Meta Platforms (FB) reported third-quarter revenue of just $285 million in its Facebook Reality Labs (FRL) division, which comprises its augmented and virtual reality operations, according to its earnings report released Wednesday. That was well short of consensus analyst estimates of $406 million, and down from $452 million in the second quarter.
FRL calculated for a loss of $3.7 billion in the quarter, up from a loss of $2.8 billion in the second quarter.
The company also said in a press release that it expected FRL’s operating losses in 2023 to grow “significantly” year over year. “Beyond 2023, we expect to pace Reality Labs investments such that we can achieve our goal of growing overall company operating income in the long run,” it said.
Meta shares were down almost 8% in after-hours trading on Wednesday. Shares are down more than 60% this year.
Facebook has faced investor calls to reduce spending on the Metaverse as lower user growth numbers and reduced ad spending have cut into its results. Meta reported a loss of $10.2 billion on revenue of $2.3 billion for FRL in 2021, and the company has said it is committed to spending even more on the division for the next several years, seeing it as a crucial driver of future growth.
For the company as a whole, Meta reported adjusted quarterly earnings per share for Q3 of $1.64, missing the analyst consensus estimate of $1.90, according to FactSet, while its overall revenue of $27.7 billion beat estimates of $27.4 billion.
The company is scheduled to hold an earnings call with analysts at 5 pm ET.
This is a developing story and will be updated.
UPDATE (Oct. 26, 20:31 UTC): Added details throughout.