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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

Scoop: Caitlyn Jenner makes it official for California governor

Caitlyn Jenner. Photo: Paul Archuleta/Getty Images

Former Olympic decathlete and reality TV star Caitlyn Jenner has filed her initial paperwork to run for governor of California and will officially announce her bid later today, her campaign tells Axios.

The big picture: Jenner, a longtime Republican, is seeking to replace Democratic Gov. Gavin Newsom in a recall election, hoping her celebrity status and name recognition can yield an upset in the nation's most populous state.

Kendall Baker, author of Sports
51 mins ago - Sports

New laws, new rules bring big changes to college sports

Illustration: Sarah Grillo/Axios

The college sports landscape could change more in the next six months than it has in the last 50 years, as the NCAA grapples with new competition, new laws and new rules.

How it works... 1. Startup leagues: Investors are flocking to new leagues that aim to compete with the NCAA, evidence of just how much opposition there is to the amateurism model — and how much belief there is in new ones.

2 hours ago - Health

Malaria vaccine from Oxford highly effective in early trials

Family in Brazil under a malaria net. Photo: J R Ripper/Brazil Photos/LightRocket via Getty Images

A malaria vaccine developed by Oxford University was found to have "high-level efficacy" in phase II trials, according to a pre-print study released on Friday.

Why it matters: Malaria kills over 400,000 people a year, more than half of them children under the age of 5. Deaths have fallen in half over the past 20 years thanks to investment in prevention and drugs, but a truly effective malaria vaccine would represent one of the greatest victories in the history of public health.

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