In its fourth-quarter results released on February 1, Meta's mixed-reality division, Reality Labs, reported an operating loss of $4.65 billion for the quarter, alongside revenue of nearly $1.1 billion. This marks the largest quarterly operating loss for the division since the fourth quarter of 2020, when Meta first included Reality Labs' financials in its reporting.
For the entirety of 2023, Reality Labs generated total revenues of just under $1.9 billion, with more than half of the year's revenue coming from the fourth quarter, boosted by the release of the Meta Quest 3. However, the total operating loss for the division in 2023 amounted to $16.1 billion, representing a 17.5% year-on-year increase from the previous year.
During an earnings call, Meta founder and CEO Mark Zuckerberg attributed Reality Labs' strong revenues to a "strong holiday season" for its Quest line of VR headsets, particularly the Quest 3, which was released on October 10, 2023, and had a "strong start."
Zuckerberg emphasized the importance of artificial intelligence (AI) and the metaverse in Meta's long-term vision, pledging continued heavy investments in both areas.
Meta's chief financial officer, Susan Li, acknowledged that they expect Reality Labs' losses to "increase meaningfully year-over-year" due to their AR and VR product development and efforts to scale their ecosystem.
Meta's shares remained flat during the trading day but surged by over 15% to nearly $455 after the earnings release on February 1. Meta reported full-year 2023 revenue of $134.9 billion, surpassing estimates and representing a 16% increase from 2022. The company also announced its first-ever dividend of 50 cents per share, scheduled for payment on March 26, with plans to issue quarterly dividends going forward.
