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Meta Reality Labs Earnings Reveal a Less Successful Holiday Season & Highest Operating Costs Yet

February 1, 2023 From roadtovr

Meta today revealed its latest quarterly earnings results, showing that Reality Labs, the company’s XR and metaverse arm, had a smaller holiday season than the last, while operating costs have reached their highest levels yet.

Today during the company’s Q4 earnings call, Meta revealed the latest revenue and operating cost figures for its XR and metaverse division, Reality Labs, providing one of the clearest indicators of the success the company is seeing in this space.

The fourth quarter has consistently been the best performer for Reality Labs, no doubt thanks to the holiday season driving sales of the company’s offerings.

In the fourth quarter of 2022, the company saw $727 million in revenue, which was 17% less compared to the fourth quarter of 2021 when the company pulled in $877 million in revenue.

The fourth quarter of 2021 was a good performer for Reality Labs revenue thanks to the success of Quest 2 which had launched earlier that year.

In the fourth quarter of 2022, the company’s latest headset to launch was Quest Pro, it’s high-end MR headset. Unsurprisingly, the more expensive device—which has yet to find a strong value proposition at $1,500—doesn’t seem to have performed as well as Quest 2 did in its launch year. Just days ago, Meta temporarily discounted the price of the headset to $1,100, appearing to test the waters at that lower price. Granted, XR headsets aren’t the only product Reality Labs offers, which means the division’s other product lines—video calling speakers and smart glasses—may have had a role to play.

In addition to a smaller holiday season than last year, the latest earnings for Reality Labs show the division’s expenses were greater than in any previous quarter, surpassing $4 billion for the first time.

This continues a trend of Meta’s ever-growing investments in Reality Labs which the company has warned investors may not flourish until the 2030s.

In the face of operating costs far outpacing revenue, Meta CEO Mark Zuckerberg told investors that his management theme for 2023 was “efficiency,” saying he wants to focus the company on streamlining its structure to move faster while being more aggressive about shutting down projects that aren’t performing.

Filed Under: Meta, meta q4 earnings, meta q4 quest earnings, meta q4 reality labs earnings, meta revenue, News, reality labs revenue, vr industry

Meta Reality Labs Latest Revenue & Operating Cost Figures Aren’t Going to Make Investors Happy

October 26, 2022 From roadtovr

In Meta’s most recent quarterly earnings call the company shared the latest revenue figures of Reality Labs, the company’s XR division. In the third quarter of the year the division hit new milestones… unfortunately not the kind investors like to see.

Meta has been clear about its plan to spend aggressively on its XR initiatives over the next several years. So while it isn’t a surprise to see the company’s latest operating costs for Reality Labs reaching an all-time high, seeing that record in the face of an all-time low revenue record for the quarter isn’t a great look.

Meta has only been sharing its Reality Labs revenue and operating cost figures since Q4 2020, so while it’s certain that prior periods had less revenue and potentially even more spending, these new milestones shared for the third quarter of 2022 are as far back as Meta has shared the data (roughly the last two years).

The likely reasons for the lower revenue and higher spending may have to do with timing more than anything. As of Q3 2022, Meta hasn’t launched a new headset in two years. That’s probably meant slowing sales of Quest 2, especially considering the company confirmed work on its next headset a year ago, which may also have slowed sales. Not to mention that the company raised the price of Quest 2 earlier this year. While on its face that should mean more revenue, it also may have reduced demand for the headset.

It won’t be until the Q4 earnings call that we see the impact Quest Pro will have on the Reality Labs bottom line.

Meta CEO Mark Zuckerberg has warned shareholders that the company’s XR investments may not flourish until 2030, but the company still needs to tread carefully to maintain faith among its investors.

Filed Under: Meta, meta revenue, News, q3 2022, Reality Labs, reality labs operating costs, reality labs revenue, vr industry

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