Meta’s Reality Labs Witnesses Quarterly Operating Loss of $4.6B

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  • The overall operational loss for 2023 was $16.1 billion.
  • The company anticipates a significant year-over-year growth in Reality Labs’ losses.

Despite recording its most quarterly sales ever in the Q4 of 2023, Meta’s mixed-reality arm, Reality Labs, had an operating loss of more than $4.6 billion.

While Meta’s virtual and augmented reality (VR/AR) research arm, Reality Labs, lost $4.65 billion in Q4, the company’s overall revenue was roughly $1.1 billion, according to figures announced on February 1st.

Banking on AI and Metaverse

Since Reality Labs’ financials were first included in Meta’s reporting in the fourth quarter of 2020, this is the highest quarterly operating loss for the arm.

With the introduction of the Meta Quest 3 in the Q4, Reality Labs generated over half of the year’s revenue, bringing the total to a little under $1.9 billion. The overall operational loss for 2023 was $16.1 billion, representing a 17.5% rise from the previous year.

Reality Labs’ new Quest 3 virtual reality headset, which debuted on October 10, 2023, was “off to a strong start,” according to Meta founder and CEO Mark Zuckerberg, who attributed Reality Labs’ profits to a “strong holiday season” for the Quest series.

He continued by saying that the company will keep pouring resources into AI and metaverse projects since they were important to the company’s long-term strategy. The area of artificial intelligence is developing at a rapid pace, and he receives a lot of questions about it these days, Zuckerberg said.

According to Meta CFO Susan Li, the company anticipates a significant year-over-year growth in Reality Labs’ losses as a result of the development of AR and VR products and expenditures made to expand its ecosystem.

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