Meta Platforms reported third-quarter 2026 revenue of $64.60 billion on Wednesday 21 October, up 26% from a year earlier and above the $63.37 billion LSEG consensus. In the same release it announced a new class of non-voting Class C shares, to be handed to every shareholder as a one-for-one stock dividend in January 2027. Meta itself says the Class A price should then reflect "the effect of a two-for-one stock split".
The stock closed on Wednesday 21 October at $697.52, up 0.47% on the day. It rose about 3% in after-hours trading after the release, according to CNBC.
Meta Q3 2026 results against the consensus
| Line | Q3 2026 | Consensus or prior |
|---|---|---|
| Revenue | $64.60 billion, +26% | $63.37 billion (LSEG) |
| Advertising revenue | $63.06 billion | $61.87 billion expected (CNBC) |
| Diluted EPS, GAAP | $3.83 | $1.05 in Q3 2025 |
| EPS excluding legal charge | $7.40 | $7.25 in Q3 2025, ex tax charge |
| Family daily active people | 3.64 billion, +3% | 3.65 billion (StreetAccount) |
| Reality Labs operating loss | $4.13 billion | $4.54 billion (StreetAccount) |
| Q4 revenue guidance | $73–76 billion | $73.73 billion (LSEG) |
Ad impressions rose 10% year on year and the average price per ad rose 14%, so most of the growth came from pricing rather than volume. User growth slowed to 3%, from 8% a year earlier, and DAP came in just under the StreetAccount estimate.
The $9.89 billion charge behind GAAP EPS of $3.83
Costs and expenses jumped 68% to $51.61 billion. They include a $9.89 billion charge for the agreement with 52 US state attorneys general, announced in August, to resolve teen mental health litigation. Meta says that agreement provides for payments of up to about $18.59 billion. Our earlier article on the teen-safety settlement covered the first version, at $16.68 billion with 29 states.
Without the charge, operating income would have been $22.88 billion instead of $12.99 billion and diluted EPS $7.40 instead of $3.83. The year-ago base is distorted too: Q3 2025 carried a one-off $15.93 billion tax charge, and EPS without it was $7.25. Like for like, earnings per share grew about 2%, while revenue grew 26%. The gap is spending, and a tax rate of 17% excluding the charge against 14% a year ago.
A new legal bill arrived the same day. A New Mexico judge imposed a $25 billion penalty in a Cambridge Analytica-related case, CNBC reported. Meta's chief legal officer said the company is confident it will "prevail on appeal". That penalty is not in the third-quarter numbers.
Capex, cash flow and the 2027 signal
Capital expenditures, including finance lease principal, were $34.91 billion in the quarter. Operating cash flow was $32.79 billion, so free cash flow was negative $2.12 billion. Cash and marketable securities stood at $82.45 billion at the end of September. In the first nine months Meta raised a net $24.91 billion of long-term debt and bought back no stock, according to the cash flow statement.
The 2026 capex range was narrowed to $135–145 billion from $130–145 billion. CNBC cited an analyst expectation of $138.27 billion. Full-year expense guidance rose to $175–179 billion to absorb the legal charge. For 2027 Meta gave no capex number. It said it will "continue investing aggressively" and expects Reality Labs losses to narrow to about $15 billion, from $18–19 billion in 2026. Headcount fell 15% to 66,775.
In June we asked whether the market misprices Meta's AI capex. A quarter of negative free cash flow explains why Meta now wants a new share class.
Meta stock split: how the Class C dividend works
The mechanics come from the press release and the preliminary information statement Meta filed with the SEC on 21 October:
- What holders get. One Class C share for each Class A or Class B share they own.
- When. The restated charter takes effect on 19 January 2027. The dividend must be paid no later than the fifth business day after that, which points to late January. The board will set the record and payment dates later.
- Voting. Class A carries one vote, Class B ten votes, Class C none. The dividend "will not change the voting power of any shareholder".
- Economics. All three classes share equally in a liquidation. Class A keeps trading as META on Nasdaq, and Meta intends to list Class C on Nasdaq when the shares are issued. No Class C ticker has been announced.
- Approval. No shareholder vote is needed. Zuckerberg-controlled entities holding about 56.1% of the voting power approved the change by written consent.
Why non-voting: Zuckerberg's control and Proposition 40
As of 1 October Zuckerberg held about 60.6% of the votes but only 13.4% of the economic interest. Each new Class A share Meta issues for acquisitions, pay or financing dilutes that control. Class C shares do not.
The filing is explicit about the purpose. Meta wants a currency for "capital raising, employee compensation, potential acquisitions". Its special committee cited Alphabet's roughly $80 billion equity raise as a sign that AI capital is getting scarcer.
The second reason is California's Proposition 40, the wealth tax measure on the 3 November ballot. Under a Founder Alignment Agreement, 20% of Zuckerberg's Class C shares, about 10% of his economic stake, can be sold freely, for example to pay that tax. The other 80% can only be sold if he sells or converts an equal number of voting shares. He also committed to stay resident in California, or wherever Meta is headquartered, for eight years.
What the split changes for a shareholder, and what it doesn't
- Value. Nothing changes on the day. At Wednesday's close, $697.52 would become about $348.76 per share across two shares, before any price gap opens between the classes.
- Votes. A Class A holder keeps the same votes. The new shares add none.
- Taxes. For US federal purposes Meta does not expect the dividend to be taxable. The cost basis is split between the old and new shares by their market values on the dividend date. Holders in other countries should check local rules.
- Options. Listed META options will need an adjustment, set by the Options Clearing Corporation once the dates are fixed.
- Future dilution. This is the real change. Meta now has a share it can issue in size without touching Zuckerberg's control.
The Alphabet precedent: GOOG and GOOGL
Google used the same tool in 2014. Non-voting Class C shares (GOOG) began trading on 3 April 2014, and the voting shares took the GOOGL ticker. On Yahoo Finance closes, GOOGL traded 0.5–2% above GOOG through the first year.
The 2022 20-for-1 split shows the limit of split enthusiasm. GOOGL started split-adjusted trading on 18 July 2022 at a close of $109.03. It fell to $83.43 by 3 November, down 23.5%, and a year later was up 13.5%, against 26.4% for the Nasdaq Composite. The business and the rate cycle decided the price, not the share count.
What I would watch
Meta closed 10.3% below its 24 September record of $777.59 after a rough week for the Nasdaq. In analyst Ruslan Averin's view, the quarter answers the revenue question and leaves the cash question open. I would watch four things:
- Thursday's close. Whether the roughly 3% after-hours gain holds after the New Mexico penalty is digested.
- The 2027 capex number. Meta usually gives it with fourth-quarter results; anything well above $145 billion keeps free cash flow negative.
- The first Class C issuance. The size and price of any sale will show how much dilution the structure was built for.
- Proposition 40 on 3 November. If it passes, the 20% of Zuckerberg's Class C shares that can be sold freely matters for supply.
Related: Meta's teen-safety settlement, Meta's AI capex and the market and Tesla's Q3 2026 results.