Meta Reports $64.6 Billion in Q3 Revenue as AI Spending and Legal Risks Mount

Meta Platforms reported $64.6 billion in third-quarter revenue on October 21, 2026, as advertising growth and artificial intelligence ambitions continued to shape its business. Revenue rose 26% year over year, but the company also disclosed rising expenses, substantial AI-related infrastructure spending, and new pressure from legal disputes.

The results arrived alongside a major change to Meta’s share structure. The company plans to issue a new class of publicly listed, non-voting Class C shares through a one-time stock dividend, expecting the distribution to have the market-price effect of a two-for-one stock split while leaving shareholders’ voting power unchanged.

The quarter highlights a central question for investors: how much can Meta’s advertising business generate as the company commits more capital to AI infrastructure and computing capacity? Meta reported third-quarter net income of $9.86 billion, compared with $2.71 billion a year earlier, though the comparison needs context, since the 2025 quarter included a large one-time tax charge while the latest quarter included a substantial charge tied to litigation over teen mental health and social media.

Meta Q3 2026 Earnings: Key Financial Results

Meta’s latest results show strong revenue growth, but they also reveal a sharp increase in reported costs and expenses.

• Revenue: $64.6 billion, up 26% year over year
• Net income: $9.86 billion, compared with $2.71 billion in Q3 2025
• Diluted earnings per share: $3.83, up from $1.05 a year earlier
• Total costs and expenses: $51.61 billion, up 68%
• Capital expenditure: $34.91 billion during the quarter
• Cash, cash equivalents, and marketable securities: $82.45 billion at September 30
• Average daily active people across Meta’s apps: 3.64 billion during September, up 3% year over year

Advertising remained an important growth driver. Meta reported that ad impressions across its family of apps increased 10%, while the average price per ad rose 14%, suggesting the company benefited from both greater ad delivery and stronger pricing.

Higher revenue did not translate into higher operating income, though. Operating income fell 37% to $12.99 billion, and the operating margin declined from 40% to 20%. Meta said the latest quarter included a $9.89 billion charge connected to its agreement with US state attorneys general over teen mental health and social media. Without that charge, Meta said operating income would have been $22.88 billion and diluted earnings per share would have been $7.40. These adjusted figures show the impact of the legal expense, but they do not remove the underlying cost of the settlement from the company’s financial obligations.

Meta’s AI Ambitions Come With a $135 to $145 Billion Spending Plan

Meta’s capital expenditure plans are among the most important parts of its earnings announcement. The company spent $34.91 billion on capital expenditure during the third quarter, including principal payments on finance leases. For the full year, Meta now expects capital expenditure to reach between $135 billion and $145 billion, raising the lower end of its previous range from $130 billion while keeping the upper end unchanged. The spending supports infrastructure and capacity Meta says it needs for AI development, training, and new products.

This commitment reflects the scale of investment required to compete in advanced AI. Training and operating large models require computing capacity, specialized chips, data centers, and energy—investments that can take time to translate into revenue. Meta says its AI investments are already improving advertising performance through stronger engagement and better recommendations and expects newer AI products to create additional opportunities, though those remain management’s expectations, and their long-term financial impact stays uncertain.

The scale of the spending matters for investors. Meta must balance investment in new AI products against the need to sustain its established advertising business. If AI improves ad targeting and engagement, the company could generate additional revenue from its existing audience; if infrastructure costs rise faster than returns, profitability could face pressure. Meta also expects its Reality Labs division to report losses of $18 billion to $19 billion in 2026, narrowing to around $15 billion in 2027 as investment shifts toward other priorities, primarily AI, a sign the company is managing its longer-term investment portfolio while continuing to fund its AI strategy.

Meta Introduces Non-Voting Class C Shares

Alongside its results, Meta announced a new class of publicly listed, non-voting Class C common stock, expected to take effect in January 2027 subject to the required corporate steps. Under the plan, Meta intends to distribute one Class C share for each outstanding Class A and Class B share through a one-time stock dividend. The company expects the market price of its existing Class A shares to reflect the effect of a two-for-one stock split after the distribution and says the dividend will not change any shareholder’s voting power.

The distinction matters. A conventional stock split divides existing shares into a larger number of shares, while Meta’s plan instead introduces a new class of non-voting shares alongside a similar expected price adjustment. Meta says the new class will give it added flexibility for capital raising, employee compensation, and potential acquisitions, and that the structure is meant to help Mark Zuckerberg continue leading Meta through its next stage of development.

