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Meta Earnings Miss Expectations Amid Apple Privacy Changes, Resulting In Stock Plummet

Facebook parent company Meta reported its Q4 earnings on February 2nd, falling short of analysts’ expectations on earnings per share, and missing on its Q1 outlook amid the continued crunch from Apple’s iOS privacy changes. Meta’s Q1 2022 revenue came up short, with the company estimating between $27 billion to $29 billion in the current quarter, below analysts’ expectations of $30.25 billion. Shares of Meta plummeted 22% following the report.

More pressing in the near term is Meta’s ability to continue to navigate Apple’s recent privacy changes that allow iOS users to opt out of letting their apps track them across the web. The feature, called App Tracking Transparency, has been a roadblock for apps like Facebook and Snap, which rely on that kind of data to sell ads to advertisers. And according to Meta CFO David Wehner, the iOS feature will hurt Meta moving forward.

“We will lap a period in which Apple’s iOS changes were not in effect and we anticipate modestly increasing ad targeting and measurement headwinds from platform and regulatory changes,” said Wehner.

The quarter marks the first time Meta has reported its earnings as a company focused on building out the metaverse, not just social media apps like Facebook and Instagram. But Meta has warned it will take time to build out its metaverse capabilities to the level where users can interact with each other across vast virtual worlds via augmented reality and virtual reality headsets.

Q4 was also the first quarter in which Meta released revenue numbers for its Reality Labs segment, which piled up losses of $3.3 billion. CEO Mark Zuckerberg previously announced that the company spent $10 billion on its metaverse effort in 2021.

(All information was provided by Yahoo! Finance)

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