Meta blames Iran outages, Russia's WhatsApp curbs for 20M user-drop
What's the story
Meta, the parent company of Facebook and Instagram, has reported a massive loss of 20 million users in the last quarter. The drop was revealed during an earnings call. The decline is measured by "Family daily active people," a term Meta uses to refer to all combined users across its platforms, like Facebook, Instagram, WhatsApp, and Messenger.
User loss explanation
User decline attributed to internet disruptions and restrictions
Meta has attributed the drop in user numbers to "internet disruptions in Iran, as well as a restriction on access to WhatsApp in Russia." However, the company has not clarified which platform was most affected by these issues. This lack of transparency has led some observers to question whether Meta is hiding potential declines in daily users for its leading social media platform.
Financial adjustments
Capital expenditures on the rise for Meta
Despite the user drop, Meta is ramping up its projected capital expenditures for 2026. The company now expects to spend between $125-145 billion, which is $10 billion more than its previous estimates. This hike is mainly due to anticipated increases in component costs and "to a lesser extent," additional expenses for future data center capacity.
Revenue surge
Reality Labs posts significant losses
Despite the user decline, Meta has reported its fastest revenue growth since 2021. The company's revenue surged by a whopping 33%, from $42.3 billion last year to $56.3 billion this quarter. However, not all divisions are performing well; Reality Labs, which develops wearables and virtual reality devices, posted an operating loss of $4.03 billion over the last three months.