- Meta’s metaverse lab, Reality Labs, has lost around $40 billion since Facebook changed its name to Meta in 2021.
- Despite these losses, Meta posted record quarterly revenue of $40.1 billion in Q4 2023, with gains expected to continue through Q1 2024.
- While Reality Labs has struggled, Meta’s revenue has come exclusively from its suite of social media and messaging apps like Facebook, Instagram, Messenger, and WhatsApp.
Meta, formerly known as Facebook, changed its name in September 2021 as part of its pivot towards building the metaverse. In the time since, the company’s Reality Labs division, which is responsible for metaverse products, has racked up over $40 billion in losses.
Metaverse efforts lead to major losses
Meta’s Reality Labs has posted successive year-over-year operating losses totaling around $40 billion since the 2021 name change. This money has gone towards research and development on virtual and augmented reality products like the Quest VR headset line.
Meanwhile, revenue has come exclusively from Meta’s social media apps – Facebook, Instagram, Messenger and WhatsApp. To compare, Meta has sold approximately 20 million Quest headsets since 2019. In contrast, Apple sold about 151 million iPhones in 2022 alone.
Meta stock surges despite metaverse costs
Despite the huge losses stemming from its metaverse ambitions, Meta’s stock value and revenue have continued to grow. The company posted a revenue of $134.9 billion in 2022, up nearly 16% over 2021. Its Q4 2022 revenue of $40.1 billion set a company record and beat analyst predictions.
Meta has also been aggressively buying back its own stock, returning $92 billion worth of shares since 2021. This seems to indicate investors are still bullish on the company’s overall trajectory, despite the money sunk into the metaverse.
Looking ahead
With Meta continuing to pour resources into the metaverse, eyes will be on the upcoming Q1 2023 earnings call on April 24. Investors and analysts will be watching to see if the profitable social media business can continue to offset the Reality Labs losses. The performance of Meta’s stock and revenue as it doubles down on its ambitious metaverse plans remains to be seen.
