Points
- Meta Platforms reported a $4.5 billion loss in its metaverse business Reality Labs in Q2.
- Despite the losses, Meta posted $49 billion in revenue, driven by advancements in AI and app growth.
- The company’s AI assistant, Meta AI, is on track to be the most used AI assistant by the end of 2024.
- Meta plans to increase capital expenditure in 2025 for AI research and development.
In the second quarter of this year, Meta Platforms reported a further $4.5 billion loss in its metaverse venture, Reality Labs, bringing its total losses in the metaverse domain to nearly $60 billion since 2019. Despite this, the company achieved a higher-than-expected revenue of $49 billion, marking a 22% increase from the previous year and its second-largest quarter on record.
Meta’s profit for the quarter stood at $13.5 billion, largely driven by its advancements in artificial intelligence （AI） and the growth of its applications, including Threads and WhatsApp. Following the earnings call on July 31, Meta’s share price saw a 7.1% jump in after-hours trading, with the Q2 results exceeding most analyst expectations.
CEO Mark Zuckerberg highlighted that the AI assistant Meta AI is poised to become the world’s most used AI assistant by the end of 2024. He also noted the positive reception and sales of AI-infused Ray-Ban Meta smart glasses, which were launched in September last year. The company’s focus on AI is evident, as Meta plans to significantly increase its capital expenditure in 2025 to further its research and development efforts in this area.
Despite the public perception of Facebook being primarily used by older demographics, Meta’s Chief Financial Officer Susan Li stated that younger users are increasingly engaging with Facebook Marketplace. The firm’s Reality Labs division, responsible for developing VR headsets like the Meta Quest 3, posted $353 million in Q2 sales but still reported a substantial $4.5 billion loss.
Li mentioned that Reality Labs’ operating losses are expected to “increase meaningfully” year-over-year due to ongoing product development in augmented reality and virtual reality. Despite these continued losses, Meta remains committed to investing in the metaverse ecosystem, believing it to be a critical area for future growth.
解説
- Meta’s significant investment in the metaverse, despite the substantial losses, underscores the company’s long-term vision and commitment to this emerging technology.
- The strong revenue growth driven by AI advancements indicates that Meta’s diversification strategy is paying off.
- The AI assistant Meta AI and AI-infused products like the Ray-Ban smart glasses represent Meta’s push to integrate AI into consumer products, potentially opening new revenue streams.
- Meta’s focus on younger users for Facebook Marketplace suggests a strategic move to retain relevance among newer demographics.
- The planned increase in capital expenditure for AI R&D in 2025 highlights Meta’s commitment to leading in the AI space, which could drive future profitability and innovation.