Meta Platforms (FB) posted a first-quarter loss of $2.96 billion in its recently created Facebook Reality Labs (FRL) division, which comprises its augmented and virtual reality operations, according to its earnings report released Wednesday.

Meta announced that it would be breaking out results for the division to show the performance and investments in a group that it considers key to the next generation of online social experiences.
FRL generated revenue of $695 million in the first quarter, a small fraction of the $27.2 billion generated in the quarter from Meta’s family of apps, which include Facebook, Instagram and WhatsApp. Analysts were expecting revenue of $683 million for the "metaverse" division.
For 2021, Facebook reported a loss of $10.2 billion on revenue of $2.3 billion for FRL.
Meta previously estimated FRL would reduce its overall operating profit by about $10 billion in 2021 and said it was committed to spending even more on the division for the next several years.
Overall, Meta’s adjusted quarterly earnings per share of $2.72 beat analysts' average estimate of $2.56, according to FactSet, while its overall revenue of $27.9 billion fell short of estimates of $28.3 billion. Meta also outperformed user growth expectations for the quarter.
Meta's shares rose almost 15% to $201.14 in after-hours trading on Wednesday on the results.
Meta CEO Mark Zuckerberg said the company's metaverse arm is on a long-term timeline, currently "laying the groundwork for a very successful 2030s," according to the earnings call.
Zuckerberg reiterated that the web version of the company's Horizon Worlds metaverse platform is slated for release this year, to be followed by its augmented and virtual reality versions.

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Eli Tan contributed reporting.

UPDATE (April 27, 20:41 UTC): Updated with Meta's overall results and share price action.

UPDATE (April 27, 21:53 UTC): Updated with Mark Zuckerberg's comments on metaverse revenue.

UPDATE (April 27, 22:22 UTC): Updated with Horizon Worlds release information.

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Meta Platforms' 'Metaverse' Division Loses $3B in 1Q

Facebook's parent company reported revenue of $695 million for the division, which beat analysts' expectations.

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