Meta reports $65B revenue for Q3
What's the story
Meta Platforms, the parent company of Facebook and Instagram, has reported a stellar third-quarter revenue for 2026. The tech giant posted a revenue of $64.6 billion for the quarter ending September 30, marking a 26% increase from last year's $51.24 billion. The figure also beat Wall Street's expectations of $63.37 billion, as per LSEG consensus estimate.
Financial growth
Net income and EPS surge
Along with the revenue surge, Meta also witnessed a massive jump in its net income and earnings per share (EPS).
The company's net income rose to $9.86 billion from last year's $2.71 billion.
Its EPS also saw a major increase, standing at $3.83 compared to just $1.05 a year earlier.
Legal expense
Legal charge hits Meta hard
Despite the impressive financial results, Meta had to bear a major expense in the third quarter.
The company took a $9.89 billion charge related to an agreement with 52 US state attorneys general over litigation concerning teen mental health and social media.
This charge was part of its financial statement for the quarter.
Future outlook
Meta's projections for Q4 and full-year expenses
For the fourth quarter, Meta has projected a revenue between $73 billion and $76 billion.
This puts the midpoint at $74.5 billion, which is above analysts' expectations of $73.73 billion as per LSEG data.
The company also expects its full-year 2026 expenses to be between $175 billion and $179 billion, including the legal charge recognized in Q3.
AI impact
AI drives ad revenue growth for Meta
Advertising continued to be the main growth driver for Meta, with ad revenue growing 26% YoY to $63.06 billion.
The company said its AI investments are already driving incremental ad revenue through improved user engagement, better recommendations, and more effective monetization.
This comes after the launch of Muse personal assistant in September and Muse Wonder later on as part of Meta's AI push.
User engagement
Key metrics from the quarter
Meta's family of apps saw an increase in average daily active people to 3.64 billion in September, a 3% rise from the previous year.
The company's operating cash flow stood at $32.79 billion while free cash flow was negative $2.12 billion due to heavy infrastructure investment during the quarter, with capital expenditure reaching $34.91 billion.