Meta Platforms' METAverse has been an ambitious and expensive project, with an investment of $10 billion and the hiring of more than 10,000 people. However, the result has not been profitable, with the company losing nearly $4 billion in just the third quarter of 2022 and $9.4 billion for 75% of the year.
Now, the company announced its financial results in Q4 and the full year of 2022, with a focus on the most important metrics such as revenue, costs, expenses and active users.
According to the data, Family Daily Active Persons (DAP) averaged 2.96 billion in December 2022, an increase of 5% year-over-year. In addition, Facebook's Daily Active Users (DAU) reached 2 billion on average by December 2022, an increase of 4% year-over-year.
On the revenue side, the company reported total revenue of $32.17 billion and $116.61 billion for the fourth quarter and full year of 2022, respectively. If exchange rates had been held constant, revenues would have been higher by $2010 million and $5960 million, an increase of 2% and 4% in constant currency, respectively.
On the other hand, total costs and expenses were $25.77 billion and $87.66 billion for the fourth quarter and full year 2022, respectively. This amount includes charges related to restructuring efforts of $4.2 billion and $4.61 billion for the fourth quarter and full year 2022, respectively.
First three quarters of 2022
The company's stock price plummeted more than 65% to $97.94 per share. Due to the poor financial results and controversies, doubt has arisen as to whether Meta will enter bankruptcy. Zuckerberg announced a restructuring plan to continue with the development of the Metaverse, which includes the reduction of staff and the elimination of offices.
Horizon Worlds fails to improve results
Despite the generally better-than-expected quarterly results released by Meta, its metaverse division is still not taking off. Horizon Worlds, the virtual world developed by the company, experienced a loss of US$4.28 billion in the last quarter, despite having generated revenues of US$727 million in the last three months.
The production of virtual reality headsets and the development of Horizon Worlds have cost the company a substantial sum, in line with the expectations of shareholders who were already suspicious of the project's profitability. Meta's $13.7 billion loss in the metaverse has been bad news for shareholders, but the share price is up +4% following the release of the quarterly results.
In conclusion, although Meta's quarterly results have been more positive than expected, the division dedicated to the metaverse remains a weak point for the company. The loss of $4.28 billion in the last quarter is a sign that Horizon Worlds still has a long way to go before becoming profitable.