INTEL: Meta revenue hits $64.6B as $9.89B legal charge cuts operating profit
Meta Platforms (NASDAQ: META) reported third-quarter 2026 revenue of $64.60 billion, exceeding analyst expectations of approximately $63.33 billion. However, operating income fell 37% to $12.99 billion, significantly below the $20.85 billion forecast cited by market analysts.
The results, released October 21, 2026, reflect strong advertising growth alongside a $9.89 billion legal charge related to a settlement with US state attorneys general.
Excluding that charge, Meta said operating income would have reached $22.88 billion.
Meta Q3 2026 earnings results
Meta reported the following third-quarter financial figures:
- Revenue: $64.60 billion versus approximately $63.33 billion expected
- Operating income: $12.99 billion versus $20.85 billion expected
- Operating margin: 20% compared with 40% a year earlier
- Net income: $9.86 billion
- Diluted earnings per share: $3.83
- Capital expenditures: $34.91 billion
- Free cash flow: negative $2.12 billion
Revenue increased 26% year over year from $51.24 billion, supported by continued growth in Meta’s advertising business.
Total costs and expenses rose 68% to $51.61 billion, including the substantial legal settlement charge.
Why did Meta’s operating profit fall 37%?
The largest contributor to Meta’s reported profit decline was a $9.89 billion charge associated with its agreement to resolve litigation involving teen mental health and social media.
Meta reached the agreement with 52 US attorneys general in August 2026. The settlement provides for payments totaling up to approximately $18.59 billion.
The charge was recognized during the third quarter and significantly reduced reported operating income.
Without the legal expense, Meta’s operating income would have been $22.88 billion instead of $12.99 billion.
This distinction is important because the reported decline does not reflect a comparable collapse in the underlying advertising business.
Advertising revenue grows 26%
Meta’s advertising revenue reached $63.06 billion, compared with $50.08 billion in the same quarter last year.
Advertising impressions increased 10%, and the average price per advertisement rose 14%.
The company’s family of applications, including Facebook, Instagram, WhatsApp and Messenger, reached an average of 3.64 billion daily active people in September, representing annual growth of 3%.
These results demonstrate continued expansion in Meta’s advertising operations despite rising company-wide expenses.
Meta accelerates artificial intelligence spending
Meta reported $34.91 billion in third-quarter capital expenditures, including payments associated with finance leases.
Operating cash flow reached $32.79 billion, but free cash flow was negative $2.12 billion as infrastructure investment accelerated.
The company expects full-year 2026 capital expenditures of $135 billion to $145 billion.
CEO Mark Zuckerberg highlighted the launch of Muse and Muse Wonder, Meta’s new AI models, and said the company was making progress toward its artificial intelligence objectives.
Meta also announced plans for a new class of nonvoting shares, providing additional flexibility for financing its expanding AI infrastructure investments.
Meta forecasts up to $76 billion in Q4 revenue
For the fourth quarter of 2026, Meta expects revenue between $73 billion and $76 billion.
The company also raised its full-year expense outlook to $175 billion to $179 billion to reflect the legal settlement charge.
The earnings report presents a mixed financial picture: advertising revenue continues to expand, but extraordinary legal expenses and substantial AI infrastructure investments are putting pressure on reported profitability and free cash flow.
Investors will be monitoring whether Meta’s AI investments translate into sustained revenue growth and improved earnings over the coming quarters.
