Meta beats Q3 revenue forecasts but $9.9bn legal charge crushes EPS

Meta reported third-quarter revenue of $64.601bn on Wednesday, up 26% from $51.242bn a year earlier and ahead of analyst forecasts of roughly $63.3bn — but a near-$10bn legal charge meant headline earnings badly missed.

Diluted EPS was $3.83, up 265% from $1.05 last year but well short of the roughly $6.5 consensus, driven by a $9.89bn charge from the August agreement with 52 US state attorneys general settling teen mental-health litigation, with total payments of up to about $18.59bn. Stripping out the charge, Meta said operating income would have been $22.88bn, EPS $7.40 and the effective tax rate 17%.

The company guided fourth-quarter revenue of $73–76bn, broadly in line with the $73.65bn analysts had modelled, and narrowed 2026 capital expenditure to $135–145bn while promising to “invest aggressively” in 2027 on AI and data centres. Daily active people rose 3% to 3.64bn, ad impressions grew 10% and the average price per ad rose 14%.

The board also approved a new non-voting Class C common stock, effective in January 2027, with a one-for-one stock dividend. Shares rallied more than 2% to $717.52, recovering after earlier gains were trimmed by news of a $25bn New Mexico privacy penalty reported separately.

“We hit major milestones this quarter toward delivering personal superintelligence for everyone — including launching Muse and Muse Wonder, our first frontier model,” said Mark Zuckerberg. “Our investments are paying off, the core business is strong, and we’re seeing velocity across the board.”