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Meta's Q3 profits dip nearly 50% after $18 billion legal settlement even as company beats revenue estimates
Meta beat revenue estimates, but its profit fell after an $18 billion settlement with nearly all US states.
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Meta beat investor expectations for third-quarter revenue in 2026, but its profits took a hit from billions of dollars in legal costs. The Facebook and Instagram owner is facing major penalties in the US.
Revenue beats expectations, profit takes a hit
As per AFP, Meta beat investor expectations for third-quarter revenue on Wednesday. But its profits took a hit because of an $18 billion legal settlement with nearly all US states.
According to AFP, the company reported $9.86 billion in profits from July to September. This was almost 50 percent below what investors expected. Meta said the drop was caused by a $9.9 billion charge linked to the settlement.
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Another big penalty came just hours earlier
Meta shared its earnings just hours after another financial penalty was announced. This one is linked to a case in New Mexico.
As per AFP, a judge ruled that Meta must pay $25 billion to New Mexico. This came after a jury found last month that the company had deceived users in a case linked to the Cambridge Analytica scandal.
According to Bloomberg, the fine was issued by state court Judge Francis Mathew. It is among the largest verdicts in US legal history. The jury found that Meta broke the state’s consumer protection law more than 43 million times. This was based on widely seen misleading statements by the company and its top executives about how it handled hate speech and user data.
Attorney General Raul Torrez argued that Meta lied to Facebook users about its privacy policies and how it handled their data. He also argued that the company misled the public about content moderation and hate speech rules. Under New Mexico’s Unfair Practices Act, the judge could order a penalty of up to $5,000 for each violation.
Also read: Meta ordered to pay $25 billion in New Mexico after jury finds over 43 million violations
Spending on AI
Meta has also been spending heavily to build up its artificial intelligence (AI) abilities. In the September quarter, it spent $35 billion on capital expenditures. Investors had expected $41 billion, so the spending was lower than expected.
As per AFP, Meta raised its spending estimate for the whole year to $145 billion in July. Earlier, the estimate was $130 billion. This is nearly double what the company spent in 2025.
Meta shares jumped more than 4 percent.
