Meta Revenue Jumps 26 Percent to $64.6 Billion as Legal Charge Hits Profit

Meta earnings revenue for the third quarter of 2026 rose 26 percent to $64.60 billion, above the company’s forecast of $61 billion to $64 billion and above the $63.31 billion consensus, the company reported after the market closed on 21 October 2026. Diluted earnings were $3.83 a share, against a $5.89 estimate, after a $9.89 billion charge tied to an agreement with 52 state attorneys general. The charge absorbed most of the operating profit for the quarter. Meta also posted negative free cash flow for the first time since its 2012 listing, a sign of how heavily it is spending on artificial intelligence infrastructure.

The revenue beat showed that demand for advertising on the company’s platforms remained strong, with businesses continuing to spend on digital ads despite higher costs elsewhere in the economy. The legal charge, however, showed the scale of the regulatory and legal costs that large technology companies can face. Meta shares rose 2.2 percent in after-hours trading, to $713.12 from an official close of $697.52, suggesting that investors focused more on the revenue strength than on the one-off charge. The company had been expected to earn $5.94 to $6.11 a share before the charge was announced.

Why Meta earnings revenue matters for advertisers

For businesses that advertise on Meta’s platforms, the 26 percent revenue growth suggests that competition for attention on those platforms remains intense, which can push up the cost of reaching customers. Small businesses in particular rely on targeted advertising to find new customers, and higher ad prices can squeeze their marketing budgets. The company’s capital spending plans were the other key question for investors, with guidance of $130 billion to $145 billion in capital spending for the year, much of it going to data centres and computing power for artificial intelligence.

The negative free cash flow reading was a notable shift for a company that has usually generated large amounts of cash after its spending. It reflected the scale of the investment in artificial intelligence, which Meta regards as central to its future, from ranking and recommendations to new products. Whether that spending pays off will depend on whether the new tools generate more advertising revenue and keep users engaged. The next earnings report, due in early 2027, will show whether the legal charge was a one-off or whether further charges are likely, and whether the heavy spending is starting to produce returns.

Source: Stock Trader Weekly