Meta Platforms today reported third-quarter 2026 revenue of $64.60 billion, up 26% year over year on both a reported and constant currency basis, while a $9.89 billion charge tied to its August agreement with US state attorneys general over teen mental health cut operating income 37% to $12.99 billion and pushed the operating margin to 20%. Advertising revenue reached $63.06 billion. Average price per ad rose 14% worldwide and 23% in the US and Canada, while ad impressions grew 10%, the slowest rate in the five quarters Meta charted. The company guided fourth-quarter revenue to $73-76 billion and set up a new class of non-voting Class C shares.

In Short

Meta, which owns Facebook, Instagram, WhatsApp and Messenger, made $64.6 billion in the three months to September, mostly from ads, and its ad sales grew 26% from a year earlier. Its profit from operations still fell by more than a third because it booked a $9.89 billion charge for its deal with US states over harm to teenagers. For advertisers, the important number is price: Meta showed only 10% more ads but charged 14% more per ad on average, and 23% more in the US and Canada.

The quarter in numbers

Meta published its results on October 21, 2026, in a press release filed as Exhibit 99.1 and an 18-page earnings presentation, with a conference call scheduled for 1:30 p.m. Pacific time the same day. The quarter ended September 30, 2026. All figures below come from those two documents unless attributed to earlier PPC Land coverage or labelled as PPC Land's calculation.

Revenue for the quarter was $64,601 million, against $51,242 million in the third quarter of 2025. The non-GAAP reconciliation shows a foreign exchange effect of $113 million, which means currency movements slightly reduced reported revenue: on a constant currency basis revenue would have been $64,714 million. Both measures round to 26% growth. That result landed above the top of the $61 billion to $64 billion range Meta gave for the third quarter in July, as PPC Land reported from the second-quarter results.

Costs and expenses rose 68% to $51,613 million. Income from operations fell 37% to $12,988 million, and the operating margin halved, from 40% to 20%. Net income, on the other hand, rose 264% to $9,860 million, and diluted earnings per share rose 265% to $3.83 from $1.05.

How can profit jump while operating income falls by more than a third? The answer sits in the comparison quarter. According to a footnote in the presentation, the third quarter of 2025 carried "a one-time, non-cash income tax charge of $15.93 billion related to the enactment of the One Big Beautiful Bill Act," which drove the effective tax rate that quarter to 87% and cut net income to $2,709 million. Against that depressed base, almost any normal quarter would look like a surge. PPC Land's coverage of the third quarter of 2025 noted at the time that net income would have been $18.64 billion without the tax charge.

Meta presented adjusted figures that strip out the settlement. According to the press release, excluding the charge:

  • Income from operations of $12.99 billion would have increased by $9.89 billion to $22.88 billion.
  • Diluted EPS of $3.83 would have increased by $3.57 to $7.40.
  • The effective tax rate of 24% would have decreased by 7 percentage points to 17%.

The presentation adds one figure the release does not carry: excluding the charge, net of the related tax effect, net income "would have increased by $9.19 billion to $19.05 billion." By PPC Land's calculation, the adjusted operating income of $22.88 billion equals an operating margin of about 35.4%, below the 40% of a year earlier and above the 31% reported for the second quarter of 2026.

The comparison with the prior year on an adjusted basis is therefore mixed. Adjusted operating income of $22.88 billion is about 11% above the $20,535 million of the third quarter of 2025, by PPC Land's calculation, while revenue grew 26%. Expenses outside the legal charge rose faster than sales.

Advertising: prices up, volume slowing

Advertising produced $63,061 million of the $64,601 million total, or about 97.6%, up 26% from $50,082 million. On a constant currency basis, ad revenue was $63,157 million, also up 26%. Sequentially, advertising revenue rose about 6.2% from $59,363 million in the second quarter, by PPC Land's calculation.

The two growth drivers Meta reports moved in opposite directions. Ad impressions delivered across the Family of Apps increased by 10% year over year, while the average price per ad increased by 14%. Taken together, the two rates are consistent with the 26% revenue growth. The balance has shifted over the year. In the first quarter of 2026, impressions grew 19% and price per ad 12%, according to PPC Land's Q1 coverage. In the second quarter, impressions grew 14% and price 12%. In the third quarter, impression growth dropped to 10% and price growth rose to 14%.

