- Meta reported $64.6 billion in third quarter revenue, up 26% annually, outpacing the $63.3 billion analysts projected.
- The company reported $7.40 earnings per share excluding one-time legal charges to beat Wall Street’s forecast of $5.46 a share
- Third quarter 2026 costs and expenses includes a $9.89 billion charge related to payouts from teen mental health and social media trials
Meta beat Wall Street expectations in its third quarter earnings despite high legal fee payouts for various social media addiction trials this year.
The tech giant reported $64.6 billion in third quarter revenue, up 26% annually, outpacing the $63.3 billion analysts projected. The company also reported $7.40 earnings per share excluding one-time legal charges to beat Wall Street $5.46 expectations, up 265 % year-over-year. The company generated a net income of $9.86 billion.
In August, the company settled a lawsuit related to teen mental health and social media cases without payments up to approximately $18.59 billion. Meta’s third quarter 2026 costs and expenses includes a $9.89 billion charge related to this agreement.
The nearly $10 billion payout barely affected the company’s bottom line and did not have much of an impact on its executives either. In the company’s opening remarks on the earnings call, chief financial officer Susan Li briefly addressed the company’s legal related costs as part of the quarter report, but the social media trials and their subsequent fees were never mentioned again.
Meta was hit with another large fine Wednesday. The tech company will have to pay a $25 billion fee for misleading Facebook users about its data privacy practices. New Mexico Judge Francis J. Mathew imposed one of the largest penalties against a tech company to date with the ruling, which found that that Meta committed nearly 44 million violations of New Mexico’s consumer protection laws.
Meta also narrowed its capital expenditure range from $130-140 billion to $135-140 billion with more spending poured into AI. The company said that their AI investments are already delivering “substantial incremental advertising revenue” with stronger engagements and more targeted recommendations. Mark Zuckerberg said that WhatsApp is already the leading surface where people engage with Meta AI.
Meta CEO Mark Zuckerberg touted its AI growth and said that the company’s investments are paying off. Zuckerberg said that its ads business is reporting faster year-over-year revenue growth due to businesses’ embracing of the company’s AI models.
“Nine million small businesses on our platforms are now using at least one of our AI creative tools, and we’re rolling out new end-to-end creative solutions that help advertisers translate performance data into their creative decisions,” Zuckerberg said.
He said that Muse AI will “supercharge” this push.
Susan Li, Meta’s chief financial officer, said that the app’s content recommendations have improved with time spent increasing on the platform.
“On Instagram, global time spent this quarter grew double digits year over year this quarter, largely driven by improvements to our feed and reels recommendations,” she said. “On Facebook, video time spent increased 9% globally year over year and over 10% within the U.S. and Canada, where it was driven by ranking improvements.”
She added that the platform will continue improving recommendations over the rest of the year and into 2027, leaning on their AI investments to deliver on this.
The CEO also revealed that 3.6 billion people used at least one of the tech giant’s apps each day. Instagram reached 2 billion daily active users. Threads crossed 500 million monthly active users, making it the fastest-growing conversation app ever, according to the executive. And Facebook has held strong with more than 2 billion daily active users.
More to come…
