Meta Platforms reported third-quarter revenue of $64.60 billion, a 26% increase year-over-year, surpassing analyst expectations of $63.3 billion. Diluted earnings per share reached $3.83, compared to $1.05 in the same period last year. Net income rose to $9.86 billion, despite a $9.89 billion charge related to a legal settlement regarding teen mental health.
The company announced a two-for-one stock split through the issuance of non-voting Class C shares, scheduled for January 19, 2027. This move aims to facilitate capital raising, employee compensation, and future acquisitions. CEO Mark Zuckerberg will retain voting control, holding approximately 60.6% of the vote, while his ability to sell the new shares will be restricted under a new agreement.
Meta reported an average of 3.64 billion daily active users across its apps in September. Operating margins declined to 20% as total expenses rose to $51.61 billion. Capital expenditures for the quarter totaled $34.91 billion, exceeding cash generated from operations, resulting in a negative free cash flow of $2.12 billion.
The company projects fourth-quarter revenue between $73 billion and $76 billion. Full-year capital expenditure guidance has been narrowed to a range of $135 billion to $145 billion. Losses at the Reality Labs division are expected to decrease to approximately $15 billion next year as the company shifts investment focus toward artificial intelligence.
