Meta on Wednesday published mixed fourth quarter financial results, sending shares sinking more than 20% in after-hours trading.

The company formerly known as Facebook reported fast-growing costs and expenses for the quarter and disclosed more than$3 billion in operating losses for its new Reality Labs business segment. Meta also gave a lower-than-expected revenue outlook for Q1.

All told, Meta's Q4 revenue came to$33.67 billion, up 20% year-over-year. Net income came to$10.29 billion, with earnings of$3.67 per diluted share. Total costs and expenses for the quarter were$21.1 billion, growing 38% year-over-year.

Analysts were expecting earnings of$3.84 per share on revenue of$33.41 billion. 

"We had a solid quarter as people turned to our products to stay connected and businesses continued to use our services to grow," CEO Mark Zuckerberg said in a statement. "I'm encouraged by the progress we made this past year in a number of important growth areas like Reels, commerce, and virtual reality, and we'll continue investing in these and other key priorities in 2022 as we work towards building the metaverse."

Advertising revenue for the quarter was$32.64 billion. "Other" revenue totaled$155 million. 

The fourth quarter marked the company's first financial report since it was renamed Meta, reflecting Zuckerberg's ambitions to build a computing platform to host the "metaverse" -- augmented and virtual reality environments. As such, the company broke its financial results into two new segments: Family of Apps (FoA) includes Facebook, Instagram, Messenger, WhatsApp and other services. Reality Labs (RL) includes augmented and virtual reality-related consumer hardware, software and content.

FoA brought in$32.794 billion in revenue for the quarter and reported an operating income of$15.89 billion. RL brought in$877 million in revenue and reported an operating loss of$3.3 billion.

For Q1 2022, Meta said it expects total revenue to be in the range of$27 billion to$29 billion. 

Analysts have been expecting revenue$30.14 billion. 

"We expect our year-over-year growth in the first quarter to be impacted by headwinds to both impression and price growth," CFO David Wehner said in prepared commentary.

Wehner specifically cited challenges like "increased competition for people's time," as well as a shift of engagement within Facebook apps towards video features like Reels, which monetize at lower rates than Feed and Stories. 

Additionally, Facebook will suffer from the comparison to Q1 2021, which was before Apple's iOS 14.5 update. Facebook has complained about the financial impact of Apple's new App Tracking Transparency (ATT) feature, which requires app developers to get permission from a user in order to track their activity across other apps and websites when using an iPhone or iPad. 

The year-over-year comparison is also tough for the company, given the strong demand it saw at the start of 2021. "We're hearing from advertisers that macroeconomic challenges like cost inflation and supply chain disruptions are impacting advertiser budgets," Wehner said.

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