Meta (formerly Facebook) has posted another quarterly revenue decline as investors begin to lose faith in its loss-making, billion-dollars metaverse dream.
In the third quarter (Q3), Meta's revenue declined 4 per cent year over year to hit $27.7 billion. The company posted a net income of $4.395 billion, down from $9.194 billion year over year.
This decline is owing to Meta's huge losses in Reality Labs, Meta's virtual reality division, which lost $3.672 billion in Q3.
"There's still a long road ahead to build the next computing platform. But we're clearly doing leading work here. This is a massive undertaking and it's often going to take a few versions of each product before they become mainstream," Meta CEO Mark Zuckerberg said during an earnings call late on Wednesday.
Meta CFO David Wehner, however, said that some of the revenue decline is due to inflation.
In Q2 2022, the company's revenue was $28.82 billion, a one per cent decrease from $29.07 billion in the second quarter of 2021.
Facebook now has 1.98 billion daily active users and 2.96 billion monthly active users.
The company, which is busy reducing its workforce, has a headcount of 87,314 as of September 30, an increase of 28 per cent year-over-year.
Meta investors have called on the company to reduce its workforce by at least 20 per cent and stop making investments in metaverse.
In a sharp criticism of Meta CEO Mark Zuckerberg, Altimeter Capital Chair and CEO Brad Gerstner said that the social network needs to reduce more headcounts and stop spending too much on metaverse to get its "mojo back".
At Meta, the number of employees is up over three times, from 25,000 to 85,000 employees in just the last four years.
"After all, why not hire more people and invest in more things when the cost of capital was near zero and growth seemed unlimited?" Gerstner asked Zuckerberg.
The company expects fourth quarter 2022 total revenue to be in the range of $30-32.5 billion.