Meta’s ability to track and target users has been hampered by Apple’s iOS privacy upgrade from the previous year while rising inflation has caused several corporations to reduce their advertising budgets.

Meta, the owner of Facebook, has disclosed its first-ever income decline because of declining advertising sales and increasing competition from TikTok.

In the three months leading up to June, the social media giant reported revenue of $28.8bn, down nearly 1 percent from $29.08bn the previous year.

The sum was less than the $28.9 billion anticipated by Wall Street, causing Meta shares to decline by almost 5 percent in extended trading.

During the quarter, the company, which also owns Instagram and WhatsApp, generated profits of $6.69bn, or $2.46 per share – a 36 percent decline compared to the same period last year, when profits were $10.39bn, or $3.61 per share.

Meta issued a subdued revenue forecast for the next quarter, spanning July to September, in the range of $26 billion to $28.5 billion.

This is less than the $30.5 billion that analysts had anticipated.

Since the beginning of the year, Meta shares have lost roughly half of their value, reflecting investors’ concerns about its advertising business.

Last year’s iOS privacy update from Apple limited Meta’s ability to track and target users, while rising inflation has caused some businesses to reduce their advertising budgets.

Last week, Meta’s competitors Snap and Twitter also reported poor results, citing comparable issues.

The metaverse has been a costly endeavor for Meta thus far. Its Reality Labs business unit, which is responsible for developing the metaverse, posted a second-quarter loss of $2.8 billion despite $452 million in revenue.

This division is anticipated to generate less revenue in the coming quarter.

Facebook’s daily active users increased by 3 percent over the past year, reaching 1.97 billion in June.