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Meta announced Q4 earnings last week, including $59.9 billion in revenue, up 24 percent year-over-year. Revenue performance continues to be driven by AI-fueled ad targeting. This is a powerful revenue driver but also a costly one, given escalating CapEx spending.
Resting under those high-level Q4 results, Meta Reality Labs’ (MRL) revenue was $955 million. This was down 12 percent year-over-year, and up 103 percent quarter-over-quarter. The former is the more apples-to-apples metric, considering cyclical patterns in a given year (e.g., holidays).
Strong MRL growth was driven by Ray-Ban Meta Smartglasses (RBMS), which tripled in year-over-year sales for full-year 2025, as noted on the earnings call. The now-familiar earnings narrative is that AI smart glasses are the growth engine, while VR headset sales slow or decline.
There’s much to say about all these dynamics (more in a bit). But our main question is how Q4 revenue translates to hardware unit sales. This is an exercise we’ve done every quarter for several years (see last quarter), which helps inform broader VR momentum and market sizing.
Reverse Engineering
Diving in, MRL’s top-line revenue was $955 million in Q4, as noted. As done in the past, we can use this to reverse-engineer unit sales. This exercise gets harder every year due to more revenue sources. It’s not just one flagship Quest headset anymore… but several devices in the mix.
To that end, we’ve estimated Meta Reality Labs’ revenue share breakdowns based on several signals we’re tracking. You can see those estimates below. In this hardware-centric exercise, we’ll focus on the last six bullets, which account for 90 percent of MRL revenue.
- VR software (game & app sales): 9 percent*
- First-party accessories (head straps, etc): 1 percent
- Quest 3: 16 percent
- Quest 3s: 14 percent
- Meta Ray-Ban Display Glasses: 5 percent
- Ray-Ban Meta Smart Glasses: 45 percent
- Oakley Vanguard: 4 percent
- Oakley HSTN: 6 Percent
(percentages apply to revenue shares in dollars, not units)
*This figure represents the Oculus Store’s gross revenue, before developer payouts, which are usually 70 percent after taxes. Meta realizes 100 percent of revenue in some cases, such as first-party titles and releases from VR game studios it has acquired.
Per-Device Unit Sales
Quest 3
Based on the above revenue shares, Quest 3’s estimated quarterly revenue was $152.8 million. Considering an average unit price of $499, Meta sold an estimated 306,212 units during the quarter.
Quest 3s
Based on the above revenue shares, Quest 3s’ estimated quarterly revenue was $133.7 million. Considering an average unit price of $329, Meta sold an estimated 406,383 units during the quarter.
Meta Ray-Ban Display Glasses
Based on the above revenue shares, MRDG estimated quarterly revenue was $47.8 million. Considering an average unit price of $799 (and a revenue split with EssilorLuxottica), an estimated 79,716 units were sold during the quarter.
Ray-Ban Meta Smart Glasses
Based on the above revenue shares, RBMS estimated quarterly revenue was $429.8 million. Considering an average unit price of $329 (and a revenue split with EssilorLuxottica), an estimated 2.6 million units were sold during the quarter.
Oakley Vanguard
Based on the above revenue shares, Vanguard’s estimated quarterly revenue was $38.2 million. Considering an average unit price of $499 (and a revenue split with EssilorLuxottica), an estimated 152,800 units were sold during the quarter.
Oakley HSTN
Based on the above revenue shares, HSTN’s estimated quarterly revenue was $57.3 million. Considering an average unit price of $429 (and a revenue split with EssilorLuxottica), an estimated 266,512 units were sold during the quarter.
Grand Total
Adding up all devices, we get an estimated 3,816,169 units sold in Q4. That consists of 3,103,573 smart glasses and 712,595 VR headsets.
So there you have it. Of course, much of this exercise is based on the above-estimated revenue shares across Meta Reality Labs’ commercial products. Those share estimates are educated but up for debate: anyone can adjust them and calculate accordingly using the above model.
Full-Stack Puzzle
Stepping back, smart glasses are growing rapidly, but offset to a degree by declines (or flat growth in some quarters) for VR. That offset is impactful due to price tags: Unit sales fluctuations in VR headsets have a greater revenue impact than AI glasses due to their price tags.
Altogether, the headline is that AI glasses are the growth engine. Meta will continue to internalize these demand signals and course correct its road map accordingly. Today, that means non-display AI glasses (RBMS) and, to a lesser extent, flat-AR display glasses (MRDG).
This is Meta’s message to the market as MRL endures massive losses. The division remains massively in the red with about $6 billion in Q4 losses. But due to Meta’s recent MRL cuts and shifting priorities towards building an AI stack, it projects MRL expenses to peak in 2026.
Wall Street seems to like that narrative, as Meta shifts spending to massive CapEx requirements for AI infrastructure. Though there’s some skepticism on the street for such high CapEx among tech giants, there’s defensibility in owning the AI stack (Meta) versus outsourcing (Apple).
Mark Zuckerberg learned this lesson the hard way throughout the smartphone era. By not owning or controlling the user touchpoint – ceding positioning to Apple and Google – Facebook suffered. MRL was created to own the XR stack, and the same approach is now in play for AI.
The bad news for MRL is that applying a full-stack development approach to two major product areas is costly. So it will continue to get budget pulled away for AI investment. But the good news is that headsets and wearables will be a key part of that full-stack AI puzzle.