Meta's Q3 net profit up 264% year-over-year, establishes Class C shares to fund AI development

Meta Q3 Net Profit Up 264% Year-over-Year, Establishes Class C Shares to Fund AI Development

Phoenix Tech Download the app for exclusive early access October 22, 2026 06:12:40 From Beijing

Meta released its Q3 2026 financial report, with total revenue of $64.601 billion, up 26% year-over-year, and net profit of $9.860 billion, up 264% year-over-year. It also announced the establishment of non-voting Class C shares to raise funds for developing and delivering AI models, effective January 19, 2027; the move does not affect Zuckerberg's voting control.

Meta

Phoenix Tech News, October 22 (Beijing Time) — Facebook parent company Meta (NASDAQ: META) today released its financial report for the third quarter ended September 30, 2026. The report shows that Meta's Q3 total revenue was $64.601 billion, up 26% from $51.242 billion a year earlier; net profit was $9.860 billion, up 264% from $2.709 billion a year earlier.

Stock performance:

Meta's Q3 revenue beat expectations, pushing the stock up more than 3% in after-hours trading.

Meta up 3.33% after hours

Meta opened at $697.74 on the Nasdaq exchange on Wednesday. As of Wednesday's close, Meta stock rose $3.27 to close at $697.52, a gain of 0.47%. As of publication, Meta stock rose $23.25 to $720.77 in after-hours trading, a gain of 3.33%. Over the past 52 weeks, Meta stock has ranged from a high of $779.82 to a low of $520.26.

Q3 operational highlights:

— In September 2026, the average daily active people (DAP) across the family of apps was 3.64 billion, up 3% year-over-year;

— Ad impressions across the family of apps increased 10% year-over-year; the average price per ad increased 14% year-over-year.

Q3 financial results:

— Total revenue was $64.601 billion, up 26% from $51.242 billion a year earlier;

· Advertising revenue was $63.061 billion, up 26% from $50.082 billion a year earlier;

· Other business revenue was $1.097 billion, up 59% from $690 million a year earlier;

— Operating profit was $12.988 billion, down 37% from $20.535 billion a year earlier; operating margin was 20%, down 20 percentage points from 40% a year earlier;

— Net profit was $9.860 billion, up 264% from $2.709 billion a year earlier;

— Diluted earnings per share were $3.83, up 265% from $1.05 a year earlier;

— Capital expenditures were $34.91 billion;

— As of September 30, 2026, Meta held $82.45 billion in cash, cash equivalents and marketable securities; cash flow from operating activities was $32.79 billion; free cash flow was -$2.12 billion.

Legal expenses

In August 2026, Meta announced an agreement with 52 state attorneys general to resolve litigation related to teen mental health and social media, under which it would pay up to about $18.59 billion. Costs and expenses in Q3 2026 included $9.89 billion in charges related to this agreement.

Creating Class C shares to fund AI

Meta said it will establish a new publicly listed, non-voting Class C share to raise the funds needed to develop and deliver AI models. The new shares will be distributed as a dividend to holders of common stock and super-voting stock, effective January 19, 2027.

The creation of Class C shares is effectively equivalent to a 2-for-1 stock split. Meta said this will not affect CEO Mark Zuckerberg's voting control, nor will it change the voting rights of other shareholders.

Outlook:

— Q4 2026 total revenue will be between $73 billion and $76 billion, an outlook based on an approximately 1% negative impact on year-over-year revenue growth from foreign exchange movements;

— Meta will raise its expense outlook to account for the $9.9 billion in legal litigation-related charges recognized in the third quarter, and now expects full-year 2026 total expenses to be between $175 billion and $179 billion.

— Excluding the third-quarter legal charges, Meta still expects 2026 operating profit to be higher than in 2025.

— 2026 capital expenditures will be between $135 billion and $145 billion, a narrower range than the previously expected $130 billion to $145 billion;

— Losses in the Reality Labs division will narrow to a range of $18 billion to $19 billion compared with 2025. (Author/Xiao Yu)

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