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Meta Platforms reported $64.60 billion in third-quarter revenue on October 21. That’s up 26% from a year earlier and roughly $1.23 billion ahead of what analysts expected. The headline number looked strong. The Meta Q3 2026 earnings report underneath it told a messier story. A one-time $9.89 billion legal charge cut operating income by more than a third, even as the core advertising business kept growing at the same pace it has all year.
Diluted earnings per share came in at $3.83, up 265% year-on-year on paper. That figure gets skewed by comparison with a weaker prior-year quarter. Strip out the legal charge and EPS would have been $7.40, according to Meta’s own disclosures. That number gives a clearer read on the business Meta is actually running day to day.
Why the Meta Q3 2026 earnings number looks unusual
Advertising revenue, the core of Meta’s business, rose 26% to $63.06 billion. Operating income fell 37% instead, to $12.99 billion. That pulled the operating margin down from 40% a year ago to 20% this quarter. Without the legal charge, operating income would have landed around $22.88 billion, with a margin much closer to normal. Total costs and expenses reached $51.61 billion for the quarter. The charge sits folded into that figure rather than broken out separately on the income statement.
The $9.89 billion charge, explained
The charge relates to a broader settlement Meta reached in August with a coalition of US state attorneys general. Those officials claimed Facebook and Instagram were designed to be addictive to children. New York’s attorney general said at the time the full settlement could reach $17.1 billion. A separate case landed in late October, outside this charge: a New Mexico judge ordered Meta to pay $25 billion after a jury found the company liable for misleading Facebook users about data privacy. That case traced back to the Cambridge Analytica scandal. Meta says it plans to appeal.
A new, non-voting share class is coming
Meta also announced plans for a new Class C stock. It carries no voting rights, effective January 19, 2027. Existing Class A and Class B shareholders will get one new Class C share for every share they already hold. That’s effectively a 2-for-1 stock split that leaves voting power unchanged, since the new shares carry none. Meta hasn’t set a distribution date yet.
What the results say about the underlying business
Daily active users across Meta’s apps averaged 3.64 billion in September, up 3% year-on-year. That’s modest growth, but growth nonetheless, at a scale few companies operate at. Reality Labs, Meta’s augmented and virtual reality division, posted an operating loss of $4.13 billion. That’s slightly narrower than the $4.43 billion loss a year earlier. Free cash flow came in at negative $2.12 billion for the quarter, a sharp reversal from positive $10.63 billion a year ago. The legal charge and heavy infrastructure spending both drove that swing. Meta hasn’t repurchased any shares in the first nine months of 2026, compared with $26.25 billion in buybacks over the same period in 2025.
What investors are watching next
Meta guided to fourth-quarter revenue of $73 billion to $76 billion. It raised full-year expense guidance to a range of $175 billion to $179 billion, without issuing a 2027 revenue outlook. Investors will watch whether the legal costs tied to the child-safety settlement and the New Mexico verdict are now largely behind the company, or whether more litigation could produce similar charges down the road.
For more on how the rest of Big Tech performed this earnings season, see Tamara News’ coverage of Alphabet’s Q3 2026 earnings and Amazon’s Q3 2026 results.
FAQ: Meta Q3 2026 earnings
- How much revenue did Meta report for Q3 2026?
- $64.60 billion, up 26% year-on-year and about $1.23 billion ahead of analyst expectations.
- Why did operating income fall despite higher revenue?
- A one-time $9.89 billion legal charge, tied to a child-safety settlement with US state attorneys general, cut operating income by 37% for the quarter.
- What would earnings have looked like without the charge?
- Diluted EPS of $7.40, versus the reported $3.83, according to Meta’s own adjusted disclosures.
- Is the $25 billion New Mexico verdict included in this quarter’s charge?
- No. That verdict, over a separate data-privacy case tied to Cambridge Analytica, came down in late October. Meta is appealing it.
- What is the new Class C share class?
- A non-voting share, effective January 19, 2027, issued to existing shareholders as a 2-for-1 split that leaves voting power unchanged.
- What is Meta’s guidance for the next quarter?
- Revenue of $73 billion to $76 billion for Q4 2026, with full-year expense guidance raised to $175-179 billion.
Sources
- StockAnalysis.com — Meta reports $64.6B in Q3 revenue; announces non-voting Class C shares. stockanalysis.com
- SEC EDGAR — Meta Platforms, Inc. Form 10-Q, FY2026 Q3. sec.gov
Image credits: featured photo by InvadingInvader, Wikimedia Commons (CC BY-SA 4.0). In-content photo by Beth Kanter / Cambodia4kids.org, Wikimedia Commons (CC BY 2.0).
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