Meta’s Reality Labs division, overseeing augmented and virtual reality operations, lost $3.7 billion in Q3. Here are all the details from the latest earnings report.
The loss is due to the significant expenses Meta is racking up to bring CEO Mark Zuckerberg’s metaverse vision to life,
Meta’s year-to-date spending is double last year’s amount, and there’s still another quarter in 2022.
Screenshot from: investor.fb.com. October 2022.Several billion of that spending went toward Meta’s Reality Labs division, which only brought in $285 million in revenue.
Meta’s third quarter loss of $3.7 billion on Reality Labs is greater than its second-quarter loss of $2.8 billion.
Screenshot from: investor.fb.com. October 2022.However, the losses won’t end here, as Meta expects even more significant operating losses in 2023.
Meta’s investors have called on the company to reduce spending on metaverse projects, though Zuckerberg says it would be a “mistake” not to continue:
“A lot of people might disagree with this investment. But from what I can tell, I think that this is going to be a very important thing, and I think it would be a mistake for us to not focus on any of these areas, which I think are going to be fundamentally important to the future.”
Zuckerberg adds that losses will grow in 2023, though he remains hopeful the investment will pay off:
“We do anticipate that Reality Labs operating losses in 2023 will grow significantly year-over-year. Beyond 2023, we expect to pace Reality Labs investments such that we can achieve our goal of growing overall company operating income in the long run.”
Meta shares fell over 15% in after-hours trading on Wednesday, partly due to Zuckerberg’s commitment to increase spending on Reality Labs. Meta shares are down over 60% in 2022.
Highlights From Meta’s Earnings Report
Meta’s net income continues to decline, earning $4.395 billion in Q3 compared to $9.194 billion last year.
Screenshot from: investor.fb.com. October 2022.Meta’s revenue was $27.71 billion, a decrease of 4% year-over-year. However, revenue would have been up if foreign exchange rates had remained constant.
Ad impressions were up by 17% YOY, although the average price per ad decreased by 18% YOY.
Facebook’s daily active users were 1.98 billion as of September 30, an increase of 3% year-over-year. Facebook’s monthly active users are 2.96 billion, an increase of 2% year-over-year.
There are more than 140 billion Reels plays across Facebook and Instagram, a 50% increase from six months ago.
Sources: Meta Investor Relations, investor.fb.com (PDF link)
Featured Image: TY Lim/Shutterstock
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