In its first quarter earnings, Meta's revenue has surged to $36.5 billion (up 27% YoY), with net income at $12.4 billion (up 117% YoY).
Likewise seeing an upswing was the company's Reality Labs division, which saw revenue of $440 million (up 30% YoY) in its Q1 earnings. However, despite the rosey outlook the division reported an operating loss of $3.85 billion, only slightly better than the $3.99 billion loss they handed over in the previous year's first quarter.
And yet, despite sustained losses of over $1 billion per month since June 2022, Meta has reaffirmed its dedication to Reality Labs as it expects massive year-over-year operating losses due to ongoing product development and ecosystem expansion efforts.
It appears that Metas VR dream lives on to limp through another day.
Big investments, heavy losses
Offsetting the bad news on the VR front the Facebook company announced a significant boost in its investment in AI, with anticipated full-year expenditures in the field now ranging from $35 billion to $40 billion, up from the previous range of $30 billion to $37 billion, with a further increase expected in 2025.
During an earnings call with investors, Meta CEO Mark Zuckerberg however once more cautioned that it will take years for these AI investments to mature into profitable services, acknowledging the past impact of such strategies on the company's stock price.
While improved app experiences have been good for the company, Zuckerberg has reaffirmed that “building the leading AI will also be a larger undertaking than the other experiences we've added to our apps, and this is likely going to take several years."
The company's metaverse ambitions haven't exactly been smooth sailing and now it appears that its switch in focus to AI initiatives is hardly going to be a walk in the park either. The company had to lay off 11,000 employees in 2022 in a bid to revitalize its business following slow take up of its VR visions.
Apple's Vision Pro headset is similarly having a hard time at present and in February, Meta CEO Mark Zuckerberg shared his thoughts about it in an Instagram reel where he boasted that Quest 3 is “the better product".
Seems that, for now at least, both have some way to go.
