Meta revenue jumps 26% to $64.6 billion, legal charge dents profit

Summary

• Meta posted $64.6 billion in third-quarter revenue, up 26% and above analyst estimates near $63.3 billion.
• A $9.9 billion legal charge cut operating profit to roughly $13 billion, far below forecasts of $20.9 billion.
• Capital spending guidance of $135–145 billion keeps Meta among the largest buyers of AI chips and data centers.

The latest

Revenue climbed 26% year over year to $64.6 billion in the third quarter of 2026, beating analyst expectations, while a $9.9 billion legal charge pushed operating profit down to about $13 billion. Net income reached $9.8 billion, or $3.83 per share, against $2.7 billion a year earlier, when a one-time tax charge of roughly $16 billion weighed on the comparable quarter. The stock rose more than 3% after the announcement.

Details

• The top line: Advertising revenue came in near $63.1 billion against expectations of about $61.9 billion, and the Family of Apps segment generated roughly $64.2 billion versus a $62.8 billion estimate. The beat of more than $1 billion came almost entirely from core advertising rather than newer product lines.
• The profit gap: Operating profit of about $13 billion fell nearly $8 billion short of the $20.9 billion consensus. Family of Apps operating profit reached roughly $17.1 billion against expectations near $23.3 billion, with the $9.9 billion legal charge booked in the quarter accounting for the bulk of the shortfall.
• The settlement: Meta raised its 2026 total expense guidance to $175–179 billion from $165–169 billion, an increase driven mostly by the legal charge. It covers about half of an approximately $18 billion settlement with dozens of US state attorneys general over claims that its platforms fostered teen addiction.
• New Mexico ruling: A state court ordered Meta to pay $25 billion after a jury found it misled consumers about data privacy, with the judge reducing an award that could have reached $219.5 billion. Meta said it intends to appeal, and has not set out a timetable for the filing.
• Capital spending: The company spent $34.9 billion on capital expenditure in the third quarter alone and narrowed full-year 2026 guidance to $135–145 billion from $130–145 billion. That pace keeps Meta among the heaviest global purchasers of AI accelerators and data center capacity.
• Reality Labs: The hardware and metaverse unit booked revenue of about $440 million, below the $518 million analysts expected, and an operating loss of roughly $4.1 billion against a forecast loss near $5.1 billion. Losses narrowed, but the division remains a drag on consolidated margins.
• The guidance: Meta guided fourth-quarter revenue to $73–76 billion, bracketing a consensus of about $73.6 billion. The midpoint implies continued double-digit growth into the holiday advertising season, though the company did not break guidance down by segment.
• Share structure: The board approved a new class of non-voting Class C common stock and a 2-for-1 split, under which each Class A holder receives one Class C share. The structure expands the share count without diluting existing voting control.
• AI products: Mark Zuckerberg said the personal agent Muse topped Apple's US App Store in September after more than 10 million downloads in 40 days, calling it one of the quarter's "major wins." He said he expects it to become highly profitable.

Between the lines

The quarter separates Meta's operating business from its legal and capital burdens. Advertising revenue beat estimates and Reality Labs lost less than expected, yet the $9.9 billion charge and a $25 billion state court award sit alongside spending guidance approaching $145 billion. Investors pushed the stock up more than 3%, suggesting they read the charge as one-time rather than structural.

What's next

Fourth-quarter results will test the $73–76 billion revenue guidance and the raised expense range. Meta's appeal in New Mexico and the remaining half of the state attorneys general settlement are the next legal markers.

Source: Meta (Q3 2026 results)