Meta reported a strong third quarter 2026 with revenue reaching $64.6 billion, though profitability was significantly impacted by a massive $9.89 billion legal charge. The company also announced a recapitalization through the creation of Class C non-voting stock to fund aggressive AI infrastructure needs without diluting founder control.
Key Highlights
- Revenue grew 26% year-over-year to $64.6 billion, exceeding the estimate of $63.34 billion, driven by 10% higher ad impressions and a 14% increase in average price per ad.
- GAAP diluted EPS was $3.83, but would have been $7.40 excluding the litigation charge related to state teen mental health settlements, beating the $6.67 estimate.
- Free cash flow turned negative at $2.12 billion for the quarter as capital expenditures surged to $34.91 billion to support AI model training and data center expansion.
- Meta announced a one-time 1:1 stock dividend of non-voting Class C shares, designed to allow the company to issue shares for acquisitions and compensation while preserving Mark Zuckerberg’s voting majority.