MetaReality Labs posted record quarterly revenue, but lost more than $4B.

In the fourth quarter of 2023, Meta's mixed-reality division, Reality Labs, posted one of the strongest quarterly earnings results in its history, but posted a loss of more than $4.6 billion.

Meta's fourth-quarter results released on Feb. 1 show Reality Labs — its virtual and augmented reality (VR/AR) research arm — lost $4.65 billion in Q4, while revenue came in at $1.1 billion.

The fourth quarter of 2020 was the biggest quarterly operating loss for the segment since Meta added Realty Labs' financials to its report.

In the year Reality Labs' total revenue for 2023 was just under $1.9 billion, with more than half of that year's revenue coming in the fourth quarter alone, when it announced Meta Mission 3. Total operating loss in 2023 was $16.1 billion, a 17.5% year-over-year increase from 2022.

On an earnings call, Meta co-founder and CEO Mark Zuckerberg pegged Reality Labs' earnings for the Mission line of VR headsets to a “strong holiday season” and the new Mission 3, released on October 10, 2023, “off to a strong start.”

He said the company's artificial intelligence (AI) and artificial intelligence plays are “core parts of our long-term vision” and will continue to invest heavily in both areas.

“There are a lot of questions I get about AI right now, and that field is moving very quickly,” Zuckerberg said.

Still, this next generation AR VR and [mixed reality] Computing platforms to provide a tangible sense of presence as a basis for future social experiences.

Meta's chief financial officer, Susan Lee, said she expects Realty Labs' losses to “increase meaningfully year-over-year” in AR and VR product development and “investments to further grow our ecosystem.”

Related: Microsoft's tech stack up 18% after ‘introducing AI'

Meta's shares traded flat on the day but jumped more than 15% after the call, jumping to $455 on Feb. 1, according to Google Finance.

Meta's full-year 2023 revenue was $134.9 billion, beating estimates from Wall Street research house Zacks and jumping 16 percent from its 2022 results.

The tech giant said it will pay its first dividend of 50 cents on March 26 and plans to pay an ongoing quarterly dividend.

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