Metallity Lab revenue was rebounded in the second quarter, up 5% compared to 2024. However, this was driven by Ray-Ban Meta Glasses, and sales of Quest Headsets fell again.
In 2Q2025, Meta’s “Metaverse and Wearables” division generated revenue of $370 million, up 5% from $353 million in the second quarter of 2024.
Meta CFO Susan Li told investors that the 5% year-on-year increase was “partially offset by increased sales of Ray-Ban Meta Glasses, lower sales of Quest Headsets.”
Li said the last quarter essentially the same as Reality Labs’ quarterly revenues were 6% lower than the previous year.
Li’s comments come just two days after Essilorluxottica, a partner at Meta, the French-A-Italian eyewear giant that owns the Ray-Ban brand, revealed that previously sold smart glasses have more than three times as long as the same time last year, and more than three times as compared to 200% growth. The CEO told investors that glasses work “exceptionally well” in the market.
Meta initially expected the Ray-Ban Meta to be the last smart glasses without a display, but is now working with Essilorluxottica on a variety of options from across the portfolio. The limited edition of the new Oakley Meta HSTN Glass has already begun shipping, and the regular edition should be available in the coming weeks.
Last year, Meta and Essilorluxottica signed an agreement to expand their partnership over the next decade to develop “multi-generation smart eyewear products.” And earlier this month, Meta reportedly invested 3 billion euros in Esilolluxottica, acquired a 3% stake in the company, and is “considering” further investments to raise this to 5% over time.
Ray-Ban Meta has more than tripled sales this year
Ray-Ban Metaglass sales so far this year have been more than tripled compared to the same time last year, compared to over 200% growth.
In contrast, the fact that Quest Headset sales have been declining year-on-year for the second quarter in a row should be the source of alarms in the VR/MR industry, especially considering that this is not a result of competitors who have plunged into Quest’s market share.
This suggests that, as Meta has suggested in the past, the Quest 3s had a very different sales pattern compared to previous Quest headsets. The Quest 3s had a very strong launch quarter during the holidays, driving Reality Lab to bring in the highest revenue ever, but this success has not been happening until this year.
Essentially, Quest 3s seemed to have been a very popular Christmas present, but it seems to have failed as a product that people would like to buy for themselves throughout the rest of the calendar year.
This is why Meta recently radically reevaluates its headset hardware roadmap and accelerates its plan for ultra-lightweight headsets using tethered computing packs while canceling key candidates for the 2026 Quest 4 series.
Meta will also be able to enable other hardware companies to use Horizon OS with third-party headsets, starting with Asus and Lenovo.
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As always, Meta Reality Labs’ revenues are costly and the division remains deeply unprofitable. Meta spent $4.9 billion in the second quarter alone, resulting in a “loss” of $4.53 billion.
Describing this as a loss is technically correct in a financial sense, but many of it could also be described as long-term investments. XR headsets like Quest are still relatively early technology, far from maturity, and as of 2022, over 50% of real-world lab spending was in AR glasses research and development. This has not been released yet.
In the fourth quarter 2024 revenue call, Susan Lee told investors to hope for a rise in reality lab losses in 2025 as the company continues to invest heavily in the future potential of the division.
“There’s a big product bet we’re making and there’s a deep technical challenge that we know we need to unlock it to bring scalable consumer products to the market,” she said at the time.
Meanwhile, Mark Zuckerberg has repeatedly mentioned his “metaverse” ambitions as something that is expected to bring returns on a decades scale, not years.
In the short term, Meta and Esilolluluxottica are reportedly set to launch Oakley Meta Spa Ela Glasses later this year, according to Bloomberg, which features a core camera suitable for first-person video capture.
Meta will also be firing its own high-end smart glasses rather than Essil Luxottica, with a small monocular head-up display (HUD) and SEMG wristband for finger gesture control. Recent leaks suggest that the product may be called metaceleste.
With the reported price at $1,000, Celeste will test whether current technology is sufficient to attract demand for high-end smart glasses, or whether the relatively low price is unique to the success of the Ray-Ban Meta.
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Neither of these products will make it in time for the third quarter, but Oakley Meta HSTN glasses do.
We will be paying attention to Meta’s financial results in future signs of a reversal of a decline in quest sales, but there is no reason to believe this will happen at the moment.
