Meta sales jump 26% to $64.6 billion; new nonvoting shares coming

The legal bill: Operating profit fell 37% to $13 billion because of a $9.89 billion charge tied to Meta's August agreement with 52 state attorneys general over teen mental health and social media, which Meta says provides for payments of up to about $18.59 billion. Without that charge, Meta said, operating income would have been $22.88 billion and earnings $7.40 a share instead of the reported $3.83. CNBC noted it was not immediately clear whether the reported figure was comparable to the $5.75 a share analysts expected.

The AI spending: Meta spent $34.91 billion on capital projects in the quarter, mostly data centers and servers for AI, up from about $19.4 billion a year earlier. Free cash flow, the cash left after that spending, swung to negative $2.12 billion from positive $10.63 billion. Meta narrowed its 2026 spending forecast to $135 billion to $145 billion, from $130 billion to $145 billion, and said it expects to keep "investing aggressively" next year. Headcount fell 15% from a year earlier to 66,775.

The new stock: Meta's board approved a new class of publicly listed, nonvoting Class C shares, effective in January 2027. Every holder of Class A and Class B stock will get one Class C share per share they own, and Meta said it expects the Class A price to adjust as if there had been a 2-for-1 split. The company said the dividend does not change anyone's voting power. It gave three reasons: having shares it can use to raise money, pay employees and fund acquisitions; long-term value; and "ensuring" Zuckerberg "continues to lead Meta into the next era." Meta also signed a "Founder Alignment Agreement" with Zuckerberg covering his sales of the new shares and his service at the company. The record and payment dates have not been set.

What the numbers show: Two one-time items push Meta's headline figures in opposite directions. Net income rose 264% to $9.86 billion, but mostly because the year-ago quarter carried an unusually large tax bill, an 87% effective tax rate versus 24% this time, according to Meta's tables. Operating profit, which ignores taxes, fell because of the legal charge. Leaving out that charge, Meta's operating margin would have been about 35%, compared with 40% a year ago and 20% as reported. User growth was slower: Meta counted 3.64 billion daily users across its apps, up 3%, just under the 3.65 billion StreetAccount expected, CNBC reported.

More legal risk: CNBC reported that a New Mexico judge on Wednesday imposed a $25 billion penalty on Meta in a state data-privacy case stemming from the 2018 Cambridge Analytica revelations, cut from a $219.5 billion jury award. Meta's earnings release does not mention that ruling, but it warns that the company faces "a number of youth-related trials scheduled in the coming months in the U.S."

What's still unknown: how the stock settles after hours and on Thursday; what executives say on the 4:30 p.m. ET call about 2027 spending, which Meta said it is still budgeting; whether Meta appeals the New Mexico penalty; and when the Class C shares will begin trading. Meta also expects Reality Labs, its headset and smart-glasses unit, to lose $18 billion to $19 billion this year and about $15 billion next year.

Figures come from Meta's third-quarter earnings release (Oct. 21, 2026); analyst estimates are from LSEG and StreetAccount as reported by CNBC. Meta's release puts its state attorneys general settlement at up to about $18.59 billion; CNBC described it as nearly $17 billion. The New Mexico penalty is as reported by CNBC from a court filing; US Brief has not seen the filing. Share-price reaction was still settling when this was written. Photos are file photos and do not show the announcement.