Meta Platforms reported third-quarter revenue of $64.60 billion, up 26% year-over-year, while announcing a 2-for-1 stock split via new nonvoting Class C shares. CEO Mark Zuckerberg noted that over 10 million people in the U.S. and Canada have set up personal AI agent Muse accounts since its August launch.
Meta Platforms delivered a strong third-quarter financial report that topped Wall Street expectations for the July-September period, though massive capital expenditures and billions in legal settlements weighed heavily on its bottom line and free cash flow.
Semafor: Meta is creating non-voting Class C shares so it can raise AI money without diluting Mark Zuckerberg’s control.Holders will get 1 Class C share for each Class A or Class B share once the charter changes on January 19, 2027.That dividend should move Class A’s price as… pic.twitter.com/5WQynHdpGG
Net income hit $9.86 billion, translating to $3.83 per share, which marked a substantial surge compared to the $2.71 billion, or $1.05 per share, recorded during the corresponding period of the prior year when results were weighed down by a one-time tax expense. Total revenue climbed to $64.60 billion from $51.24 billion in the prior-year quarter, easily beating the $63.34 billion consensus expected by analysts.
Meta Creates Nonvoting Stock to Fund AI Investments
To help finance its heavy investments in artificial intelligence, Meta announced it will create a new class of nonvoting Class C stock that will be issued as a dividend, effectively executing a 2-for-1 stock split with an effective date of January 19, 2027. The move will list the new stock on the Nasdaq exchange and provide the social media giant with a currency to raise capital, pay employee stock compensation, and fund acquisitions without diluting Chief Executive Mark Zuckerberg’s voting control over the company.
A special committee of independent directors recommended the restructuring. Under an accompanying Founder Alignment Agreement, Zuckerberg has committed to staying in California for eight years and agreed that only 20% of the Class C shares he receives can be sold freely, helping address potential tax liability tied to his stock ownership in the company.
According to the corporation, the impending 2-for-1 stock division will leave the voting dominance of Chief Executive Mark Zuckerberg and other equity holders entirely untouched. Leadership contended that introducing a fresh category of non-voting equities would grant greater agility regarding fundraising and staff compensation, whereas the board views the maneuver as a mechanism to sustain long-term shareholder value growth and maintain Mark Zuckerberg at Meta’s helm.
BREAKING: Meta stock, $META, surges +5% after reporting stronger than expected Q3 2026 earnings. pic.twitter.com/HxIVRrBtVf
The new shares will be issued as a dividend to holders of common and supervoting shares. The stock will be distributed to all existing shareholders via a dividend, and the company expects the share price to reflect that once the stock dividend is executed. Meta indicated that this newly established common stock tier is designed to supply the firm with the financial capability to drive its expansion and help maintain its competitive edge against intense domestic and international rivals.
Meta Raises Capital Expenditure Range for AI Infrastructure
Meta raised the bottom end of its capital expenditures range for the year, setting a new range between $135 billion and $145 billion, up from a previous lower bound of $130 billion. Capital expenditures for the quarter reached $34.91 billion, outpacing the cash generated by operations during the same three-month window.
Scoop: Meta eyes new nonvoting stock so Zuck can continue funding his AI ambitions without diluting his stake https://t.co/WgBxLBPVb8
While infrastructure costs surged, the company’s hardware and virtual reality division, Reality Labs, posted $4.13 billion in losses while generating $443 million in sales. Meta expects losses in that segment to narrow to roughly $15 billion next year, down from $18 billion to $19 billion this year, as investments shift further toward artificial intelligence.
User Growth and Early Adoption of the Muse AI Agent
Across its family of apps—including Facebook, Instagram, WhatsApp, and Messenger—daily active people averaged 3.64 billion in September, marking a 3% increase compared to the previous year. Meanwhile, headcount ended September at 66,775 employees, representing a decrease of 15% year-over-year.
Projecting into the final three months of the year, Meta projected its upcoming revenue to land between $73 billion and $76 billion, hitting a midpoint that outpaces the $73.65 billion consensus anticipated by analysts. Total expenses were $51.61 billion, an increase of 68% year-over-year, which includes the charge stemming from its multistate legal settlement. Company shares rose about 2% in after-hours trading following the earnings release on Wednesday, with some reports noting gains of up to 6%.
Legal Settlements over Teen Mental Health Impact Earnings
Financial results were heavily impacted by legal settlements, including an $18 billion agreement with 48 U.S. states over the effects of social media on teen mental health, involving payments that could reach about $18.59 billion. The earnings figure absorbed a $9.89 billion charge for the agreement, and excluding this impact, the company’s third-quarter earnings would have been $7.40 per share.
FT: Meta’s AI build-out now needs outside equity on a scale that its founder-control structure could not absorb, so the company is creating a share class that gives investors economics with no votes.i.e. now Meta will issue non-voting shares that let Mark Zuckerberg sell stock… pic.twitter.com/hPKSOyQKEb
