Quest quarterly revenue grows, but lags behind pandemic boom years
Quest headset revenue increased in the most recent quarter, but did not reach the levels of the pandemic years.
Meta has published its financial results for the first quarter of 2024:
- Reality Labs' revenue was $440 million, up 30 percent from the previous year. According to CFO Susan Li, the revenue was driven by sales of Quest headsets, i.e. Quest 2 and Quest 3. By comparison, revenue in the first quarter of 2021 was approximately $530 million and $700 million a year later.
- Reality Labs' expenses were just under $4.3 billion. Subtracting the revenue from the expenses results in a loss of approximately $3.8 billion.
Therefore, Meta continues to spend far more on the metaverse than it earns from it, viewing it as a long-term investment.
Meta Reality Labs P&L (Q1'19-Q1'2024)
Usual disclaimer: Costs includes R&D and other investments into products that have yet to even ship (e.g. optical AR devices, electromyography, games) or been scrapped (some watches, Portal), plus device subsidies, marketing, and some M&A pic.twitter.com/L2Fffj4bJVD
- Matthew Ball (@ballmatthew) April 24, 2024
Susan Li reiterated, as she does every quarter, that Reality Labs' spending will continue to increase significantly year-over-year.
The first quarter of 2024: good, but not brilliant
Last quarter, Meta achieved its highest revenue ever through Reality Labs, surpassing $1 billion in quarterly revenue for the first time. This result is likely due to the holiday price reduction of the Quest 2 and the launch of the Quest 3 and the Ray-Ban Meta Smartglasses, which seem more popular with consumers than the first generation of the wearable.
This momentum was not maintained in the first quarter of 2024, with Q1 sales not exceeding those of the strong VR years of 2021 and 2022. The Quest 2 is nearing the end of its lifecycle, and the Quest 3, at $500, is mainly aimed at enthusiasts who are likely to have already purchased a device by now. It is possible that a cheaper Quest 3 Lite, which unconfirmed reports suggest will be released later this year, will give Reality Labs a further boost.
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