Meta beat revenue estimates and forecast a $74.5 billion fourth-quarter midpoint.
Why it matters: The results offer a read on digital advertising demand and Meta's ability to fund AI infrastructure while maintaining growth. They also show how a $9.89 billion litigation charge and rising capital spending affected reported earnings and cash generation.
- Third-quarter revenue rose 26% to $64.60 billion, above the $63.34 billion analyst consensus.
- Advertising revenue reached $63.06 billion as ad impressions rose 10% and average prices increased 14%.
- Meta forecast fourth-quarter revenue of $73 billion to $76 billion, a midpoint of $74.5 billion.
- Capital expenditures reached $34.91 billion, while free cash flow was negative $2.12 billion.
Meta's third-quarter revenue beat estimates as its advertising business continued to grow. Revenue rose 26% year over year to $64.60 billion, above the $63.34 billion analyst consensus cited in CNBC's coverage.
Advertising revenue rose to $63.06 billion from $50.08 billion a year earlier. Ad impressions across Meta's apps increased 10%, while the average price per ad rose 14%, according to Meta's earnings release.
Meta said AI contributed incremental advertising revenue through stronger engagement, improved recommendations and more efficient monetization. The company said investments in frontier AI - advanced AI systems - will take longer to generate returns. Meta has not disclosed a standalone revenue figure for AI, so the reported advertising growth does not establish how much revenue AI generated independently. AP's reporting also examined Meta's AI spending and advertising outlook.
Management forecast fourth-quarter revenue of $73 billion to $76 billion, a midpoint of $74.5 billion. It raised its full-year 2026 total-expense outlook to $175 billion to $179 billion. That revised outlook includes the $9.89 billion litigation charge tied to a settlement with 52 U.S. state attorneys general over youth mental-health litigation, according to Meta's release. The charge is included in the reported results.
The charge reduced reported diluted earnings per share to $3.83. Meta's company-calculated diluted EPS excluding the charge was $7.40, rather than a directly comparable reported EPS figure. Capital expenditures were $34.91 billion, compared with $32.79 billion in operating cash flow, producing free cash flow of negative $2.12 billion for the quarter, according to the company's results.
Shares rose about 0.5% in regular trading and 2.9% after hours on October 21, 2026, AP reported.
By the numbers
- $64.60 billion - third-quarter revenue, up 26% year over year
- $9.89 billion - litigation charge included in reported results and the revised full-year expense outlook
- $34.91 billion - third-quarter capital expenditures
Yes, but: Meta said its frontier AI investments will take longer to generate returns, and it has not disclosed standalone AI revenue.
What's next: Meta expects fourth-quarter revenue of $73 billion to $76 billion.