Facebook Parent Meta’s Metaverse Division Lost $13.7B in 2022
Meta Platforms (FB) continued to lose massive amounts of money in its fledgling Facebook Reality Labs (FRL) division, which comprises its augmented and virtual reality operations, according to its earnings release Wednesday.
FRL accounted for a loss of $4.3 billion in the quarter, better than consensus analyst estimates for a loss of $4.4 billion and up from a loss of $3.7 billion in the third quarter.
For the whole of 2022, Meta lost $13.7 billion in the division on revenues of $2.2 billion, up from a loss of $10.2 billion on revenues of $2.3 billion in 2021. The company has previously said it expects FRL’s operating losses in 2023 to grow “significantly” over 2022 as it invests in what it sees as a crucial part of its future.
Meta also reported fourth-quarter FRL revenue of $727 million, down from year-ago division revenues of $877 million, but up from $285 million in the third quarter.
Meta has recently faced investor calls to reduce its spending on the metaverse as falling user growth numbers and reduced ad spending have cut into its profits.
For the company as a whole, Meta reported adjusted quarterly earnings per share for the fourth quarter of $1.76, missing the analyst consensus estimate of $2.26, according to FactSet, while Meta's overall revenue of $32.2 billion beat estimates of $31.6 billion. It guided for Q1 revenue between $26 billion to $28.5 billion, which at its midpoint of $27.25 billion was slightly ahead of the consensus estimate of $27.2 billion. Facebook’s daily active users also hit 2 billion for the first time in the quarter.
Shares of Meta were up 18% to $180.73 in after-hours trading on Friday. Shares are down more than 50% over the last year, but up 27% year to date.
Facebook has a call with analysts scheduled for 5 p.m. ET.
Read more: Facebook Parent Meta Dips Toe Back Into Policy Circles to Boost Metaverse
UPDATE (Feb. 1, 21:38 UTC): Added info on Meta's overall results.