Meta Metaverse Division Posts $4.3B Net Loss in Q4 2022
Meta, led by metaverse-obsessed CEO Mark Zuckerberg has released its earnings for 2022’s fourth quarter, and it doesn’t look good
Frederic Legrand – COMEO/Shutterstock.com modified by Blockworks
The net losses endured by Meta’s division responsible for producing metaverse-related technology continue to grow quarter over quarter — as the damage amounted to nearly $4.3 billion in the final three months of 2022.
Despite the hit to the unit known as Reality Labs, the tech giant’s net income for the quarter stood at $4.65 billion, as its family of apps unit posted a gain of $10.7 billion. The segment includes Facebook, Instagram, Messenger and WhatsApp.
Meta’s stock price was $153.12 at the end of the trading day, down more than 50% over the past year but up about 23% in the last month. The price was up about 19% in after-hours trading, as of 6 p.m. ET.
The results came after Meta revealed on its November earnings call that Reality Labs lost nearly $3.7 billion during the third quarter — up from the division’s second-quarter loss of $2.8 billion and a $2.9 billion loss in the first quarter.
Reality Labs’ net loss totaled $13.7 billion last year, the company revealed Wednesday.
The division includes augmented reality, virtual reality and the company’s metaverse software platform.
Then-Meta Chief Financial Officer David Wehner said in a November statement that the company was expecting Reality Labs’ operating losses to grow year over year in 2023.
Susan Li, who has since taken over as Meta’s chief financial officer, reiterated that projection during Meta’s earnings call Wednesday.
“We’re going to continue to invest meaningfully in this area given the significant long-term opportunities that we see,” she said.
Meta CEO Mark Zuckerberg added the company is “constantly tuning the roadmap” for Reality Labs.
“Even though none of the signals I’ve seen so far suggest that we should shift the Reality Labs strategy long-term, we are constantly adjusting the specifics of how we execute this,” Zuckerberg said.
The continued losses in this business segment come after Facebook changed its name to Meta in October 2021 to capitalize on the anticipated metaverse trend.
Zuckerberg said on the company’s November call its future initiatives include a social metaverse platform with avatars, augmented reality and neural interfaces.
“I get that a lot of people might disagree with this investment,” the CEO added at the time. “But from what I can tell, I think this is going to be a very important thing, and I think it would be a mistake to not focus on any of these areas, which I think will be fundamentally important to the future.”
About a week later, Zuckerberg said in a letter the company decided to layoff about 11,000 employees — roughly 13% of Meta’s workforce.
Get the news in your inbox. Explore Blockworks newsletters:
- Blockworks Daily: The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam.
- Empire: Start your day with top crypto insights from David Canellis and Katherine Ross.
- Forward Guidance: Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin.
- 0xResearch: Get alpha directly in your inbox — market highlights, charts, degen trade ideas, governance updates, and more.
- Lightspeed: All things Solana, in your inbox, every day from Jack Kubinec and Jeff Albus.
- The Drop: The newsletter for crypto collectors and traders, covering games, tokens, apps, memes and more.
