What you need to know
- Meta announces Q1 2024 earnings, topping estimates amid warnings of a lighter Q2.
- Revenue for Meta's Family of Apps increased to more than $17 billion, while Reality Labs losses shrunk slightly to $3.8 billion.
- Sales of Quest headsets helped increase Reality Labs revenue by 30%, despite overall losses.
- Meta recently made several large announcements related to AI and its new Ray-Ban smart glasses.
After a rather exciting week for the company, Meta announced its Q1 2024 financial earnings on Wednesday, revealing rather impressive numbers despite a worrying forecast. Revenue was up year over year to $36.45 billion, led mostly by Meta's Family of Apps and increased ad spend. However, VR also played a role, thanks to improved Quest sales.
Reality Labs, Meta's division focused on VR and AR, was up by 30% as a result of sales of its VR headsets like the Quest 3, despite continuing to bleed cash. The division lost more than $3.8 billion during the quarter as the company continues to invest in its platform. Just this past week, Meta announced that it is expanding the Meta Horizon OS to third-party headsets, which should not only expand the company's offerings but open it up to more types of headsets.
We expect to see headsets from companies like Lenovo and ASUS ROG, and there will even be an Xbox-inspired headset.
"I think that our first-party Quest devices will continue to be the most popular headsets, as we see today," Meta CEO Mark Zuckerberg said during the earnings call. "And we'll continue focusing on advancing the state-of-the-art tech and then making it accessible to everyone, but I also think that opening our ecosystem and opening our operating system will help the overall mixed reality ecosystem grow even faster."
But beyond VR, Meta has also increased its investments in AI, which is an area the company hopes will expand throughout its products. Recently, Meta announced its improved Llama 3 model, which can now be accessed via Meta AI on apps such as Facebook, Instagram, and WhatsApp.
"We are also starting to see our AI initiatives increasingly overlap with our Reality Labs," Zuckerberg added, highlighting the new AI capabilities rolling out on the well-received Ray-Ban Meta smart glasses. With this update, users will be able to make video calls and perform multimodal searches, which incorporate voice and visuals to help users learn about what's around them.
This essentially means Meta has two major investments going forward as it looks to bolster its VR platform and its position in the ongoing AI race. As a result, and adding in other factors like an upcoming trial over facial recognition tech, the company expects a more modest Q2 as we begin to see these strategies take shape.
Despite this, Meta says it will "invest significantly more in infrastructure over the coming years" to support its AI ambitions, which will be crucial as companies like Google and Microsoft continue to inject their AI models across their products and services.
