Meta posts strong ad-driven quarter while legal charge and AI costs weigh on profit
Meta's third-quarter revenue reached $64.6 billion, up 26% and above analyst expectations, helped by a 14% rise in average ad prices. A $9.89 billion one-time legal charge cut reported profit to $9.86 billion, or $3.83 per share, while EPS excluding the charge was $7.40. Meta guided fourth-quarter revenue to $73–76 billion and set 2026 capital spending at $135–145 billion.
Meta’s ad business expanded through both volume and pricing: impressions rose 10%, while the average price per ad increased 14%. Revenue of $64.6 billion topped the $63.37 billion consensus, and excluding the legal charge, operating income would have been $22.88 billion with diluted EPS of $7.40.
The $9.89 billion charge stems from an August agreement with 52 state attorneys general over teen mental-health litigation, with potential payments up to about $18.59 billion. Meta also approved a non-voting Class C stock effective Jan. 19, 2027, structured as a one-time dividend that works like a two-for-one split without changing voting control.
The quarter could shape how advertisers, investors, and users view Meta’s priorities. Strong ad pricing may sustain services but also raise questions about costs passed to advertisers. The legal charge tied to teen mental-health litigation may affect families and advocates seeking platform safeguards, while heavy AI spending could influence product changes and staffing. These are possible effects, not certain outcomes.