Meta Reality Labs achieved its highest ever quarterly revenue in Q4 2024, $1.083 billion, following the launch of Quest 3S.
Reality Labs is the division of Meta behind Quest headsets and their Horizon software platform, the technology side of the Ray-Ban Meta smart glasses, and research & development of AR glasses and their sEMG wristband input device.
In 2024 overall Reality Labs brought in $2.146 billion, up 13% from 2023. That puts Reality Labs on par, revenue wise, with companies like Unity and Roblox.
“The number of people using Quest and Horizon has been steadily growing,” Mark Zuckerberg told investors, without giving specific user numbers.
Being the holiday season, Q4 has always been the strongest quarter for Reality Labs since Meta started breaking out its financials in Q4 2020. But Q4 2024 was the strongest ever, a continued success from Q4 2023, which saw the launch of Quest 3 drive the previous quarterly revenue record of $1.071 billion.
The record revenue is being reported just weeks after it was revealed that Quest 3S was the top selling games console on Amazon US in 2024, despite only releasing in October, and the Meta Horizon app needed to set up Quest headsets was the #1 free iPhone app on Christmas Day 2024. Further, SteamVR saw near-record usage in December.
However, Meta Reality Labs is still nowhere near making its first profit. The record revenue came alongside record spending too, a whopping $6.05 billion, resulting in a “loss” of $4.967 billion.
But while describing this as a loss is technically correct in a financial sense, in reality it’s more accurate to describe most of it as long-term investment. XR headsets like Quest are still a relatively early technology, far from maturity, and as of 2022 more than 50% of Reality Labs spending was on the research and development of AR glasses, a future product line that hasn’t even launched yet.
Meta’s AR/VR Hardware Teams Must Cut Spending By 20%
Meta’s AR/VR hardware teams have been told to cut spending by 20% by 2026, The Information reports.
Meta may be planning to slowly rein in spending starting this year though, as last summer it reportedly told its hardware teams to cut spending by 20%. While in all previous quarters Meta’s CFO Susan Li had warned investors that Reality Labs losses would increase, there was no such statement in this earnings call.
Combined with revenues from Quest 3S and the HUD glasses set to launch this year, two Quest 4 models reportedly planned for 2026, and an ultralight headset and AR glasses in 2027, Meta will seemingly soon start steering Reality Labs on the very long path to eventual profitability, which Mark Zuckerberg previously indicated to investors should arrive sometime in the 2030s.
