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Photo: Aytac Unal/Anadolu Agency/Getty Images

Facebook's stock price was free-falling (down 23% at one point) in after-hours trading on Wednesday, as the company warned investors on its earnings call that changes to its platform will continue to depress its revenue growth rate for the rest of the year.

Why it matters: Facebook's business appeared invincible for the past two years despite a string of controversies. That tide may now be turning.

"We expect our revenue growth rates to decline by high single digit percentages from prior quarters sequentially in both Q3 and Q4"
— Facebook CFO David Wehner

Facebook says several factors in particular will lead to deceleration of revenue growth, including currency headwinds, shifts to private messaging and sharing content on "Stories," and giving users more privacy options.

  • "We’re investing so much in security that it’ll begin to affect our profitability,” said CEO Mark Zuckerberg during a call with analysts.
  • Facebook said that since its implementation of GDPR-compliant features, it's lost one million users in Europe, though it declined to share further expectations for the region.

New metric: For the first time, Facebook revealed that it now has 2.5 billion individual people using at least one of its apps every month. The company said this figure is a better representation of its user base than simple monthly average users, as it doesn't count multiple accounts that are owned by the same person (many use several of Facebook's apps).

Instagram v. Facebook: "Instagram is growing more quickly and making an increasing contribution to growth,” Facebook CFO David Wehner said.

  • Though both services have similar ad load in their feeds, Instagram has more Stories usage than Facebook.
  • The company views its video efforts on Instagram with IGTV as aimed to help content creators connect with their followers, while its Watch effort on Facebook is geared at helping users watch longer-form video with friends and connect with other community members, Zuckerberg said.

Messaging, rising: The company also conceded that more users globally are moving from social networking and into messaging. "Another major trend we're seeing is a shift towards private messaging. There's a lot to build here," said Zuckerberg.

  • Facebook, which operates both WhatsApp and Facebook Messenger, is currently the biggest messaging provider in the world.
  • But those apps are not yet that lucrative and have lately been causing the tech giant headaches over the sharing of misinformation and fake news.

Go deeper

The Mischief Makers

Illustration: Sarah Grillo/Axios

Several Republican and Democratic lawmakers are emerging as troublemakers within their parties and political thorns for their leadership.

Why it matters: We're calling this group "The Mischief Makers" — members who threaten to upend party unity — the theme eclipsing Washington at the moment — and potentially jeopardize the Democrats' or Republicans' position heading into the 2022 midterms.

41 mins ago - Politics & Policy

Obama speechwriter fears Biden unity drive is one-sided

Cody Keenan (right) is shown heading to Marine One in December 2009. Photo: Mandel Ngan/AFP via Getty Images

President Obama's former speechwriter says he's "preemptively frustrated" with President Biden's effort to find unity with Republicans.

What they're saying: Cody Keenan told Axios that Biden's messaging team has "struck all the right chords," but at some point "they're gonna have to answer questions like, 'Why didn't you achieve unity?' when there's an entire political party that's already acting to stop it."

Scoop: Conservative group puts $700k behind Hawley

Sen. Josh Hawley explains his objection to certifying the 2020 election results hours after the U.S. Capitol siege. Photo: Congress.gov via Getty Images

A Republican group is raising and spending huge amounts of money defending Sen. Josh Hawley after he was ostracized for early January’s attack on the U.S. Capitol.

Why it matters: The Senate Conservatives Fund is plugging Hawley's ideological bona fides and backfilling lost corporate cash with needed political and financial support, helping inoculate him as he weighs reelection or a possible presidential campaign in 2024.

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