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Thursday, October 22, 2026

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Companies · Thursday, October 22, 2026

Meta sales rise 26 percent as a legal charge cuts profit

The File desk · Oct. 22, 2026, 6:40 a.m. ET

Confirmed2 primary sources

Status

Confirmed from Meta's third-quarter earnings release, filed with the Securities and Exchange Commission on Wednesday, Oct. 21, 2026. The figures and the forecast are the company's. A separate New Mexico penalty is a different case and is not in this filing.
  • Confirmed
    Meta reported revenue of $64.60 billion for July through September, up 26 percent from a year earlier.
  • Confirmed
    The quarter includes a $9.89 billion charge for an August agreement with 52 state attorneys general over teen mental health. The forecast and the new share class are the company's.
Meta said Wednesday that sales in the July-through-September quarter were $64.60 billion, up 26 percent from a year earlier. A legal charge of $9.89 billion cut the profit from running the business.1
The charge is for an agreement Meta says that it announced in August with 52 attorneys general, to resolve litigation over teen mental health and social media. The company says that agreement provides for payments of up to about $18.59 billion. Income from operations was $12.99 billion, down 37 percent from a year earlier. The release says that without the charge, operating income would have been $22.88 billion.1
Meta told investors to expect fourth-quarter revenue of $73 billion to $76 billion. It narrowed its 2026 capital-spending range to $135 billion to $145 billion, from a prior range of $130 billion to $145 billion. In the quarter itself the company spent $34.91 billion on capital projects, and free cash flow was negative $2.12 billion.1
The board approved a new class of non-voting . Meta says it will hand out one new share for each Class A share and each Class B share, with an effective date of January 19, 2027, and that it expects the Class A price to reflect a two-for-one split. The company says the dividend will not change any shareholder's voting power. A Founder Alignment Agreement limits how Mark Zuckerberg can sell the new shares.1
Why it matters (Estimate). Estimate. Meta's ads pay for the feeds a huge number of people scroll, and that business is still growing. The same quarter, the company spent more on data centers and equipment than it brought in as free cash, and it booked a multibillion-dollar charge for state lawsuits about teens and social media. The new non-voting shares let Meta issue stock without changing who holds the votes.
Family daily active people averaged 3.64 billion in September, up 3 percent from a year earlier, the release says.
How we know

Notes

  1. 1.Meta Platforms, Exhibit 99.1 to the Form 8-K filed Oct. 21, 2026. https://www.sec.gov/Archives/edgar/data/1326801/000162828026066700/meta-09302026xexhibit991.htm Revenue $64,601 million versus $51,242 million, up 26 percent. Costs and expenses $51,613 million versus $30,707 million. Income from operations $12,988 million versus $20,535 million, down 37 percent. Operating margin 20 percent versus 40 percent. “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. Third quarter 2026 costs and expenses includes a $9.89 billion charge related to this agreement.” Excluding the charge, operating income would have been $22.88 billion and diluted earnings per share $7.40, against reported diluted earnings per share of $3.83. Net income was $9,860 million versus $2,709 million. The prior-year tax provision was $18,954 million, at an 87 percent effective tax rate. “We expect fourth quarter 2026 total revenue to be in the range of $73-76 billion.” 2026 capital expenditures “$135-145 billion, narrowed from our prior outlook of $130-145 billion.” Capital expenditures in the quarter were $34.91 billion. Free cash flow was negative $2.12 billion. Headcount was 66,775 as of Sept. 30, 2026, down 15 percent from a year earlier. “DAP was 3.64 billion on average for September 2026, an increase of 3% year-over-year.” Ad impressions up 10 percent. Average price per ad up 14 percent. Class C: effective date “January 19, 2027.” “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.” Mark Zuckerberg: “We hit major milestones this quarter toward delivering personal superintelligence for everyone - including launching Muse and Muse Wonder, our first frontier model.” The investor-relations feed timed the release at 4:01 p.m. Eastern. https://investor.atmeta.com/rss/pressrelease.aspx The filing does not mention New Mexico or a $25 billion penalty.

What is still unknown or disputed

  • The share-price reaction. Not taken from a primary market record for this story.
  • How the settlement money is split among states. Not in the release.
  • Meta's earnings filing does not mention a New Mexico court penalty. That case is a separate story.

Primary sources

Every claim in this story is drawn from the documents below. If a fetch failed, that is recorded on the card.

  1. Source 1

    Meta third-quarter 2026 results, Exhibit 99.1

    U.S. Securities and Exchange Commission · October 21, 2026

    Revenue was $64.60 billion, up 26 percent. Costs include a $9.89 billion charge for an agreement with 52 attorneys general. The board approved non-voting .

    https://www.sec.gov/Archives/edgar/data/1326801/000162828026066700/meta-09302026xexhibit991.htm

  2. Source 2

    Meta Reports Third Quarter 2026 Results

    Meta · October 21, 2026

    The investor feed lists the third-quarter release with a publication time of 4:01 p.m. Eastern on Oct. 21, 2026.

    https://investor.atmeta.com/rss/pressrelease.aspx

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