Meta’s $18 billion nationwide settlement with state attorneys general forced nearly $10 billion in additional costs for the company during its third quarter in 2026, missing Wall Street expectations even as its quarterly revenue was up 28%.
The company’s revenue for the quarter hit $64.6 billion, up 26%, while its net income was $9.86 billion, up 264%. Its earnings per share hit $3.83. Analysts polled by LSEG Data & Analytics expected the company’s revenue to hit $63.4 billion and earnings per share of $5.46.
Wall Street analysts didn’t seem to mind the lower EPS, however, as its share price was up 2% after market close.
“We hit major milestones this quarter toward delivering personal superintelligence for everyone – including launching Muse and Muse Wonder, our first frontier model,” Meta CEO Mark Zuckerberg said in a statement. “Our investments are paying off, the core business is strong, and we’re seeing velocity across the board.”
The earnings report came hours after a New Mexico state judge ordered Meta to pay $25 billion after a jury found the company liable last month for deceiving users about Facebook‘s data privacy and content moderation policies. That ruling came after Meta reached an $18 billion settlement with 52 state attorneys general in August over claims that it designed Instagram with addictive features, knowingly exposed young users to serious mental harms, and intentionally misled the public about the safety of its platforms, among other claims.
The settlement saw Meta’s costs for the quarter balloon to $51.6 billion. The company said in its earnings release that its operating income would have jumped from $12.98 billion to $22.88 billion — had it not had $9.89 billion in costs from the settlement.
Meta’s third quarter saw the company effectively relaunch its AI efforts, including the introduction of its AI agent Muse, a Muse-infused gadget and a new suite of Meta-branded eyeglasses.
Meta introduced Muse last month, touting the agent as “the world’s first personal AI agent built for everyone.” The agent took center stage at its Meta Connect event last month, where it was given both an animated character to represent it and an infusion into several of the company’s software and hardware offerings.
More to come…
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