Meta Platforms (NASDAQ: META), the owner of Facebook and Instagram, reported third-quarter results today, and its shares rose 3.1% in after-hours trading. The stock had closed the regular session at $697.52, up 0.5%.
Revenue rose 26% to $64.601bn from $51.242bn a year earlier, about 1.9% above the $63.41bn average analyst estimate on Yahoo Finance. Ad impressions grew 10% and the average price per ad 14%, lifting advertising revenue to $63.061bn.
Costs rose 68% to $51.613bn, so operating income fell 37% to $12.988bn and the operating margin dropped to 20% from 40%. The main driver was a $9.89bn charge for an August agreement with 52 attorneys general over teen mental health litigation, with payments of up to about $18.59bn. Without it, operating income would have been $22.88bn.
Diluted earnings per share were $3.83, against $1.05 a year ago, when a large tax charge weighed on profit. Excluding the legal charge they would have been $7.40. Yahoo Finance’s average EPS estimate was $5.46, though the basis of that figure is unclear.
Spending is the other pressure. Capital expenditure was $34.91bn against operating cash flow of $32.79bn, leaving free cash flow of negative $2.12bn, compared with positive $10.625bn a year earlier. Meta narrowed 2026 capex guidance to $135bn to $145bn from $130bn to $145bn, and expects total expenses of $175bn to $179bn. Its Reality Labs division lost $4.129bn on $443m of revenue.
Fourth-quarter revenue is guided at $73bn to $76bn, with about a 1% currency headwind. Yahoo Finance’s average estimate is $73.75bn, though that figure may not yet reflect the guidance. Meta gave no 2027 revenue outlook but expects to “sustain strong overall revenue growth throughout 2027”. Chief executive Mark Zuckerberg said:
We hit major milestones this quarter toward delivering personal superintelligence for everyone – including launching Muse and Muse Wonder, our first frontier model… Our investments are paying off, the core business is strong, and we’re seeing velocity across the board.
Mark Zuckerberg, chief executive of Meta Platforms
Separately, Meta will create a publicly listed, non-voting Class C stock, effective on the 19th of January 2027, via a one-for-one stock dividend on Class A and B shares. Class A is expected to reflect a two-for-one split effect once it is paid. Voting power is unchanged, and the new shares could be used for capital raising, employee pay and acquisitions.