Meta approves non-voting share for each outstanding share, raises spending forecast to $135–145 billion
Key Facts
Meta approved the distribution of one new non-voting Class C share for each outstanding Class A and Class B share alongside its third-quarter results on Wednesday evening, expanding its financing options while preserving its voting structure. According to Investing's coverage, the company plans to implement the move through a special stock dividend to holders of the two existing classes. Shareholders will receive the new share for each existing share, while their voting power remains unchanged. The new class is intended to give Meta additional flexibility to raise capital to fund growth, according to the same coverage. The uses identified by the company also include employee compensation and funding acquisitions, alongside fundraising. The coverage summarized the purposes of the new class as including "raising capital, employee compensation and acquisitions." The decision thus links an expansion of the company's financing tools and its management of compensation and deals with the preservation of shareholders' existing voting rights.
The announcement came as Meta's revenue in the third quarter of 2026 rose to $64.60 billion, exceeding Wall Street expectations of $63.37 billion, according to London Stock Exchange Group data cited by Reuters. Revenue in the corresponding period of 2025 was about $51.24 billion, according to the Associated Press, representing annual growth of 26%. In its advertising business during the reported quarter, ad impressions rose 10% from the same period a year earlier, according to Investing's coverage of the earnings call. The average price per ad also rose 14% year on year, alongside the increase in impressions. The gains thus covered both the volume of ads shown and the average price, alongside overall quarterly revenue growth. In the initial reaction to the results, Meta shares rose 2.9% in after-hours trading on Wednesday evening, according to the Associated Press.
Meanwhile, Meta's total expenses rose 68% year on year to about $51.6 billion during the reported quarter, according to Investing's coverage of the earnings call. The increase reflected pressure from a legal settlement, alongside the company's infrastructure and artificial intelligence costs. The results included a $9.89 billion charge tied to the settlement reached in August over teen mental health lawsuits, Reuters reported. Reported diluted earnings per share for the third quarter were $3.83, reflecting the impact of that legal charge on the quarterly results. Meta said earnings per share would have been $7.40 excluding the settlement charge, according to the agency. That figure represents earnings excluding the legal item, while reported earnings include the settlement's impact in the same quarter.
On its spending outlook, Meta raised the lower end of its 2026 capital expenditure range to $135 billion while keeping the upper end at $145 billion, according to the Associated Press. The company's previous estimate ranged from $130 billion to $145 billion for the same year, with the latest revision focused on the lower end of projected spending. The increase comes as infrastructure and artificial intelligence costs weigh on expenses, alongside approval of the share class that provides additional financing flexibility. Free cash flow, meanwhile, recorded a deficit of $2.12 billion during the third quarter, according to Reuters. The period's results thus combined a cash deficit and an increase in the lower end of expected annual spending with reported revenue growth. For the fourth quarter of 2026, Meta expects revenue of between $73 billion and $76 billion, according to the Associated Press.