Facebook is stalling – or going in reverse – in two of its most profitable markets.
On Wednesday, the Californian social networking company announced its Q2 financial results. They failed to meet Wall Street’s expectations for revenue, daily active users, and monthly active users, and the stock dropped as much as 10% in after-hours trading.
In most of the key metrics, the company is still growing, albeit at a slower rate.
But one cause for concern is Facebook’s daily- and monthly- active users in two of its most important markets, US & Canada, and Europe.
In the US & Canada, Facebook’s MAUs are flatlining, unchanged at 241 million from the first quarter of 2017.
The company’s MAUs in Europe actually declined slightly in Q2 2018, down to 376 million from 377 million. It’s the first time Facebook has ever experienced a decline in monthly users since at least September 2009, the first period for which metrics are publicly available.
Overall, MAUs grew from 2.196 billion to 2.234 billion, buoyed by growth in Asia-Pacific and the rest of the world.
It’s not clear what’s behind the slumping user growth, though young users have long gravitated away from Facebook, facing apps like Snapchat and Instagram instead. It’s also worth noting that the decline in Europe comes as new user privacy regulations like GDPR have recently kicked in.
It’s a similar story with daily active users. US & Canada DAUs stayed unchanged at 185 million, while European users shrunk more significantly, from 282 million to 276 million.
Again, overall DAUs grew to 1.471 billion, up from 1.449 billion.
It’s also worth noting that figures only apply to Facebook itself. The company doesn’t release its DAUs or MAUs for its other platforms like Instagram or WhatsApp, the former of which recently hit one billion MAUs.
These alternative products will provide a vital hedge for the company against Facebook’s declining engagement – though there will be very significant overlap in userbase between the different platforms.
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