The presentation charts both measures for five quarters. Worldwide impression growth ran at 14%, 18%, 19%, 14% and 10% from the third quarter of 2025 to the third quarter of 2026. Price per ad growth over the same quarters ran at 10%, 6%, 12%, 12% and 14%. The quarter just reported therefore shows both the slowest impression growth and the fastest price growth in the series Meta chose to display.

By region

The regional split is where the price story becomes sharpest. According to the presentation, which apportions impressions and prices by "our estimation of the geographic location of our users when an ad impression is delivered":

Region Ad impressions YoY Average price per ad YoY Ad revenue Q3 2026 Ad revenue Q3 2025
Worldwide 10% 14% $63,061m $50,082m
US & Canada 8% 23% $28,438m $21,331m
Europe 8% 10% $14,234m $12,072m
Asia-Pacific 14% 1% $11,531m $10,020m
Rest of World 8% 24% $8,858m $6,659m

By PPC Land's calculation from the presentation's dollar figures, advertising revenue by user geography grew about 33.3% in the US and Canada, 17.9% in Europe, 15.1% in Asia-Pacific and 33.0% in Rest of World. The US and Canada accounted for about 45.1% of ad revenue in the quarter, up from about 42.6% a year earlier.

The US and Canada price figure has risen in each of the last three quarters: 14% in the first quarter of 2026, 20% in the second and 23% in the third. Impression growth in the same region fell from 13% in the first quarter to 9% and then 8%. In plain terms, Meta's largest market delivered modestly more ad slots and charged considerably more for each one.

Europe moved in the other direction on price. Price per ad growth there was 19% in the first quarter of 2026, then 10% in both the second and third quarters, while impression growth fell from 17% in the first quarter to 13% and then 8%. Asia-Pacific remains a volume market: impressions rose 14%, the fastest of any region, but price per ad rose only 1%, a rate that has stayed between minus 2% and 5% across the five quarters shown. Rest of World recorded the largest price increase, 24%, on impression growth of 8%.

One difference between the current deck and PPC Land's earlier reporting deserves a note. The presentation's chart shows Europe ad impression growth of 9% for the third quarter of 2025. PPC Land's report on that quarter, published October 30, 2025, gave Europe's figure as 6%. The documents published today do not mention any restatement, and they do not explain the difference.

Revenue per person

Family daily active people, Meta's count of unique people who used Facebook, Instagram, Messenger or WhatsApp on a given day, averaged 3.64 billion in September 2026, up 3% year over year. The count was 3.54 billion a year earlier and 3.60 billion in the second quarter. A footnote explains that the slight decline in the first quarter of 2026, to 3.56 billion from 3.58 billion, "was driven by internet disruptions in Iran (which were largely restored in the second quarter of 2026), as well as a restriction on access to WhatsApp in Russia."

Average revenue per person, which Meta defines as Family of Apps revenue divided by the average number of daily active people at the beginning and end of the quarter, reached $17.72. That compares with $14.46 a year earlier, an increase of about 22.5% by PPC Land's calculation, and $16.86 in the second quarter. With users up 3% and revenue per person up more than 20%, almost all of the growth came from monetising the existing audience more heavily rather than from adding people.

Meta's appendix repeats its caveats about these metrics. The company estimates the error margin for its Family metrics at "approximately 3% of our worldwide DAP," and states that in the fourth quarter of 2025 it estimated that "less than 5% of our worldwide DAP consisted solely of violating accounts," which it defines as accounts intended for purposes that break its terms, "including bots and spam." It attributes the increase over its prior estimate to a methodology update. The deck also notes that user location is estimated from factors "such as the user's IP address and self-disclosed location," which may not reflect the actual location of someone connecting through a proxy server.

What Meta says about AI and ad tools

Neither document names a specific advertising product. There is no mention of Advantage+, of ads on Threads or WhatsApp, or of advertising inside Muse. The documents also give no advertiser counts, conversion figures or adoption rates for AI creative tools, figures that have appeared in Meta's earlier results coverage. PPC Land's first-quarter report, for example, cited more than 8 million advertisers using at least one AI creative tool.

The only reference to the mechanics of ad growth comes in the CFO outlook commentary. "Our AI investments are already delivering substantial incremental advertising revenue through stronger engagement, better recommendations, and more efficient monetization," Meta wrote. The commentary does not quantify "substantial" or break out how much of the 26% growth it attributes to those factors.

