Meta Platforms reported financial results for the third quarter ended September 30, 2026, on October 21, 2026, posting revenue of $64.6 billion, up 26% from a year earlier, and announcing that its Board of Directors approved a new class of publicly listed, non-voting Class C common stock.
“We hit major milestones this quarter toward delivering personal superintelligence for everyone – including launching Muse and Muse Wonder, our first frontier model,” Mark Zuckerberg, Meta founder and CEO, said in the company’s third-quarter 2026 results release. Zuckerberg added that the company’s investments are paying off, described the core business as strong, and said Meta is seeing velocity across the board.
Third-Quarter Results and Legal Charge
Total costs and expenses were $51.61 billion, up 68% year over year, a figure that includes a litigation charge recorded in general and administrative expenses. Income from operations was $12.99 billion, down 37%, and operating margin was 20%, compared with 40% in the third quarter of 2025. Net income rose 264% to $9.86 billion, while diluted earnings per share rose 265% to $3.83 from $1.05. The effective tax rate was 24%, compared with 87% a year earlier.
In August 2026, Meta announced an agreement with 52 U.S. state attorneys general to resolve litigation related to teen mental health and social media, which provides for payments of up to approximately $18.59 billion. Third-quarter costs include a $9.89 billion charge related to that agreement. Meta said that excluding the charge, quarterly income from operations would have been $22.88 billion, diluted EPS would have been $7.40, and the effective tax rate would have been 17%.
Family daily active people averaged 3.64 billion for September 2026, an increase of 3% year over year. Ad impressions delivered across the company’s Family of Apps rose 10%, and the average price per ad rose 14%.
Capital expenditures, including principal payments on finance leases, were $34.91 billion. Cash flow from operating activities was $32.79 billion, and free cash flow was negative $2.12 billion. Cash, cash equivalents, and marketable securities were $82.45 billion as of September 30, 2026, and dividend and dividend-equivalent payments were $1.36 billion. Headcount was 66,775, down 15% year over year.
Meta said it would host a conference call to discuss the results at 1:30 p.m. Pacific Time on October 21, 2026, with a replay and transcripts to be posted to its investor relations website.
Fourth-Quarter Guidance and 2027 Plans
Meta said it expects fourth-quarter 2026 total revenue in a range of $73 billion to $76 billion, guidance that assumes foreign currency is roughly a 1% headwind to year-over-year revenue growth at current exchange rates. The company raised its full-year 2026 expense outlook to $175 billion to $179 billion to incorporate the legal charge, and said that excluding the charge it continues to expect 2026 operating income above its 2025 level.
The company narrowed its 2026 capital-expenditure outlook, including principal payments on finance leases, to $135 billion to $145 billion, from a prior range of $130 billion to $145 billion. Meta said it expects Reality Labs losses of $18 billion to $19 billion for 2026, a decline from 2025, and expects those losses to narrow to around $15 billion in 2027 as investment is reallocated toward other priority areas, primarily AI. Absent changes to its tax landscape, Meta expects a fourth-quarter 2026 tax rate of 15% to 17%.
Meta said it continues to monitor active legal and regulatory matters that could significantly affect its business and financial results, noting scrutiny of youth-related issues in several markets and a number of youth-related trials it said are scheduled in the coming months in the United States.
Looking beyond 2026, Meta said it is still developing its budget and capacity plans for 2027 but expects to continue investing aggressively to support both its core business and emerging AI initiatives. The company said its AI investments are already delivering substantial incremental advertising revenue through stronger engagement, better recommendations, and more efficient monetization, and that its MSL investments are creating the technology and infrastructure needed to unlock significant new revenue opportunities.
Meta said it is not providing a full-year 2027 revenue outlook, adding that the benefits its AI investments are delivering to the core business, combined with emerging opportunities from model advances and product launches, position it to sustain strong overall revenue growth throughout 2027.
Class C Dividend, Listing, and Advisors
The Class C approval followed the unanimous recommendation of a Special Committee of disinterested and independent directors, which the Board established to evaluate Meta’s capital structure. The committee and the Board determined that creating the new class is advisable, fair, and in the best interests of Meta and its shareholders.
Reasons cited by the committee included giving Meta capacity for capital raising, employee compensation, potential acquisitions, and other general corporate purposes, citing the significant scale of investment required amid the industry’s AI transformation; continuing to maximize long-term value, with the committee noting Meta’s stock price has risen more than 1,700% since its IPO compared with approximately 495% for the S&P 500 over the same period; and ensuring that Zuckerberg continues to lead the company, maintaining what the committee called the founder-led model that has driven Meta’s success since its inception.
Meta intends to file an amended and restated certificate of incorporation in Delaware with an effective date of January 19, 2027, and that certificate has been approved by shareholder written consent. The Board declared a one-time stock dividend of one Class C share for each outstanding share of Class A and Class B common stock, contingent on and payable after the certificate takes effect, with record and payment dates to be set by the Board later. Meta said it expects the Class A market price to reflect the effect of a two-for-one stock split after the payment date, and that the dividend will not change any shareholder’s voting power.
Meta also entered a Founder Alignment Agreement with Zuckerberg that sets terms for his sales of Class C shares received in the dividend, his service at the company, and conditions for potential future Class C stock dividends. Class A shares will continue to trade on Nasdaq, and Meta intends to qualify the Class C shares for a Nasdaq listing upon issuance. The company said further information will be available in a Form 8-K and an information statement to be filed with the Securities and Exchange Commission. Moelis & Company served as independent financial advisor to the Special Committee, and Morgan Stanley served as financial advisor to Meta.
