Meta Platforms reported a major increase in third-quarter earnings on Wednesday. The company’s revenue grew as Facebook, Instagram, WhatsApp, and Messenger continued to attract billions of users. At the same time, Meta outlined plans to spend more on artificial intelligence and the technology needed to support it.
The company earned $9.86 billion in the three months ending in September. That equals $3.83 per share. A year earlier, Meta reported net income of $2.71 billion, or $1.05 per share.
Revenue climbed 26% to $64.60 billion. This was up from $51.24 billion in the same period last year. It also beat the $63.34 billion forecast by Wall Street analysts.
Chief Executive Mark Zuckerberg said the company had reached key goals in its AI work. He highlighted the launch of Muse and Muse Wonder, which Meta described as its first frontier AI model.
“Our investments are paying off, the core business is strong, and we’re seeing velocity across the board,” Zuckerberg said.
Legal Settlement Weighs on Results
Meta’s quarterly results came with a major legal cost. In August, the company reached an $18 billion settlement with 48 US states over concerns about social media and teen mental health.
The agreement requires Meta to take steps to keep children under 13 off Facebook and Instagram. It also includes measures to place teenagers aged 14 to 18 in accounts suited to their age.
Meta recorded a $9.89 billion charge linked to the settlement. Without this cost, the company said its third-quarter earnings would have been $7.40 per share.
The year-earlier quarter also included a one-time tax charge of nearly $16 billion. These unusual costs affect comparisons between the two periods.
Meta faced another legal blow on Wednesday. A judge ordered the company to pay New Mexico $25 billion after a jury found that it had deceived users about privacy on Facebook. The ruling was reported as the largest fine ever imposed on the technology giant.
Despite these legal challenges, user numbers continued to rise. Meta said its family of apps had an average of 3.64 billion daily active users in the third quarter. That was 3% higher than a year earlier.
Muse AI Agent Attracts Millions
Artificial intelligence is central to Meta’s next stage of growth. During a call with analysts, Zuckerberg said more than 10 million people in the United States and Canada had created accounts for Muse since its August launch.
The AI agent is designed for adults aged 18 and older. It can help users manage daily tasks, including schedules, shopping, and other plans.
Zuckerberg said around one in four people who had created an account used Muse on a given day. However, he noted that the service requires significant computing power.
Meta expects to make Muse much cheaper to run. Zuckerberg said the company aims to improve its cost efficiency by more than ten times over the next year. He said this could allow the service to become profitable once its revenue streams grow large enough.
Spending on AI infrastructure is also pushing Meta’s investment plans higher. The company narrowed its 2026 capital expenditure forecast to between $135 billion and $145 billion. Its previous estimate ranged from $130 billion to $145 billion.
Higher Costs and New Forecast
Meta’s total expenses reached $51.61 billion in the third quarter. This was a 68% rise from the same period last year. The figure included the charge tied to the settlement with US states.
The company reported 66,775 employees as of September 30. That was 15% fewer than a year earlier.
Meta did not provide an estimate for capital spending next year. It also gave no revenue forecast for 2027. However, the company expects losses at its Reality Labs division to fall to about $15 billion next year as it shifts investment toward other areas, mainly AI.
Reality Labs develops virtual reality and augmented reality products, including related wearable devices.
Meta expects revenue in the current quarter to reach between $73 billion and $76 billion. The midpoint is higher than analysts’ forecast of $73.65 billion.
New Shares Could Help Fund AI Plans
Meta’s board also approved a new class of publicly traded, nonvoting Class C common stock. The change will take effect in January and is designed in part to help the company raise money for AI infrastructure.
Zacks Investment Research stock strategist Andrew Rocco said the plan would let Meta fund AI projects without reducing Zuckerberg’s control of the company.
Meta shares closed 0.5% higher during regular trading on Wednesday. They gained another 2.9% in after-hours trading following the earnings report. The stock has risen 5.7% so far this year.
Meta’s results show continued growth in its core business and rising interest in its AI services. Yet legal costs and large technology investments remain key issues as the company works to expand its AI products and improve their profitability.
