Meta Posted Record $64.6B Revenue and Announced a 2-for-1 Stock Split

Meta just posted the biggest quarterly revenue in its history and immediately changed the subject to its share structure. The company reported Q3 2026 results after the bell on Wednesday, October 21: record revenue of $64.6 billion, up 26% year over year, beating analyst expectations of around $63.3 billion on strong advertising demand. The Meta Q3 earnings story, though, is really three stories: a record quarter, a $9.89 billion legal charge, and a 2-for-1 stock split engineered to change nothing about who controls the company.

Meta Q3 earnings by the numbers

Revenue: $64.6 billion, a record, up 26% from $51.24 billion a year ago. Net income: $9.8 billion, or $3.83 GAAP earnings per share, well below the $17.2 billion analysts expected. The miss is entirely the legal charge: excluding the $9.89 billion, earnings per share would have been $7.40 against a $6.54 consensus, and operating income would have been $22.88 billion. The ads engine is running hotter than expected; the bottom line is carrying a one-time legal bill.

The $9.89 billion legal charge

The charge ties to an August settlement with 52 US state attorneys general over litigation about teens' mental health and social media. The reported total settlement value runs up to roughly $18 billion over ten years, pending court approval. This is the cost of a decade of regulatory exposure landing in a single quarter, and it is why GAAP earnings look weak while the underlying business looks strong. Investors mostly shrugged: one-time charges get added back, and everyone on the call knew the number was coming.

The stock split that isn't

Meta announced an effective 2-for-1 stock split structured as a dividend of new non-voting Class C shares to holders of common and supervoting shares, effective January 19, 2027. Read that carefully: the new shares carry no votes. Mark Zuckerberg's voting control is fully preserved, which makes this a liquidity and accessibility move rather than a governance change. It is the first effective split in Meta's history to use non-voting shares, and the structure is transparent about its purpose.

One detail from the filing raised eyebrows: Zuckerberg can immediately sell 20% of his new non-voting shares, tied to a proposed California wealth tax he may need to pay. The split creates the vehicle; the tax bill may be the reason.

AI spending keeps climbing

Full-year 2026 capital expenditure guidance narrowed to $135-145 billion, with the low end raised from $130 billion. Quarterly capex hit $34.91 billion, and free cash flow turned negative at minus $2.12 billion. Meta is spending at a pace that would have been unthinkable three years ago, and the guidance raise says management sees no reason to slow down. The AI infrastructure buildout is the defining bet of this earnings season, and Meta just confirmed it is all in.

Guidance and the market reaction

For Q4 2026, Meta guided revenue of $73-76 billion, roughly in line with the $73.65 billion consensus and about 23% year-over-year growth. Shares rose 3-5% in after-hours trading Wednesday on the revenue beat and the split news, then gave it back in premarket trading amid a broader market selloff. The pattern is familiar: great quarter, macro mood wins.

What to take from it

Strip out the legal charge and this is a straightforward story: the advertising business is compounding at 26%, and every dollar of it is being funneled into AI infrastructure. The stock split is financial engineering that changes the share count without touching control. The legal settlement is expensive but finite. The open question, the one Wall Street is repricing in real time, is whether $140 billion a year in capex earns an adequate return. Meta's answer, delivered via guidance, is that it intends to find out.

For context on how Meta got here, the unwind of its blocked $2B Manus buyout and the launch of Muse Spark Open show a company spreading AI bets across acquisitions and open weights simultaneously. Big Tech M&A season is active on all fronts, with Amazon circling Decart for up to $7B in the same week. Meta's quarter kicks off earnings season with the bar set high.