Meta Reports Q3 2026 Results: Revenue Up 26%, Plans Non-Voting Class C Stock for AI Funding
Meta reported 26% revenue growth in Q3 2026, with net income rising sharply despite a large litigation charge. The company announced plans to establish a new non-voting Class C common stock in January 2027 to raise capital for AI infrastructure without diluting CEO Mark Zuckerberg's control.
U.S. social media giant Meta Platforms (Nasdaq: META) released its financial results for the third quarter ended September 30, 2026, on October 21. The report shows revenue reached $64.60 billion, up 26% year-over-year, while net income surged 264% to $9.86 billion. This profit growth was primarily driven by a drop in the effective tax rate from 87% to 24%, which partially offset a $9.89 billion charge related to a settlement with U.S. state attorneys general over teen mental health litigation. Excluding this one-time expense, adjusted operating income would have been $22.88 billion, and adjusted diluted EPS would have been $7.40.
In terms of capital allocation and governance, Meta's Board of Directors approved the establishment of a new class of publicly listed, non-voting Class C common stock, effective January 2027. Recommended by a Special Committee of independent directors, this move aims to provide financing flexibility for massive AI infrastructure investments while ensuring that Founder and CEO Mark Zuckerberg's voting control remains undiluted. Meta expects full-year 2026 capital expenditures to range between $135 billion and $145 billion, reflecting continued aggressive investment in 'personal superintelligence' initiatives.
Meta's CFO noted that AI investments are already delivering substantial incremental advertising revenue through stronger engagement and better monetization efficiency. While losses at the Reality Labs segment are expected to narrow to $18-19 billion compared to 2025 levels, the company is reallocating resources toward priority areas, primarily AI. With the introduction of the new share class, investors should monitor how Meta balances long-term strategic autonomy with the cash flow pressures of sustained high-capex spending.