Meta Revenue Jumps to US$64.6 Billion as Settlement Charge Hits Profit

Meta Platforms posted a 26% jump in third-quarter revenue to US$64.6 billion, beating Wall Street forecasts, but a near US$10 billion legal charge and soaring artificial intelligence spending cut deep into its operating profit, Fortune reported. The Facebook and Instagram owner also unveiled a new class of non-voting shares that will work like a two-for-one stock split.

Revenue for the three months to September came in above the US$63.3 billion analysts had expected, according to Visible Alpha estimates cited by Fortune, and compared with US$51.2 billion a year earlier. Ad impressions rose 10% and the average price per ad climbed 14%, while daily users across Meta’s family of apps averaged 3.64 billion in September, up 3%.

Settlement charge squeezes profit

Meta booked a US$9.89 billion charge linked to its August agreement with 52 US state attorneys general to settle litigation over teen mental health and social media, according to the company’s earnings release. The deal provides for payments of up to about US$18.59 billion over time.

The charge pushed total costs and expenses up 68% to US$51.6 billion. Operating income fell 37% to about US$13 billion, halving the operating margin to 20% from 40% a year ago. Net income still rose to US$9.86 billion, or US$3.83 a share, from US$2.71 billion, as the year-earlier quarter carried a heavy tax bill. Excluding the legal charge, Meta said earnings per share would have been US$7.40.

Chief executive Mark Zuckerberg said in the release that “our investments are paying off,” pointing to strength in the core advertising business.

Spending ramps up on AI

Capital expenditure, including finance lease payments, reached US$34.9 billion in the quarter, up from US$19.4 billion a year earlier, Fortune said. Meta narrowed its 2026 capex outlook to US$135 billion to US$145 billion from US$130 billion to US$145 billion, and lifted its full-year expense forecast to US$175 billion to US$179 billion to absorb the settlement charge.

The heavy outlay turned free cash flow negative at about US$2.1 billion, against US$10.6 billion a year earlier. Meta ended September with US$82.45 billion in cash and marketable securities, while headcount fell 15% from a year ago to 66,775.

New Class C shares

The board approved a one-time dividend of one non-voting Class C share for every Class A and Class B share outstanding, which Meta said should leave the Class A price reflecting a two-for-one split. The company said the move will not change any shareholder’s voting power. Forbes noted the structure allows Zuckerberg to keep control. The amended charter is due to take effect on January 19, 2027, with record and payment dates still to be set, and Meta plans to list the new shares on Nasdaq.

Forbes reported that the shares rose more than 3% after hours to around US$723. But the gain faded on Thursday, with Yahoo Finance reporting that Meta fell more than 3% at the open as a broad selloff in technology and chip stocks dragged the Nasdaq lower.

What’s next

Meta guided fourth-quarter revenue to US$73 billion to US$76 billion and said it still expects 2026 operating income, excluding the charge, to top last year’s. It gave no 2027 revenue forecast but said it plans to keep investing aggressively and expects Reality Labs losses to narrow to around US$15 billion next year, from US$18 billion to US$19 billion in 2026.

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