Meta Platforms booked a $9.9 billion charge tied to an agreement resolving teen mental health litigation in the quarter ended Sept. 30, cutting its operating profit, the company said.
Operating income fell 37% to $13 billion even as revenue increased. The agreement, announced in August, provides for payments of up to about $18.6 billion to resolve litigation involving teen mental health and social media.
Meta said it reached the agreement with 52 attorneys general. The charge contributed to costs and expenses of $51.6 billion for the quarter, up 68% from a year earlier.
Revenue reached $64.6 billion for the quarter ended Sept. 30, up 26% from $51.2 billion a year earlier, the company said. Net income rose 264% to $9.9 billion from $2.7 billion, while diluted earnings per share rose to $3.83 from $1.05.
The company's operating margin, the share of revenue left after operating costs, fell to 20% from 40% a year earlier. Costs and expenses in the year-earlier quarter were $30.7 billion.
Meta said operating income would have been $22.9 billion excluding the litigation charge, compared with the $13 billion it reported. Diluted earnings per share would have been $7.40 excluding the charge, an increase of $3.57 from the reported figure.
The company's income tax provision fell 83% to $3.1 billion from $19 billion a year earlier. Its effective tax rate fell to 24% from 87%, helping explain why net income increased while operating income declined.
Excluding the litigation charge, the effective tax rate would have been 17%, the company said. That is seven percentage points below the rate it reported for the quarter.
Advertising volume and prices both increased. Ad impressions, the number of times advertisements appeared across Meta's apps, rose 10% from a year earlier, while the average price per advertisement increased 14%.
Meta said an average of 3.64 billion people used its family of apps daily in September, up 3% from a year earlier. Revenue growth was 26% both as reported and excluding currency changes.
The disclosures covered Oct. 18 through Oct. 22 and a review of 24 large U.S. listed companies and financial institutions. The supplied material contained one company filing, Meta's Oct. 21 Form 8-K with the Securities and Exchange Commission.
The filing listed entry into a material definitive agreement and results of operations and financial condition. Meta also announced the establishment of a new Class C common stock.
