What happened

Shares of Meta Platforms (META -3.02%) took it on the chin Thursday, slumping by as much as 8.7%. As of 1:32 p.m. ET, the stock was down 6.3%.

The catalyst that sent the social media giant lower was the company's second-quarter financial report, and the results weren't pretty.

So what

Meta generated revenue of $28.8 billion, down 1% year over year and the first such decline in its history. The company cited currency headwinds caused by a strong dollar. On a constant currency basis, revenue would have grown 3%. There was a bright spot, however, as sales were up sequentially. Operating expenses jumped 22% year over year to $20.4 billion, weighing heavily on the bottom line, as diluted earnings per share (EPS) of $2.46 sank 32%. 

To give those results context, analysts' consensus estimates were calling for revenue of $28.9 billion and EPS of $2.54, so Meta missed expectations on both counts.

Other metrics pointed to the challenges faced by the social media behemoth. Daily active users (DAUs) climbed to 1.97 billion, up 3% year over year, while monthly active users (MAUs) increased 1% during the same time frame. There was an expected sequential decline in MAUs, from 2.94 billion to 2.93 billion, which Meta attributed to "internet blocks related to the war in Ukraine."  At the same time, its family of platforms attracted 2.88 billion people each day and 3.65 billion last month, each up 4%.

Now what

CEO Mark Zuckerberg said the economic downturn was pressuring Meta's digital advertising business. That led to the company's muted outlook for the coming quarter. 

For Q3, Meta is guiding for total revenue in a range of $26 billion to $28.5 billion, which would represent a decline of nearly 8% year over year at the low end, and a gain of less than 1% in the best scenario. This factors in a continuing strong dollar, which could result in a currency headwind of as much as 6%. The company is also anticipating accelerating weak demand for its digital advertising. In light of these challenges, Meta has slowed hiring and plans to reduce expenses for the remainder of the year.

These obstacles are likely short-term in nature and will be widespread in the digital advertising world as businesses cut marketing dollars in the face of economic uncertainty. That said, Meta's clear dominance in the social media space makes the stock a long-term buy.