Meta Platforms announced a stock split with its third-quarter results, creating a non-voting Class C stock with one new share for each existing share, which the company says will help raise capital without diluting CEO Mark Zuckerberg's voting control. Revenue rose 26% year over year to $64.6 billion and EPS reached $3.83, up 265%, while operating income fell 37% to about $13 billion because of a $9.89 billion legal charge; excluding that charge, it would have risen 11%. The charge relates to a settlement of up to $18 billion over 10 years with a bipartisan group of state attorneys general over lawsuits about harm from its social media platforms. Daily active people rose 3% to 3.64 billion, and more than 10 million people in the U.S. and Canada have set up the Muse AI agent, with about 25% using it on any given day. The article says Meta's AI push could diversify its revenue, though its core advertising business still generates most of it.
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Meta reported better-than-expected third-quarter results with record revenue and announced a 2-for-1 stock split, under which shareholders receive one new Class C share for each share held. The highlight was its Muse AI agent: about 10 million people in the US and Canada have set up the app since launch, mostly for shopping, with average purchases above $200. Zuckerberg said Meta would earn revenue by taking a small cut of sales made through the agent and that compute efficiency could improve 10x within a year, which he believes could make Muse highly profitable over time. TD Cowen's John Blackledge estimates Muse could exceed 1 billion daily active users within five years, and Meta's leadership suggests it could happen sooner.
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Meta reported third-quarter revenue up 26% to $64.6 billion, above the $63.4 billion expected, with ad impressions up 10% and average price per ad up 14%. Reported EPS was $3.83 after an $18.59 billion litigation settlement over teen health and a related $9.89 billion charge; excluding these, operating income would have been $22.9 billion and EPS $7.40. Headcount fell about 15% after roughly 10,000 layoffs earlier this year, and Reality Labs' loss is expected at $18–19 billion, narrowing to around $15 billion next year. Zuckerberg said more than 10 million people in North America have set up Muse personal agents and that Muse could eventually double the company's revenue. Meta will also split its stock 2-for-1 through a new non-voting Class C share dividend, executed on January 19, 2027, with shares trading around $700.
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Meta Platforms’ third-quarter revenue rose 26% to $64.6 billion on stronger advertising demand, higher engagement and AI-driven improvements, with ad impressions up 10% and the average price per ad up 14%. Expenses jumped 68% to $51.6 billion, including a $9.9 billion charge tied to an August 2026 agreement with multiple state attorneys general, pulling GAAP operating income down 37% to $13 billion. Excluding the legal charge, CFO Susan Li said operating income would have risen 11% year over year, while capital expenditures of $34.9 billion pushed free cash flow to negative $2.1 billion. Meta forecast fourth-quarter revenue of $73 billion to $76 billion and announced a two-for-one stock split expected to begin trading in late January 2027. CEO Mark Zuckerberg said more than 10 million people in the U.S. and Canada had set up its Muse AI agent in roughly six weeks, with shopping the most common use case.
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Meta reported third-quarter revenue up 26% year over year to $64.6 billion, above the top of its guidance, and said it plans to issue one non-voting Class C share for each Class A and Class B share, which it expects to act like a 2-for-1 split, effective January 19, 2027. The company said Class C stock could be used to raise capital, pay employees and make acquisitions without diluting voting power, though CFO Susan Li said no specific financing plans were announced. Capital expenditures rose to $34.9 billion, pushing free cash flow to negative $2.1 billion, while operating income fell 37% to $13 billion because of a $9.9 billion legal charge. With shares near $698, Meta trades at about 21 times 2027 earnings estimates, and the author argues the valuation still looks reasonable given revenue growth above 25%.
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Meta Platforms (META) shares fell on Thursday despite third-quarter results that beat expectations, as investors weighed rising AI spending, negative free cash flow and legal costs. Revenue rose 26% year over year to $64.6 billion, above the roughly $63.4 billion expected, and EPS excluding a $9.89 billion legal settlement charge was $7.40 versus $6.52 expected. Capital expenditures reached $34.91 billion and free cash flow turned negative at $2.12 billion, while the full-year capex outlook was narrowed to $135–145 billion. Meta also faces a $25 billion judgment in a New Mexico privacy case, which it plans to appeal, and expects fourth-quarter revenue of $73–76 billion, in line with consensus of $73.65 billion. The company also announced a 2-for-1 stock split in January 2027 through non-voting Class C shares, which the article says would not change overall market value.
- Meta's new nonvoting shares create an overhang — and Wall Street wants it gone
Meta created a new class of nonvoting Class C stock that works like a 2-for-1 split, giving every Class A or Class B holder one Class C share, with trading slated to begin in January 2027. The structure lets Mark Zuckerberg raise outside capital for the AI build-out without diluting his voting control, a move partly designed to keep him working in California as a 5% billionaire's tax looms. JPMorgan analyst Doug Anmuth said issuing the stock sooner is better, as it would remove the overhang now that the Street knows nonvoting shares are coming in January 2027. Core advertising revenue rose 26% to $64.6 billion and GAAP EPS of $3.83 beat the $3.56 estimate, but shares fell 2% in premarket trading on Thursday. Anmuth called the stock move near-term noise and remained encouraged by the 2027 revenue outlook.
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