Meta reported its first quarterly revenue decline earlier this year. This quarter, Meta’s financials aren’t inspiring much confidence in its investors. Although Meta’s revenue fell 4% year on year to $27.7 billion, CFO David Wehner stated on today’s earnings call that some of this decline is due to inflation. Meanwhile, net income was $4.395 billion, a decrease from $9.194 billion the previous year.
This drop in income is primarily due to Meta’s massive investment in the metaverse. This quarter, Reality Labs, Meta’s virtual reality division, lost $3.672 billion. It happened in the first quarter once CEO Mark Zuckerberg justified a $3 billion loss and said that the 2030s will be “exciting.”
Meta also casually announced that its next consumer-grade Quest headset, which is responsible for some of these costs, will be released next year. This week, Meta shipped its first high-end Quest Pro headsets.
Zuckerberg also elaborated on Meta’s overall metaverse plans. Horizon Worlds, the company’s underwhelming social VR platform, is now something Meta is “iterating on out in the open,” he says.
He also emphasized Meta’s dedication to the advancement of VR and AR technology in general.
In terms of social media, Zuckerberg provided some updated statistics. He stated that there are now over 140 billion Reel plays on Facebook and Instagram, a 50% increase from six months ago. Reels have a $3 billion annual revenue run rate across all platforms. As stated in previous earnings calls, Meta is heavily investing in AI content discovery to compete with platforms such as TikTok.
Meta also mentioned that hiring will slow significantly next year. In Q3, the company added 3,700 net new employees, compared to 5,700 net additions in Q2.