Meta revenue expected to rise to $63.42 billion as profit falls
Key Facts
Analysts expect Meta's revenue in the third quarter of 2026 to rise 23.8% year on year to $63.42 billion, according to a Reuters report ahead of the upcoming earnings release. The expected sales increase contrasts with estimates for a decline in net profit, with quarterly capital expenditure exceeding the previous quarter's level. Estimates from the London Stock Exchange Group cited by Reuters point to a roughly 17% year-on-year drop in net profit to $15.44 billion. Revenue and profit forecasts are thus moving in opposite directions for the same period as investors await the company's reported figures. The Reuters report, published on October 20 ahead of the results, comes as recent AI launches have bolstered analysts' confidence in Meta's ability to execute.
Revenue estimates are near the upper end of the range Meta set out in its guidance issued on July 29, 2026. The company had forecast third-quarter revenue of between $61 billion and $64 billion, compared with $60.80 billion in the second quarter. Revenue in that quarter grew 28% year on year, driven by higher advertising revenue, according to Meta's filing with the U.S. Securities and Exchange Commission. Ad impressions across the company's apps rose 14% year on year in the second quarter. The average price per ad also increased 12%, alongside growth in the volume of ads displayed. Meta attributed the increase in impressions to "user growth and engagement, as well as the frequency of ads shown across our products," outlining the factors that supported its advertising business in the previous period.
On spending, analysts estimate capital expenditure of $41.68 billion for the quarter ended in September, according to figures compiled by Visible Alpha and cited by Reuters. That estimate covers third-quarter spending, while the company separately announced a range for full-year capital expenditure. In the second quarter, actual capital expenditure totaled $31.08 billion, including principal payments on finance leases, according to Meta's quarterly filing. The new quarterly estimates put spending above the amount the company reported in the previous period. The expected spending increase comes alongside continued revenue growth, but also accompanies estimates for a year-on-year decline in quarterly profit, bringing sales, spending and profitability into focus together in the upcoming results.
Analyst estimates cited by Reuters point to negative free cash flow of $8.52 billion in the third quarter. That compares with positive free cash flow of $784 million in the second quarter, according to Meta's earnings filing with the U.S. Securities and Exchange Commission. The estimate implies a shift in free cash flow from positive in the previous period to negative in the quarter ended in September. This cash flow measure is moving differently from expected net profit, which remains positive despite the year-on-year decline analysts forecast. The estimates therefore combine continued accounting profits with a free cash outflow in the same quarter, alongside the capital expenditure bill the market expects.
In the stock market, Meta shares had risen about 7% since the start of the year as of the Reuters report published on October 20, 2026. That performance lagged the S&P 500 index's gain of about 12% over the comparable period, according to Reuters. In their assessment of the AI business, analysts at BofA Global Research said recent launches had strengthened their confidence in the company's ability to execute. Reuters quoted them as saying that "recent AI launches have bolstered confidence in the company's execution of its AI plans." The assessment comes ahead of the results, while the stock's year-to-date performance remained below that of the broader U.S. market index despite the analysts' positive view of the launches.
For the full year, Meta had narrowed its 2026 capital expenditure guidance to between $130 billion and $145 billion. The range includes principal payments on finance leases, compared with previous guidance of between $125 billion and $145 billion, according to the company's earnings filing. Meta thus raised the lower end of its expected spending range while leaving the upper end unchanged. It also forecast total annual expenses of between $165 billion and $169 billion, in guidance separate from its capital expenditure range. The company will report third-quarter results after the market closes on October 21, 2026, according to Meta's official announcement, providing figures for the period ended in September following the estimates issued ahead of the release.