Meta’s speculative Reality Labs division continues to excel at losing billions

Reality Labs, the division Facebook owner Meta hopes will eventually birth the metaverse, lost over $17.7 billion during the last fiscal year.

According to the company’s fiscal report for the year ended December 31, 2024, the segment delivered a loss of $4.9 billion during Q4–an increase on the $4.6 billion loss posted in Q4 last year.

Similar performance across previous quarters resulted in Reality Labs delivering a full-year loss of more than $17.7 billion.

Q4 revenue within the segment rose by 1 percent year-on-year to $1.1 billion and was driven by hardware sales. Reality Labs expenses totalled $6 billion.

Reality Labs is the home of Meta’s virtual, augmented, and mixed reality consumer hardware, software, and content initiatives. That includes the company’s Quest headset business, formerly known as Oculus.

The division has become the standard bearer for obscene losses. It burned through $16.1 billion and $13.7 billion across 2023 and 2022, respectively, and continues to haemorrhage cash.

Zuckerberg says Quest headset usage is rising, reiterates that Reality Labs is a long-term bet

Discussing the Quest business specifically, Meta CEO Mark Zuckerberg said the number of people using its headsets and Horizon metaverse software has been “steadily growing.”

“This is the year when a number of the long-term investments that we’ve been working on that will make the metaverse more visually stunning and inspiring will really start to land. So I think we’re going to know a lot more about Horizon’s trajectory by the end of this year,” he added.

Last year, Meta CFO Susan Li indicated Reality Labs was “definitely part of the budget conversation” amid rising expenses and infrastructure costs.

Yet, Meta execs have repeatedly told investors to expect losses to increase year-over-year. It was more of the same this year.

“We do anticipate that operating losses in Reality Labs will increase in 2025 as they did in 2024,” said Li during an investor call. “We expect our Wearables devices to be the primary driver of Reality Labs operating losses growing in 2025 across both cost revenue and operating expenses. And that really comes from our efforts to further accelerate the adoption of our AI glasses products.”

Li described Meta’s ongoing Reality Labs investments as “big product bets” but said the company is determined to bring scalable products to market.

In the meantime, Meta plans to eliminate 5 percent of its workforce to jettison people the company feels are “low performers.”

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