Facebook owner Meta has reported its first ever drop in revenue amid a looming global recession.

The Menlo Park, California-based company was hit by a decrease in ad sales and competition from TikTok.

The company issued a gloomy forecast for its third-quarter, with revenue expected between $26bn and $28.5bn. This is lower than the $30.52 analysts had expected.

The company also reported mixed results for user growth. Monthly active users on Facebook were less than analysts expected at 2.93 bn in the second quarter, an increase of 1 per cent year over year, while daily active users beat estimates at 1.97bn.

Like many global companies, Meta is facing some revenue pressure from the strong dollar, as sales in foreign currencies amount to less in dollar terms. Meta expected a 6 per cent revenue growth headwind in the third quarter, based on current exchange rates.

The company is also facing pressure as it competes for users’ time with short video app TikTok and adjusts its ads business to privacy controls introduced by Apple last year.

“They are being greatly affected by everything, and I’d probably give it a third, a third and a third,” Bokeh Capital Partners’ Kim Forrest said, referring to the economy, global ad market slowdown and competition from TikTok and Apple.

“Meta has a problem because they’re chasing TikTok and if the Kardashians are talking about how they don’t like Instagram...Meta should really pay attention to that.”

Meta’s drop in revenue follows a broader decline in digital advertising, which is affecting platforms such as Snap Inc and Twitter, who both missed sales expectations last week.

The company’s revenue fell 1 per cent to $28.8 billion in the second quarter ended 30 June, from $29.1bn last year. The figure slightly missed Wall Street’s projections of $28.9bn according to Refinitiv.

“This outlook reflects a continuation of the weak advertising demand environment we experienced throughout the second quarter, which we believe is being driven by broader macroeconomic uncertainty,” finance chief David Wehner said in a statement.

Shares of Meta Platforms Inc. fell 58 cents to $169 in after-hours trading.