TLDR
- Meta (META) stock rose about 2.5% in extended trading after Q3 revenue of $64.6 billion beat estimates of $63.37 billion.
- Q3 EPS was $3.83, which included a $9.9 billion legal charge. Without it, EPS would have been $7.40.
- Q4 revenue guidance of $73 billion to $76 billion topped the $73.73 billion analyst estimate.
- Operating margin fell to 35% from 40%, and free cash flow turned negative.
- Morgan Stanley raised its price target to $820 from $775 and kept an Overweight rating.
Meta (META) stock rose about 2.5% in extended trading on Wednesday after the company beat third-quarter revenue estimates. The stock had closed up 0.5% in the regular session.
Revenue came in at $64.6 billion, above the $63.37 billion analysts expected. That is a 26% jump from a year ago.
Earnings per share were $3.83, which included a $9.9 billion charge tied to an August child-safety legal settlement. Without the charge, EPS would have been $7.40.
$META Platforms Q3’26 Earnings Highlights
🔹 Revenue: $64.60B (Est. $63.33B) 🟢; +26% YoY
🔹 EPS: $3.83 (Est. $5.89) 🔴; +265% YoY
🔹 DAP: 3.64B; +3% YoYGuide:
🔹 FY26 CapEx: $135B-$145B (Est. $132.08B)
🔹 Q4 Revenue: $73.00B-$76.00B (Est. $73.68B) 🟡
🔹 FY26 Expenses:… pic.twitter.com/A1Tb6G3kSj— Wall St Engine (@wallstengine) October 21, 2026
Estimates for EPS varied by source. Barron’s cited $6.54, while CNBC noted a $5.75 figure and said it was unclear if the results were comparable.
This was Meta’s 17th straight quarter of beating sales expectations. Headcount also fell 15% from last year.
Q4 Guidance Tops Estimates
Meta expects fourth-quarter revenue of $73 billion to $76 billion. The midpoint of $74.5 billion compares with the $73.73 billion analysts expected, according to LSEG.
The company also edged up the midpoint of its capital expenditure guidance for the year. Spending may stretch up to $145 billion in 2026.
Third-quarter capex came in below expectations. Even so, free cash flow went negative, and analysts do not expect it to return until 2029.
Expenses grew faster than sales. Even without the legal charge, operating margin slipped from 40% to 35%.
Meta also has nearly $700 billion in long-term supply and lease commitments. That sits alongside the cost of its AI push.
Muse Takes Center Stage
CEO Mark Zuckerberg said Meta launched Muse and Muse Wonder, its first frontier model. The Muse assistant debuted in September and helped the stock post its best month since 2022.
Similarweb data shows Muse has more than 3 million daily users. That is still less than 0.1% of Meta’s user base.
Zuckerberg said the focus now is to scale the product, grow revenue and optimize compute costs. CFO Susan Li then said total serving costs are expected to rise, and the stock pulled back.
Morgan Stanley’s Brian Nowak raised his price target from $775 to $820 and kept an Overweight rating. He urged investors to keep adoption rates in perspective.
Meta also created a new class of non-voting class C stock. Holders of class A and B stock will each get an equal number of class C stock after January 19 in a special dividend.
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