The social media giant reported a loss of $4.3 billion in the unit on revenue of $727 million in the fourth quarter of 2022. Meta Platforms (META) continues to post losses in its fledgling Facebook Reality Labs (FRL) division, which includes augmented and virtual reality businesses, according to earnings on Wednesday.
FRL's loss of $4.3 billion for the quarter was better than analysts' consensus estimate of a loss of $4.4 billion and up from a loss of $3.7 billion in the third quarter.
For the full year 2022, the Meta segment posted a loss of $13.7 billion on revenue of $2.2 billion, up from a loss of $10.2 billion on revenue of $2.3 billion in 2021. The company has previously said it expects FRL's operating losses to grow "significantly" in 2023 over 2022 as Meta invests in what it sees as a key part of its future.
Meta also reported fourth-quarter FRL revenue of $727 million, down from segment revenue of $877 million a year earlier but up from $285 million in the third quarter.
Meta has recently faced calls from investors to reduce its spending on the metaverse, as declining user growth numbers and reduced ad spending have cut into its profits.
During an earnings call with analysts on Wednesday, CEO Mark Zuckerberg said he expects the Reality Labs ecosystem to grow significantly in the coming years. Meta plans to launch its next-generation consumer VR headset later this year, and Zuckerberg said he expects it to "establish this technology as the foundation for all headsets and, of course, eventually AR (augmented reality) The basis of glasses."
As a sign of progress, Zuckerberg noted that there are now more than 200 virtual reality apps in the Meta ecosystem that generate more than $1 million in revenue, and that more than 100 million WhatsApp users have created animations since the feature launched last quarter avatar. Zuckerberg pointed out that with the development of VR technology, "most people will first experience the virtual world on their phones, and then start to build their digital identities in our applications."
For the company as a whole, Meta reported adjusted quarterly earnings per share of $1.76 in the fourth quarter, missing analysts' consensus estimate of $2.26, while Meta's total revenue of $32.2 billion topped expectations, according to FactSet 31.6 billion US dollars. It guided for first-quarter revenue of $26.0 billion to $28.5 billion, with a midpoint of $27.25 billion, just above the consensus estimate of $27.2 billion. Facebook also surpassed 2 billion daily active users for the first time during the quarter.
Meta shares rose 18 percent to $180.73 in after-hours trading Friday. Shares have fallen more than 50% in the last year, but are up 27% so far this year.
