Meta Reports Mixed Results for 3Q26

Meta Platforms recorded revenue growth in the third quarter of 2026; however, strong top-line performance was tempered by significantly rising operational costs. The company’s quarterly revenue increased 26% year-over-year to $64.6 billion. Conversely, costs surged 68% to $51.6 billion, a figure that includes a $9.89 billion legal charge resulting from an August settlement with 52 attorneys general regarding teen mental health claims.

Operating income declined by 37% to $13 billion, and the operating margin subsequently halved to 20%. Net income rose to $9.9 billion, compared to $2.7 billion in the previous year, when a one-time $15.9 billion tax charge significantly impacted profitability. Capital expenditures reached $34.9 billion, with Meta projecting a total spend between $135 billion and $145 billion for the full year 2026. Daily active users across its applications reached 3.64 billion, up 3% year-over-year but slightly below consensus analyst estimates of 3.65 billion.

CEO Mark Zuckerberg noted that Threads has surpassed X in terms of monthly active users. Reality Labs, the division responsible for Quest headsets and AI-integrated eyewear, reported a $4.1 billion loss on $443 million in revenue, compared to a $4.4 billion loss the prior year. Meta CFO Susan Li stated that the company anticipates Reality Labs will record total losses between $18 billion and $19 billion for 2026, a slight improvement over the $19.2 billion loss in 2025.

The company intends to expand its Muse personal AI agent and implement transaction fees for business-facilitated interactions, according to Zuckerberg. He reported that over 10 million users in the U.S. and Canada adopted Muse within its first six weeks, with approximately 25% utilizing the agent daily.

Zuckerberg emphasized that Muse has demonstrated a clear product-market fit, and Meta’s future focus will involve user acquisition, revenue growth, and the optimization of computational costs. “We expect to scale Muse to serve billions of individuals,” he stated, describing the objective as central to the company’s mission. The Muse product line launched in April with Muse Spark, followed recently by Muse Wonder and Muse Wonder Full.

Shopping has emerged as the primary use case for Muse, with over 25% of users utilizing the agent for commercial purposes. Zuckerberg indicated that while Muse will remain free for the general public, Meta will collect fees on transactions facilitated for businesses. Additionally, subscription models will likely cover access to high-tier models or additional tokens for power users.