Short: Meta had its best third quarter in years, outperforming expectations and recording its largest quarterly revenue since going public in 2012. But there’s at least some welcome news from Reality Labs XR, the division responsible for the company’s metaverse ambitions. Its revenue fell to $210 million, its lowest point on record, while losses stood at $3.74 billion. This brings its total record loss to $37.48 billion since the fourth quarter of 2020.Thank you for reading this post, don't forget to subscribe!
Meta’s fourth quarter sales increased 23% year-over-year to $34.1 billion, marking the third consecutive quarter of growing revenues and the largest year-over-year increase since Q3 2021. The figure beat analysts’ expectations of $33.4 billion.
Net income also beat forecasts. The increase of $11.6 billion was well above expectations of $9.4 billion, an increase of 164% year-over-year.
But one area where the cash crunch continues is Meta’s Reality Labs division. Its lowest-ever revenue of $210 million, a decline of 26%, was attributed to lower sales of the Meta Quest 2 headset ahead of the Meta Quest 3 launch on October 10. Expenses were $4 billion, resulting in a total loss of $3.7 billion. Analysts had expected sales of $299.3 million and operating losses of $3.9 billion.
Since Meta began disclosing Reality Labs’ revenue in the fourth quarter of 2020, the division has lost a total of $37.48 billion.
“For Reality Labs, we expect operating losses to decline meaningfully year-over-year due to our ongoing product development efforts in augmented reality/virtual reality and our investments to further grow our ecosystem,” Meta said in the report. Will increase from.”
It was Mark Zuckerberg’s belief that the metaverse would become “the next frontier” that led him to change the company name of Facebook to Meta. But the concept of a shared VR/AR virtual world has failed to capture the public’s imagination, and has been pushed even further into the background this year as generic AI has stolen all the headlines (and investment). But the CEO has long insisted that the money Reality Labs is wasting now will eventually pay off — in about ten years, when he says the metaverse could make billions of dollars.
For the current quarter, Meta expects revenue of $36.5 billion to $40 billion. Analysts expect sales of $38.85 billion in the quarter.
As part of Zuckerberg’s “Year of Efficiency”, Meta has reduced its workforce by 24% to 66,185 employees after implementing massive layoffs. Its total costs and expenses declined by 7% compared to the previous year and came to $20.4 billion.