Investors were further disappointed during the company's earnings call, when Facebook provided guidance for the coming quarters, and said revenue growth was likely to continue to slow during the rest of the year and expense growth would outstrip revenue growth in 2019.
"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," said CFO David Wehner.
He added that expenses are likely to increase 50 per cent to 60 per cent compared with last year as the company spends more on hiring thousands of content moderators to stop the spread of violent or extremist content, security and marketing.
Zuckerberg, however, expressed optimism about the future.
"We are committed to investing to keep people safe and secure, and to keep building meaningful new ways to help people connect," he said.
There had been some concern about user growth levels ahead of the results, particularly in Europe, where industry experts had warned over the effect of the new General Data Protection Regulation which had meant Facebook was required to ask users whether they wanted to "opt-in" to its data policies or stop using the site.
Although monthly average users ticked up 11 per cent year on year across the site to 2.23 billion, this was the slowest growth ever recorded in this metric, and was also down on analyst forecasts. User numbers in Europe slipped over the three months to 376 million from 377 million.
Facebook said it would not be providing any guidance on user engagement in Europe, although the company said the decline was purely down to GDPR and not engagement trends.
Wehner said GDPR had not had a significant impact on Facebook's advertising revenue in the period, although said advertisers were still adapting to the changes. "We do think that there will be some modest impact...on revenue growth" going forward, he added.
The results, which mark the first time Facebook has missed revenue expectations since 2015, come as the company has been grappling with a string of crises in recent months, including the scandal over the misuse of personal data gleaned from the platform by Cambridge Analytica, the British political consultancy which advised the campaign to elect US President Donald Trump.
Last week, Mark Zuckerberg was forced to apologise after he appeared to defend the right of users of the platform to post material denying the existence of the holocaust. The climbdown came after Zuckerberg was dragged before the US Congress in April to defend Facebook's failures and the alleged abuse of the platform by Russian hackers.
The company has recently pledged to change its policies with less spam, fake news and fake accounts, especially ahead of the US midterm elections.
"Our community and business continue to grow quickly," said Zuckerberg, the Facebook founder, said this evening.
"The outlook for tech is still solid," said analysts at Canaccord Genuity, who cautioned that data and privacy concerns "continue to be key risks for the stock along with slowing ad load growth, user engagement contraction, and expense growth".
One bright spot for Facebook has been Instagram, the photo-sharing app it bought for US$1 billion in 2012. Instagram, popular with celebrities such as Kylie Jenner, now has more than 1 billion users, and analysts expect it to be a model for how Facebook molds its other big app purchase, WhatsApp, into a lucrative business. So far, WhatsApp doesn't show ads, and its founders Jan Koum and Brian Acton left Facebook amid disagreements over advertising and other issues.