The CEO's quote names Meta's new AI products instead. "We hit major milestones this quarter toward delivering personal superintelligence for everyone - including launching Muse and Muse Wonder, our first frontier model," Mark Zuckerberg said in the release. "Our investments are paying off, the core business is strong, and we're seeing velocity across the board." The documents give no technical or commercial details about Muse Wonder. Muse, the personal AI agent, went live in the United States on September 8, 2026, and on September 29 Meta extended it to small businesses with access to Meta ad accounts and 15 third-party tools. Neither document reports Muse users, revenue or downloads.

Segments

Meta reports two segments. The Family of Apps, covering Facebook, Instagram, Messenger, WhatsApp and other services, generated revenue of $64,158 million, up from $50,772 million. Within that total, advertising brought in $63,061 million and other revenue $1,097 million, up from $690 million, an increase of about 59% by PPC Land's calculation. Neither document says what drove other revenue.

Family of Apps operating income fell to $17,117 million from $24,967 million, a decline of about 31.4%. The segment's operating income has now fallen for three consecutive quarters, from $30,766 million in the fourth quarter of 2025 to $26,900 million, $23,394 million and $17,117 million. The documents do not state which segment the $9.89 billion legal charge was recorded in.

Reality Labs, which covers virtual and augmented reality hardware, software and content, generated $443 million of revenue, down from $470 million a year earlier, and lost $4,129 million, compared with a loss of $4,432 million. Over nine months the unit has lost $12,775 million on revenue of $1,276 million.

The income statement breaks the 68% rise in costs into four lines:

  • Cost of revenue: $13,369 million, up from $9,206 million, or about 45%.
  • Research and development: $20,054 million, up from $15,144 million, or about 32%.
  • Marketing and sales: $3,333 million, up from $2,845 million, or about 17%.
  • General and administrative: $14,857 million, up from $3,512 million.

The percentages are PPC Land's calculations. General and administrative expenses include the $9.89 billion settlement charge, according to a footnote. Without it, the line would have been about $4,967 million, still about 41% above a year earlier by PPC Land's calculation. As a share of revenue, the presentation shows cost of revenue climbing to 21% from 18% a year earlier, while general and administrative costs reached 23% of revenue.

Depreciation and amortization, which grows as new data centres and servers come into service, rose to $7,154 million from $4,963 million. Share-based compensation rose to $7,363 million from $5,555 million.

Headcount was 66,775 as of September 30, 2026, a decrease of 15% year over year, according to the release. The documents give no reason for the decline and do not mention severance. The drop within the quarter was large: PPC Land reported headcount of 75,472 at June 30, 2026, in its second-quarter coverage, which means a reduction of 8,697 people, or about 11.5%, in three months by PPC Land's calculation. That came after a May 2026 reduction affecting about 8,000 employees, which PPC Land previously covered along with $1.18 billion in severance costs.

The attorneys general agreement

According to the release, "In August 2026, we announced an agreement with 52 attorneys general to resolve litigation related to teen mental health and social media, which provides for payments of up to approximately $18.59 billion." The third-quarter charge of $9.89 billion relates to that agreement.

That description differs from what PPC Land found in the court documents. PPC Land's August 27 report on the consent judgment found that the settlement lists 51 jurisdictions while Meta referred to 52 attorneys general, including Texas, which the settlement omits. The same report totalled the payments in the court filing at about $17.21 billion, including a $459,293,017.80 Cambridge Analytica component, while Meta described the deal at the time as roughly $18 billion. Meta's new figure of up to approximately $18.59 billion is higher than both. Neither document explains how the $18.59 billion is calculated or why the charge is $9.89 billion rather than the full amount.

The balance sheet shows some movements consistent with a large obligation being recorded, though the documents do not link them to the settlement. Other liabilities rose to $13,345 million from $4,253 million at the end of 2025. Restricted cash and restricted cash equivalents included in other assets reached $12,535 million, against $1,612 million a year earlier.

What the documents do not mention

The release went out on the same day that a New Mexico judge ordered Meta to pay $25 billion in civil penalties over Facebook privacy statements, a ruling PPC Land covered earlier on October 21. Neither the press release nor the presentation refers to New Mexico, to that judgment or to any figure connected with it. The only reference to pending youth litigation in the outlook is general: "we continue to see scrutiny on youth-related issues in several markets and have a number of youth-related trials scheduled in the coming months in the U.S." The jury verdict in the New Mexico case came on September 25, inside the reporting quarter, as PPC Land reported, but it is also absent from both documents.

