Meta (META) Q3 2026 Earnings: Revenue Up 26% as a $9.9 Billion Legal Charge Halves Operating Margin, Plus a New Non-Voting Share Class

Meta Platforms reported third-quarter 2026 results on October 21 and, in the same filing, announced a new class of non-voting stock. The earnings release shows revenue of $64.60 billion, up 26% from $51.24 billion on both a reported and constant-currency basis.

Advertising still accelerating#

Ad impressions across the family of apps rose 10% and the average price per ad rose 14%. Daily active people averaged 3.64 billion in September, up 3%. Headcount fell 15% to 66,775.

The legal charge#

Costs and expenses rose 68% to $51.61 billion, including a $9.89 billion charge for the agreement announced in August with 52 attorneys general to resolve litigation over teen mental health and social media, which provides for payments of up to approximately $18.59 billion. Operating income was $12.99 billion, down 37%, for a 20% margin versus 40%. Excluding the charge, Meta says operating income would have been $22.88 billion and diluted EPS $7.40 rather than $3.83. Reported net income was $9.86 billion, up 264% against a prior-year quarter depressed by an 87% tax rate.

Spending and cash#

Capital expenditures including finance-lease payments were $34.91 billion. Operating cash flow was $32.79 billion and free cash flow negative $2.12 billion. Cash and marketable securities were $82.45 billion.

Guidance#

Fourth-quarter revenue is expected at $73 billion to $76 billion. Full-year 2026 expenses are now $175 billion to $179 billion including the charge; capital expenditures are narrowed to $135 billion to $145 billion; Reality Labs losses are expected to decline to $18 billion to $19 billion. Meta says it will continue investing aggressively in 2027 and is not providing a 2027 revenue outlook. It also flagged youth-related trials scheduled in coming months.

The new share class#

A separate 8-K says the board, on a special committee’s recommendation, approved a restated charter creating non-voting Class C common stock, approved by shareholder written consent on October 20 and effective January 19, 2027. Each Class A and Class B share will receive one Class C share as a stock dividend. Under a Founder Alignment Agreement, 20% of Mark Zuckerberg’s Class C shares are freely saleable and 80% are stapled: he can generally sell them only by also selling or converting a matching number of voting shares, so he cannot cash out most of the new shares without reducing his voting power, which the information statement puts above 60%. Meta says Class C shares can fund acquisitions, financings and equity awards without further voting dilution to the founder.

What to compare next#

For readers following META, the underlying quarter is strong, but the company is now spending more on infrastructure than it generates in free cash flow, and a second legal charge of similar size remains possible under the settlement’s payment schedule. The Class C dividend will roughly halve the per-share price when it pays, so compare per-share figures with care across the January effective date.

Published October 21, 2026. Informational reporting, not investment advice. Figures come from the cited filings and reports; forward-looking statements are management's or analysts' expectations and can change. No share-price outcome is predicted.