Meta’s Reality Labs division experienced a significant operating loss of $3.7 billion in the second quarter of this year. Despite this setback, the social media giant remains fully dedicated to advancing metaverse technology.
In 2023 alone, Meta has already poured an impressive $7.7 billion into its virtual reality business, as revealed in the company’s latest earnings report released on July 26. However, the unit’s revenue took a hit, dropping to $276 million in the same quarter from $452 million the previous year, mainly due to a decrease in sales of the Quest 2 virtual reality headset.
During a recent earnings call, Meta’s CEO, Mark Zuckerberg, stressed the company’s commitment to artificial intelligence (AI) and the vision for the metaverse. He highlighted how these initiatives have been ongoing for years and are seen as interconnected and mutually beneficial endeavors.
Meta’s CFO, Susan Li, attributed the decline in revenue to reduced VR headset sales and disclosed that expenses for Reality Labs surged to $4 billion in the second quarter, up by 23% primarily due to previous losses and escalating employee-related costs.
The $3.7 billion loss in Q2 followed previous losses of $4 billion in Q1 2023 and $2.8 billion in Q2 2022. Despite these setbacks, Meta anticipates continued operating losses for Reality Labs throughout the year as the company pushes forward with VR product development and investments in the metaverse.
Undeterred by these challenges, Zuckerberg remains optimistic about the potential of the metaverse and AI. Meta reported quarterly profits of $7.79 billion, marking a 16% increase from the same period last year, with quarterly revenue also climbing 11% year-over-year to $32 billion.
Following the earnings report, Meta’s stock price saw a significant boost, surging over 7% in after-hours trading to approximately $320, reflecting a nearly 140% increase year-to-date, although still below the all-time high reached in September 2021.
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