European regulatory matters do not appear either. Neither document mentions the European Union, the Digital Markets Act, the less personalised ads option or any EU proceeding. Europe appears only as a revenue and pricing region. The forward-looking statements list "privacy, legislative, and regulatory concerns or developments" and "risks associated with government actions that could restrict access to our products or impair our ability to sell advertising in certain countries" among general risk factors, without naming jurisdictions.

Capital expenditures and cash

Capital expenditures, including principal payments on finance leases, were $34.91 billion in the quarter, against $19,374 million a year earlier. The presentation gives the precise figure as $34,906 million, made up of $33,942 million in purchases of property and equipment and $964 million in finance lease principal payments. Year-to-date capital expenditures reached $85,824 million, compared with $50,078 million in the first nine months of 2025.

That pace has a direct effect on cash generation. Cash flow from operating activities was $32.79 billion, while free cash flow was negative $2.12 billion. A year earlier, free cash flow was $10,625 million. The presentation shows free cash flow falling across 2026, from $12,386 million in the first quarter to $784 million in the second and minus $2,120 million in the third.

Cash, cash equivalents and marketable securities totalled $82.45 billion at September 30, against $90.26 billion at June 30, according to PPC Land's second-quarter report, and $81.59 billion at the end of 2025, by PPC Land's calculation from the balance sheet. Long-term debt stood at $80,922 million, up from $58,744 million at December 31, 2025. The nine-month cash flow statement shows $24,910 million of net proceeds from issuing long-term debt, none of it in the third quarter. The cash flow statement also records $1,037 million in "proceeds from data center venture distribution" during the quarter, without further explanation.

Property and equipment, net, reached $253,222 million, up from $176,400 million at the end of 2025.

No buybacks in 2026

The release lists the capital return program for the quarter as "Dividend and dividend equivalent payments were $1.36 billion." The cash flow statement shows no repurchases of Class A common stock in the third quarter or in the first nine months of 2026. In the same periods of 2025, Meta bought back $3,327 million and $26,248 million of stock. Dividend payments over nine months were $4,060 million.

Guidance

Meta expects fourth-quarter 2026 revenue of $73 billion to $76 billion, assuming foreign currency is an approximately 1% headwind to year-over-year growth. Against fourth-quarter 2025 revenue of $59,893 million, the range implies growth of about 21.9% to 26.9%, by PPC Land's calculation. Combined with nine-month revenue of $181,712 million, it points to full-year 2026 revenue of roughly $254.7 billion to $257.7 billion.

The expense outlook went up by about the size of the charge. "We are raising our expense outlook to incorporate the $9.9 billion charge related to legal proceedings recognized in the third quarter," Meta wrote. Full-year 2026 total expenses are now expected at $175 billion to $179 billion. In July the range was $165 billion to $169 billion, according to PPC Land's second-quarter report. With $127,077 million spent in the first nine months, the new range implies fourth-quarter expenses of about $47.9 billion to $51.9 billion. Excluding the legal charge, Meta said it continues to expect 2026 operating income to be above 2025 operating income.

The capital spending range narrowed again. Meta now anticipates 2026 capital expenditures of $135 billion to $145 billion, "narrowed from our prior outlook of $130-145 billion." The range has moved several times this year: PPC Land reported a raise to $125 billion to $145 billion in April, which was then narrowed to $130 billion to $145 billion in July. With $85.82 billion spent through September, the new range implies fourth-quarter capital expenditures of roughly $49.2 billion to $59.2 billion, by PPC Land's calculation. That would exceed every quarter so far this year.

Reality Labs losses are expected to decline compared with 2025 to $18 billion to $19 billion. With $12.78 billion lost in the first nine months, that implies a fourth-quarter loss of about $5.2 billion to $6.2 billion. Meta expects losses "to narrow next year to around $15 billion as we reallocate investment toward other priority areas, primarily AI."

The fourth-quarter tax rate is expected between 15% and 17%, "absent any changes to our tax landscape."

2027

Meta did not give a 2027 revenue range. "Although we are not providing a full-year 2027 revenue outlook, the benefits our AI investments are delivering to the core business, combined with emerging opportunities from model advances and product launches, position us to sustain strong overall revenue growth throughout 2027," the company wrote.

