Some of the largest companies in the world spend part of their profit on products that may take a decade or more to pay off. Shareholders tend to put up with that while the main business keeps growing, but the cost lands in the profit figures every quarter, whether the long bet is working or not.
That makes these bets hard to judge from the outside. A headline saying a unit has lost billions again tells you little about what it is building. It also leaves out whether the losses are still growing or starting to level off, and how much bigger the company's profit would be without them.
Listed companies answer part of that question in their own filings. When a company reports a loss-making unit as a separate segment, it has to publish that unit's revenue and operating loss every quarter, the amount by which the cost of running the unit exceeds its sales. Anyone can then add up the total, follow the trend and set it against the rest of the business.
Meta Platforms reports its virtual and augmented reality business in exactly this way, under the name Reality Labs. BloFin lists two ways to follow Meta's shares with crypto: the METAX/USDT Spot market, where you can hold tokenized Meta, and the METAUSDT Perpetual, where you can go long or short on Meta's price with leverage. The Reality Labs loss is one of the lines that changes Meta's profit each quarter.
What is Meta Reality Labs?
Meta Reality Labs is the part of Meta that makes virtual reality headsets, AI glasses and the software and content that run on them. Meta reports it as one of its two business segments. In 2025 it brought in $2.2 billion of revenue and recorded an operating loss of $19.2 billion (source: Meta 10-K for 2025).
Meta's annual report splits the unit's work into two kinds. Much of the money goes to long-term research on products that are not on the market yet, alongside the headsets and glasses Meta sells today. The report ties both to one goal, which Meta calls building the next computing platform: a step beyond phone and laptop screens toward things you see all around you. It adds that some of these products may only be fully realized in the next decade (source: Meta 10-K for 2025).
Two terms come up again and again. Virtual reality, or VR, puts you inside a scene drawn by a computer, through a headset that covers your eyes. Augmented reality, or AR, lays digital images over the real world while you can still see it. Meta sells VR headsets today, and its glasses are a first step toward AR.
Meta expects the metaverse to become that platform, though its annual report says the metaverse is in the very early stages of its development (source: Meta 10-K for 2025). The bill for all of this is separate from Meta's AI capex, the money it spends building data centers for AI.
What Reality Labs sells: glasses, Quest and Horizon
Reality Labs sells three groups of products. There are Meta Quest virtual reality headsets, with apps and games from the Meta Horizon Store. There are AI glasses such as Ray-Ban Meta and Oakley Meta, which carry Meta's AI assistant. And there is Meta Ray-Ban Display, a pair of AI glasses with a small screen built into the lens (source: Meta 10-K for 2025).
Meta Ray-Ban Display ships with the Meta Neural Band, a wrist-worn device that works with the glasses (source: Meta 10-K for 2025). Horizon is the name Meta gives to its VR platform and its virtual worlds, which Meta now wants people to use on phones as well as in headsets (source: Meta Q4 2025 earnings call).
The mix of what sells has shifted toward glasses. Mark Zuckerberg said in January 2026 that sales of Meta's glasses more than tripled in 2025 (source: Meta Q4 2025 earnings call). Between April and June 2026, Reality Labs revenue rose 16% to $431 million. Finance chief Susan Li put that down to strong growth in AI glasses, partly offset by lower Quest headset sales (source: Meta Q2 2026 earnings call).
On the same call, Zuckerberg said Meta had just released its own line of Meta Glasses, made with the eyewear group EssilorLuxottica. He said they were the first glasses to ship with its Muse Spark AI model already on board. Say you buy a pair of those glasses this year: that sale counts as Reality Labs revenue, while the Instagram ads you scroll past on the same day count in Meta's other segment, Family of Apps.
How much has Meta lost on Reality Labs?
Meta lost $88.1 billion on Reality Labs from 2019 through 2025, worked out by adding up its yearly losses (source: Meta 10-K for 2021) (source: Meta full-year 2022 results) (source: Meta 10-K for 2025). The first half of 2026 added $8.6 billion, which brings the total to $96.7 billion (source: Meta Q2 2026 results). Over the same period the unit brought in $13.2 billion of revenue.
