Meta delivered higher-than-anticipated revenue in its third-quarter results and issued a forecast for the final quarter of the year that surpassed most analysts’ expectations. The company’s shares climbed 2% in after-hours trading following the announcement.
Third-quarter revenue reached $64.60 billion, according to the report, representing a 26% increase year-on-year and exceeding the consensus estimate of $63.37 billion compiled by LSEG. Earnings per share were reported at $3.83.
For the fourth quarter, Meta projected revenue in the range of $73 billion to $76 billion, with the midpoint at $74.5 billion, ahead of Wall Street’s average estimate.
Meta attributed much of this momentum to the performance of its new AI-powered Muse agent, which debuted in September and contributed to its best monthly trading performance since 2022. The company noted that innovations like Muse and the recently launched Muse Wonder have rapidly expanded their audience, with over 10 million users in the U.S. and Canada registering for Muse accounts within roughly six weeks.
As part of its strategy to support ongoing AI development, Meta announced the introduction of a new class of non-voting Class C common stock, with a two-for-one split scheduled for January 2027. This move is intended to sustain funding for acquisitions and talent retention, without reducing CEO Mark Zuckerberg’s control.
Executives said the Muse agent will be central to its AI roadmap and is expected to serve billions, potentially driving higher monetization per user than traditional platforms. While the product aims to cultivate network effects at scale, management confirmed that costs to operate Muse currently exceed those of many other Meta products and indicated an accelerated path to monetization relative to past launches.
Chief Financial Officer Susan Li forecast that the AI segment would start delivering incremental revenue in 2027 and, over time, provide substantial diversification beyond Meta’s existing income streams.
AI has also become a key focus for Reality Labs, Meta’s division previously tasked with building the “metaverse.” Company leaders indicated that AI will drive the division’s future strategy and projected that Reality Labs’ losses would ease next year, with a narrowed deficit of around $15 billion as investments shift toward other priorities.
Meta increased the lower bound of its annual capital expenditure forecast and now expects to spend between $135 billion and $145 billion this year, revising its prior range upward. The firm reported a free cash flow deficit of $2.12 billion for the third quarter, a sharp turnaround from positive free cash flow of $10.63 billion in the same period a year ago.
