MENLO PARK, California, February 1, 2026, 04:29 (PST)
- In 2025, Meta Platforms’ Reality Labs reported an operating loss near $19.2 billion.
- Despite pulling in around $1.0 billion in revenue, the unit faced a fourth-quarter operating loss close to $6.0 billion.
- Meta expects Reality Labs’ losses in 2026 to remain close to the levels seen in 2025.
Meta’s Reality Labs, the company’s VR and AR division, reported an operating loss of $19.193 billion for 2025, up from $17.729 billion the previous year. The segment’s fourth quarter alone saw a $6.021 billion operating loss on $955 million in revenue. 1
Scale is crucial now as Meta pitches investors on two costly ventures simultaneously: AI infrastructure on one front, and a long-term gamble on headsets and smart glasses on the other. Reality Labs still stands out as the clearest indicator for that second bet.
This division is central to Meta’s push into the “metaverse”—a broad concept of shared digital environments accessed via headsets or glasses—even as the company’s messaging around it has evolved. It also tests how long Meta can sustain steep losses beyond its core advertising business without a tangible return.
Zuckerberg is steering the focus toward devices that don’t resemble helmets but something you’d actually wear out. “We are directing most of our investment towards glasses and wearables,” he said during the earnings call, noting that 2026 will “likely be the peak” for the division’s losses as Meta aims to “gradually reduce” them over time. 2
Meta has reduced its Reality Labs team, with media reports estimating layoffs around 10% of the staff. Some sources suggest cuts could total up to 1,000 jobs. 3
Analyst George Jijiashvili from Omdia said the company had grown frustrated with being “entirely dependent on iOS held by Apple,” as well as Android and the Play Store, both controlled by Google. Ola Kristensson at the University of Cambridge highlighted a more straightforward issue: in VR office work tests, “you can, but you will hate it.” He also noted that Meta’s push to bring Horizon to mobile seems like a reaction to big virtual platforms like Roblox, which don’t need headsets. 4
Meta’s filings highlight the uncertainty ahead. The company cautioned the metaverse “may not develop” as anticipated and admitted market acceptance of new products remains unclear. It also projected Reality Labs’ operating losses in 2026 will likely stay on par with 2025. 5
Reality Labs continues to generate revenue, but it’s nowhere near enough to keep up with the spending. For Meta, the equation only balances if these devices evolve into a full-fledged platform rather than staying a niche gadget — and if a large crowd of developers and users jump on board.
Zuckerberg is steering the conversation away from just one buzzword: “metaverse.” He’s presenting the lab as a hub for AI-driven wearables and a wider “extended reality” ecosystem, where virtual reality plays a role but isn’t the main focus.
Investors will be closely watching whether that shift leads to a profitable business or just reduces the annual losses through 2026.
