- Meta records its most profitable quarter since 2021 but faces significant financial losses in the metaverse projects.
- Meta’s Reality Labs division reports a $3.7 billion loss in Q2 2023, with only $276 million in revenue.
- Threads launch shows the positive impact of cultural changes at Meta, managed by a small team.
Despite recording its most profitable quarter since 2021, Meta continues to suffer significant financial losses from its ventures into the metaverse, with even larger losses anticipated in the coming year.
According to Meta’s recent earnings report, its Reality Labs division, responsible for virtual and augmented reality projects, recorded a $3.7 billion loss in the second quarter of 2023, with only $276 million in revenue.
Despite the losses, Meta remains committed to investing more in the metaverse. CFO Susan Li stated that they anticipate the losses incurred by Reality Labs to “increase meaningfully” compared to last year, when the division suffered over $13 billion in losses on similar initiatives.
Apart from its metaverse projects, Meta had a strong quarter with $32 billion in revenue, representing an 11% increase from last year. Mark Zuckerberg praised Reels, which now receives 200 billion daily views on Facebook and Instagram thanks to the company’s increased emphasis on AI-driven suggestions.
The recent launches of Threads and Meta’s Llama 2 large language model were also sources of pride for the company.
Despite the initial drop in Threads engagement, Zuckerberg mentioned that the app is attracting more daily return users than he had expected. He believes that Threads has the potential to eventually reach a user base in the “hundreds of millions.”
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Meta has confirmed that the majority of its recent layoffs, which resulted in the termination of over 20,000 jobs since the previous fall, have been “substantially completed.” Mark Zuckerberg has previously referred to 2023 as Meta’s “year of efficiency,” during which he streamlined the company’s management structure and reduced its workforce.
The launch of Threads, managed by a relatively small team, serves as evidence that the “cultural changes” at Meta are showing their impact, as highlighted by Mark Zuckerberg.
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