Meta Platforms reported third-quarter 2026 revenue of $64.60 billion, a 26% increase from a year earlier, as both ad volume and pricing rose. Operating income fell 37% to $12.99 billion and the operating margin narrowed to 20% from 40%.
The quarter included a $9.89 billion charge tied to an agreement with 52 U.S. attorneys general over litigation concerning teen mental health and social media. Meta said the agreement provides for payments of up to approximately $18.59 billion. Excluding the charge, the company said operating income would have been $22.88 billion and diluted earnings per share would have been $7.40 instead of $3.83.
Advertising growth and heavy investment
Family daily active people averaged 3.64 billion in September, up 3% year over year. Ad impressions across Meta’s Family of Apps increased 10%, while the average price per advertisement rose 14%. Those figures are company-reported operating metrics and are not directly comparable with audience measures used by every other platform.
Capital expenditures, including principal payments on finance leases, totaled $34.91 billion for the quarter. Operating cash flow was $32.79 billion, but free cash flow was negative $2.12 billion under Meta’s non-GAAP definition. The company narrowed its expected 2026 capital-spending range to $135 billion to $145 billion and said it plans continued investment in AI infrastructure.
A new non-voting share class
Meta’s board also approved a publicly listed, non-voting Class C common stock, planned to take effect in January 2027. The company intends to issue one Class C share for each outstanding Class A and Class B share through a one-time stock dividend after an amended Delaware certificate becomes effective.
Meta said the structure could support capital raising, employee compensation and acquisitions while preserving its founder-led voting model. The stock dividend would not change any shareholder’s voting power, according to the release. Meta expects the Class A market price to reflect the economic effect of a two-for-one split after the distribution and plans to seek a Nasdaq listing for the Class C shares.
For the fourth quarter, Meta forecast revenue of $73 billion to $76 billion. It raised its full-year expense outlook to $175 billion to $179 billion to include the legal charge and said additional legal and regulatory matters could materially affect future results.
The Class C proposal is central to the governance story. Non-voting shares can give a company more flexibility to fund investment without diluting existing voting control in the same proportion as economic ownership. Meta says an independent special committee recommended the structure, but shareholders will still need to evaluate the long-term balance between financing options, founder control and accountability when the company files its information statement and Form 8-K.
Source: Meta third-quarter 2026 earnings release.
Featured image: AI-generated editorial illustration; not a photograph of a market event.
