Facebook will begin breaking out results for Facebook Reality Labs (FRL), its augmented/virtual reality division, starting in the fourth quarter, according to the social network company’s third-quarter earnings release.
- ”As we have discussed, we are dedicating significant resources toward our augmented and virtual reality products and services, which are an important part of our work to develop the next generation of online social experiences,” the company said. “The new segment disclosures will provide additional information on the performance of FRL and the investments we are making.”
- Facebook sees its investment in Reality Labs reducing its overall operating profit by about $10 billion in 2021
- CEO Mark Zuckerberg said on the company’s earnings call Monday afternoon that the investment won’t be profitable any time in the near future; however, he believes that moving into the metaverse holds great potential for the company by unlocking a “massively larger creative economy”
- Zuckerberg has previously discussed repositioning Facebook as a player in the metaverse, or the immersive digital world created by the combination of virtual reality, augmented reality and the internet. There have been recent reports the company plans to rebrand and potentially even rename itself accordingly.
- Starting in the fourth quarter, Facebook said it will have a new reporting structure with two reportable segments: Family of Apps (FoA), which includes Facebook, Instagram, Messenger, WhatsApp and other services; and Facebook Reality Labs (FRL), which includes augmented and virtual reality related consumer hardware software and content.
- Overall for the third quarter, Facebook reported adjusted earnings per share of $3.22 versus the $3.19 expected by analysts, according to FactSet, and revenue of $29.01 billion, versus $29.49 billion expected. Shares of Facebook rose about 1.6% in postmarket trading to $338.80
Read more: A Crypto Guide to the Metaverse
UPDATE (Oct. 25, 21:20 UTC): Added commentary from Facebook’s earnings conference call in third bullet, and updates share movement.