Meta’s VR Headsets and AI Glasses Cost the Company $4.4 Billion in Q3 2025

Meta shared its earnings report for the third quarter of 2025 on Wednesday. While the Menlo Park-based tech giant posted $56 billion (roughly Rs. 4.9 lakh crore) in revenue, marking an increase of 26 percent year-over-year (YoY), its Reality Labs division suffered a loss of $4.4 billion (roughly Rs. 39,000 crore). The loss-making division oversees development of the company's Quest-branded headsets as well as the Ray-Ban and Oakley-branded artificial intelligence (AI) glasses. Interestingly, the losses were incurred despite the popularity of Meta's AI glasses.

Meta's Reality Labs Posts Big Losses

Based on the tech giant's earnings report for Q3 2025, Reality Labs generated $470 (roughly Rs. 4,170 crore) million in sales, up from $270 (roughly Rs. 2,400 crore) million in the same quarter last year, up by 74 percent YoY. But despite the significant growth in revenue generation, the operating losses of the division reached $4.4 billion (roughly Rs. 39,000 crore).

According to a CNBC report, the division has accumulated a total loss of $70 billion (roughly Rs. 6.2 lakh crore) since late 2020, making it one of the least profitable ventures of the company. The report claims that the expenditure of Reality Labs is due to the high costs associated with augmented reality (AR) and virtual reality (VR) technologies.

Interestingly, during the earnings call, Meta CEO Mark Zuckerberg said the AI glasses revenue had a strong performance in the third quarter, hinting that the losses were largely due to the expenditures associated with Quest-branded headsets. However, the headsets also performed better than expected in Q3.

“The significant year-over-year growth in Q3 was partly due to retail partners stocking up on Quest headsets ahead of the holiday season. We did not have a similar benefit in the third quarter of last year since our Quest 3S headset launched in the fourth quarter of 2024,” Zuckerberg said.

Meta's outlook for Reality Labs for the next quarter is also pessimistic. Answering an analyst's question, Susan Li, the Chief Financial Officer at Meta, said, “We expect that Q4 Reality Labs revenue will be lower than last year for a couple of reasons that I alluded to. The biggest factor is we're lapping the introduction of Quest 3S in Q4 of last year, and we don't have a new headset in the market this year.”