With a loss of US$3.7 billion in the third quarter, Meta reported yet another billion-dollar loss on its metaverse projects.
Reality Labs, a division of Meta that oversees augmented and virtual reality operations, lost US$3.7 billion in the third quarter.
The deficit is due to the significant expenses Meta is incurring to achieve CEO Mark Zuckerberg’s metaverse objective.
Meta has spent twice as much this year as it did last, and 2022 still has one more quarter to go.
The Reality Labs section of Meta received several billion of those funds, although it only generated US$285 million in revenue.
With regard to Reality Labs, Meta lost US$3.7 billion in the third quarter compared to $2.8 billion in the second.
The losses won’t stop there, either, as Meta anticipates even more sizable operating losses in 2023.
Investors in Meta have urged the corporation to cut back on spending on metaverse projects, but Zuckerberg says doing so would be a “mistake”:
“Many people might object to this investment. But based on what I can tell, this will be crucial, and it would be a mistake if we didn’t concentrate on any of these issues, which will be crucial for the future.
Zuckerberg adds that losses will increase in 2023, but he is still optimistic that the investment will be profitable:
“In 2023, we do anticipate that Reality Labs’ operational losses will significantly worsen year over year. After 2023, we want to pace Reality Labs investments so that we can finally realise our long-term goal of raising operating profitability across the board for the organisation.
The decision by Zuckerberg to expand expenditure on Reality Labs contributed to the over 15% decline in Meta shares during after-hours trading on Wednesday. In 2022, Meta stock is down more than 60%.
The third quarter of this year saw a fall in Meta’s net income from US$9.194 billion to US$4.395 billion.
The US$27.71 billion in revenue for Meta was a 4% year-over-year decline. However, if foreign currency rates had remained the same, revenue would have increased.
Although the average cost per ad fell by 18% YoY, ad impressions increased by 17% YoY.
As of September 30, there were 1.98 billion daily active users on Facebook, a rise of 3% from the previous year. 2.96 billion people use Facebook each month, a rise of 2% over the previous year.
More than 140 billion Reels plays have occurred on Facebook and Instagram, which is a 50% increase from the previous six months.
