This is not financial advice. All figures are from Meta's Q3 2026 earnings release, published Oct 21, 2026, unless stated otherwise. Percentages and totals we worked out ourselves are marked as our math.
Meta reported a week ahead of Microsoft and Alphabet (Oct 28) and Amazon (Oct 29). The headline: the ad business is growing fast, and Meta is spending everything it brings in, and a bit more, on infrastructure.
The headline numbers (quarter ended Sep 30, 2026)
| Q3 2026 | Q3 2025 | Change | |
|---|---|---|---|
| Revenue | $64.60B | $51.24B | +26% |
| Costs and expenses | $51.61B | $30.71B | +68% |
| Operating income | $12.99B | $20.54B | −37% |
| Operating margin | 20% | 40% | |
| Net income | $9.86B | $2.71B | +264% |
| Diluted EPS | $3.83 | $1.05 | +265% |
The year-ago net income looks small because Q3 2025 carried an $18.95B tax provision (an 87% effective tax rate). The large drop in operating income this year mostly comes from one item, covered next.
The legal charge
In August 2026, Meta announced an agreement with 52 US state attorneys general to resolve litigation over teen mental health and social media. It provides for payments of up to about $18.59B. Q3 includes a $9.89B charge tied to that agreement.
Excluding the charge, Meta says operating income would have been $22.88B and diluted EPS $7.40. Meta also warns that more youth-related trials are scheduled in the US in the coming months.
The ad engine
- Advertising revenue: $63.06B, +26% year over year.
- Ad impressions: +10%. Average price per ad: +14%.
- Family daily active people: 3.64B on average in September 2026, +3%.
- Headcount: 66,775, down 15% year over year.
Meta credits its AI investments with "substantial incremental advertising revenue through stronger engagement, better recommendations, and more efficient monetization."
The capex story
This is the part builders and investors are watching most.
- Q3 capex, including finance-lease principal: $34.91B. A year earlier it was about $19.37B ($18.83B + $0.55B), so roughly +80% (our math).
- That's about 54% of revenue for the quarter (our math).
- Operating cash flow: $32.79B. Free cash flow: −$2.12B, compared with +$10.63B a year earlier.
- Depreciation and amortization: $7.15B, up from $4.96B (+44%, our math). As new data centers come online, this cost keeps rising.
- Property and equipment, net: $253.2B on Sep 30, 2026, up from $176.4B on Dec 31, 2025.
2026 outlook: capex of $135–145B, narrowed from $130–145B. Nine-month spending was about $85.8B, which implies a Q4 of roughly $49–59B to land in that range (our math).
On 2027, Meta says it is "still developing" its plans but expects "to continue investing aggressively".
How Meta is funding it
- Cash, cash equivalents and marketable securities were $82.45B on Sep 30, 2026.
- Long-term debt rose to $80.92B from $58.74B at the end of 2025. Meta raised $24.91B of debt in the first nine months.
- Meta made no share buybacks in 2026 through September. It repurchased $26.25B in the same period of 2025. It is still paying dividends ($1.36B in Q3).
Then there's the new stock class. Meta's board approved a non-voting Class C common stock, planned to take effect Jan 19, 2027. Every Class A and Class B share will get one Class C share as a stock dividend. Meta says this will give it a way to raise capital and pay employees, and says it doesn't change voting power. It expects Class A shares to trade as though after a two-for-one split.
Reality Labs and Muse
Reality Labs lost $4.13B in Q3 on $443M of revenue. Meta now expects 2026 losses of $18–19B and about $15B in 2027 as it shifts money "primarily" to AI.
Mark Zuckerberg's headline quote: "We hit major milestones this quarter toward delivering personal superintelligence for everyone - including launching Muse and Muse Wonder, our first frontier model."
Q4 guidance
- Revenue: $73–76B.
- Full-year 2026 total expenses: $175–179B, raised to include the legal charge.
- Q4 tax rate: 15–17%.
Why this matters if you build with AI
Meta's capex goes toward GPUs, memory and power, the same things that set what you pay for compute. When the biggest buyers keep ordering at this pace, tight supply for high-end parts is likely to continue. Our explainers on HBM, RAM prices and GPU rental costs follow that thread. For the bigger picture, see the AI capex math and this week's chip earnings from TSMC, Lam and TI.
