Mark Zuckerberg, CEO of Meta Platforms, wears Meta Ray-Ban Display AI glasses during the MetaConnect event on Wednesday, September 17, 2025 in Menlo Park, California, USA.
David Paul Morris | Bloomberg | Getty Images
Meta continues to pour money into the Metaverse, building on virtual reality and augmented reality technology.
The company reported third-quarter earnings on Wednesday, saying its Reality Labs division posted revenue of $470 million in the period, but an operating loss of $4.4 billion.
Wall Street had expected Reality Labs to post an operating loss of $5.1 billion on revenue of $316 million.
The Reality Labs division is responsible for developing the company’s Quest-branded family of VR headsets, as well as the Ray-Ban and Oakley AI smart glasses that Meta is developing in partnership with glasses giant EssilorLuxottica.
The company’s Reality Labs division currently has cumulative losses of more than $70 billion since late 2020, highlighting the high cost of building VR, AR and other consumer hardware.
Finance Director Susan Lee told analysts Wednesday that Meta expects Reality Labs’ fourth-quarter revenue to be lower than the company reported in the same period last year. Lee said this is partly because the company did not introduce a new VR headset in 2025.
“We still expect strong year-over-year growth in AI Glasses revenue in the fourth quarter, benefiting from strong demand for our recent product introductions, which will be more than offset by headwinds to the Quest headset,” Lee said.
Meta CEO Mark Zuckerberg announced the $799 Meta Ray-Ban display glasses in September. This is the company’s first consumer AI glasses with a built-in display and an attached wristband powered by neural technology.
EssilorLuxottica said in its latest financial report released earlier this month that these AI glasses contributed to sales growth in the third quarter.
“Clearly, Ray-Ban Meta wearables are driving growth as a product category,” EssilorLuxottica CFO Stefano Grassi said during the company’s third-quarter earnings call.
Meta’s AI glasses have become a surprise hit, and investors are watching the company for signs of changing its Metaverse strategy.
Meta announced Monday that Vishal Shah, who led the Metaverse effort, is now vice president of AI products for the company’s Superintelligence Labs division, which focuses on AI.
Note: Market volatility reflects AI trade fears ahead of Mag 7 earnings.
