Meta Q3 revenue beats at $64.6B (+26%) but EPS misses on $9.9B legal charge; creates Class C stock in effective 2-for-1 split to fund AI
What happened
Meta Platforms reported Q3 2026 revenue of $64.6 billion, up 26% year over year and ahead of the ~$63.2-63.4 billion consensus, with advertising revenue up 26% ($63.06B) on 10% higher impressions and 14% higher ad prices. GAAP net income was $9.86 billion, up 264% YoY, but diluted EPS of $3.83 missed consensus ($4.98-6.54) because the quarter absorbed a $9.89 billion charge from the multistate social-media-harm settlement; excluding it, EPS would have been $7.40. Meta also announced it will create publicly listed, non-voting Class C common stock, issued as a dividend to common and supervoting holders — an effective 2-for-1 stock split effective January 19, 2027 that preserves Zuckerberg's voting control while raising capital for AI. Q4 revenue guidance of $73-76 billion came with the high end above analyst expectations, 2026 capex was narrowed to $135-145B (low end raised from $130B), and free cash flow went negative (-$2.1B) for the first time in Meta's history, though better than the -$9.4B analysts feared. Shares rose 2.9-4% in after-hours trading.
Why it matters & what’s next are part of Pro, along with the audio summary.
Start your free 14-day trialWho’s affected
- META — revenue beat, legal overhang quantified, structural share creation to fund AI capex
- NVDA / AI infrastructure names — Meta raised the low end of 2026 capex to $135B and guides aggressive 2027 AI spending
- GOOGL — ad-revenue comps and AI model competition (Meta's Muse/Wonder vs. Google frontier models)