Meta’s revenue in the first quarter surged to $36.5 billion, showing a 27% year-over-year increase. The company also saw a significant rise in net income, hitting $12.4 billion, a 117% year-over-year boost.
Similarly, Meta’s Reality Labs division reported revenue of $440 million in its Q1 earnings, marking a 30% year-over-year increase. However, despite this growth, the division faced an operating loss of $3.85 billion, only marginally better than the $3.99 billion loss from the previous year’s first quarter.
Despite sustaining losses exceeding $1 billion per month since June 2022, Meta remains committed to Reality Labs, anticipating substantial year-over-year operating losses due to ongoing product development and ecosystem expansion efforts.
It seems that Meta’s VR aspirations persist, albeit with some struggles.
Big investments, heavy losses
Alongside the VR challenges, Meta announced significant investments in AI, with projected annual expenditures in the range of $35 billion to $40 billion, up from the previous $30 billion to $37 billion range, and further increases expected in 2025.
During an earnings call with investors, Meta CEO Mark Zuckerberg cautioned that it will take years for these AI investments to translate into profitable services, acknowledging their historical impact on the company’s stock price.
While improved app experiences have been beneficial, Zuckerberg emphasized 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.”
Meta’s journey towards the metaverse has had its challenges, and the shift towards AI initiatives is unlikely to be smooth. The company had to make tough decisions, such as laying off 11,000 employees in 2022 to revitalize its business following the slow adoption of its VR visions.
Apple’s Vision Pro headset is facing similar obstacles, with Meta’s CEO Mark Zuckerberg claiming superiority for Quest 3 in a recent Instagram reel. Both companies seem to have a long way to go before achieving their goals.
