Meta, along with other tech companies, has shared its Q2 2022 financial report — in short, Facebook’s parent company has seen revenue decline for the first time and continues to burn billions of dollars on its ambitious VR and metaverse-related plans.
The Reality Labs division, which is responsible for research in the field of virtual reality and the metaverse, as well as developing the Horizon Worlds VR gaming platform, amounted to $ 2.81 billion, and sales amounted to $ 452 million. For comparison, in the first quarter, the Reality division Labs spent $2.96 billion and generated $695 million. In April, Kotaku reported that Reality Labs’ spending has nearly reached $20 billion since 2020. This impressive amount is further evidence that Mark Zuckerberg continues to dream of the metaverse and relentlessly leads the social media giant down the path VR.
Zuckerberg and other Meta leaders believe that virtual and augmented reality headsets will be a key next-generation computing platform and are willing to spend heavily to develop technologies that could reach the market in a few years and create intermediate prototypes, as well as significant funds for a staff of technical experts. to compete with Apple, Google, Microsoft and other companies that are eyeing the industry.
For the quarter, Meta posted $8.36 billion in operating income on revenue of $28.82 billion, down 1% from a year earlier. Meta also expects a decline in revenue in the current quarter. Other key Meta metrics from Q2 2022 report:
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- Daily Active Users (DAU): 1.97 billion vs. 1.96 billion projected, according to StreetAccount
- Monthly active users (MAU): 2.93 vs. 2.94 billion projected, according to StreetAccount
- Average revenue per user (ARPU): $9.82 vs. $9.83 projected, according to StreetAccount
Meta’s stock has lost about half its value since the start of the year , underlining investor concerns about the health of its core advertising business, which has been hit hard by Apple’s new tracking policy on iOS. Because of these new rules, Facebook lost $10 billion in 2022 alone. Following Apple, Google announced similar rules on Android earlier this year, making it much more difficult for Facebook to track user actions, which has had a corresponding impact on its advertising revenue. The popularity of TikTok and the difficulty of monetizing Reels’ own short video service on Instagram have only made Meta’s predicament even more difficult.
Meta has 83,553 employees, up 32% year-over-year. Meta CEO Mark Zuckerberg told analysts on a conference call that the company will be cutting headcount over the next year and tightening its belts as it, like many others , braces for a global recession.
“These are times of greater impact and I expect we can do more with less,”
Mark Zuckerberg,
Founder and CEO Meta
For the current quarter, Meta expects revenue in the range of $26 billion to $28.5 billion, below the average analyst estimate of $30.5 billion. This means a projected decline of 2-11% year-over-year. At the same time, Meta is forecasting total spending between $85 billion and $88 billion in 2022, while my estimate was $87-92 billion at the time.
As for the direction of VR, on the eve of Meta announced a price increase for the Quest 2 headset – from August 1, it will rise in price by $ 100 to $ 400 for the base model with 128 GB of memory. Later this year, Meta plans to release an advanced headset that will use the cameras on the front of the device to allow users to see their actual surroundings.
Meta Quest 2 VR headset to rise by $100 from August 1 to $400 for the base model with 128 GB of memory
