Meta’s shares tank on bummer earnings, while its metaverse investments weigh on profits

Cue the “Social Network” soundtrack... Tension is rising at the company formerly known as Facebook. Meta shares tanked 22% after the company disappointed on earnings and user growth. Meta’s quarterly revenue growth slowed, with sales up just 20% from a year ago (compared with 33% growth the previous quarter and 56% before that). Even worse: Quarterly profit fell by $1B from a year earlier.

• Meta blamed Apple’s iOS update, which lets users opt out of ad tracking, and inflation and supply issues for hurting advertiser spend. Ads still make up 97% of Meta’s revenue.
• Awk: Google just posted its third straight quarter of record sales despite facing the same challenges, as holiday searches drove ad spend.

An Oculus for Hanukkah... Smart Ray-Bans for Christmas. This holiday quarter was the first that Meta broke out results for Facebook Reality Labs, which houses its VR and AR goodies. Think: $200 Oculus VR headsets, which are required to access Meta’s immersive “Horizon Worlds.” ICYMI: Meta is positioning itself as a metaverse company, not a social company. How it’s going:

• Virtual $$: Reality Labs brought in $877M in quarterly revenue, slightly up from a year ago. But its operating loss was $3.3B.
• To build an immersive meta-future, Meta says it’ll spend $10B over the next year. It’s a big bet that’s currently hurting profits.
• A bet that didn’t pan out: Meta just ended its cryptocurrency project, Diem (fka: Libra), selling it for $200M after years of regulatory pushback.