On spending, the company said it is "still developing our budget and capacity plans for next year, but we expect to continue investing aggressively to support both our core business and emerging AI initiatives." The commentary refers to "our MSL investments," meaning the Meta Superintelligence Labs effort, and states that these "will take longer to generate returns than those in our core business."

New Class C shares

The release also set out a change to Meta's share structure. The board approved a new class of publicly listed, non-voting Class C common stock, effective January 19, 2027, following the unanimous recommendation of a special committee of independent directors.

Meta will pay a one-time stock dividend of one Class C share for each outstanding Class A and Class B share, contingent on the amended certificate of incorporation becoming effective. The record and payment dates have not been set. According to the release, "After the payment date of the stock dividend, we expect the market price for our Class A common stock to reflect the effect of a two-for-one stock split. The stock dividend will not change the voting power of any shareholder."

The special committee gave three reasons. The first is capital: the new class gives Meta shares for "Capital Raising, Employee Compensation, Potential Acquisitions, and Other General Corporate Purposes," because "the scale of investment required to compete, sustain growth, expand infrastructure, and pursue new strategic initiatives amidst the AI transformation taking place in the industry is significant." The second is long-term value: the release states that Meta's stock "has increased by more than 1,700% since its IPO," against roughly 495% for the S&P 500 over the same period. The third concerns the chief executive: "The creation of the Class C common stock will continue the founder-led model that has driven the company's success since its inception."

Non-voting shares can be issued without diluting existing voting control. The amended certificate has already been approved by shareholder written consent, and Meta entered a Founder Alignment Agreement with Zuckerberg covering his sales of Class C stock received in the dividend, his service at the company and "conditions for potential future stock dividends of Class C common stock." Moelis & Company advised the special committee; Morgan Stanley advised Meta. Class A shares will continue to trade on Nasdaq, and Meta intends to list the Class C shares there as well.

Why this matters for advertisers

The third quarter put the cost of reaching Meta's audience at the centre of the results. Worldwide, Meta delivered 10% more impressions and charged 14% more for each one on average. In the US and Canada, the gap was wider: 8% more impressions at 23% higher average prices. Average price per ad is a blended figure that moves with auction competition, ad format mix and where ads are shown, so it does not translate directly into any single advertiser's costs. But the direction over three quarters is consistent, and Meta did not present any offsetting measure of advertiser returns in today's documents.

The results also show how much of Meta's spending now sits outside advertising. Capital expenditures of $34.91 billion in one quarter exceeded the company's operating cash flow, turning free cash flow negative for the first time in the nine quarters Meta charted, and the fourth-quarter guidance implies a still higher figure. The new non-voting share class gives Meta another way to fund that spending without changing who controls the company.

For marketers and publishers watching legal risk, the documents set out a $9.89 billion charge for one settlement and a generic warning about upcoming youth trials, while staying silent on the New Mexico penalty ordered the same day and on European regulatory matters. The fourth-quarter range of $73 billion to $76 billion will be the first test of whether price-led ad growth holds through the holiday season.

Timeline

Summary

Who: Meta Platforms, Inc., owner of Facebook, Instagram, Messenger and WhatsApp, with founder and CEO Mark Zuckerberg quoted in the release. The results affect advertisers buying on Meta's apps, especially in the US and Canada, and the 52 state attorneys general party to the August teen mental health agreement.

What: Third-quarter revenue rose 26% to $64.60 billion and advertising revenue to $63.06 billion, driven by a 14% rise in average price per ad and a 10% rise in ad impressions. A $9.89 billion settlement charge cut operating income 37% to $12.99 billion. Meta guided fourth-quarter revenue to $73-76 billion, raised its 2026 expense outlook to $175-179 billion, narrowed capex to $135-145 billion and approved a non-voting Class C share class.

When: Results were published on October 21, 2026, for the quarter ended September 30, 2026. The Class C stock is set to take effect on January 19, 2027.

Where: Meta is based in Menlo Park, California. Revenue is reported across the US and Canada, Europe, Asia-Pacific and Rest of World, with the US and Canada accounting for about 45% of ad revenue.

Why: Ad revenue growth now depends more on higher prices than on more ad slots, while AI infrastructure spending has pushed free cash flow negative. The documents frame AI as the source of "substantial incremental advertising revenue" and as the reason for continued aggressive investment in 2027, but they give no figures on advertiser outcomes and do not address the New Mexico judgment or EU regulatory matters.