Meta Platforms, Inc.
META10-Q,quarter ended Sep 30, 2026,filed Oct 22, 2026,Original on SEC.gov (opens in a new tab)
3 of 3 checkable figures match the filing, 4 of 4 risk excerpts located in the filing text
Coverage details
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The Print
Meta reported third-quarter 2026 revenue of $64.60B, up 26% YoY, while net income of $9.86B ($3.83 diluted EPS) included a $9.89B legal charge that cut income from operations 37% to $12.99B.
Revenue increased 26% to $64.60B, which management attributes to an increase in advertising revenue. Income from operations decreased $7.55B, or 37%, to $12.99B; management states the decrease was driven by higher costs and expenses, primarily increases in legal-related costs including the $9.89B charge related to the August 2026 multistate attorneys general agreement, infrastructure expenses related to data centers, technical infrastructure, and third-party cloud services, and third-party AI token costs. General and administrative expenses rose 323% to $14.86B on higher legal-related costs.
- Revenue rose 26% YoY to $64.60B, with advertising revenue of $63.06B (+26%) as ad impressions grew 10% and average price per ad rose 14%.
- Income from operations fell 37% to $12.99B and operating margin narrowed to 20% from 40%, reflecting higher costs and expenses including the $9.89B charge related to the August 2026 multistate attorneys general agreement.
- Net income was $9.86B with diluted EPS of $3.83, versus $2.71B and $1.05 in the prior-year quarter; the provision for income taxes fell to $3.14B from $18.95B.
- Capital expenditures including principal payments on finance leases were $34.91B for the quarter, and cash, cash equivalents, and marketable securities totaled $82.45B at September 30, 2026.
Results That Matter
- Revenue
- Current period
- $64.6B
- Prior period
- $51.2B
- Change
- +26.1%
Management attributes the increase to advertising revenue, with ad impressions up 10% and average price per ad up 14% year-over-year. - Income from operations
- Current period
- $13.0B
- Prior period
- $20.5B
- Change
- −36.8%
Management states the decrease was driven by higher costs and expenses, primarily legal-related costs including the $9.89B charge, infrastructure expenses, and third-party AI token costs. - Net income
- Current period
- $9.9B
- Prior period
- $2.7B
- Change
- +264.0%
Net income rose despite the operating decline, as the provision for income taxes fell to $3,141M from $18,954M, which management attributes mostly to the effects of the enactment of the One Big Beautiful Bill Act in the third quarter of 2025, partially offset by the non-deductible portion of the August 2026 multistate attorneys general agreement charge. - Diluted EPS
- Current period
- $3.83
- Prior period
- $1.05
- Change
- +264.8%
Diluted EPS moved with net income; diluted weighted-average shares were 2,573M versus 2,572M. - Operating margin
- Current period
- 20.0%
- Prior period
- 40.0%
- Change
- −20.0 ppts
The margin reflects the operating income decline against a 26% revenue increase; management attributes the cost increase primarily to legal-related costs, infrastructure expenses, and third-party AI token costs.
| Metric | Current Period | Prior Period | Change | Investor Takeaway |
|---|---|---|---|---|
| $64.6B | $51.2B | +26.1% | Management attributes the increase to advertising revenue, with ad impressions up 10% and average price per ad up 14% year-over-year. | |
| $13.0B | $20.5B | −36.8% | Management states the decrease was driven by higher costs and expenses, primarily legal-related costs including the $9.89B charge, infrastructure expenses, and third-party AI token costs. | |
| $9.9B | $2.7B | +264.0% | Net income rose despite the operating decline, as the provision for income taxes fell to $3,141M from $18,954M, which management attributes mostly to the effects of the enactment of the One Big Beautiful Bill Act in the third quarter of 2025, partially offset by the non-deductible portion of the August 2026 multistate attorneys general agreement charge. | |
| $3.83 | $1.05 | +264.8% | Diluted EPS moved with net income; diluted weighted-average shares were 2,573M versus 2,572M. | |
| 20.0% | 40.0% | −20.0 ppts | The margin reflects the operating income decline against a 26% revenue increase; management attributes the cost increase primarily to legal-related costs, infrastructure expenses, and third-party AI token costs. |
What changed
Quarter over quarter, against the 10-Q for the quarter ended Jun 30, 2026.
Prior 10-QRevenue up 6.2%; Net income down 37.8%
| Metric | Prior | Current | Change | Read as |
|---|---|---|---|---|
| Revenue | $60.8B | $64.6B | +6.2% | Favorable |
| Net income | $15.8B | $9.9B | −37.8% | Unfavorable |
| EPS (diluted) | $6.18 | $3.83 | −38.0% | Unfavorable |
- Revenue+6.2%Prior $60.8B, current $64.6BFavorable
- Net income−37.8%Prior $15.8B, current $9.9BUnfavorable
- EPS (diluted)−38.0%Prior $6.18, current $3.83Unfavorable
▲ and ▼ show the direction of each change. Color and “Read as” show whether that direction is usually favorable for the metric.
Earnings Quality & Cash Conversion
Reported income from operations of $12.99B includes the $9.89B charge related to the August 2026 multistate attorneys general agreement, which is recorded within general and administrative expenses ($14.86B for the quarter, up 323%). The filing does not define an adjusted or ex-item operating total. Net income of $9.86B also reflects a $3.14B provision for income taxes (24% effective rate) and a $13M net interest and other income (expense) line, down 99% from $1.13B, which management attributes primarily to increases in unrealized losses on marketable equity investments.
