For the first time in Facebook’s 18-year existence, the number of daily active users (DAUs) has decreased.
DAUs declined to 1.929 billion in the three months to the end of December, down from 1.930 billion the previous quarter, according to Facebook’s parent company Meta Networks.
In addition, the company cautioned that revenue growth will decelerate due to competition from rivals such as TikTok and YouTube, as well as advertisers pulling back on spending.
In New York after-hours trade, Meta’s stock dropped by more than 20%.
The fall in Meta’s stock price took off about $200 billion (£147.5 billion) from the company’s market capitalization.
Other social media sites, such as Twitter, Snap, and Pinterest, saw their stock prices plummet in extended trading.
The company’s sales growth has been hampered, according to CEO Mark Zuckerberg, since audiences, particularly younger users, have defected to competitors.
Meta, which operates the world’s second-largest digital advertising network behind Google, claimed it was also impacted by Apple’s operating system’s privacy modifications.
According to Meta’s chief financial officer Dave Wehner, the changes have made it more difficult for marketers to target and assess their advertising on Facebook and Instagram, and might cost them “in the neighborhood of $10 billion” this year.
In the time, Meta’s overall revenue, which is primarily made up of advertising revenues, increased to $33.67 billion, slightly exceeding market expectations.
It also predicted sales of $27 billion to $29 billion for the coming quarter, which is lower than experts had predicted.
While the firm has made its own video investments to compete with TikTok, which is controlled by Chinese internet giant ByteDance, the corporation generates less money from these products than it does from its standard Facebook and Instagram feeds.
Mr. Zuckerberg expressed confidence that the investments in video and virtual reality, like past bets on mobile advertising and Instagram stories, would pay off.
However, he pointed out that throughout past strategy revisions, the company didn’t have to compete with a large competitor.
“The teams are doing a great job, and the product is developing at a rapid pace,” he added. “What makes this situation somewhat unusual is that TikTok is already a major rival and continues to expand at a rapid pace.”