London Daily

Focus on the big picture.
Sunday, Feb 22, 2026

Facebook owner Meta in first ever sales fall

Facebook owner Meta in first ever sales fall

The owner of Facebook and Instagram was hit by a fall in advertising sales in the three months to July which caused the first year-on-year revenue decline in the firm's history.

Meta's total revenue slipped 1% to $28.8bn (£23.7bn), but the company fended off a decline in users.

Analysts fear the company's growth may have peaked after years of large gains.

Rivals such as TikTok have eroded its popularity, while more firms are competing for ad spending.

Meta, which typically commands more than 20% of the global ad market, warned investors that ad sales were likely to fall again in the months ahead, as e-commerce spending falls from its pandemic boom and companies worried about inflation and the war in Ukraine spend more cautiously.

Meta boss Mark Zuckerberg said the firm would reduce its hiring "steadily" over the next year, a response to the downturn and the company's plans to shift investment into new areas, including its virtual reality platform, Horizon, in a bet that the so-called metaverse is its best prospect for growth.

Those plans have drawn scrutiny from regulators, including the Federal Trade Commission, America's consumer watchdog, which said it would sue to block Meta's acquisition of the virtual reality fitness company Within Unlimited, which owns the app Supernatural, over monopoly concerns.

Any payoff from those plans remains years away, with Meta's struggle to increase its users a sign of limited growth in the years ahead, said Angelo Zino, senior equity analyst at CFRA Research.

"Essentially it's now become a low-to no-growth company," he said.

Earlier this year, Facebook reported its first ever decline in daily users.

In response, the company, which also owns WhatsApp, recently shifted its algorithms on Instagram and Facebook to act more like TikTok, recommending posts to users from outside the base of accounts they follow.

The moves have drawn outcry from users, perhaps most prominently celebrity Kylie Jenner, who shared a post with her more than 360 million followers on Instagram this week saying "Make Instagram Instagram again. (stop trying to be Tiktok I just want to see cute photos of my friends.) Sincerely, everyone".

Kylie Jenner has criticised the changes Meta has made to try to compete with TikTok


But the changes may be helping.

In June, the company said 1.97 billion people logged into Facebook on average each day, up from 1.96 billion in March; and 2.88 billion into one of its apps daily, up from 2.87 billion in March.

Mr Zuckerberg said he was pleased by signs that people were spending more time on the firm's apps, but profits in the quarter still dropped 36% to $6.7bn.

He said the firm would continue to invest, though at a slower pace than planned.

"We face a number of challenges in the near term, but the investments we're making should give us...advantage over the long term," he added.


'Challenging conditions'


Meta, whose number two in command Sheryl Sandberg in June announced plans to leave the company, is not the only firm facing challenges.

Alphabet, the parent company of Google and YouTube, this week reported its slowest revenue growth since the pandemic hit in 2020, with executives repeatedly warning investors that the firm was feeling the impact of economic "uncertainty".

Twitter also reported an unusual fall in revenue, while Snap warned of "incredibly challenging" conditions after its weakest quarter ever, sending shares plunging 25%.

"When you look at the ad space right now...growth is deteriorating at a very fast pace, much faster than most people had anticipated," Mr Zino said.

Meta's reliance on small and medium-sized businesses - which are "spooked" about the economy - makes it particularly vulnerable to any market slowdown, said Nikhil Lai senior analyst for performance marketing at Forrester Research.

The company's fine-tuned model for targeting adverts was also disrupted last year when Apple overhauled its privacy settings.

