Reality Labs, a subdivision of Meta, has posted a dramatic operating loss of $4.6 billion for the last quarter of 2023, in stark contrast with its strong revenue performance. Announced on February 1, these figures have set a new record for the company’s quarterly losses. Despite this setback, the division’s revenue reached $1.1 billion for the quarter, a substantial part of its nearly $1.9 billion total revenue for the year.
Staggering Annual Losses Despite Growth
The year 2023 concluded with Reality Labs experiencing an operating loss of $16.1 billion, marking a 17.5% increase from the previous year’s losses. Over half of the division’s annual revenue was generated in the fourth quarter, following the release of the Meta Quest 3, enhancing the year’s overall financial performance.
Meta’s CEO, Mark Zuckerberg, credited the surge in revenues to a robust holiday season driving sales of the Quest series VR headsets. He particularly highlighted the strong market debut of the Meta Quest 3 on October 10, 2023. Zuckerberg also emphasized the company’s continuous investment in artificial intelligence and metaverse games as pivotal elements of Meta’s long-term strategy.
Meta’s Market Performance and Dividend Announcement
While the day saw Meta’s shares fluctuating, there was a notable increase post-market opening on February 1, with shares climbing over 15%. Meta’s overall revenue for 2023 stood at $134.9 billion, surpassing Wall Street expectations and registering a 16% year-on-year growth. Additionally, the company announced its inaugural dividend of 50 cents per share to be distributed on March 26, with plans to maintain quarterly dividend payments.
Despite substantial investments in developing the AR and VR product ecosystem, which are anticipated to increase losses, Meta’s financial outlook remains strong, with the first dividend marking a new phase in its financial strategy.