Meta Platforms, Inc.

Meta's advertising engine is getting stronger: Q3 2026 revenue rose 26% to $64.60B as the average price per ad climbed 14%. Spending, legal liabilities and commitments, however, are now growing faster than the business that pays for them. Excluding a $9.89B youth-litigation settlement charge, operating margin fell to about 35% from 40% (my calculation). Free cash flow, which is cash from operations minus spending on data centers and equipment, turned negative at −$2.12B. With $454.52B of non-cancelable commitments, a $25B New Mexico penalty under appeal, and roughly $37B of equity and equity-linked financing arranged in late October (my calculation), Meta has moved from funding itself to relying on outside capital. It has also created non-voting stock to keep raising that capital without diluting founder control.

• Results. Revenue was $64.60B, up 26%, and also up 26% at constant currency. Operating income was $12.99B, down 37%, for a 20% margin against 40% a year earlier. Net income was $9.86B against $2.71B in the year-ago quarter, which a $15.93B tax-law charge had depressed.
• Guidance.
• Q4 revenue: $73–76B.
• 2026 expenses: $175–179B, raised to include the charge.
• 2026 capex, including finance-lease principal: $135–145B, narrowed from $130–145B and up from $115–135B in January.
• Reality Labs loss: $18–19B, against January's "similar to 2025" ($19.19B).
• Litigation. In August Meta reached an agreement with 52 state attorneys general for payments of up to about $18.59B. On Oct 21 a New Mexico court imposed a $25B civil penalty with 15% post-judgment interest, which Meta intends to appeal.
• Capital structure. The board approved a non-voting Class C stock on Oct 19, and the requisite shareholders approved it by written consent on Oct 20. It will be distributed 1:1 to all holders, effective Jan 19, 2027. A Founder Alignment Agreement with Mark Zuckerberg accompanies it.
• Cash. Free cash flow was −$2.12B against +$10.63B a year earlier. Meta bought back no shares in nine months, against $26.25B in the same period of 2025.

Its findings, each with the evidence, the strongest counterpoint and what would prove it wrong:

• Growth now comes from price, not more people
• Costs are outrunning revenue even before the legal charge
• Cash generation turned negative, and outside capital fills the gap
• Legal liabilities have reached operating scale

Then its finances, the quality of its earnings, its management, the case for and against, and what to watch, its claims cited to the filings and checked against them.

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