Meta Posts 26 Per Cent Q3 Revenue Surge To US$64.6 Billion Despite US$9.89 Billion Legal Settlement Hit

SAN FRANCISCO, Oct 22 – Tech giant Meta Platforms reported a 26 per cent year-on-year surge in third-quarter revenue to US$64.60 billion for the period ended September 30, beating Wall Street expectations of US$63.37 billion.

However, operating income for the quarter fell 37 per cent year-on-year to US$12.99 billion due to a massive US$9.89 billion legal settlement charge related to teen mental health litigation with US state attorneys general.

Excluding the multi-billion-dollar legal payout, Meta’s operating income would have reached US$22.88 billion.

Despite the legal charge weighing on operating margins, net income rose 264 per cent to US$9.86 billion (US$3.83 per diluted share) compared to US$2.71 billion (US$1.05 per share) in the prior-year period, which was heavily impacted by a non-cash tax charge.

Advertising Growth, AI Infrastructure, and Class C Stock Structure

Key financial metrics, operational expansion, and strategic outlook from Meta’s financial report include:

• Advertising Revenue: Core ad revenue grew to US$63.06 billion from US$50.08 billion a year earlier, driving total revenue expansion.
• Active User Base: Meta’s family of apps—including Facebook, Instagram, Messenger, and WhatsApp—reached 3.64 billion daily active users in September, representing an addition of approximately 100 million users year-on-year and 40 million from June 2026.
• Capital Expenditures & Free Cash Flow: Capital expenditures reached US$34.91 billion as Meta accelerated investments in AI chips and data centers. Free cash flow shifted to negative US$2.12 billion compared to a positive US$10.63 billion in Q3 2025.
• Revenue Guidance: For Q4 2026, Meta projects revenue between US$73 billion and US$76 billion, while narrowing its full-year capital expenditure forecast to US$135 billion–US$145 billion.
• New Class C Non-Voting Stock: Meta announced plans to establish a new class of publicly listed, non-voting Class C common stock in January 2027 (effectively functioning as a 2-for-1 stock split) to fund future AI investments, potential acquisitions, and talent retention without diluting CEO Mark Zuckerberg’s voting control.

–NMT