Meta Reality Labs revenue rebounded in Q2, up 5% compared to 2024. But this was driven by the Ray-Ban Meta glasses, while Quest headset sales were again down.Q2 2025 saw Meta's "metaverse and wearables" division bring in $370 million revenue, 5% more than the $353 million of Q2 2024.Meta CFO Susan Li told investors that the 5% year-over-year increase was "driven by increased sales of Ray-Ban Meta glasses, and partially offset by lower Quest headset sales".Li said essentially the same last quarter, when Reality Labs quarterly revenue was 6% lower than the year before.Li's comments come just two days after Meta's partner EssilorLuxottica, the French-Italian eyewear giant that owns the Ray-Ban brand, revealed that sales of the smart glasses so far this year have more than tripled compared to the same time last year, more than 200% growth. Its CEO told investors that the glasses are performing "exceptionally well" in the market.While Meta originally expected Ray-Ban Meta to be its last smart glasses without a display, it's now working with EssilorLuxottica on a range of options from across its portfolio. The limited edition of the new Oakley Meta HSTN glasses has already started shipping, and regular editions should go on sale sometime in the next few weeks.Last year Meta and EssilorLuxottica signed an agreement extending their partnership “into the next decade” to develop “multi-generational smart eyewear products”. And earlier this month, Meta invested €3 billion in EssilorLuxottica, taking a 3% stake in the company, and it's reportedly "considering" further investment to bring this to 5% over time.Ray-Ban Meta Sales Have More Than Tripled This Year So FarSales of Ray-Ban Meta glasses so far this year have more than tripled compared to the same time last year, more than 200% growth.UploadVRDavid HeaneyIn contrast, the fact that Quest headset sales were down year-over-year for the second quarter in a row should be cause for alarm for the VR/MR industry, especially given that this isn't the result of any competitor eating into Quest's market share.It suggests that, as Meta has hinted in the past, Quest 3S has had a very different sales pattern compared to previous Quest headsets. While Quest 3S had a very strong launch quarter over the holidays, driving Reality Labs to bring in its highest ever revenue, this success simply hasn't carried through to this year.Essentially, it seems that Quest 3S was a very popular Christmas gift, but has failed as a product people want to buy for themselves throughout the rest of the calendar year.This is likely why Meta recently fundamentally re-evaluated its headset hardware roadmap, canceling the leading candidates for a 2026 Quest 4 series while accelerating plans for an ultralight headset with a tethered compute puck, running the same Horizon OS.Meta also plans to let other hardware companies use Horizon OS in third-party headsets, starting with Asus and Lenovo.Meta Prioritizing Ultra-Light Headset With Puck Over Traditional Quest 4Meta is prioritizing shipping an ultralight Horizon OS headset with a tethered compute puck in 2026, and might not ship a new traditional form factor Quest until 2027.UploadVRDavid HeaneyAs always, the Meta Reality Labs revenue came at an enormous cost, and the division remains deeply unprofitable. Meta spent $4.9 billion on it in Q2 alone, resulting in a "loss" of $4.53 billion.Though while describing this as a loss is technically correct in a financial sense, much of it could also be described as long-term investment. XR headsets like Quest are still a relatively early technology, far from maturity, and as of 2022 more than 50% of Reality Labs spending was on the research and development of AR glasses, a future product line that hasn't even launched yet.In the Q4 2024 earnings call, Susan Li told investors to expect Reality Labs losses to increase in 2025 as the company continues to invest heavily in the future potential of the division."There are big product bets we’re making and there’s sort of a deep technological set of challenges that we know that we need to unlock in order to be able to bring scalable consumer products to market", she said at the time.Mark Zuckerberg, meanwhile, has repeatedly referred to his "metaverse" ambitions as something he expects to bring returns on the scale of decades, rather than years.In the shorter term, Meta and EssilorLuxottica reportedly plan to launch Oakley Meta Sphaera glasses later this year, according to Bloomberg, featuring a centered camera better suited for first-person video capture.Meta also plans to launch its own high-end smart glasses, not with EssilorLuxottica, featuring a small monocular heads-up display (HUD) and sEMG wristband for finger gesture controls. Recent leaks suggest that the product could be called Meta Celeste.With a reported price north of $1000, Celeste will be a test of whether current technology is sufficient to attract demand for high-end smart glasses or the relatively low price is inherent to the success of Ray-Ban Meta so far.Meta HUD Glasses Name, Design & EMG Wristband Gestures LeakThe name, design, and key finger gestures of Meta’s smart glasses with a HUD and neural wristband, expected to launch in October, have leaked.UploadVRDavid HeaneyNeither of these products will arrive in time for Q3, though the Oakley Meta HSTN glasses will.We'll keep a close eye on Meta's financial results next quarter for any sign of a reversal of the Quest sales decline, though there's currently no reason to believe this will happen.