Meta reports a decline in ad revenue amidst the Russia-Ukraine crisis in Q1 2022

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After a rough Q4 2021, Meta, the parent company of Facebook, Instagram and WhatsApp had seen a 25% dip in shares since Apple changed its privacy policy. But on the brighter side, the Q1 2022 results look better for the company.

Meta’s Q1 2022 Earnings Report

The company reported a 7% YOY growth in its total revenue in the first quarter of 2022. Although experts and analysts were expecting it to be 7.8%. This is the first time since that company went public that the growth reported has been in the single digit. After the company announced its quarterly financial report, its shares rose by 18% on Wednesday in the extended trading hours.

It reported total revenue of $28 billion compared to $26 billion in Q1 2021. The majority of the revenue, i.e. 97.5% of the revenue was from its app family including Facebook, WhatsApp and Instagram, and Reality Labs, the company’s attempt in building the metaverse accounted for the remaining $695 million in revenue. Facebook’s Daily Active Users also saw a YOY 4% increase and its Monthly Active Users were up by 3%.

“We made progress this quarter across a number of key company priorities and we remain confident in the long-term opportunities and growth that our product roadmap will unlock,”

Mark Zuckerberg, CEO of Meta

“We made progress this quarter across a number of key company priorities and we remain confident in the long-term opportunities and growth that our product roadmap will unlock,” said Mark Zuckerberg, CEO of Meta.

Decline in Ad Revenue

The company like its competitors Snapchat and YouTube saw a decrease in ad revenue. This is because of the ongoing Russia-Ukraine crisis which resulted in Facebook getting banned in Russia.

CFO of Meta, Dave Wehner also said that because of the loss of users in Russia, the company is expecting a sequential decline in the Monthly Active Users in Europe in the following quarter.

“We think while these times are challenging, over the long run, we do have a very strong competitive advantage when you look across the opportunities advertisers have to advertise both offline and online.”

-Sheryl Sandberg, COO of Meta
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The increase in Daily Active Users and a decline in ad revenue can also be explained because the company’s family of apps is growing in the Asia-Pacific Regions where ads are cheaper compared to countries like Europe and the U.S.

Sherly Sandberg, COO of Meta said, “We think while these times are challenging, over the long run, we do have a very strong competitive advantage when you look across the opportunities advertisers have to advertise both offline and online.” The company is currently tackling challenges like growth in competition and privacy policy changes for its advertising.

Also Read:  Teens don't call them "intimate images", it's "nudes": Meta's Parental Guide on Teen Sexting

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