Meta's Reality Labs, the division focused on building the metaverse, reported a staggering operating loss of $17.7 billion last year. That's a 10% increase over the previous year. Since 2020, total losses have now exceeded $60 billion.

In the fourth quarter of 2024, things didn’t get any better. Reality Labs faced $4.97 billion in operating losses, while bringing in just over $1 billion in revenue. For the entire year, revenue climbed by 13% to $2.15 billion, but losses also rose by 10%.

During an earnings call, Mark Zuckerberg, the CEO of Meta, expressed optimism. He stated that 2025 will be a pivotal year for the metaverse. He highlighted a steady growth in users of Meta’s augmented reality hardware and platforms. Zuckerberg believes that this year will mark the start of significant advancements in the visual and inspirational aspects of the metaverse.

Reality Labs is dedicated to developing virtual and augmented reality technologies, including the Quest VR headsets and the Horizon metaverse. This division is also increasingly connected to Meta's artificial intelligence efforts. Zuckerberg mentioned plans to invest between $60 billion and $65 billion in AI strategies, including a new, massive datacenter.

He also projected that agentic AI, or AI assistants, will reach over a billion users this year. He expects Meta AI to lead the way in this space.

Looking at the overall financial picture, Meta's fourth-quarter revenues grew by 21% year-on-year, reaching $48.4 billion. This surpassed analyst expectations by more than a billion dollars, mainly driven by advertising revenue. For the full year, revenues jumped by 22% to $164.5 billion.

Investors reacted positively to the news. Meta's stock gained 5% during the earnings call, closing at $676.5 on January 29. After-hours trading saw the stock rise an additional 2.3% to $692, marking an increase of over 15% since the start of the year.