This carries implications for governance as well as financing. Meta can seek more flexibility to fund growth while maintaining its existing voting structure, and it has entered a Founder Alignment Agreement with Zuckerberg covering his Class C shares and continued service. For investors, the move raises questions about how future share issuance and acquisitions could affect the company’s capital structure. The planned distribution should not be confused with a cash dividend or an immediate increase in shareholder value, and investors should review subsequent filings for the final terms and timetable.

Muse and Meta’s Push Into AI Products

Meta also highlighted the launch of Muse and Muse Wonder, which CEO Mark Zuckerberg described as milestones in the company’s effort to deliver more personalized AI experiences. The products form part of Meta’s broader push to turn its AI research and infrastructure into services that attract users, building on the company’s large distribution advantage through Facebook, Instagram, WhatsApp, and its other platforms.

Media reporting around the results said Muse had passed 10 million downloads in 40 days after reaching the top of the US App Store in September. Zuckerberg has also said he expects the AI agent to become highly profitable over time, though downloads do not establish long-term retention, revenue per user, or profitability.

The business challenge is converting AI engagement into durable value. Meta could potentially monetize AI through subscriptions, business services, advertising, or integrated platform features, though each model requires adoption, reliable performance, and costs that can scale. The company’s advertising business already offers one route, since AI systems that improve recommendations can help increase ad delivery or pricing, but returns from standalone AI assistants may follow a different timeline. Meta has said its AI investments will take longer to generate returns than investments in its core business, an admission that highlights the gap between spending today and the revenue investors will expect in the future.

New Mexico Orders Meta to Pay $25 Billion in Privacy Case

Meta’s earnings arrived amid significant legal pressure. On October 21, Reuters reported that a New Mexico judge had ordered the company to pay $25 billion after a jury found that Meta misled consumers about data privacy in a case concerning representations about access to user data and the company’s handling of harmful content. Reuters reported that the jury found 26 misleading statements amounting to more than 43 million violations of the state’s consumer protection laws. The judge reduced the penalty from a much larger amount initially considered, and Meta said it planned to appeal, arguing the ruling threatens free speech and fair business practices.

The legal order is separate from the $18.59 billion agreement Meta reached with 52 US state attorneys general over litigation related to teen mental health and social media. Meta recognized a $9.89 billion charge tied to that agreement in the third quarter, and the two matters should not be treated as the same proceeding. The New Mexico ruling creates an additional risk, since an appeal could change the outcome, but the case underscores the financial and reputational consequences of disputes involving privacy and consumer protection. For investors, these legal risks sit alongside Meta’s spending plans, as the company must fund AI infrastructure while managing litigation across several markets.

Meta Forecasts $73 to $76 Billion in Q4 Revenue

Meta expects fourth-quarter 2026 revenue to reach between $73 billion and $76 billion, along with full-year expenses of $175 billion to $179 billion, incorporating the legal charge recognized during the third quarter. The company said that, excluding that charge, it still expects 2026 operating income to exceed 2025’s, and it expects AI-related opportunities and product launches to support revenue growth into 2027, though it has not issued a full-year 2027 forecast.

The outlook gives investors several indicators to watch. Revenue growth will show whether advertising demand remains strong. Capital expenditure will reveal how quickly Meta expands its AI capacity. Operating margins will show whether revenue gains can offset infrastructure, research, and legal costs. The planned Class C shares will also attract attention as implementation nears in January 2027, and investors will need to assess the final documents and how the structure affects future financing.

The Takeaway

Meta’s third-quarter results present a clear contrast: the company is generating substantial revenue from its established platforms while committing unprecedented resources to AI and managing serious legal challenges. Revenue rose 26% to $64.6 billion, supported by advertising growth. Yet operating income declined, quarterly capital expenditure reached nearly $35 billion, and Meta expects full-year capital expenditure of up to $145 billion. At the same time, the company announced a new non-voting share class and faces a $25 billion New Mexico court order that it plans to appeal.

For the fintech and financial services ecosystem, Meta’s results matter because they show how AI infrastructure is becoming a major capital-allocation decision for global technology businesses, and they demonstrate how data governance and consumer protection can carry substantial financial consequences. The key question is no longer whether Meta will invest heavily in AI. It is whether those investments can produce sustainable returns while the company protects its core business, manages legal risks and maintains investor confidence.

Meta Posts $64 Billion In Revenue And Announces Stock Split In Q3 Earnings

AI infrastructureAI investmentClass C sharescorporate governanceData Privacydigital advertisingfinancial resultsMark ZuckerbergMeta PlatformsMeta Q3 earningsMeta revenueMuse AINew Mexico rulingstock splittechnology stocksTheFinRate