Facebook Stares Down Its First Ever Quarterly Revenue Decline

In April, Meta said it might post a quarterly revenue decline for the first time in its history. Next week, we’ll see the results.

Meta may report its first-ever revenue decline when it releases its second-quarter earnings next week, a potentially stunning slowdown for a business that once seemed to have no ceiling.

Until last year, Meta reliably grew revenue by 20% or more each quarter, demonstrating formidable business strength even amid reputational chaos. But, as a series of economic and competitive problems set in, the company’s revenue growth slowed significantly and may now disappear altogether. The contraction would punctuate an enduring, post-covid slide for Meta, whose share price has dropped 45% this year.

“This company is facing this perfect storm,” said Mark Mahaney, sr. managing director of internet research at Evercore ISI. “It has been for a while.”

The perfect storm Mahaney references includes: 1) Rising inflation, which cooled off the ad market. 2) A strengthening dollar, which diminished international revenue. 3) A new Meta content format in Reels, which it’s been slow to monetize. 4) Competition from TikTok, which makes money from that exact format. 5) The…