Meta's revenue jumped 26% — then the legal bills took $10 billion off the top

The quarter

Meta Platforms reported third-quarter revenue of $64.6 billion on Wednesday, up 26% from a year earlier and ahead of analyst expectations of roughly $63.3 billion, according to multiple reports. Advertising revenue — still the engine of the company — came in at about $63.1 billion, also beating forecasts.

Profitability told a different story. Operating income fell 37% to about $13 billion, well short of the roughly $20.9 billion analysts expected, and the operating margin was roughly halved to 20%. Costs and expenses rose 68%, driven by the legal charge and continued infrastructure investment. Diluted earnings per share came in at $3.83.

The $10 billion legal hit

The headline drag was a $9.89-billion charge tied to the company's August settlement with 52 U.S. state attorneys general over litigation concerning teen mental health and social media, according to the earnings reports. Meta says earnings per share would have been $7.40 without that charge.

And hours before the earnings landed, a New Mexico state judge ordered Meta to pay $25 billion after a jury found the company liable for deceiving users about Facebook's data privacy and content moderation policies, according to WDC News 6 reporting. That followed the August $18-billion settlement with state attorneys general over claims about Instagram's effects on young users.

What the money is buying

Meta raised the lower end of its capital-expenditure range — now $135 billion to $145 billion — and lifted its full-year expense outlook to $175–179 billion, the increase almost entirely the legal charge. Fourth-quarter revenue guidance of $73–76 billion came in above the roughly $73.6-billion consensus.

Chief executive Mark Zuckerberg said the quarter marked progress toward what he called "personal superintelligence for everyone," pointing to the launch of Muse and Muse Wonder — Meta's first frontier models, per the earnings release. The company also announced the creation of a new non-voting Class C common stock.

The Canadian angle

Canadian advertisers and small businesses are deeply embedded in Meta's ad machine — the $63.1-billion ad quarter is, in part, money Canadians spent to reach other Canadians on Instagram and Facebook. And Meta is not just selling here: the company is building out its AI infrastructure footprint in Alberta, making the province a small but real piece of the $135–145-billion capital program.