Meta narrowed its 2026 capital expenditure guidance to $135 billion to $145 billion on Wednesday, lifting the floor by $5 billion from the prior $130 billion to $145 billion range, as it reported third-quarter revenue of $64.6 billion, up 26% from a year earlier. The company also announced a new publicly listed, nonvoting Class C stock that a Meta special committee said gives it the ability to finance its growth, with AI investment among the stated reasons.
Capital spending in the quarter, including principal payments on finance leases, came to $34.91 billion, up from $31 billion in the second quarter and $19.4 billion a year earlier. Operating cash flow was $32.79 billion, leaving free cash flow at negative $2.12 billion, compared with positive $10.63 billion in the third quarter of 2025. Meta ended September with $82.45 billion in cash and marketable securities.
Meta said its AI investments are already delivering substantial incremental advertising revenue through stronger engagement and better recommendations. Advertising revenue reached $63.06 billion, ad impressions rose 10% year over year, and the average price per ad climbed 14%. Total revenue topped the roughly $63.3 billion analysts expected, and family daily active people averaged 3.64 billion in September, up 3%.
“Our investments are paying off, the core business is strong, and we're seeing velocity across the board.”— Mark Zuckerberg, Meta CEO
Key facts
- 01Meta narrowed 2026 capex guidance to $135B-$145B from $130B-$145B, raising the floor by $5B.
- 02Q3 revenue rose 26% to $64.6B; Meta guided Q4 revenue to $73B-$76B.
- 03Q3 capex of $34.91B exceeded $32.79B in operating cash flow, leaving free cash flow at -$2.12B.
- 04A $9.89B legal charge cut operating income 37% to $12.99B.
- 05Nonvoting Class C stock takes effect January 19, 2027, via a one-for-one stock dividend.
Profit took a hit from litigation. Third-quarter costs included a $9.89 billion charge tied to an August agreement with 52 state attorneys general over teen mental health and social media litigation, under which payments can reach about $18.59 billion. Costs and expenses rose 68% to $51.61 billion, operating income fell 37% to $12.99 billion, and operating margin dropped to 20% from 40%. Excluding the charge, operating income would have been $22.88 billion and diluted earnings per share $7.40.
Reported net income still rose 264% to $9.86 billion, or $3.83 per diluted share, against $2.71 billion, or $1.05 per share, a year earlier, when Meta's effective tax rate was 87%. The rate this quarter was 24%.
Meta guided fourth-quarter revenue to $73 billion to $76 billion, including a roughly 1% foreign-currency headwind. It raised full-year 2026 total expense guidance to $175 billion to $179 billion to reflect the legal charge, and expects Reality Labs losses of $18 billion to $19 billion this year, narrowing to about $15 billion in 2027. Meta gave no 2027 capex or expense guidance, saying budgets are still in development and that it expects to keep investing aggressively.
The Class C structure takes effect January 19, 2027. Each Class A and Class B share will receive one Class C share as a one-time stock dividend, and Meta expects Class A shares to reflect a two-for-one split once the dividend is paid. Meta said the dividend does not change any shareholder's voting power, and shareholders approved the amendment by written consent. The company intends to list the Class C shares on Nasdaq.
Meta also signed a Founder Alignment Agreement with Mark Zuckerberg covering his sales of Class C shares, his service, and future Class C dividends. The special committee said Zuckerberg is best suited to lead Meta into its next era. Zuckerberg holds about 61% of Meta's voting rights.
Headcount stood at 66,775 at the end of the quarter, down 15% from a year earlier.
The results came about a week after Meta Superintelligence Labs released Muse Wonder to the public as the company's first frontier model. Meta's outlook commentary said its investments position it to sustain strong overall revenue growth throughout 2027.
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