Meta Posts $2.12 Billion Free Cash Flow Deficit in Third Quarter

Key Facts

Meta recorded negative free cash flow of $2.12 billion in the third quarter of 2026, as operating cash flow reached $32.79 billion and capital expenditures, including finance lease principal payments, totaled $34.91 billion, according to the company’s filing with the U.S. Securities and Exchange Commission. The quarter marked a period in which the company spent more on capital investment than its operations generated in cash. Results also showed strong revenue growth, putting the expansion of commercial activity alongside the cost of scaling infrastructure in the performance picture. Meta did not attribute the shift in cash flow in its filing to any single factor, but said it continues to invest to support its core business and artificial intelligence initiatives. The announcement came as the company raised its annual spending forecast, while its shares fell in Thursday’s session.

Meta’s purchases of property and equipment totaled $83.06 billion in the nine months ended September 30, 2026, according to the filing, including investments in servers, data centers and network infrastructure. The figure provides a cumulative picture of spending through most of the year, while capital expenditures in the third quarter alone totaled $34.91 billion when finance lease principal payments are included. The comparison between operating cash flow and capital expenditures shows why free cash flow turned negative in the quarter. Spending was not the only metric in the results: revenue rose 26% to $64.60 billion, compared with $51.24 billion in the same quarter of 2025. Revenue also topped Wall Street analysts’ estimate of $63.34 billion, according to the Associated Press.

Meta raised the low end of its 2026 capital expenditure forecast to $135 billion, keeping the high end at $145 billion, compared with a previous range of $130 billion to $145 billion, according to the Associated Press. The company’s forecast includes finance lease principal payments, and it did not provide a separate range for the fourth quarter. Raising the low end expands the amount expected to be spent during the year, as part of investments the company says support its core business and artificial intelligence initiatives. In its filing, Meta said AI investments are already boosting ad revenue through “increased engagement, improved recommendations and more efficient monetization.” But it added that these investments “will take longer to generate returns” than investments in its core business, without specifying a timeframe for those returns.

Meta’s broad user base supports its advertising business. The average number of daily active users across its family of apps reached 3.64 billion in September 2026, up 3% year over year, according to the filing. On new products, the Associated Press reported that more than 10 million people in the United States and Canada had created accounts on Muse, and about 25% of those who created an account use it on a given day. Mark Zuckerberg said the company expects to improve Muse’s operating cost efficiency by more than 10 times over the following year. The company linked the potential to reach profitability to a broader range of revenue sources, while these figures alone do not provide a specific timeline for achieving it. The addition of a new product therefore coincides with continued infrastructure spending that Meta needs to support its services and initiatives.

For the near-term outlook, Meta expects fourth-quarter 2026 revenue of between $73 billion and $76 billion, according to the Associated Press. The company did not provide a full-year 2027 revenue forecast, but said it expects strong overall revenue growth to continue throughout the year, supported by AI investments and product launches. This full-year guidance leaves the range for future revenue open, while the company points to continued growth in its core business alongside ongoing investment. In the markets, Meta shares closed down 7% on Thursday, October 22, according to Axios, while EL7 data showed a closing price of $648.85. The decline reflected the market’s reaction in the session following the results and the updated spending forecast.