Meta Platforms posted a blowout third-quarter 2026 earnings report on October 21, with revenue climbing 26% year over year to $64.6 billion — comfortably ahead of Wall Street expectations — while a $9.9 billion legal charge tied to teen mental-health litigation dragged on operating profit.

The Facebook and Instagram parent said revenue for the quarter ended September 30 reached $64.60 billion, up from $51.24 billion a year earlier, beating the roughly $63.3 billion consensus. Net income more than tripled, jumping 264% to $9.86 billion from $2.71 billion, with diluted earnings per share rising to $3.83 from $1.05.

Meta shares rose as much as 5% in after-hours trading following the Meta Q3 earnings release, according to multiple market reports.

Advertising remains the engine

Advertising continued to do the heavy lifting. Ad revenue rose 25.9% to $63.06 billion, driven by a 10% increase in ad impressions and a 14% rise in the average price per ad across Meta’s family of apps. Family of Apps revenue — spanning Facebook, Instagram, Messenger, and WhatsApp — grew 26.4% to $64.16 billion and accounted for 99.3% of total revenue.

Other highlights from the quarter, according to Meta’s earnings release and call transcript:

• Family Daily Active People: 3.64 billion on average in September 2026, up 3% year over year.
• WhatsApp monetization: Family of Apps “other” revenue surged 59% to $1.1 billion, driven by paid messaging and subscriptions.
• Reality Labs: revenue slipped 5.7% to $443 million as lower Quest headset sales offset growth in AI glasses revenue. The company expects a full-year Reality Labs loss of $18–19 billion, narrowing toward about $15 billion next year.
• Muse, Meta’s AI personal agent: reached 10 million users in the United States and Canada within six weeks of launch, with 25% using it daily.
• Threads: time spent per user rose more than 20% year over year as the platform overtook X in monthly active users, per the earnings call.

The $9.9 billion legal charge

The strong top line came with a significant offset: a $9.89 billion charge tied to an agreement with 52 U.S. state attorneys general to resolve litigation concerning teen mental health and social media. According to the Motley Fool’s analysis of the report, the total settlement amounts to $18.59 billion — a figure not broken out in the company’s headline numbers, so treat it as reported rather than confirmed by Meta’s official filing.

The charge pushed total costs and expenses up 68% to $51.61 billion and dragged operating income down 37% to $12.99 billion from $20.54 billion a year earlier. Meta said that excluding the charge, operating income would have been $22.88 billion and diluted earnings per share $7.40 rather than the reported $3.83.

Operating margin fell to 20% from 40% — though it would have been 35% without the legal charge, per the earnings call transcript.

Heavy AI spending continues

Meta is spending aggressively on artificial intelligence infrastructure. Third-quarter capital expenditures hit $34.9 billion, driven by investments in servers, data centers, and network infrastructure, and free cash flow was negative $2.1 billion. The company raised its full-year 2026 capital expenditure outlook to $135–145 billion, from an earlier range of $130–145 billion.

For the fourth quarter, Meta expects revenue of $73 billion to $76 billion, and it raised its full-year 2026 expense outlook to $175–179 billion, incorporating the legal charge.

“The strong quarter shows Meta’s AI investments are already delivering incremental advertising revenue,” the company’s CFO outlook commentary said, citing stronger engagement, better recommendations, and more efficient monetization.

The broader picture

Meta’s quarter stood out in a mixed earnings week. Netflix, for instance, slid to a two-year low after weaker fourth-quarter guidance — a contrast The Nerdy Humourist covered in Netflix’s weak Q4 forecast story. For investors, Meta’s report suggests the AI advertising bet is paying off even as legal and infrastructure costs weigh on the bottom line.

Frequently asked questions

Q: How much revenue did Meta report for Q3 2026?

A: Meta reported revenue of $64.6 billion, up 26% year over year from $51.24 billion, beating analyst expectations of about $63.3 billion.

Q: What was the $9.9 billion charge in Meta’s earnings?

A: A $9.89 billion charge related to an agreement with 52 U.S. state attorneys general to resolve litigation concerning teen mental health and social media. Excluding it, operating income would have been $22.88 billion and EPS $7.40.

Q: How did Meta’s stock react to the earnings?

A: Meta shares rose as much as 5% in after-hours trading after the October 21 report, according to market reports.

Q: What did Meta guide for the fourth quarter?

A: The company expects Q4 revenue of $73 billion to $76 billion, and raised its full-year 2026 capital expenditure outlook to $135–145 billion as it continues investing in AI infrastructure.