Meta CEO Mark Zuckerberg reiterated his commitment to spending billions of dollars developing the metaverse amid investor concern about the health of his company’s online advertising business.
On a call with analysts as part of Meta’s third-quarter earnings report, Zuckerberg and other Meta executives fielded a number of questions from analysts who sounded increasingly frustrated with the company’s rising costs and expenses, which jumped 19% year over year to $22.1 billion during the quarter.
Meta shares tanked 19% after the company reported weak fourth-quarter guidance below analysts’ estimates. The Facebook parent’s revenue slipped 4% year-over-year to $27.7 billion in the third quarter while its profits plummeted 52% year-over-year to $4.4 billion.
Meta’s Reality Labs unit, which is responsible for developing the virtual reality and related augmented reality technology that underpins the yet-to-be built metaverse, has lost $9.4 billion so far in 2022. Revenue in that business unit dropped nearly 50% year-over-year to $285 million, which Meta chief financial officer Dave Wehner attributed to “lower Quest 2 sales.”