Newsletter

Related Articles

0:00
0:00
Close
UK Government Weighs Removing Prince Andrew from Line of Succession After Arrest
Prince Andrew’s Arrest in UK Rekindles Scrutiny Over US Handling of Epstein Records
Trump’s Strategic Warning to UK Over Chagos Islands Deal Sparks Diplomatic Whiplash
Starmer Government Postpones Local Elections Affecting 4.5 Million Voters
UK Economy Remains Fragile Despite Recent Upturn in Headline Indicators
UK Businesses Face Fresh Uncertainty Following US Tariff Ruling
Reform UK’s Senior Figures Face Scrutiny Over Remarks on Women and Family Policy
UK Electric Vehicle Drive Threatened by Shortage of 44,000 Qualified Technicians
University of Kentucky Trustees Advance Academic Reforms and Approve Coliseum Plaza Purchase
Boris Johnson Calls for Immediate Deployment of UK Troops to Support Ukraine
OpenAI CEO Sam Altman praises the rapid progress of Chinese tech companies.
North Korea's capital experiences a significant construction boom with the development of a new city district dubbed 'Pyonghattan'.
New electric vehicle charging service eliminates waiting times
Vox Populi confronts Justin Trudeau at Davos over vaccination policies
Poland's President Karol Nawrocki ENDS support for Ukrainian citizens:
The mayor of Rotherham in Britain
One day after ex-Prince Andrew's arrest, British police are searching his former home, while U.K. lawmakers will consider introducing legislation to remove him from the line of royal succession
Vandana Shiva reminding the world that Bill Gates did not invent anything.
Italy's PM Giorgia Meloni highlights record employment and economic growth
UK Confirms Preferential U.S. Trading Terms Will Continue After Supreme Court Tariff Ruling
U.S. and U.K. to Hold Talks on Diego Garcia as Iran Objects to Potential Military Use
UK Officials Weigh Possible Changes to Prince Andrew’s Position in Line of Succession Amid Ongoing Scrutiny
British Police Probe Epstein’s UK Airport Links and Expand High-Profile Inquiries
The Impact of U.S. Sanctions on Cuba's Humanitarian Crisis: A Tightening Noose
Trump Directs Government to Release UFO and Alien Information
Trump Signs Global 10% Tariffs on Imports
United Kingdom Denies U.S. Access to Military Base for Potential Iran Strike
British Co-founder of ASOS falls to his death from Pattaya apartment
Early 2026 Data Suggests Tentative Recovery for UK Businesses and Households
UK Introduces Digital-First Passport Rules for Dual Citizens in Border Control Overhaul
Unable to Access Live Financial Data for January UK Surplus Report
UK Government Considers Law to Remove Prince Andrew from Royal Line of Succession
UK ‘Working Closely with US’ to Assess Impact of Supreme Court Tariff Ruling
Trump Criticises UK Decision to Restrict Use of Bases in Potential Iran Strike Scenario
UK Foreign Secretary and U.S. State Chief Hold Strategic Talks as Tensions Rise Over Joint Air Base
Two teens arrested in France for alleged terror plot.
Nordic Fracture: How Criminal Scandals and Toxic Ties are Dismantling the Norwegian Crown
US Supreme Court Voids Trump’s Emergency Tariff Plan, Reshaping Trade Power and Fiscal Risk
King Charles III Opens London Fashion Week as Royal Family Faces Fresh Scrutiny
Trump’s Evolving Stance on UK Chagos Islands Deal Draws Renewed Scrutiny
House Democrat Says Former UK Ambassador Unable to Testify in Congressional Epstein Inquiry
No Record of Prince Andrew Arrest in UK as Claims Circulate Online
UK Has Not Granted US Approval to Launch Iran Strikes from RAF Bases, Government Confirms
AI Pricing Pressure Mounts as Chinese Models Undercut US Rivals and Margin Risks Grow
Global Counsel, Advisory Firm Co-Founded by Lord Mandelson, Enters Administration After Client Exodus
London High Court dispute over Ricardo Salinas’s $400mn Elektra share-backed bitcoin loan
UK Intensifies Efforts to Secure Saudi Investment in Next-Generation Fighter Jet Programme
Former Student Files Civil Claim Against UK Authorities After Rape Charges Against Peers Are Dropped
Archer Aviation Chooses Bristol for New UK Engineering Hub to Drive Electric Air Taxi Expansion
UK Sees Surge in Medical Device Testing as Government Pushes Global Competitiveness
×