Revenue up 26%, profits tell a different story
Meta reported $64.6 billion in revenue for Q3 2026, up 26% from last year. But behind the growth lies a bigger question: how much is Meta spending to stay ahead?
A $9.89 billion legal hit
A legal settlement related to teen mental health and social media weighed heavily on the quarter.
• Operating income fell 37% to $12.99 billion.
• Without the legal charge, operating income would have been $22.88 billion.
• Net income rose 264%, largely because last year’s unusually high tax bill made this year’s comparison look much stronger.
The AI race is getting expensive
Meta spent $34.91 billion on capital expenditures in just three months, pushing free cash flow into negative territory at $2.12 billion.
The company still has $82.45 billion in cash and marketable securities, but its AI ambitions come with a hefty price tag.
More revenue, fewer employees
Meta’s workforce shrank 15% to 66,775 employees, even as revenue grew 26%. The company is increasingly directing resources towards AI infrastructure rather than expanding its workforce.
What comes next?
Meta expects Q4 revenue of $73 billion to $76 billion and plans to keep investing heavily in AI. Meanwhile, legal challenges remain a risk, and investors will be watching to see whether these investments translate into lasting growth.
The big question: Can Meta turn its massive AI spending into sustainable profits without letting costs and legal risks eat into its growth?
To read more, click: Meta Q3 Earnings 2026: 26% revenue growth, but a huge legal charge cuts profit - Vested Finance