Meta Q2 sales surge 22% despite billions loss from AR/VR and metaverse business

"Meta AI is on track to be the most used AI assistant in the world by the end of the year," said Mark Zuckerberg.

Meta's social-media empire continues to generate substantial revenue from digital ads, while its metaverse and AR/VR ventures face increasing losses.

The company, which owns Facebook, Instagram, and WhatsApp, reported total revenue of $39.07 billion, with nearly all of it coming from advertising. This marks a 22% increase year over year. Net income was $13.47 billion, or $5.16 per share. Analysts had predicted average revenue of $38.31 billion and earnings per share of $4.73, according to financial data provider LSEG.

“We had a strong quarter, and Meta AI is on track to be the most used AI assistant in the world by the end of the year,” Meta co-founder, CEO and chairman Mark Zuckerberg said in announcing the earnings. He added, “We’ve released the first frontier-level open source AI model, we continue to see good traction with our Ray-Ban Meta AI glasses, and we’re driving good growth across our apps.”

The company announced that it anticipates total revenue for the third quarter of 2024 to be between $38.5 billion and $41 billion, aligning with analyst predictions.

Meanwhile, Meta’s Reality Labs segment, responsible for the Quest AR/VR headset and metaverse projects, reported a larger loss for Q2. Mark Zuckerberg’s ambitious project continues to consume substantial funds, with the unit generating quarterly sales of $353 million (a 28% increase) but incurring an operating loss of $4.49 billion, compared to a $3.74 billion loss the previous year. Since early 2019, Reality Labs has accumulated a total loss of $59.5 billion. The company has indicated that in 2024, it expects Reality Labs' operating losses to “increase meaningfully” year-over-year "due to our ongoing product development efforts in augmented reality/virtual reality and our investments to further scale our ecosystem.”

Meta is also making significant investments in artificial intelligence. In April, the company increased its 2024 capital expenditure forecast to $35 billion-$40 billion for the year, up from the previous estimate of $30 billion-$37 billion, due to accelerated AI infrastructure investments.