Meta's Reality Labs division reported a 16% revenue increase to $431 million in Q2 2026, primarily driven by the strong growth of its AI-powered smart glasses, which offset a decline in Quest headset sales. Despite this revenue growth, Reality Labs still incurred a substantial operating loss of $4.62 billion, an increase of $89 million from the previous year. This division's total expenses for the quarter were approximately $5.05 billion.
EssilorLuxottica, Meta's partner in manufacturing the Ray-Ban Meta AI glasses, reported that revenue from these AI glasses almost doubled in Q2 2026. The company also disclosed that over 7 million pairs of Ray-Ban and Oakley Meta glasses were sold in 2025 alone, more than tripling the combined sales from 2023 and 2024. Market data from Circana indicates that the smart glasses segment saw a 233% surge in revenue to $436 million over the 12 months ending May 2026, with Meta-EssilorLuxottica products dominating 69.2% of the market share as per IDC's Q1 2026 tracker.
Meta CEO Mark Zuckerberg stated that the company's glasses are among the fastest-growing consumer electronics, with early sales of the new Meta Glasses exceeding expectations. Analysts from Citi Research are "incrementally positive" on Meta's AI glasses strategy, forecasting that smart glasses shipments will grow at a 105% compound annual growth rate through 2030, reaching 112 million units, and market revenue could grow at a 112% CAGR to $40 billion. Citi analysts believe Meta is currently in the second wave of smart glasses adoption, focusing on AI-powered experiences, and maintain a 'buy' rating with a target price of $915 per share for Meta stock.
Despite the significant growth in AI glasses sales, neither Meta nor EssilorLuxottica disclosed specific unit sales for Q2, standalone profit for the glasses, or the exact decline in Quest sales. The substantial gap between Reality Labs' revenue and spending highlights the division's ongoing financial reliance on Meta's other profitable segments, as it also funds long-term research, product development, and infrastructure across Meta's broader XR portfolio.
