Facebook Inc said on Wednesday it expects revenue growth to “decelerate significantly,” sending the social media giant’s shares down 3.5% in extended trading even as it reported strong ad sales.

The warning overshadowed the company’s beat on Wall Street estimates for quarterly revenue, bolstered by increased advertising spending as businesses build their digital presence to cater to consumers spending more time and money online.

Facebook said it expects Apple’s recent update to its iOS operating system to impact its ability to target ads and therefore ad revenue in the third quarter. The iPhone maker’s privacy changes make it harder for apps to track users and restrict advertisers from accessing valuable data for targeting ads.

The company also announced on Wednesday that it would require anyone working at its U.S. offices to be vaccinated against COVID-19, joining Alphabet Inc and Netflix .

Monthly active users came in at 2.90 billion, up 7% from the same period last year but missing analyst expectations of 2.92 billion and marking the slowest growth rate in at least three years, according to IBES data from Refinitiv.

Its revenue from advertising rose 56% to $28.58 billion in the second quarter ended June 30, Facebook said. It pointed to a 47% increase in price per ad.

“In the third and fourth quarters of 2021, we expect year-over-year total revenue growth rates to decelerate significantly on a sequential basis as we lap periods of increasingly strong growth,” Chief Financial Officer Dave Wehner said in the earnings release.

Net income in the second quarter more than doubled to $10.4 billion, or $3.61 per share. Analysts had expected a profit of $3.03 per share.

The world’s largest social network has been ramping up its ecommerce efforts, which are expected to bring additional revenue to the company and make its ad inventory more valuable.

Source: https://www.tribuneindia.com/news/world/facebooks-slowdown-warning-hangs-over-strong-ad-sales-while-zuckerberg-talks-metaverse-289979