Yesterday, Meta released its quarterly earnings report for Q2 2024, showing strong results, with $39.07 billion in revenue and $13.46 billion in net income. However, Meta Reality Labs continued to incur losses, with losses amounting to approximately $4.48 billion in the last quarter alone.
This marks a significant increase from the $3.73 billion loss in Q2 2023. Reality Labs’ revenue, which includes both Quest headsets and Ray-Ban Meta smart glasses, increased by 28% year-over-year to $353 million, up from $276 million in Q2 2023.
Formed in 2020 with the goal of building the next computing platform, Reality Labs has accumulated approximately $46.54 billion in losses from Q2 2020 to Q2 2024. During last night’s earnings call, Meta explicitly stated that Reality Labs’ losses are expected to increase further due to ongoing product development and investments aimed at expanding its ecosystem.
Despite these mounting losses, Meta continues to invest heavily in Reality Labs, primarily due to the support of its founder and CEO, Mark Zuckerberg. Thanks to the strong financial performance of other products and services, Meta is able to absorb these losses.
During the earnings call, Meta’s CFO, Susan Li, commented on Reality Labs’ performance:
“Quest 3 is selling well, and Ray-Ban Meta smart glasses are showing very promising traction. The early signals we are seeing across demand, usage, and retention are increasing our confidence in the long-term potential of AR glasses.”
She also mentioned that Meta is increasing its focus on AR glasses due to the positive traction seen with the Ray-Ban Meta glasses, product-market fit, market demand, and the overlap with the company’s overall AI efforts.
While the financial burden of Reality Labs is undeniable, Meta's willingness to absorb these losses demonstrates a long-term vision for the future of spatial computing. By continuing to invest in cutting-edge technologies and expanding the AR/VR ecosystem, Meta is positioning itself to play a pivotal role in shaping the next generation of computing platforms.
Source: Meta
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