Meta’s Reality Labs lost $14 billion last year

The large image: Mark Zuckerberg’s Metaverse ambitions proceed to appear like a cash pit, costing Meta tens of billions of {dollars} during the last two years. The corporate’s 2022 year-end monetary statements compound prior heavy losses from Actuality Labs, however Meta’s management stays dedicated to the enterprise.

Meta’s monetary statements for This fall 2022 show that its VR division’s losses elevated in comparison with its critical cash burn from prior quarters within the yr. Nevertheless, that did not cease Meta’s shares from experiencing one in all their finest days.

Actuality Labs hemorrhaged $4.3 billion in This fall 2022. Together with the $3.7 billion burnt in Q3, the $3 billion sunk in Q2, and the $2.96 billion thrown away in Q1, Meta’s Metaverse division losses for 2022 complete $13.7 billion. That quantity follows the $10.2 billion Actuality Labs misplaced all through 2021.

As the prices mounted final yr, CEO Mark Zuckerberg maintained that the corporate’s efforts would repay within the subsequent decade and that pondering hasn’t modified. Within the This fall earnings name, CFO Susan Li mentioned Meta expects Actuality Labs to lose more cash in 2023 however will proceed what it considers a long-term funding.

Final yr, Meta launched its newest VR headset for enterprise operations –the $1,500 Quest Pro. The corporate expects to release a less expensive consumer-oriented mannequin this yr to succeed the Meta Quest 2. Nevertheless, VR headset gross sales and shipments have been down in 2022 in comparison with 2021, casting doubt over Meta’s focus within the sector.

Meta’s VR division additionally lost legendary programmer John Carmack final yr. In December, he left the corporate after repeatedly expressing concern over inefficiencies in its method to constructing the Metaverse. Meta additionally laid off 11,000 workers the earlier month –about 13% of its employees.

The stark numbers from Actuality Labs accompany Meta’s annual and This fall earnings and income losses. Fourth quarter income fell by 4 % to $32.2 billion, whereas web earnings for the quarter was down 55 % at $4.7 billion. Complete 2022 income was down 1 % for the yr at $117 billion, and web earnings for the yr fell 41 % to $23 billion.

Though the numbers look dreary, they exceeded analyst expectations. Attributable to that glass-half-full outlook and Meta’s introduced $40 billion in share buybacks, the corporate’s shares rallied this week. Meta’s market cap rose 27 % in at some point, a greater than $100 billion soar.

Though the corporate’s inventory noticed its finest day in a decade this week, that solely returns it to the place it was final June. Meta hasn’t begun to regain the half a trillion {dollars} of worth it has lost since late 2021.