Meta Reality Labs reported an operational loss of $4.65 billion in Q4 of 2023 despite Meta’s overall record-breaking quarterly revenue.
Despite having one of the highest quarterly revenue figures in company history, the mixed-reality section of Meta known as Meta Reality Labs, reported an operational loss of more than $4.6 billion during the fourth quarter of 2023.
During the fourth quarter, Meta Reality Labs which is Meta’s research arm for virtual and augmented reality (VR/AR), lost $4.65 billion, while the company’s revenue came in at over $1.1 billion.
On February 1, Meta revealed the results of the fourth quarter. Since the fourth quarter of 2020, when Meta first began including Reality Labs’ financials in its reporting, this is the period in which the division has experienced the most significant quarterly operating loss.
Meta Reality Labs’ revenues in 2023 came in at just under $1.9 billion, with more than half of the year’s revenue coming in during the fourth quarter alone, when the company released the Meta Quest 3 game.
Meta Reality Labs recorded a total operating loss of $16.1 billion for 2023, which represented a year-on-year rise of 17.5% from 2022. Mark Zuckerberg, the founder and CEO of Meta stated on an earnings call that Reality Labs’ revenues were based on a “strong holiday season” for its Quest line of virtual reality headsets.
He also stated that the company’s most recent Quest 3, released on October 10, 2023, was “off to a strong start.” He said that the company’s artificial intelligence (AI) and metaverse performances were “major parts of our long-term vision” and that the company would continue to make significant investments in both areas.
“These days, I get a lot of questions about artificial intelligence, and that field is moving very quickly,” Zuckerberg said. “It’s a field that’s moving very quickly.”
I still expect that this next generation of AR VR and [mixed reality] computing platforms to deliver a realistic sense of presence that will be the foundation for the future of social experiences.”
The chief financial officer of Meta, Susan Li stated that the company anticipates Reality Labs’ losses to “increase meaningfully year-over-year” due to the company’s development of augmented reality and virtual reality products and “investments to further scale our ecosystem.”
During the trading day, Meta shares were not moving, but after the bell rang on February 1, they increased by more than fifteen percent, reaching a price of nearly $455.
Full-year revenue for Meta in 2023 was $134.9 billion exceeding projections made by Zacks, a research firm based on Wall Street, and representing a 16% increase from the company’s earnings in 2022.
In addition, the internet giant said that it would pay its very first dividend, which would be fifty cents per share, on March 26. Additionally, the company intends to continue paying quarterly dividends in the future.
