Meta Platforms third quarter results failed to convince investors that its big bet on the metaverse was bearing fruit, as slowing revenue growth and a sizeable net income drop contributed to more than $65 billion being wiped from the company’s market capitalisation.
Following the release of its Q3 2022 earnings, shares in the company dropped as much as 19 per cent in trading, adding to around $500 billion in value lost over 2022.
Meta Platforms is of course not the only big tech company facing struggles, with the sector in particular hit hard by the economic downturn.
Numbers in Q3 did not make good reading as revenue declined 4 per cent year-on-year to $27.7 billion.
Net income dropped 52 per cent to $4.4 billion, while its costs and expenses ramped to $22 billion, a 19 per cent increase.
Revenue from its metaverse unit Reality Labs halved to $285 million, while losses rose to $3.7 billion, from $2.6 billion.
In Q4, the company said its total revenue would be in the range of around $30 billion to $32.5 billion, while total expenses in 2022 would be in the range of $85 billion to $87 billion.
As it funds advancements in the metaverse and AI, 2023 expenses are expected to rise to between $96 billion to $101 billion.
In an earnings statement, CFO David Wehner noted the company was making significant “changes across the board to operate more efficiently”, including taking action on headcount and increasing scrutiny on other operating expenses.