Latest Updates

Forrester Research analyst Mike Proulx said in an email that he sees Meta’s Reality Labs business as a “leaky bucket,” as its losses continue to grow, while revenue declined in the quarter.

Meta’s Reality Labs reported a second-quarter operating loss of $4.2 billion, an increase from an operating loss of $3.8 billion in the year-ago quarter. At the same time, revenue in the quarter fell to $412 million, down from $420 million.

“I predict come end of this year, Meta will shutter its Metaverse projects, like Horizon Worlds,” Proulx said. “This would allow the company to give more focus to its AI projects including Llama, Meta AI and AI glasses.”

Proulx was not alone in singling out Reality Labs this quarter. Jefferies analyst Brent Thill pointed out in a note earlier Wednesday that Reality Labs is one area where Meta could make some cuts, to discipline some of its expense growth.