Meta’s cost burden brought its operating margin to 20% in the third quarter, half the year-earlier level, as expenses expanded far faster than total revenue.
Meta reported operating income of $12.988 billion, down from $20.535 billion a year earlier. Revenue for the three months ended Sept. 30 reached $64.601 billion, up 26%, while costs and expenses rose 68% to $51.613 billion, the company said.
Meta’s quarterly filing tied a $9.89 billion charge to an August agreement with 52 attorneys general across U.S. states, territories and the District of Columbia. The agreement concerned litigation over teen mental health and social media. Meta said payments under the agreement could total up to about $18.59 billion.
The company said operating income would have been $22.88 billion without the legal charge, about 11% above the prior-year result by calculation.
Meta attributed the increase mainly to legal costs, infrastructure spending, higher third-party cloud-service expenses and third-party AI token costs.
Advertising brought in $63.06 billion of Meta’s revenue. In its filing, Meta said advertising almost entirely accounted for growth in its Family of Apps segment. The company reported a 10% annual increase in ad impressions and a 14% gain in average price per ad.
Meta set its 2026 capital expenditure outlook at $135 billion to $145 billion, including principal payments on finance leases. EconoTimes previously reported those spending plans and the quarter’s advertising growth and free-cash-flow deficit.
For the fourth quarter, Meta forecast revenue of $73 billion to $76 billion. It expects total expenses for 2026 to reach $175 billion to $179 billion, including the legal charge.
