Meta Platforms CEO Mark Zuckerberg (pictured) remained bullish on the prospects of AI and the metaverse fuelling future growth despite its Reality Labs unit posting an operating loss of $4.6 billion in Q4 2023, up from a loss of $3.2 billion in the comparable period of 2022.
Reality Labs revenue of just over $1 billion was up from $727 million.
The division develops the VR and AR technologies which underpin Meta Platforms’ goal of creating a metaverse. Despite the success of its Quest family of headsets, the company painted a gloomy outlook for Reality Labs.
In its earnings statement, Meta Platforms predicted the operating losses would “increase meaningfully year-over-year due to our ongoing product development efforts in AR/VR and our investments to further scale our ecosystem”.
Meta Platforms debuted its Quest 3 VR headset in September 2023, but now faces competition from Apple’s Vision Pro headset.
On an earnings call, Zuckerberg declared the success of Quest 3 and the company’s Ray Ban smart glasses.
“Quest 3 is off to a strong start, and I expect it to continue to be the most popular mixed reality device.”
He explained customers are going to want new categories of devices to engage with AI more frequently without requiring their smartphones.
“I think smart glasses are going to be a compelling form-factor for this and it’s a good example of how our AI and our metaverse visions are connected,” Zuckerberg said.
The company posted revenue of $40.1 billion, up 25 per cent.
Net income rose 201 per cent to $14 billion.
Meta Platforms’ board announced a $0.50 dividend, its first ever, and authorised a $50 billion share buyback.
It intends to pay a cash dividend on a quarterly basis going forward, “subject to market conditions and approval by our board”.
Following several rounds of layoffs in 2023, CFO Susan Li said Meta Platforms had 67,300 employees by end-December, down 22 per cent year-on-year but 2 per cent higher consecutively after resuming “hiring efforts”.
Zuckerberg said communities “are growing and our businesses are back on track”, before referring to an “exciting roadmap of software improvements” that will commence with deploying “multimodal AI” and other features relating to the technology due “later in the year”.
Full year net income rose 69 per cent to $39 billion on revenue of $134.9 billion, up 25 per cent.