❯ Meta revenue rises 26% as a $9.89 billion settlement charge weighs on operating profit

Revenue and profit divergeMeta’s October 21 earnings release reported third-quarter revenue of approximately $64.6 billion, up 26%, and operating income of about $12.99 billion, down 37%. A $9.89 billion charge related to a settlement with US state attorneys general was a major factor in the profit comparison.

The advertising base keeps growingAverage family daily active people reached 3.64 billion in September, up 3%. Meta says AI improvements to recommendations, engagement and monetization are already generating incremental advertising revenue. New products such as Muse will take longer to produce returns, creating different return horizons for advertising and new applications.

More infrastructure spendingMeta narrowed its annual capital expenditure forecast from $130–145 billion to $135–145 billion. Quarterly operating cash flow was $32.79 billion, while free cash flow was negative $2.12 billion, showing infrastructure investment exceeded the operating cash generated during the quarter.

A further financing toolThe board also approved nonvoting Class C shares, planned to take effect in January 2027, for capital raising, employee compensation and potential acquisitions. Creating the share class does not itself raise cash, but expands financing options while preserving the existing control structure.

▮ SIGNALAdvertising supplies cash for AI expansion, while higher capital spending and another financing instrument prepare Meta for investment over a longer horizon.