Meta just dropped its Q4 earnings, and the Reality Labs division continues its cash bonfire. The metaverse unit posted a staggering $6.02 billion operating loss on just $955 million in revenue, surpassing analyst expectations of a $5.67 billion loss. The miss underscores why the company laid off over 1,000 Reality Labs employees earlier this month, redirecting resources toward AI and smart glasses as the VR market grows slower than executives hoped.
Meta just confirmed what Wall Street feared: the metaverse remains an expensive bet with no clear payoff in sight. The company's Reality Labs division reported a $6.02 billion operating loss in Q4 2025, topping analyst estimates and pushing the unit's total losses past the $80 billion mark since late 2020, according to Wednesday's earnings report.
The numbers paint a sobering picture. Reality Labs pulled in just $955 million in revenue during the quarter, a 13% year-over-year increase that's completely dwarfed by the 21% jump in operating losses. Analysts had braced for a $5.67 billion loss on $940.8 million in revenue, but the actual figures show Meta's metaverse ambitions burning through cash faster than anticipated.
The timing couldn't be more telling. Just weeks before these earnings dropped, Meta laid off more than 1,000 Reality Labs employees in a dramatic pivot away from virtual reality toward artificial intelligence and wearable tech. The company shuttered internal VR studios, triggering what industry insiders are calling a potential "VR winter," CNBC reported earlier this month.
Tech chief Andrew Bosworth tried damage control last week, telling media outlets that Meta isn't abandoning VR entirely. But his admission that the market is "growing slower than executives hoped" speaks volumes about the gap between Mark Zuckerberg's metaverse vision and consumer reality.