Year | Reality Labs revenue | Operating loss | Total loss since 2019 | Loss for each $1 of revenue |
|---|---|---|---|---|
2019 | $501 million | $4.5 billion | $4.5 billion | $8.99 |
2020 | $1.1 billion (source: Meta 10-K for 2021) | $6.6 billion | $11.1 billion | $5.81 |
2021 | $2.3 billion | $10.2 billion | $21.3 billion | $4.48 |
2022 | $2.2 billion | $13.7 billion | $35.0 billion | $6.35 |
2023 | $1.9 billion | $16.1 billion | $51.2 billion | $8.50 |
2024 | $2.1 billion | $17.7 billion | $68.9 billion | $8.26 |
2025 | $2.2 billion | $19.2 billion | $88.1 billion | $8.70 |
First half of 2026 | $833 million | $8.6 billion | $96.7 billion | $10.38 |
The running totals and the loss for each dollar are worked out from Meta's figures in millions. That is why a few totals differ by $0.1 billion from adding the rounded numbers (source: Meta 10-K for 2021) (source: Meta 10-K for 2025). The loss grew every year from 2019 to 2025, while revenue has stayed close to $2 billion a year since 2021. Spread across 2025, the loss came to about $52.6 million a day, worked out.
The loss for each dollar of revenue tells you how far the unit is from paying its own way. It fell to $4.48 in 2021, when Meta's 10-K says higher hardware sales doubled the unit's revenue (source: Meta 10-K for 2021). It has stayed over $8 since 2023, as costs kept rising and revenue did not. The loss rose by $3.6 billion in 2021 and $3.5 billion in 2022, worked out, the two biggest one-year increases on the record. In 2022, Meta stock's long fall from its 2021 high also reached its low.
Meta's own spending figure matches this record. Its annual report puts total Reality Labs investment at $21.4 billion in 2025, which is the unit's $2.2 billion of revenue and its $19.2 billion loss added together (source: Meta 10-K for 2025).
Reality Labs quarter by quarter
Reality Labs takes in the most money between October and December, when headsets and glasses sell as holiday gifts, so the loss for each dollar of revenue drops at the end of each year. In the nine quarters on Meta's latest results slides, revenue passed $900 million only in the final quarters of 2024 and 2025 (source: Meta Q2 2026 slides).
Quarter | Reality Labs revenue | Operating loss | Loss for each $1 of revenue |
|---|---|---|---|
April to June 2024 | $353 million | $4.5 billion | $12.7 |
July to September 2024 | $270 million | $4.4 billion | $16.4 |
October to December 2024 | $1.1 billion | $5.0 billion | $4.6 |
January to March 2025 | $412 million | $4.2 billion | $10.2 |
April to June 2025 | $370 million | $4.5 billion | $12.2 |
July to September 2025 | $470 million | $4.4 billion | $9.4 |
October to December 2025 | $955 million | $6.0 billion | $6.3 |
January to March 2026 | $402 million | $4.0 billion | $10.0 |
April to June 2026 | $431 million | $4.6 billion | $10.7 |
The holiday quarter of 2025 is also when the biggest single loss in those nine quarters landed, at $6.0 billion. Revenue in that quarter was 12% lower than a year before. Susan Li said Meta was up against the launch of the Quest 3S headset in late 2024. She added that retailers had already bought Quest stock for the holidays in the July to September quarter (source: Meta Q4 2025 earnings call).
Outside the holiday quarter, the loss has stayed between about $4.0 billion and $4.6 billion a quarter since the middle of 2024. That steady base is the number to compare each new quarter against, and the Reality Labs line sits in the same segment table every time, as reading Meta's earnings shows.
What Meta has said about Reality Labs losses
Meta tells investors early in each year which way it expects Reality Labs losses to go. From 2023 to 2025 the loss rose each time Meta said it would (source: Meta Q4 2022 earnings call) (source: Meta Q4 2023 earnings call) (source: Meta 10-K for 2024). For 2026 the message changed. In January 2026 Meta said losses would stay similar to 2025, and Mark Zuckerberg said this year would likely be the peak (source: Meta Q4 2025 earnings call).
When Meta said it | Where | What Meta expected | What happened |
|---|---|---|---|
February 1, 2023 | Fourth-quarter 2022 call, Susan Li | Losses would rise in 2023 | The loss grew 17.5% to $16.1 billion |
February 1, 2024 | Fourth-quarter 2023 call, Susan Li | Losses would rise meaningfully in 2024 | The loss grew 10.0% to $17.7 billion |
January 30, 2025 | Annual report for 2024 | Investment and losses would rise in 2025 | The loss grew 8.3% to $19.2 billion |
January 28, 2026 | Fourth-quarter 2025 call (annual report filed January 29) | Losses in 2026 would stay similar to 2025 | First-half loss of $8.6 billion, down 1.1% on a year earlier |
Each growth rate is worked out from the yearly losses, and the 2026 figure sets the first half of the year against the first half of 2025 (source: Meta Q2 2026 results).
