revenue pressure from the strong dollar, as sales in foreign currencies amount to less in dollar terms. Meta said it expected a 6 percent revenue growth headwind in the third quarter, based on current exchange rates.
Meta results suggest that fortunes in online ads sales may be diverging between search and social media players, with the latter impacted more severely as ad buyers reel in spending, Reuters news report said.
Alphabet, the world’s largest digital ad platform, reported a rise in quarterly revenue on Tuesday, thanks to strong sales from its biggest moneymaker – Google search.
Meta’s core business is also experiencing unique strain as it competes with short video app TikTok for users’ time and adjusts its ads business to privacy controls rolled out by Apple last year.
Reels, a short video product Meta is increasingly inserting into users’ feeds to compete with TikTok, is now generating over $1 billion annually in revenue.
However, Reels cannibalizes more profitable content that users could otherwise see and will continue to be a headwind on profits through 2022 before eventually boosting income, executives told analysts on Wednesday.
About 15 percent of content on Facebook and Instagram is currently recommended by AI from accounts users do not actively follow, and that percentage will double by the end of 2023, CEO Mark Zuckerberg told investors on the call.