Meta continues to lose money through its Metaverse research and development arm, Reality Labs, posting a $3.67 billion loss for the third quarter of 2022 and predicting that these losses will worsen in the coming year.
The most severe quarterly losses for Reality Labs can be traced back to the fourth quarter of 2020, according to the company’s Q3 2022 financial report, which was issued on October 26th. And the company’s third-quarter revenue of $285 million was its lowest for the quarter.
Meta is on track to beat its 2021 losses, which saw just over $10 billion in losses last year, with its Reality Labs business posting its third consecutive quarterly loss totaling $9.44 billion so far in 2022.
According to statements made by Meta CFO Dave Whener in the earnings report, these year-on-year losses are expected to widen:
“We do anticipate that Reality Labs operating losses in 2023 will grow significantly year-over-year. Beyond 2023, we expect to pace Reality Labs investments such that we can achieve our goal of growing overall company operating income in the long run.”
Mark Zuckerberg, CEO of Facebook, seemed unconcerned by Meta’s significant investment in the “next computing platform“ during the company’s most recent earnings call. He informed shareholders that the company’s primary focus is creating a Metaverse and the required technology.
$27.71 Billion in Revenue Earned
He continued that it takes multiple iterations of a product before it becomes widely used.
“In addition to ensuring the company’s long-term survival, our efforts will go down in history as the catalyst for a revolutionary change in the way people communicate and incorporate technology into their daily lives.“
The company earned $27.71 billion in revenue, just ahead of the $27.69 billion predicted by Wall Street analysts, but only $1.64 in earnings per share, which was below the $1.88 expected by analysts.
MetaStock Fell 19.5% After-hours
According to Yahoo Finance, the stock price of Meta had fallen by more than 19.5% in after-hours trading at the time of writing, bringing the total decline for the stock to more than 61.5% since the beginning of 2022.
Some investors are urging the company to scale back its investment because of its large bet on its virtual world. Brad Gerstner, founder of the technology investment firm Altimeter Capital and a Meta shareholder, wrote an open letter to Mark Zuckerberg and the board of directors of Meta urging them to reduce the company’s investment.
Some are pessimistic about the future of the Metaverse under Zuckerberg’s leadership. In April, Meta whistleblower Frances Haugen warned that the company’s virtual world would repeat “all the harms of Facebook“ without a commitment to transparency.
