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Meta's Reality Labs reports over $21 billion in losses since start of 2022

July 27, 2023
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Meta's Reality Labs unit, which focuses on developing virtual and augmented reality technologies, reported a $3.7 billion operating loss in the second quarter, with sales dropping from the first quarter and failing to meet analysts' projections. Despite this, Meta's overall revenue increased, and the company's stocks rose, underlining Meta's strength in advertising.

Reality Labs' Performance: Meta's Reality Labs unit faced significant losses in the second quarter.
  • The unit reported a $3.7 billion operating loss.
  • It recorded $276 million in second-quarter sales, down from $339 million in the first quarter.
  • This performance was below analysts' projections of $421 million in sales and $3.5 billion in operating losses.

  • Meta's Overall Performance: Despite the loss in the Reality Labs unit, Meta's overall performance was promising.
  • The company reported an 11% increase in revenue, driven by a rebound in advertising.
  • Meta issued an uplifting sales forecast for the third quarter.
  • After the earnings report, Meta's shares rose by approximately 5%.

  • Current Business Structure: The recent results underscore Meta's existing business model.
  • Despite its investment in virtual and augmented reality technologies, Meta is still predominantly an advertising company.
  • The Reality Labs unit represents a significant cost center for the company.
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