Meta today announced its fourth quarter earnings for 2023, revealing how Reality Labs has fared during the holiday season. It’s been a banner quarter for Meta’s XR division, with Reality Labs posting record revenue numbers, but also record costs.
During its Q4 earnings call, Meta revealed its XR division had crossed over $1 billion in revenue for the first time, but also had its biggest quarter in terms of costs at $5.72 billion, resulting in a quarterly loss of $4.65 billion. This beats the division’s revenue record of $877 million in Q4 2022, and handily beats it’s second largest quarters for costs of operation in Q4 2022, $5.01 billion.
Meta says its uptick in revenue was primarily driven by Quest 3 sales, its latest VR headset released in October 2023. Undoubtedly some of that record revenue was also supported by Quest 2, which was dropped from $300 to $250 prior to the holiday season, putting the company’s 2020-era headset at half the price of the new Quest 3.
Meta revealed that in addition to strong Quest sales, EssilorLuxottica is set to manufacture more Ray-Ban Meta smartglasses to fulfill continued demand.
Holiday quarters are typically the most performant, and this is absolutely true for Meta’s Reality Labs division, showing over a 47% increase in revenue year-over-year. Here’s a closer look at revenue gains year-over-year:
The company says however we can expect “more meaningful losses” in the coming years, as Meta says it will continue to invest in the XR space. This is largely expected, as the company has been insistent that major investment expenses may not pay off until the 2030s.
We’re still listening in on the earnings call and diving into the particulars, so check back soon as this story is breaking.