Meta shares dropped a further 14% in after-hours trading.

Meta is battling a host of challenges, including the tough macroeconomic climate, growing competition from rival TikTok and the fallout from

Apple Inc.’s

ad-tracking changes, all of which have taken a toll on its massive advertising business.

At least some of those issues are being felt across Silicon Valley, with Google’s YouTube unit posting a decline in advertising revenue on Tuesday and

Snap Inc.

delivering disappointing results last week.

But Meta is also undergoing an ambitious and expensive pivot, away from its core social-media products including Facebook and Instagram, and toward a future centered around the so-called metaverse where users can live, work and play in an immersive online experience.

Meta’s Reality Labs unit, which is driving the company’s virtual-reality and metaverse efforts, posted revenue of $285 million for the quarter, a decline of nearly 49% compared with a year ago. The unit had an operating loss of $3.7 billion, and the company said it expects that figure will grow significantly next year.

Horizon Worlds, Meta’s flagship metaverse product for consumers, has fewer than 200,000 monthly active users, far less than the company’s original goal of 500,000 users by the end of this year, according to company documents cited by The Wall Street Journal earlier this month.

The company didn’t provide new user figures for Horizon Worlds on Wednesday.

Meta said its average ad price decreased 18% year-over-year, a decline almost certainly attributable to Apple’s changes that make it harder for Meta to track users and serve them personalized advertising. In the same quarter last year, the average price per ad climbed 22%.

“While we face near-term challenges on revenue, the fundamentals are there for a return to stronger revenue growth,” said Meta founder and Chief Executive

Mark Zuckerberg.

The company said it was also hurt by the strong dollar and that if foreign-exchange rates had been constant, it would have posted a slight increase in revenue.

Meta reported a net profit of $4.4 billion for the third quarter. That represents the fourth quarter in a row that the company’s bottom line has fallen, something Meta hasn’t experienced in a decade.

For the quarter, advertising came in at $27.2 billion, down nearly 4% year-over-year. Analysts predicted Meta’s advertising revenue would fall to $26.9 billion. Advertising revenue represented 98.2% of the company’s total revenue.

The company said it plans to invest in head count growth “only in our highest priorities” and shrink some of its teams. It said it had more than 87,000 employees at the end of September, a 28% increase over the same period last year, and anticipates staying around that level.

Meta said it expects its 2022 total expenses to be in the range of $85 billion to $87 billion, down from a previous forecast of between $85 billion and $88 billion. The company said it estimates its 2023 total expenses to be between $96 billion and $101 billion.

Meta is also grappling with a digital advertising market in upheaval from surging inflation and other factors, including the war in Ukraine, that are causing a slowdown in ad spending.

“It’s tough a time to be a big social-media company right now,” said

Debra Aho Williamson,

principal analyst at Insider Intelligence. “You’re facing a lot of pressures on revenue, usage and the worsening economy on top of it.”

Before Wednesday, Meta shares had fallen nearly 60% and the company had lost more than $550 billion in market value in 2022.

In its efforts to combat TikTok, Meta has given priority to the development and growth of Reels, its short-form video format on Facebook and Instagram.

One area where Meta showed promise was in adding to Facebook’s massive user base, which came in at 1.98 billion daily active users. That was up from 1.97 billion three months ago. 

Write to Salvador Rodriguez at salvador.rodriguez@wsj.com