Meta misses net profit expectations as quarterly revenue surges 26% to 86 trillion won

[Financial News] Meta posted a 26% year-over-year revenue surge, but net profit fell short of expectations because of astronomical lawsuit settlement costs.
Meta announced that third-quarter revenue rose 26% from the same period last year to $64.6 billion (about 85.7 trillion won) on the 21st (local time). That exceeded the market forecast of $63.37 billion compiled by market research firm London Stock Exchange Group (LSEG).
Revenue from the Family of Apps segment, which includes advertising—the core business that accounts for most of the company’s revenue—grew 26.4% year over year to $64.16 billion.
Meta said ad impressions rose 10% from the same period a year earlier, while the average price per ad increased 14% over the same period.
Reality Labs, which includes smart glasses, generated $443 million in revenue, down 5.7% from the same period a year earlier. Its operating loss narrowed slightly, from $4.432 billion to $4.129 billion.

Chief Financial Officer Susan Li projected an operating loss of $18 billion–$19 billion for Reality Labs this year, but said the loss would narrow to around $15 billion next year.
Earnings per share (EPS) came in at $3.83, below the market expectation of $5.75.
Meta said the figure included a one-time charge of $9.89 billion (about 1.31 trillion won) set aside for settlements in youth-protection lawsuits with state governments last August. Excluding that expense, EPS would have been $7.40, the company said.
Meta said its revenue growth is expected to continue, with fourth-quarter revenue forecast at $73 billion–$76 billion. The midpoint of $74.5 billion is above Wall Street’s forecast of $73.73 billion.
Meta said capital expenditures (CapEx) on infrastructure expansion reached $34.91 billion (about 46.3 trillion won), as it increased investment in data center construction and securing artificial intelligence (AI) chips.
As a result, third-quarter free cash flow (FCF) swung to a deficit, coming in at negative $2.12 billion.
Even so, Meta signaled its intention to continue investing in AI infrastructure, raising the lower end of its capital expenditure forecast for this year from $130 billion–$145 billion to $135 billion–$145 billion.
Meta’s daily active people (DAP) totaled 3.64 billion, up 3% year over year, but fell slightly short of Wall Street’s forecast of 3.65 billion.

CEO Mark Zuckerberg said, “This quarter, we achieved major milestones in our work to deliver personal superintelligence (SI, or artificial intelligence) for everyone, including the launch of our first cutting-edge models, ‘Muse’ and ‘Muse Wonder.’ Our investments are paying off, and our core business is strong and gaining momentum across the board.”
Meanwhile, Meta disclosed that its board had approved the creation of non-voting Class C common shares to raise the large-scale infrastructure funding needed during the AI transition while ensuring CEO Zuckerberg retains control.
The new Class C shares will take effect on January 19 next year, and holders of Meta’s Class A and Class B shares will receive one Class C share for each share they own.
Meta’s shares edged up 0.47% from the previous day’s closing price during regular trading that day, remaining modestly higher. They then rose about 6.7% in after-hours trading following the earnings announcement, trading around $744 as of 4:40 p.m. U.S. Eastern Time.
[email protected] Lee Seok-woo, International Affairs Correspondent Reporter