Meta's Reality Labs Posts Quarter's Highest Ever Loss Despite Record Revenue
Summary:
Despite achieving one of the highest-ever quarterly revenues, Meta's Reality Labs division suffered an operating loss of over $4.6 billion in Q4, marking the largest quarterly operating loss since 2020. Their overall 2023 revenue was just under $1.9 billion, with 2023's operating loss reaching $16.1 billion. CEO Mark Zuckerberg attributing some of the revenue to strong sales of their Quest VR headsets. CFO Susan Li indicated that they anticipate further losses in the coming year due to heavy investment in AR and VR product development. Despite this, Meta shares rose by over 15% after market close on February 1. The company's full year 2023 revenue was $134.9 billion, a 16% increase from 2022.
Meta's Reality Labs division registered a quarterly operating loss exceeding $4.6 billion, despite scoring one of their highest-ever revenue for the quarter. The figures for Meta's fourth quarter, released on February 1, reveal that the virtual and augmented reality research arm, Reality Labs, faced a significant loss of $4.65 billion in Q4, although it achieved nearly $1.1 billion in revenue. This is the highest quarterly operating loss for Reality Labs since it started incorporating its financial statements into its report in the final quarter of 2020. The entire 2023 revenue for Reality Labs was slightly under $1.9 billion, with more than half of that being made in the last quarter when its Meta Quest 3 was introduced. The overall operating loss for 2023 was $16.1 billion, representing year-on-year growth of 17.5% compared to the previous year.
According to Meta, the revenue and operating losses for Reality Labs in the quarter were the highest ever. Meta's founder and CEO, Mark Zuckerberg, in an earnings call, linked the revenues of Reality Labs to a "high demand season" for its Quest VR headsets during the holidays. He specifically mentioned that their new Quest 3, launched on October 10, 2023, had a very successful kickoff. Zuckerberg stated that investing heavily in the company's Artificial Intelligence and metaverse initiatives, which are significant components of their long-term vision, would remain a priority.
Susan Li, the CFO of Meta, predicts that due to the development of products for AR and VR, and its plan to expand their ecosystem further, the losses of Reality Labs will "grow substantially year-over-year."
Despite these developments, on February 1, Meta's shares remained steady throughout the day but rose by over 15% and reached close to $455 after the market closed, according to Google Finance. For 2023, Meta's overall revenue was $134.9 billion, surpassing estimates by financial research firm Zacks, and marking a 16% growth from its 2022 results. Meta also announced a plan to pay its debut dividend of 50 cents per share on March 26 and to continue issuing dividends every quarter.
Published At
2/2/2024 8:24:51 AM
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