Key Highlights:
- The fourth quarter operational loss for Meta’s Reality Labs division was $4.28 billion, bringing the year-to-date total to $13.72 billion.
- According to CEO Mark Zuckerberg, the company’s ambitious metaverse technologies are housed at this company.
- Late in 2021, Facebook changed its name to Meta, although the business continues to generate most of its income from advertising.
Amid an extended bear market, Reality Labs lost $13.7 billion in 2022 due to Mark Zuckerberg’s Metaverse bid.
According to the company’s financial announcement, the metaverse division had an operational loss of $4.28 billion in the fourth quarter, lowering its year total.
In the fall of 2021, Facebook changed its name to Meta as Mark Zuckerberg stepped up his efforts to build a digital universe where people might work, shop, play, and learn. However, as a result of the unstable market conditions, Metaverse adoption slowed down in 2022, prompting the company’s investors to urge for a reduction in expenditure in the sector.
What does the higher management say?
Reality Labs‘ operating losses are anticipated to increase year over year in 2023, according to a statement from the company in November from then-Meta Chief Financial Officer David Wehner.
During Wednesday’s earnings call for Meta, Susan Li, who has since taken over as the company’s chief financial officer, reiterated that forecast.
She said, “We’re going to continue to invest meaningfully in this area given the vital long-term opportunities that we see.”
The company is “constantly tuning the roadmap” for Reality Labs, according to Meta CEO Mark Zuckerberg.
“Even though none of the signals I’ve seen so far suggest that we should change the Reality Labs strategy long-term, we are constantly adjusting the specifics of how we execute this,” Zuckerberg said.
What about shareholders and competitors?
The early results have not precisely pleased shareholders. Due to rising metaverse costs, a weakening economy, greater competition from TikTok, and Apple’s privacy update, which restricted ad targeting, Meta lost roughly two-thirds of its worth in 2017.
Following the company’s announcement of a $40 billion buyback and fourth-quarter earnings above analysts’ sales forecasts on Wednesday, the stock increased by more than 17% in extended trade.
