Meta’s earnings fell more than 50% in the third quarter of 2022, becoming the latest big tech company to report disappointing financial results this quarter, as costs rise and the global economy slows .
In results announced Wednesday, the social networking giant that owns the Facebook, WhatsApp and Instagram brands posted net income of $4.4 billion, down from $9.2 billion in Q3 2021 and representing a decrease of 52%
Meta’s virtual reality division RealityLabs lost $3.7 billion on revenues of $285 million, compared with a year-ago Q3 loss of $2.6 billion on revenues of $558 million.
Total revenues were $27.71 billion, a decrease of 4% year-over-year, but an increase of 2% year-over-year on a constant currency basis. Like other US companies, Meta is currently being hit by the strong dollar.
The number of monthly active users on Facebook was 2.96 billion at the end of September, an increase of 2%, Meta said. Daily active users were 1.98 billion on average for September 2022, an increase of 3% year over year. These numbers show a decline in enthusiasm for Facebook.
However, despite reports of a hiring freeze at the company, there are now 28% more employees than a year ago, with the current head count at 87,314. Meta said it expects headcount to be stable next year.
Following the announcement, Meta stock fell 19% in after-market trading.
The company is seeking to put past scandals behind it, with last year’s name change from Facebook to Meta signaling a new focus on the Metaverse. However, so far there isn’t much to show for this effort, and some analysts believe the company’s move is too early.
“Meta is shaking its feet when it comes to the current state of its business,” said Insider Intelligence principal analyst Debra Aho Williamson. “Mark Zuckerberg’s decision to focus his company on the future promise of the metaverse took his attention away from the unfortunate realities of today.”
A study commissioned by digital experience company Acquia shows that only 28% of consumers in the UK, 34% in the US and 45% in France are excited about Metaverse. 56% of UK consumers are somewhat concerned about data protection and privacy in the metaverse.
“The metaverse promises rich opportunities for marketers to deliver digital experiences that can create and strengthen consumer brand loyalty. However, our research suggests that there are still some fairly significant hurdles to overcome before those buyers are really excited”, said Tom Bianchi, VP Corporate Marketing, Acquia.
ServiceNow is on the rise
Meanwhile, after a generally difficult few months that saw its stock fall, workflow platform provider ServiceNow reported total revenues of $1,831 million in Q3 2022, representing a 21% year‑over‑year growth from Q3 2021 of $1.51 billion.
The company’s 1,530 customers (up 22%, renewal rate 98%) brought in Non-GaaP revenue of $398 million.
On Wednesday, the company named CEO Bill McDermott as the company’s new chairman, with former chairman and company founder Fred Luddy becoming a board member.
McDermott said CRN he’s excited to see ServiceNow beat both its top-line and bottom-line goals in the quarter, as well as follow-through on new innovations expected for the rest of 2022 and into 2023.
“We are now making a bold transition in security,” McDermott said.
“Digital trust is a big thing. And think about encryption, data anonymisation, security controls, and all these things to protect critical business applications, think about that vault in one platform, integrating everything of other solutions, but provides a version of the truth so managers can quickly automate and act on threats and resolve them before they become serious.”
ServiceNow stock was up 12 percent in after-hours trading on Wednesday.