Meta's Reality Labs loses $2.9 billion, Zuckerberg says: 'I admit it's expensive'

On Wednesday, Meta Platforms Inc. (formerly Facebook Inc.) reported its first-quarter 2022 earnings, with losses increasing at its Metaverse-focused Reality Labs unit.

The Reality Labs division (formerly Facebook's Oculus division), which has been plowing more and more money into developing virtual reality and metaverse-related products, lost $2.9 billion in the first quarter of 2022. That's 61% higher than its $1.8 billion loss in the first quarter of 2021.

Reality Labs' overall revenue beat expectations, with sales of VR headsets and Meta Portal hardware reaching $695 million in the first quarter of this year.

On Wednesday's earnings call, Meta Chief Executive Mark Zuckerberg said the unit's losses were to be expected because Reality Labs remains largely focused on a range of hardware and software products, including Project Cambria.

"I admit it's expensive to build this thing, and it's something that's never been built before. It's a new paradigm for computing and social connectivity," Zuckerberg said.

"We want to be better than others in the space in terms of profitability, and we hope this will be a sustainable advantage as our platform grows."

In its financial report earlier this year, Reality Labs reported a loss of about $10 billion for the full year 2021, with about $4 billion of that loss coming from staff costs and research and development.

Overall, the company's total revenue for the first quarter of 2022 was $27.9 billion, up 6.9% from $26.1 billion in the first quarter of last year. Meta's quarterly report was well received by the market, and as of this writing, Meta shares were up 18% in after-hours trading.

As of March 31, the total number of Meta employees was 77,805, an increase of 28% year-on-year, continuing the growth momentum.

In February, Meta suffered the largest one-day plunge in stock market history, wiping $251 billion off its market value. At the time, the company's daily active user count was down by about 1 million.

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