Meta Reality Labs’ quarterly revenue is continuing to grow year-over-year in 2024.
During the company’s Q2 2024 earnings call today, Mark Zuckerberg told investors Quest 3 sales are “outpacing our expectations”.
Reality Labs is the division of Meta behind Quest headsets, the Horizon platform, Ray-Ban Meta smart glasses, and research & development toward AR glasses and their neural wristband input device.
Meta reported $353 million Reality Labs quarterly revenue for Q2 2024, a 28% increase compared to Q2 2023. The revenue for Q1 was also been higher than in 2023 by 30%. Meta CFO Susan Li said investors that this growth was driven by Quest 3,
The Reality Labs first three quarters in 2023 saw lower revenue than the previous year. Quest 2 had just turned three, Quest Pro was a hit with consumers and Quest 3 has been announced. Quest 3 has reversed this trend, leading Reality Labs to a return to year-over-year quarterly revenue growth in 2024.failedHowever, while revenue for the first half of 2024 was higher than 2023, it was still lower than the first halves of 2022 and 2021, when sales of Quest 2 were at their peak. Quest 3’s $200 price difference from Quest 2 is almost certain to be the reason. Even adjusted for inflation, the difference is still $150, putting Quest 3 in a different price segment than its predecessor.
To grow Reality Labs beyond its Quest 2 era, Meta
at somewhere around $300 which could sell significantly higher volume than Quest 3. Even Quest 3S will not bring Reality Labs any closer to making a profit. While technically speaking, the quarterly loss of $4.5 billion is correct, it would be more accurate to call it a long-term investment. XR headsets like Quest are still a relatively early technology, far from maturity, and plans to release a Quest 3S of Reality Labs spending is on the research and development of AR glasses, a future product line that hasn’t even launched yet.wide range of sourcesAs in many previous quarters, Li told investors she expects these “losses” to continue to increase this year due to “ongoing product development efforts and our investments to further scale our ecosystem”.
Meta may be planning to slowly rein in spending starting next year though, as it
recently told its hardware teams to cut spending by 20%. Meta may be planning to slowly rein in spending starting next year. It more than 50% recently told its hardware teams to cut their expenditure by 20%.