Meta Actuality Labs quarterly income was 6% decrease in Q1 2025 than it was in Q1 2024.
The quarter noticed Meta’s metaverse and wearables division usher in $412 million, in comparison with $440 million for a similar quarter final yr.
Throughout Meta’s Q1 2025 earnings name, CFO Susan Li instructed buyers the drop was “because of decrease Meta Quest gross sales, which have been partially offset by elevated gross sales of Ray-Ban Meta AI glasses”.
Whereas headset gross sales decreased, Mark Zuckerberg instructed buyers that Quest is seeing “deeper engagement”. At GDC in March Meta’s Director of Video games revealed that month-to-month headset utilization elevated 30% in 2024, and final yr he stated that Quest 3 has larger retention than earlier headsets.
Zuckerberg additionally instructed buyers that the Ray-Ban Meta glasses had “tripled in gross sales within the final yr”, and Li stated that the glasses have 4 instances as many month-to-month lively customers in comparison with Q1 2024.
The lackluster Q1 income comes after This fall 2024 noticed Actuality Labs usher in its highest ever income with the launch of Quest 3S. The headset was additionally the highest promoting console on Amazon US in 2024.
This means that whereas Quest 3S had a robust launch, and was a well-liked present over the vacation season, its momentum hasn’t carried via into the start of this yr.
Q1 is at all times the worst quarter for consoles and related client tech, as customers pull again on spending after the vacations, but it surely’s nonetheless an even bigger drop than final yr. It wasn’t the worst ever Q1 for Actuality Labs although. Q1 2023 noticed simply $339 million introduced in throughout Quest 2’s 12-month $100 value hike.
As at all times, the Meta Actuality Labs income got here at an infinite value, and the division stays deeply unprofitable. Meta spent $4.6 billion on it in Q1 alone, leading to a “loss” of $4.2 billion.
Although whereas describing this as a loss is technically appropriate in a monetary sense, a lot of it may be described as long-term funding. XR headsets like Quest are nonetheless a comparatively early know-how, removed from maturity, and as of 2022 greater than 50% of Actuality Labs spending was on the analysis and improvement of AR glasses, a future product line that hasn’t even launched but.
Requested about Actuality Labs spending by an analyst from an funding analysis agency in the course of the followup name, Zuckerberg responded that the division is now “targeted on doing the work extra effectively”, however that he needs to take a position closely in scaling the sensible glasses product line given its sturdy progress over the previous yr. Due to this, final quarter Susan Li instructed buyers to count on Actuality Labs losses to extend in 2025.
“There are huge product bets we’re making and there’s type of a deep technological set of challenges that we all know that we have to unlock so as to have the ability to convey scalable client merchandise to market”, she stated on the time.
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