META · Forward model · Reality Labs · Bear case
What has to happen in Reality Labs
Model as of
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Reality Labs
Basis quarter$431M
Final quarter$616M
Implied CAGR+7%
Final revenue mix1%
Quest headsets, Ray-Ban and Oakley Meta AI glasses, and the software and content around them. $431M of revenue against a $4.62B operating loss in 2026 Q2 - it is 0.7% of the company's revenue and about a quarter of its operating income burned. Glasses are growing; headsets are shrinking.
Last four quarters
2025 Q3
$470M
Reported
2025 Q4
$955M
Reported
2026 Q1
$402M
Reported
2026 Q2
$431M
Reported
AI glasses (Ray-Ban Meta, Oakley Meta)Quest headsetsContent, software and accessories
Sequential growth
+5.0%/qtr
decaying toward +3.0%
5% a quarter. AI glasses are growing and Quest is not; this is the net of the two.
Reality Labs
Latest: $616M (2031Q2E)
| Period | Value |
|---|---|
| 2025Q1 | $412M |
| 2025Q2 | $370M |
| 2025Q3 | $470M |
| 2025Q4 | $955M |
| 2026Q1 | $402M |
| 2026Q2 | $431M |
| 2026Q3E | $443M |
| 2026Q4E | $455M |
| 2027Q1E | $467M |
| 2027Q2E | $478M |
| 2027Q3E | $489M |
| 2027Q4E | $499M |
| 2028Q1E | $509M |
| 2028Q2E | $518M |
| 2028Q3E | $528M |
| 2028Q4E | $537M |
| 2029Q1E | $545M |
| 2029Q2E | $554M |
| 2029Q3E | $562M |
| 2029Q4E | $570M |
| 2030Q1E | $578M |
| 2030Q2E | $586M |
| 2030Q3E | $593M |
| 2030Q4E | $601M |
| 2031Q1E | $608M |
| 2031Q2E | $616M |
Assumptions & reasoning
- Carried as a growth rate rather than as units x price because Meta has never disclosed headset or glasses unit sales. A units model here would be two invented numbers multiplied together to reproduce a disclosed one.
- The line is heavily seasonal - Q4 2025 was $955M against $470M the quarter before - and a smooth quarterly growth rate deliberately does not reproduce that. Read the annual totals, not the individual quarters.
- The margin of -970% is not a typo: it is a $4.18B EBITDA loss on $431M of revenue, which is what the reported $4.62B operating loss looks like once an assumed share of depreciation is added back. Expressing it any other way would quietly delete $15B a year of real spending from the free cash flow.
- It glides toward -250%, so the loss stays roughly flat in dollars as revenue grows rather than shrinking - which is what management guided to when it said Reality Labs operating losses would remain similar to 2025 levels.
- This is the cleanest single lever in the model: a reader who believes Meta caps the burn can drag the terminal margin and watch what closing the loss is worth, without touching a single advertising assumption.