The social network's user base and revenue grew more slowly than expected in the second quarter as the company grappled with privacy issues, sending its stock tumbling after hours.
All of those problems are hitting amid a harsh truth for the company: Facebook, the social network with 2.23 billion active monthly users, can't grow forever.
Shares of Facebook plunged more than 20% in after hours trading, as executives recapped second quarter results that fell short of Wall Street expectations and delivered a financial forecast that seemed to catch investors by surprise. Revenue, fueled by mobile advertising sales, increased 42 percent to $13.2 billion, missing the average projection of $13.3 billion.
Analysts were generally expecting earnings-per-share of $1.72 on revenues of $13.3 billion.
The chief financial officer, David Wehner, said: "Our total revenue growth rates will continue to decelerate in the second half of 2018, and we expect our revenue growth rates to decline by high single-digit percentages from prior quarters sequentially in both Q3 and Q4".
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Daily user growth for Facebook's namesake service has slid in six straight quarters, bringing it to 1.47 billion users in the second quarter from 1.23 billion at the end of 2016 when it became embroiled in political issues.
"They're talking about currency headwinds, but more we think it's due to slower user growth given GDPR and more focus on privacy", Morningstar analyst Ali Mogharabi said. Fourteen analysts surveyed by Zacks expected $13.43 billion.
In the same quarter a year ago, Facebook rang up $1.32 in EPS on revenue of $9.32 billion.
Facebook said the European privacy rules, called General Data Protection Regulation, or GDPR, did not have a big effect on the quarter's revenue, but also noted that they were only in effect for about a month before the quarter ended. Facebook and Instagram ad spending through 4C rose 48 percent year over year, according to Goldman. User growth - both on a monthly and daily basis - was flat in the US and the rest of North America, while it declined slightly in Europe. In North America, an effort to get all political advertisers to verify their identities may have halted some purchases as the company worked through its broad definition of what's considered "political". The company owns three other properties with more than 1 billion users: WhatsApp, Messenger and Instagram.
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Later, North Korea announced it would instead launch a rocket meant to carry a satellite into orbit. "Likewise, no Nuclear Tests. South Korean President Moon Jae-in, a longtime proponent of engagement with the North, has been a prime mover in the U.S.
"There is never a "right time" for a transition like this, but the team and the company boast incredible talent and will navigate this well", Stretch said on his Facebook page.
Executives warned that revenue growth would slow and expenses would rise.
But there's also been a notable slowdown in user growth.
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All told, there is a chance Tesla might report a profitable quarter when the company posts its Q3 earnings report on August 1. All of that has to happen while Tesla carries $10.5 billion in debt.