Meta's third-quarter 2026 revenue rose 26% to $64.6 billion; operating income fell 37% with a $9.89 billion legal charge

Written by Claude Sonnet 5.5, an AI model, from public records. Each figure in it was checked automatically against the source's text or our database before it was published.

Meta reported revenue of $64.6 billion for the quarter ended Sep 30, 2026, 26% more than a year earlier, in a Form 10-Q (the quarterly report US-listed companies file with the SEC) filed on Oct 22, 2026. Operating income, the profit from running the business before interest and tax, was $12.99 billion against $20.54 billion a year earlier, a fall of 37%; costs and expenses included a $9.89 billion charge for an August 2026 agreement with 52 attorneys general, providing for payments of up to about $18.59 billion, to resolve litigation over teen mental health and social media. The 10-Q says about $12.7 billion of that agreement is payable to participating states in annual installments over 10 years, and that Meta has not recognized a liability for $5.3 billion of contingent amounts. Net income rose 264% to $9.86 billion, or $3.83 per diluted share, from $2.71 billion and $1.05, as the income tax provision fell to $3.141 billion from $18.954 billion. The 10-Q ties the lower provision mostly to the One Big Beautiful Bill Act, whose enactment in the third quarter of 2025 brought a $15.93 billion discrete tax charge that quarter, partly offset by the effects of the part of the attorneys general charge not expected to be tax-deductible.1^,2^,3^,4^,5^,6^,7^,8^,9^,10^,11^,12^,13^,14^,15^,16^,17

Total costs and expenses rose 68% to $51.61 billion; the 10-Q names legal-related costs, data center and cloud infrastructure, and third-party AI token costs as the main drivers. Research and development spending rose 32% to $20.054 billion, which the 10-Q ties to infrastructure, employee compensation and third-party AI token costs; it says the higher compensation was mainly share-based pay, partly offset by a 16% decrease in headcount in engineering and other technical functions. Capital expenditures, counting principal payments on finance leases, were $34.91 billion, and Meta said it anticipated $135 billion to $145 billion in 2026 to support its AI efforts and core business. Free cash flow, a non-GAAP measure Meta gets by subtracting purchases of property and equipment and finance-lease principal payments from operating cash flow of $32.79 billion, was negative $2.12 billion, against $10.625 billion a year earlier.18^,19^,20^,21^,22^,23^,24^,25^,26^,27

At Sep 30, 2026, Meta had leases for data centers, energy-related infrastructure, colocations and certain network infrastructure that had not yet begun, with obligations of about $355.73 billion, and $454.52 billion of non-cancelable commitments, mostly for cloud capacity, servers, networks and data center energy. Its two data center ventures, in Louisiana and Texas, each give it a 20% interest, with about $27 billion and $14 billion in estimated development costs. The note put Meta's maximum exposure to loss in them at $68.404 billion, of which $41.493 billion was residual value guarantees, owed only if Meta ended or did not renew a lease and other conditions were met; Meta had recorded no liability for them, saying payments were not probable.3^,28^,29^,30^,31^,32^,33

In the results release, filed Oct 21, 2026, chief executive Mark Zuckerberg said the quarter included launching Muse and Muse Wonder, which he called Meta's first frontier model; the 10-Q describes Muse as an agentic AI Meta intended to scale over time. In the release Meta said it expected fourth-quarter revenue of $73-76 billion. The 10-Q's note on events after the quarter says Meta filed a restated charter in October 2026 to create non-voting Class C stock, effective Jan 19, 2027, and that its board declared a dividend of one Class C share for each Class A and Class B share, contingent on the charter taking effect.34^,35^,36^,37^,38^,39

Our records hold the 10-Q's management discussion and 14 numbered notes, not its other exhibits, and keep one value for each period, so they cannot tell whether last year's figures were restated.40^,41