Meta revenue rises 26% to $64.60 billion as capital spending climbs
Key Facts
Meta posted revenue of $64.60 billion in the third quarter of 2026, up 26% from $51.24 billion in the same period last year, beating Wall Street analysts’ estimate of $63.34 billion, according to the Associated Press. The results showed a widening gap between sales growth and pressure on earnings, as total expenses and costs rose to $51.61 billion, up 68% year over year. Those expenses included a $9.89 billion charge related to U.S. cases concerning teenagers’ health. The company said earnings per share would have been $7.40 excluding the impact of the charge. The disclosure of the new class of shares came in this context, as investment needs rose and free cash flow turned negative.
A comparison of net income shows an additional challenge, as the third quarter of 2025 included an exceptional tax charge of nearly $16 billion. The difference in net income between the two periods therefore does not by itself reflect a change in operating performance, but is also affected by differences in exceptional items. These indicators reflect growth in the core business alongside rising company costs, while the legal settlement remained a significant factor in the quarter’s results.
Meta raised its 2026 capital spending forecast to a range of $135 billion to $145 billion, from a previous estimate of $130 billion to $145 billion, according to the Associated Press. The increase in the lower end of the range comes as the company seeks to expand its investments in infrastructure and artificial intelligence. In the third quarter, free cash flow posted a deficit of $2.12 billion, making the financing of upcoming spending a parallel focus alongside revenue growth. The company said its available resources, cash flows from operations and financing were sufficient for its operating needs and obligations over the next twelve months and beyond for the foreseeable future. But it added that it may seek to raise additional capital from time to time through debt, equity or other financing arrangements.
In its filing with the U.S. Securities and Exchange Commission, Meta said it may issue non-voting Class C common stock from time to time to raise capital, compensate employees, finance acquisitions and for other general purposes. The filing did not specify a particular offering or target financing amount. The board committee said the company had sufficient capital resources for its current needs, but considered it prudent to prepare early for future financing needs, before other companies absorb more of the capital available in the market. The new class provides a future financing option, but does not mean the company has already announced a fundraising offering. Any potential issuance remains subject to the company’s decision and market conditions.
The filing provides for the creation of non-voting Class C shares and the amended charter to take effect on January 19, 2027. Meta intends to submit the appropriate applications and notices to Nasdaq before paying the distribution, according to the filing; it did not say that listing had occurred or was guaranteed upon issuance. Class A shares closed at $694.25 on October 20, before the results were announced. After that, EL7 data showed the shares closing at $697.52 on October 21, then at $648.85 on October 22 and $642.62 on October 23. The Associated Press reported that the shares rose 0.5% in regular trading on Wednesday, while the available price data do not establish their percentage change after the close.
As an indicator of the progress of its artificial intelligence business, the Associated Press reported that the Muse app had surpassed 10 million accounts in the United States and Canada as of October 21, and that about 25% of those who created an account use it on a typical day. Meta also said it expects Reality Labs’ losses to decline to about $15 billion in 2027, as it shifts investment to other areas, particularly artificial intelligence. In the nearer term, the company expects revenue of $73 billion to $76 billion in the fourth quarter of 2026, a range above analysts’ average estimate of $73.65 billion at the midpoint. These forecasts place upcoming sales alongside high spending requirements and the possibility of using additional financing tools. The Class C charter amendments will take effect on January 19, 2027, while the filing does not specify a date or amount for any future stock offering.