Meta's Reality Labs division is expected to report losses exceeding 650 billion yen in the first quarter of 2026.

Meta has announced its first-quarter 2026 earnings. While revenue increased 33% year-over-year, the metaverse business continues to incur losses.

Meta - Meta Reports First Quarter 2026 Results
https://investor.atmeta.com/investor-news/press-release-details/2026/Meta-Reports-First-Quarter-2026-Results/default.aspx

Meta's Reality Labs lost over $4 billion in first quarter
https://www.cnbc.com/2026/04/29/metas-reality-labs-lost-over-4-billion-in-first-quarter.html

Meta's revenue for the first quarter of 2026 was $56.311 billion (approximately 9.02 trillion yen). This was broken down as follows: $55.909 billion (approximately 8.96 trillion yen) from the 'Family of Apps' division, which operates various services such as Facebook and WhatsApp, and $402 million (approximately 60 billion yen) from the 'Reality Labs' division, which works on VR and other technologies.

Of these, the Family of Apps division generated a profit of $26.9 billion (approximately 4.31 trillion yen) from advertising expenses, while the Reality Labs division recorded a loss of $4.028 billion (approximately 650 billion yen). The Reality Labs division also recorded a loss of $4.21 billion (approximately 670 billion yen) in the same period last year, and has recorded cumulative operating losses of more than $80 billion (approximately 21.82 trillion yen) since the second half of 2020.

Meta's daily active users averaged 3.56 billion as of March 2026, a 4% increase year-on-year. While there was a slight decrease on a quarterly basis, this was attributed to internet outages in Iran and restrictions on access to WhatsApp in Russia.

Meta has been sued in several cases for allegedly making underage users addicted to the social media platform, and in its earnings announcement, it stated that 'additional lawsuits are scheduled in the United States this year, which could ultimately lead to significant losses.'

Facebook founder Mark Zuckerberg changed the company's name to Meta in 2021, reflecting his view that work and play would shift to the virtual world.

Facebook announces it will change its company name to 'Meta' - GIGAZINE

However, that vision was interrupted by the generative AI boom triggered by 'ChatGPT,' which emerged in the latter half of 2022. Meta is now actively investing in infrastructure and new AI models to catch up with OpenAI, Anthropic, and Google.

On the other hand, the Reality Labs division has been a drag, leading to employee reductions across all divisions and the forced closure of some metaverse-related studios. However, according to the earnings announcement, the total number of employees has increased by 1% year-on-year.

Meta officially confirms layoffs of over 1,000 employees and closure of subsidiary VR studios, shifting focus from metaverse strategy to mobile features and AI wearables - GIGAZINE