Meta beat on revenue, took a US$9.89 billion legal charge and created shares without votes

Meta

Meta closed Wednesday at US$697.52, up 0.47%, ahead of its results. Once they landed, the shares rose more than 3% in after-hours trading.

The advertising business is growing fast. Revenue rose 26% in the September quarter to US$64.6 billion, ahead of the roughly US$63.3 billion expected. Meta showed 10% more ads than a year earlier, and charged 14% more for each one.

Profit took a hit from the courts. Meta booked a US$9.89 billion charge after settling with 52 state attorneys general over teen mental health, and the deal could cost it up to about US$18.59 billion in all. Net income still came to US$9.86 billion.

Chart: Meta's spending closes in on its cash. Cash from operations (columns) and capital spending (dots), 2010 to 2025, in US$bn. Meta now forecasts US$135bn to US$145bn of spending in 2026. — This story’s chart of the day: the numbers, the dark version and the animated version are on its own page. The chart’s page →

Spending is the other drain. Meta put US$34.91 billion into data centres and equipment in the quarter. It now expects to spend US$135 billion to US$145 billion this year, with the bottom of the range up from US$130 billion. Free cash flow was negative US$2.12 billion.

Then came the new shares. Every shareholder will get one Class C share for each share they own, starting in January 2027. Class C shares carry no votes, so Meta can issue them to raise money or pay staff while Mark Zuckerberg keeps control.

Our view

Meta is creating a share class built for raising money in a quarter when its free cash flow went negative. That tells you how much it expects to spend. We'd want to see the 2027 spending plan before reading much into a 3% move after hours.

This story ran in Two for One Thursday 22 October’s edition, with the market snapshot, the other two stories, the numbers and the week ahead. Read the whole edition →

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