Meta earnings analysis: questions answered and next catalysts

Meta Platforms (META) shares fell 7.2% after reporting Q3 revenue of $64.6B, up 26%, and EPS of $3.83, up 265%, including a $9.9B legal charge. The company plans a 2-for-1 stock split and a new non-voting share class. New Mexico issued a $25B judgment against Meta, which plans to appeal.

Meta's board approved a new Class C non-voting stock, to be issued as a dividend. Mark Zuckerberg can sell part of his stake without losing control. The move aims to raise capital and compensate employees. Meta's revenue was $64.601 billion, with shares rising 2.16% after hours. The Class C stock is expected to list on Nasdaq in late January 2027.

Meta (META) shares fell 7% on Thursday, erasing $125 billion in market value and turning the stock negative for the year. The company reported Q3 revenue of $64.6 billion, up 26%, but raised its full-year expense outlook. Analysts note Meta's AI investments may take time to generate returns. Since early October, Meta, Alphabet (GOOGL), and SpaceX (SPCX) have lost nearly $800 billion combined, while Apple (AAPL), Lilly (LLY), and Walmart (WMT) have gained over $400 billion.

Meta was ordered to pay New Mexico $25 billion for violating consumer protection laws, according to a ruling by Judge Francis Mathew. The penalty stems from over 43 million violations linked to Cambridge Analytica's use of Facebook data for political ads. New Mexico Attorney General Raúl Torrez called it a historic verdict, while Meta's Chief Legal Officer C.J. Mahoney plans to appeal, arguing the ruling hinders business operations.

Meta announced a new nonvoting Class C stock to raise capital, with board approval alongside Q3 results showing 26% revenue growth to $64.60 billion. The move aims to fund AI investments without diluting Mark Zuckerberg's control. Shareholders will receive one Class C share per Class A or B share by Jan. 19, 2027, with Class A shares expected to reflect a two-for-one split. The company plans to use Class C shares for equity offerings, employee compensation, and acquisitions.

Meta reported Q3 revenue of $64.6B, beating estimates, but shares fell 7% due to high spending plans. Q3 capex was $34.9B, turning free cash flow negative. The company projected $135–145B in 2026 capex and $825B in future spending commitments. Meta announced a 2-for-1 stock split with new nonvoting Class C shares. Analysts noted potential dilution and financing concerns, while some maintained bullish views on Muse adoption and future profitability.