Zuckerberg's full words in January 2026 were that 2026 "will likely be the peak as we start to gradually reduce our losses going forward" (source: Meta Q4 2025 earnings call). That is Meta's own view, and the first half of 2026 is in line with it so far. The yearly rate of growth in the loss had already slowed from 17.5% to 8.3% before the new guidance.
The 2026 shift from the metaverse to wearables
In 2026 Meta is moving most Reality Labs money from virtual reality and the metaverse to wearables, meaning AI glasses and the AR glasses it is still developing. Its annual report says about 70% of the unit's 2026 running costs will go to wearables, and the other 30% to VR and Horizon (source: Meta 10-K for 2025).
On the January 2026 call, Zuckerberg said Meta was "directing most of our investment towards glasses and wearables going forward" (source: Meta Q4 2025 earnings call). Jobs followed the money. In January 2026 Meta began cutting about 10% of Reality Labs staff, more than 1,000 jobs (source: Bloomberg News via Bloomberg Law, January 13, 2026). A Meta spokesperson said the savings would be put back to support the growth of wearables in 2026 (source: FOX Business via FOX 5 DC, January 14, 2026).
Why keep paying at all? Meta's filings describe these devices as the start of the next way people will use computers, and Meta sees AI as what makes glasses worth wearing all day. Zuckerberg told analysts in July 2026 that glasses are the ideal form for an AI assistant. They can be with you all day, he said, and help without pulling you out of the moment (source: Meta Q2 2026 earnings call).
The other side of that bet is spelled out in the same annual report. Meta says it has fairly little experience making consumer hardware. It also says its plan to build the next computing platform depends on earning enough profit from the rest of the company (source: Meta 10-K for 2025). That trade-off, a large loss paid for by the apps' profit, is one of the risks to weigh when judging whether Meta stock is a good investment.
Connect 2026 and the next Reality Labs report
At its Connect event on September 23, 2026, most of the new hardware Meta showed was glasses. They included Meta VR Glasses, a 100-gram headset in the shape of glasses that goes on sale in spring 2027 for $1,299.99. Meta says it is five times lighter than Meta Quest 3 (source: Meta Newsroom, Meta VR Glasses).
Meta also launched Ray-Ban Meta Audio glasses from $349, with shipping from October 13. A third generation of Ray-Ban Meta, from $449, went on sale the same day as the event (source: Meta Newsroom, Ray-Ban Meta Audio). Meta's Muse AI agent is due to come to its AI glasses in the coming months (source: Meta Newsroom, The Biggest News From Connect 2026).
The first Reality Labs figures since Connect arrive soon. Meta will release its third-quarter 2026 results after the market close on Wednesday, October 21, 2026 (source: Meta's results date notice). That report covers July to September, so it can include only about a week of Gen 3 sales, while every Audio pair falls in the October to December quarter because shipping starts in October.
If you want to watch the market react to that report, METAX trades on its METAX/USDT Spot page, while the METAUSDT Perpetual page shows where the contract is priced and what funding it pays.
Meta's operating margin excluding Reality Labs
Meta's profit margin would be about 10 points higher without Reality Labs. In 2025 Meta kept 41.4% of its revenue as operating profit, while the Family of Apps segment, which holds Facebook, Instagram, Messenger and WhatsApp, kept 51.6% of its own revenue. Both margins are worked out from Meta's segment figures (source: Meta 10-K for 2025).
Year | Meta's operating margin | Family of Apps operating margin | Gap in percentage points |
|---|---|---|---|
2019 | 33.9% | 40.6% | 6.7 |
2020 | 38.0% | 46.3% | 8.3 |
2021 | 39.6% | 49.2% | 9.6 |
2022 | 24.8% | 37.3% | 12.5 |
2023 | 34.7% | 47.3% | 12.6 |
2024 | 42.2% | 53.7% | 11.5 |
2025 | 41.4% | 51.6% | 10.1 |
First half of 2026 | 35.6% | 43.3% | 7.7 |
Each margin is operating profit divided by revenue, from the same four filings as the loss record, and each gap is worked out from the unrounded margins. The gap was widest in 2022 and 2023, when the Reality Labs loss was growing fastest. It narrowed in the first half of 2026 mostly because the apps' own margin fell, while the Reality Labs loss held close to its 2025 pace (source: Meta Q2 2026 results).
A simple way to picture 2025 is to take $100 of Meta's revenue. About $1.10 of it came from Reality Labs, yet Reality Labs used about $10.65 of it in costs. Meta ended with $41.44 of operating profit, and without the Reality Labs loss that figure would have been about $50.99, all worked out from Meta's segment figures. That is a little below the apps' own 51.6% because Reality Labs' $1.10 of revenue stays in the total.
