Meta Reports $64.6 Billion Q3 Revenue Amid AI Spending Surge

Meta Platforms reported third-quarter revenue of $64.6 billion, a 26% year-over-year increase that beat Wall Street estimates of $63.33 billion. Despite the revenue growth and earnings per share of $3.83, operating income fell 37% to $12.99 billion, missing analyst expectations. The company's free cash flow turned negative at -$2.12 billion, driven by aggressive artificial intelligence investments and heavy legal costs.

To fund AI infrastructure and data centers, Meta raised its full-year capital expenditure guidance to between $135 billion and $145 billion. The company also increased its full-year 2026 total expense outlook to a range of $175 billion to $179 billion. To finance these goals without diluting CEO Mark Zuckerberg's voting control, the board approved a two-for-one stock split and the creation of a new nonvoting Class C common stock, effective January 19, 2027.

Legal burdens significantly impacted the quarter, including a $9.89 billion charge for a teen mental health settlement and a $25 billion penalty ordered by a New Mexico judge over data privacy practices, which Meta intends to appeal. On the product side, the company reported that its AI agent, Muse, has surpassed 10.5 million downloads. Meta provided fourth-quarter revenue guidance between $73 billion and $76 billion.