Shares of Facebook continued to plunge Thursday, wiping more than $100 billion from its market cap in just hours after the company's CFO forecast a significant drop in revenue growth and margins in the coming quarters. "Looking beyond 2018, we anticipate that total expense growth will exceed revenue growth in 2019," said Chief Financial Officer David Wehner on a conference call Wednesday. "Over the next several years, we would anticipate that our operating margins will trend towards the mid-thirties on a percentage basis." Wehner's comments on the conference call came after Facebook said revenues grew less than expected in the second quarter, and its user count missed estimates. The statements accelerated losses in the stock, which was down as much as 24 percent after hours. "\[We see\] substantial legal and regulatory issues, and really structural changes in the business model, that we're going to see evolve over the next couple quarters at the least," said CFRA analyst Scott Kessler. In the first earnings report to cover a full quarter since the Cambridge Analytica scandal broke, the social media network said monthly active users grew 11 percent from a year ago to about 2.23 billion people, though analysts were looking for 2.25 billion. Users in the U.S. remained at 241 million, the same level as at the end of March, while users in Europe fell for the first time. "I think we've hit a point with Facebook where user growth is just going to slow down," said Jason Moser, analyst at Motley Fool, in an interview to Cheddar. Revenues came in at about $13.2 billion for the quarter, also short of estimates. The company has been plagued by criticism over how it handles user data for months, and CEO Mark Zuckerberg has not only issued several rare public apologies but even testified before Congress on the issue. Facebook was also hit with calls to better police the content on its platform, most recently after the company refused to take down a post from right-wing conspiracy theorist Alex Jones, threatening Special Counsel Robert Mueller. Ad sales rose 42 percent during the quarter but were outpaced by a 50 percent increase in costs, driven by added efforts to address those issues. Facebook's stock drop, the biggest on a percent basis ever for the company, erased all the gains it had made since its last earnings report three months ago. The loss in market value was bigger than the entire market cap of IBM, McDonald's, and Nike. The results put pressure on the entire tech landscape, with shares of Amazon, Twitter, Snap, and Google parent Alphabet all falling in sympathy. Quick facts from Facebook's Q2 earnings report: * Earnings per share: $1.74 vs. $1.72 estimate * Revenues: $13.23 vs. $13.36 billion estimate * Monthly active users: 2.23 billion vs. 2.25 billion estimate * Daily active users: 1.47 billion vs. 1.49 billion estimate * Monthly active users in Europe fell for the first time * Mobile ad revenue accounted for 91 percent of all ad revenue * Ad revenue grew by 42 percent, but costs grew by 50 percent For full interview, [click here](https://cheddar.com/videos/facebook-earnings-drop-as-much-as-10-after-slight-revenue-miss)

Share:
More In Technology
TIER Mobility Enters North America By Acquiring Spin
One of Europe's leading micromobility providers, TIER mobility, is expanding into North America after acquiring the micromobility operator, Spin. Ford Motor Company previously owned Spin but is now selling the company to TIER Mobility, which says the deal will make it the largest multimodal micromobility operator in the world in terms of the number of cities it operates in and the number of vehicles in its fleet. Lawrence Leuschner, CEO of TIER Mobility, and Ben Bear, CEO of Spin, join Cheddar News' Closing Bell to discuss.
Publicis Sapient Partners With NFT Auction House Portion to Deliver the Metaverse
Digital consulting company Publicis Sapient has its sights set on the Metaverse. The subsidiary of the French advertising giant Publicis Group is announcing a new partnership with NFT auction house Portion in an effor to help brands deliver experiences in the metaverse, including the sales of products. Publicis Sapient CEO Nigel Vaz joined Cheddar News' Closing Bell to discuss. "In the context of our collaboration with Portion, the first experience that we created was with Decentraland, which is a virtual world," he said. "And car manufacturers in this metaverse, in terms of their buyers, can interact with a virtual person, (and) they can view quality NFTs. They can examine a virtual vehicle, be inside the car, rev an engine, open doors, all without leaving their homes."
ForgeRock CEO on Going Beyond Passwords for Secure Computer Access
Identity and access management company ForgeRock looks to use pattern recognition and artificial intelligence to ease secure access for users as an alternative to just password management. CEO Fran Rosch joined Cheddar News to discuss how the company's services work. "I mean, who likes to set up and use a new password? And they're also really bad security because a lot of people repeat the same one and use it everywhere and use the simplest one possible," he said. "We're trying to really create a smarter better identity system where we can find different ways, smarter ways, of recognizing you as a user and giving you access to what you need by really eliminating the password altogether."
Ford CFO on Splitting Electric Vehicle and Combustion Engine
Ford announced today that it will be separating its electric vehicles business from its internal combustion engine vehicles in two divisions named Ford Model E and Ford Blue, respectively. Ford Motor Company CFO John Lawler joined Cheddar to discuss the decision-making behind the restructuring. "When you think about the expertise that Ford has in like body structural engineering, chassis engineering, manufacturing at scale, there isn't an EV startup company out there that wouldn't love to have our capabilities in that space," he said.
Load More