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Updated 35m ago · Business
Meta Reports Earnings as AI Spending Draws Scrutiny
Meta's third-quarter revenue rose 26% to $64.6 billion, above analyst forecasts. Legal costs from a settlement with state attorneys general cut deeply into profit.
- $3.83 in earnings per share; $7.40 without the settlement charge.
- 20% operating margin, down from 40% a year earlier.
- $34.9 billion in quarterly capital spending, up from $19.4 billion.
- Negative $2.1 billion in free cash flow, versus $10.6 billion a year ago.
Why it matters: Meta is a major test of whether AI investment can earn its cost. Its spending moves markets beyond the company itself.
- The settlement with states over youth safety runs about $18 billion.
- Shares rose in after-hours trading on revenue and AI tool traction.
How 10 sources split on this story
Source landscape
Factuality
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Strong LeftLeftLean LeftCenterLean RightRightStrong Right
Political Bias
Coverage by lean
10 sources · 14 articles · 40% Center coverage
Where they split: Variety reported that earnings per share missed analyst expectations, while Deadline reported that they beat estimates.
Center coverage, 4 sources: The center sees strong revenue and AI momentum weighed against settlement charges and rising spending that squeeze profit and cash flow.
Fortune3hMeta’s revenue surges 26% to $64.6 billion, but billions in settlements and skyrocketing AI spending turn screws on profit, free cash flow | FortuneDeadline2hMeta Tops Q3 Revenue Estimates, But Earnings Hit By Teen Lawsuit Settlement; Stock Split Creates Class C SharesCNBC41mStock futures tick lower as investors digest earnings from Meta and Tesla: Live updatesForbes2hMeta Posts $64 Billion In Revenue And Announces Stock Split In Q3 Earnings
Left coverage, 3 sources: The left sees a quarter defined by legal costs from Meta's handling of user safety and privacy, with Wall Street largely unbothered.
Right coverage, 3 sources: The right sees Meta's report as a test of whether trillions in AI investment can produce returns that support the broader economy.
What’s next: Meta announced a 2-for-1 stock split and a new class of Class C shares. They begin trading in January 2027.
- Meta plans to appeal the $25 billion New Mexico penalty.
- CFO Susan Li cited several youth-related U.S. trials scheduled in the coming months.
- Will Meta's AI products generate enough revenue to justify its capital spending?
- How will the upcoming youth-related trials affect Meta's legal costs?
- Will Meta's 2027 capital spending match analyst projections?
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