Meta beats Q3 forecasts, boosts AI spending with new stock plan

Meta Platforms reported third-quarter revenue that beat Wall Street expectations, driven by strong advertising growth, and issued an upbeat current-quarter outlook. The company also approved a new class of non-voting stock to fund expanded artificial intelligence investments, sending shares up 4%. Revenue for the quarter ended September 30 reached $64.6 billion, a 26% increase year-over-year, surpassing analyst estimates of $63.33 billion. Earnings per share came in at $3.83, above the consensus forecast of $3.57. Advertising revenue, the primary growth driver, totaled $63.06 billion, up 26% and exceeding expectations of $61.85 billion. The board approved issuing new non-voting "Class C common stock," effective January 19, 2027, to fund AI investments, employee compensation, and acquisitions. Existing shareholders will receive one Class C share per share held as a one-time dividend, with no change to voting rights. Profitability was pressured by a $9.89 billion legal charge from a settlement with 52 state attorneys general over teen mental health, pushing operating income to $12.99 billion, below forecasts.