Meta's Q3 Revenue Rises 26 Pct, Operating Profit Falls 37 Pct Amid Legal Costs

SAN FRANCISCO, Oct 22 (Bernama-Xinhua) -- US technology giant Meta Platforms reported a 26 per cent year-on-year increase in third-quarter revenue on Wednesday, while operating profit fell 37 per cent largely due to a multi-billion-dollar charge related to a legal settlement over teen mental health and social media.

According to the company's latest financial report, revenue rose to US$64.60 billion in the quarter ended Sept 30, compared with US$51.24 billion a year earlier, exceeding analysts' expectations of US$63.37 billion, reported Xinhua.

Net income reached US$9.86 billion, up 264 per cent from US$2.71 billion a year earlier, while diluted earnings per share increased to US$3.83 from US$1.05. The year-earlier net income was affected by a one-time, non-cash tax charge of US$15.93 billion.

Operating income declined 37 per cent to US$12.99 billion from US$20.54 billion a year earlier, with the operating margin narrowing to 20 per cent from 40 per cent.

Meta said its third-quarter expenses included a US$9.89 billion charge related to an August agreement with US state attorneys general to settle litigation concerning teen mental health and social media. Excluding the charge, operating income would have reached approximately US$22.88 billion.

Advertising revenue, which accounts for the overwhelming majority of Meta's business, increased to US$63.06 billion from US$50.08 billion a year earlier.

The company's family of apps, including Facebook, Instagram, Messenger and WhatsApp, recorded an average of 3.64 billion daily active users in September, up 3 per cent from 3.54 billion a year earlier, representing an increase of approximately 100 million people. The figure also rose by about 40 million from June 2026.

Meta continued to expand its investment in artificial intelligence infrastructure. Capital expenditures, including principal payments on finance leases, totalled US$34.91 billion during the quarter.

Free cash flow turned negative at US$2.12 billion, compared with positive free cash flow of US$10.63 billion a year earlier.

Looking ahead, Meta forecast fourth-quarter revenue of between US$73 billion and US$76 billion. It also narrowed its full-year capital expenditure forecast to between US$135 billion and US$145 billion, raising the lower end from its previous projection of US$130 billion.

Separately, Meta announced plans to establish a new class of publicly listed, non-voting Class C common stock in January 2027. The move is intended to support future investment, acquisitions and employee compensation while preserving the company's existing voting structure.

--BERNAMA-XINHUA