Meta Platforms reported a sharp rise in third-quarter profit on Wednesday as revenue grew and its artificial intelligence business gained users. The company, which owns Facebook, Instagram, WhatsApp, and Messenger, also outlined plans for more spending on AI systems and data centers.
Meta reported net income of $9.86 billion for the July to September period. That was equal to $3.83 per share. In the same quarter last year, the company earned $2.71 billion, or $1.05 per share.
Revenue rose 26% to $64.60 billion from $51.24 billion a year earlier. The result was also above the $63.34 billion expected by Wall Street analysts.
Chief Executive Mark Zuckerberg said the company had reached important goals in its AI work. He pointed to the launch of Muse and Muse Wonder, which he described as the company’s first frontier AI model.
“Our investments are paying off, the core business is strong, and we’re seeing velocity across the board,” Zuckerberg said in a statement.
Legal Costs Affect Quarterly Results
The strong results came as Meta faced major legal costs. In August, the company reached an $18 billion settlement with 48 US states over concerns about the effects of social media on teen mental health.
Under the agreement, Meta committed to steps aimed at keeping children under 13 off Facebook and Instagram. It also agreed to place teenagers aged 14 to 18 in accounts designed for their age group.
Meta recorded a $9.89 billion charge related to the settlement. Without that charge, the company said its third-quarter earnings would have been $7.40 per share.
The same quarter last year included a one-time tax charge of nearly $16 billion. This makes direct comparisons between the two periods more complex.
Meta also faced another legal setback on Wednesday. A judge ordered the company to pay New Mexico $25 billion after a jury found it liable for deceiving users about privacy on Facebook. The ruling marked the largest fine ever imposed on the technology company, according to the report.
Despite these legal challenges, Meta continued to report growth across its main apps. The company said its family of apps had an average of 3.64 billion daily active users in the quarter. That was a 3% increase from the same period a year earlier.
AI Agent Gains Millions of Users
AI is becoming a major focus for Meta. 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 launch in August.
Muse is designed to help adults with daily tasks. These include planning schedules, shopping, and organizing other activities. The service is available to people aged 18 and older.
Zuckerberg said about 25% of people who had set up an account used Muse on a given day. He also noted that the service requires substantial computing power.
Meta expects to make the system more efficient. Zuckerberg said the company aims to improve its cost efficiency by more than ten times over the next year. He added that this could help Muse become profitable once its revenue sources reach sufficient scale.
The company’s growing AI ambitions are also driving its spending plans. Meta narrowed its forecast for 2026 capital expenditure to between $135 billion and $145 billion. Its previous estimate ranged from $130 billion to $145 billion.
Costs and Investment Plans Grow
Meta’s total expenses reached $51.61 billion in the third quarter, up 68% from a year earlier. The increase included the charge tied to the multistate legal settlement.
The company had 66,775 employees on September 30, a 15% decline from a year earlier. Even with a smaller workforce, Meta plans to keep investing heavily in its main business and AI infrastructure.
Meta did not provide a capital spending forecast for next year. It also gave no revenue guidance for 2027. However, it expects losses at its Reality Labs unit to fall to about $15 billion next year as investment shifts toward other areas, mainly AI.
Reality Labs develops augmented reality, virtual reality, and related wearable devices.
The company also expects fourth-quarter revenue of between $73 billion and $76 billion. The midpoint of that range is above analysts’ forecast of $73.65 billion.
New Share Class Could Support AI Funding
Meta’s board approved a new class of publicly listed, nonvoting Class C common stock. The change is set to take effect in January and is intended to help the company raise money for AI infrastructure.
The new shares could allow Meta to fund major investments without reducing Zuckerberg’s control of the company, according to Zacks Investment Research stock strategist Andrew Rocco.
Meta shares closed 0.5% higher in regular trading on Wednesday. They then rose 2.9% in after-hours trading following the earnings announcement. The stock has gained 5.7% so far this year.
Meta’s latest results show that its core business continues to grow while AI becomes a larger part of its plans. However, high spending needs and legal risks remain important factors as the company prepares for its next stage of growth.
