Meta’s Strong Earnings in 2023 Amidst Billions in Losses

Despite having its most profitable quarter since 2021, Meta is still facing considerable financial losses from its foray into the metaverse, and it anticipates even larger losses in the upcoming year.

In the second quarter of 2023, Meta’s division called Reality Labs, responsible for virtual and augmented reality projects, recorded a loss of $3.7 billion while generating only $276 million in revenue, according to the company’s recent earnings report.

Despite these losses, Meta remains committed to investing further in the metaverse. The CFO, Susan Li, mentioned that the losses incurred by Reality Labs are expected to increase significantly compared to last year when they amounted to over $13 billion.

Outside of its metaverse endeavors, Meta had a strong quarter, reporting $32 billion in revenue, which is an 11% increase from the previous year. Zuckerberg praised the success of Reels, which now garners 200 billion daily views across Facebook and Instagram, attributing it to the company’s focus on AI-driven suggestions.

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Threads and the company’s Llama 2 large language model were also highlighted as achievements.

Despite initial data showing a decline in Threads engagement since its launch, Zuckerberg expressed satisfaction with the number of daily return users, which surpassed his expectations. He envisions the potential for Threads to eventually attract a user base in the “hundreds of millions.”

Regarding layoffs, Meta confirmed that most of the recent job cuts, totaling over 20,000 since the previous fall, have been “substantially completed.” Zuckerberg had previously referred to 2023 as Meta’s “year of efficiency,” streamlining the company’s management structure and reducing the workforce.

The launch of Threads, managed by a relatively small team, indicates that the “cultural changes” at Meta are making a noticeable impact.