Put another way, Reality Labs brought in about 1% of Meta's 2025 revenue and accounted for about 18% of its total costs, worked out. For Meta's profit, the size of the loss matters far more than the unit's sales, since the apps bring in the other 99% of Meta's revenue.
What Reality Labs means for METAX and METAUSDT holders
For METAX and METAUSDT holders, Reality Labs matters because its loss sits inside the profit figure Meta reports each quarter, and both products follow Meta's share price. The unit is small in revenue and large in cost, so a change in its loss, or in Meta's guidance for it, can shift Meta's profit by billions of dollars.
Meta's results come out after the 4PM ET Nasdaq close. Under its written schedule, METAX trades 24 hours on each weekday, so it can move on a Reality Labs surprise hours before Nasdaq opens again, as METAX trading hours explains. With the perpetual you can take a position either way using leverage, which makes both a gain and a loss from report night larger, and the position also carries margin and funding on the METAUSDT Perpetual. Open it before the 4PM ET close, because outside the Nasdaq session BloFin may accept only orders that reduce a position (source: BloFin stock futures notice).
On October 21, three Reality Labs lines are worth reading. The first is revenue and what Meta says about glasses against Quest. The second is the loss against the first-half pace of about $4.3 billion a quarter, worked out. The third is any change to the guidance that 2026 losses would stay similar to 2025. Before the report, you can size a position for Meta's earnings night so that a move on any of those lines stays within what you can afford to lose.
Looking to follow Meta's next Reality Labs report with crypto? To get started, you'll need to first create a BloFin account, fund your account with cryptocurrency, and go to the METAX/USDT Spot trading page or the METAUSDT Perpetual trading page.
Frequently asked questions
Is Meta an augmented reality company?
Meta sells virtual reality headsets and AI glasses today, and full augmented reality glasses are still in development. Meta unveiled a prototype of AR glasses called Orion in 2024, and its annual report lists long-term AR work as part of its wearables effort, next to its AI glasses (source: Meta 10-K for 2025). Meta Ray-Ban Display, with its in-lens screen, is the closest product on sale.
When did Meta start reporting Reality Labs as a separate segment?
Meta began reporting Reality Labs as its own segment in the fourth quarter of 2021, the same quarter Facebook renamed itself Meta. It recast its figures for 2019 and 2020 on the same basis, which is why the loss record starts in 2019 (source: Meta 10-K for 2021). Before that, the costs were part of Facebook's overall results.
Has Meta said when Reality Labs will make a profit?
Meta's annual report for 2025, filed in January 2026, says it expects Reality Labs to keep operating at a loss for the foreseeable future (source: Meta 10-K for 2025). The nearest thing to a profit goal is narrower. On the January 28, 2026 call, Zuckerberg said Meta aims to make VR "a profitable ecosystem over the coming years", while most new Reality Labs money goes to glasses (source: Meta Q4 2025 earnings call).
Is Meta's AI spending part of Reality Labs?
Meta's main AI research lab, known as FAIR, used to sit in Reality Labs. Meta moved it into the Family of Apps segment to be closer to its generative AI group, which Zuckerberg confirmed on a February 2024 call (source: Meta Q4 2023 earnings call). Susan Li said in January 2026 that higher 2026 capital spending was driven by Meta Superintelligence Labs and the core business (source: Meta Q4 2025 earnings call).
How much revenue did Reality Labs make in its best quarter?
Its best quarter on Meta's latest slides was October to December 2024, when revenue reached $1.1 billion (source: Meta Q2 2026 slides). Zuckerberg had said Reality Labs first passed $1 billion in a single quarter at the end of 2023, helped by a strong holiday season for Quest (source: Meta Q4 2023 earnings call). Glasses now drive most of the unit's growth (source: Meta Q2 2026 earnings call).
Researched and written by the BloFin Academy editorial team with AI-assisted drafting. All facts independently verified. Primary sources include Meta's annual reports for 2021, 2024 and 2025, its 2022 and second quarter 2026 results, its Q2 2026 slides and its earnings calls from 2023 to 2026. They also include Meta's results date notice, Meta Newsroom posts from Connect 2026 and reporting from FOX Business and Bloomberg, and BloFin's stock futures notice, current as of October 2026.
Nothing in this article constitutes financial advice, and nothing in it is a recommendation to buy, sell or hold Meta in any form. Reality Labs has lost money every year since Meta began reporting it, and a larger loss or a change in Meta's guidance can cut the company's profit and its share price on report night. METAX can fall as fast as Meta's shares, and a leveraged METAUSDT Perpetual position can be liquidated before its whole margin is gone. Past performance does not indicate future results. Do your own research and consider your risk tolerance before you trade on BloFin.