By Tony Sycamore
Publication Date: 2026-01-20 05:18:00
Reality Labs Challenges
Meta’s third quarter earnings report and conference call clearly illustrated the ongoing challenges facing Reality Labs. The division posted an operating loss of $4.43 billion in the quarter, consistent with prior periods and adding to cumulative losses of well over $70 billion since 2021.
While revenue rose 74% year-over-year to $470 million, driven by pre-stocks of the Quest headsets and strong early demand for the AI-powered Ray-Ban Meta smart glasses, management specifically forecast a year-over-year decline in fourth-quarter revenue. These headwinds come from lapping last year’s launch of the Quest 3S and the lack of new virtual reality (VR) headset releases in 2025.
Key areas to watch
In addition to the total revenue and EPS numbers, investors will focus on several key areas in the Meta Q4 2025 earnings report. These build on the momentum of strong advertising-driven performance in the third quarter, while contending with the company’s massive expansion of its AI infrastructure and Reality Labs’ ongoing challenges.