Red flag
Red flag
Red flag
Value Drivers & Capital Allocation
Capital returned — dividends paid $1.4B (prior $1.3B).
“In May 2026, we issued an aggregate of $25.00 billion of fixed-rate senior unsecured notes in six series.”
Filing statement
Period net income attributable to the parent / period-end equity, not annualized: 3.6% (prior at 2025-09-30: 1.4%); period net income attributable to the parent / period-end assets, not annualized: 2.1%.
Forward Signals
The filing states that management expects full-year 2026 Reality Labs operating losses to be approximately $18 billion to $19 billion, and that absent any changes to its tax landscape it expects a fourth quarter 2026 effective tax rate between 15-17%. No consolidated revenue or expense guidance is provided.
Known trends
- Our advertising revenue has been, and we expect will continue to be, adversely affected by reduced marketer spending as a result of limitations on our ad targeting and measurement tools arising from changes to the regulatory environment and third-party mobile operating systems and browsers.
- In particular, we have significantly increased our infrastructure investments in connection with our AI initiatives, including third-party cloud capacity arrangements and investments in servers, data centers, and network infrastructure, and expect our investments to continue to increase.
- As additional jurisdictions enact legislation, transitional relief expires, and other provisions of the global minimum tax legislation become effective, our effective tax rate and cash tax payments could increase in future years.
Subsequent events
- On October 21, 2026, the court issued an order imposing a civil penalty in the amount of $25 billion, assigning 15% post-judgment interest, and reserving ruling on injunctive relief pending further briefing.
“we expect our full-year 2026 RL operating losses to be approximately $18 billion to $19 billion”
Meta Platforms, Inc. (MD&A)
“Absent any changes to our tax landscape, we expect our fourth quarter 2026 effective tax rate to be between 15-17%.”
Meta Platforms, Inc. (MD&A)
Risks
Excerpts are the filing’s own words; each heading is the start of its excerpt. Selected excerpts are not a complete risk inventory.
On October 21, 2026, the court issued an order imposing a civil penalty in the amount…
On October 21, 2026, the court issued an order imposing a civil penalty in the amount of $25 billion, assigning 15% post-judgment interest, and reserving ruling on injunctive relief pending further briefing.
As of September 30, 2026, we had $454.52 billion of non-cancelable contractual commitments…
As of September 30, 2026, we had $454.52 billion of non-cancelable contractual commitments, comprising both short-term and long-term arrangements.
The following table summarizes our maximum exposure to loss in the unconsolidated data center…
The following table summarizes our maximum exposure to loss in the unconsolidated data center ventures (in millions):
The District of Columbia Attorney General has disclosed that it is seeking up to $1.7 billion…
The District of Columbia Attorney General has disclosed that it is seeking up to $1.7 billion in civil penalties, restitution, and certain injunctive relief.
4 of 4 excerpts located in the filing text
Balance Sheet & Liquidity
Leverage: Identified debt as of 2026-09-30 (carrying amount): noncurrent long-term debt of $80.9B; current portion of long-term debt of $2.7B. Not separately reported in this filing's standardized data: short-term borrowings. Total debt, net debt and debt-to-equity are therefore not stated.
Liquidity: Cash, cash equivalents, and marketable securities were $82.45B as of September 30, 2026, an increase of $857M from December 31, 2025, which management attributes mainly to $96.87B of cash generated from operations and $24.91B of net proceeds from the May 2026 notes, partially offset by $85.82B of capital expenditures, $12.77B of taxes paid related to net share settlement, and $4.06B of dividend payments.
Working capital: Current assets $119.9B vs. current liabilities $63.0B (current ratio 1.90x). Prior reported balance sheet as of 2025-12-31: $108.7B vs. $41.8B (2.60x).
Maturities & covenants
- We are not subject to any financial covenants under the Notes.
- As of September 30, 2026, future principal payments for the Notes include $2,750 million due in 2027 and $73,750 million thereafter.
- As of September 30, 2026, we had $1.53 billion of unused letters of credit outstanding, the majority of which was related to our long-term infrastructure purchase commitments.
Notable Footnotes
| Item | Impact |
|---|---|
| Restricted cash equivalents of $12.83B, including $10.80B of money market funds tied to escrow requirements under multi-year infrastructure purchase agreements, expected to be released between 2028 and 2030. | These funds are restricted from general corporate use and are classified substantially within other assets, reducing unrestricted liquidity relative to reported cash and marketable securities. |
| Data center ventures: 20% membership interests in the Louisiana Venture (October 2025) and Texas Venture (July 2026), with committed pro rata funding of approximately $27B and $14B in total estimated development costs, respectively. | The ventures are not consolidated as Meta is not the primary beneficiary; maximum exposure to loss was $68.40B at September 30, 2026, including $41.49B of residual value guarantees for which no liability has been recorded. |
| Held-for-sale data center assets with a net carrying value of $1.89B approved for disposal in July 2026, and $2.26B of assets contributed to the Texas Venture. | Total held-for-sale assets, net, were $2.60B at September 30, 2026, included within prepaid expenses and other current assets. |
| Approximately 55 million shares were excluded from the diluted EPS calculation for the three months ended September 30, 2026 as including them would have been anti-dilutive, versus approximately 1 million in the prior-year period. | Diluted weighted-average shares were 2,573M versus 2,572M a year earlier, limiting the dilutive effect on per-share results. |
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