Despite achieving one of its strongest quarterly revenue results, Meta’s subsidiary company Reality Labs reported an operating loss of over $4.6 billion for the fourth quarter of 2023. Meta’s fourth-quarter results, announced on February 1st, show that Reality Labs incurred a loss of $4.65 billion during the quarter, while revenue was approximately $1.1 billion.
A Record-Breaking Report for Reality Labs
This development marks the largest quarterly operating loss for the division since Meta first included Reality Labs’ financials in its reporting in the fourth quarter of 2020. Reality Labs’ total revenue for 2023 was just under $1.9 billion, with more than half of the year’s revenue coming in the fourth quarter following the launch of Meta Quest 3. The total operating loss for 2023 was $16.1 billion, showing an annual increase of 17.5% compared to 2022.
Meta’s founder and CEO Mark Zuckerberg attributed Reality Labs’ revenues to a strong holiday season for the Quest series VR headsets and added that the latest Quest 3, released on October 10, 2023, had a strong start.
He further stated that artificial intelligence (AI) and metaverse games are significant parts of our long-term vision and that they will continue to invest heavily in both areas. Zuckerberg commented on the subject:
“These days I get a lot of questions about artificial intelligence, and this field is progressing very quickly. Still, I expect these next-generation AR VR and computing platforms to provide a realistic sense of presence that will form the foundation of future social experiences.”
Meta Shares on the Rise
Meta’s finance chief Susan Li said she expected Reality Labs’ losses to increase significantly year over year due to investments made to scale AR and VR product development and our ecosystem. According to Google Finance, Meta shares traded sideways during the day but approached $455 after a rise of over 15% following the opening on February 1st.
Meta’s revenue for the year 2023 was $134.9 billion, exceeding the estimates of Wall Street research firm Zacks and showing a 16% increase compared to the 2022 results. The tech giant also announced it would pay its first dividend of 50 cents per share on March 26th and plans to continue paying dividends quarterly.
