# META Full forecast · Q3 2026

> A newer forecast, cutoff 21 October 2026, replaces this one. This page stays as published.

Canonical: https://pricedin.markets/meta/fq3-2026/forecast/

cutoff 21 October 2026, 07:41 ET

A newer forecast, cutoff 21 October 2026, replaces this one. This page stays as published.

[Full forecast, Q4 2026 →](https://pricedin.markets/meta/fq4-2026/forecast/)

META · as of 2026-10-21 07:41:37 ET · 6 AI forecasters · 80% ranges, 1 in 10 to 9 in 10

## Sales and earnings outlook

Next quarter · Q3 2026

Sales $63.1B inside the $61.0B–$64.0B outlook

Adjusted EPS $6.86 +554% on Q3 2025

Quarter after · Q4 2026

Sales $72.2B +21% on Q4 2025

Adjusted EPS $8.37 −6% on Q4 2025

This year · FY2026

Sales $252B +26% on FY2025

Adjusted EPS $31.84

Next year · FY2027

Sales $296B +17% on FY2026

Adjusted EPS $31.43 −1% on FY2026

Year +2 · FY2028

Sales $340B +15% on FY2027

Adjusted EPS $37.03 +18% on FY2027

##### Sales

PricedIn **$63.1B** $60.9B – $65.1B

$60.9B $63.1B $65.1B

##### adjusted EPS

PricedIn **$6.86** $5.85 – $7.81

$5.85 $6.86 $7.81

**Middle** the forecast **80% range** 1 in 10 chance below this bar, 1 in 10 above it. These are the low and high printed by each number.

All six expect sales inside the outlook, from $62.5B to $64.0B. GLM and Muse Wonder are lowest at $62.5B; GLM sees growth 'decelerating as Meta laps strong impression gains'. Sol is highest at $64.0B because 'U.S. spending data have not turned down'. On earnings, Muse Wonder's $7.84 stands apart: it keeps 'costs inside the guided range even after the $10 billion legal accrual'.

Third-quarter sales of about $63.1B, in the upper half of the company's own outlook, as ad demand held up.

Sales **$63.1B** $60.9B – $65.1B · +23% on Q3 2025 ($51.2B)

Adjusted EPS **$6.86** $5.85 – $7.81 · +554% on Q3 2025 ($1.05)

#### Investment and cash generation

Base case

Capital spending **$41.1B**

Free cash flow **−$9.05B**

Free cash flow: operating cash flow less capital spending.

Meta reported second-quarter sales of $60.8B, up 28% from a year earlier, as ad impressions rose 14% and the average price per ad rose 12%. Costs jumped too: total expenses reached $42.0B, including a $2.4B legal charge and $1.2B of severance from the May job cuts, so the operating margin fell to 31% from 41% in the first quarter.

For the third quarter, which ended on 30 September, the company guided sales to between $61B and $64B, assuming currency trims growth by about 1%. In August it settled with state attorneys general over harm to young users and said it would book a legal expense of about $10B in the quarter, while leaving its sales outlook unchanged.

The six AI models put sales between $62.5B and $64.0B, averaging $63.1B, about 3.8% above the second quarter. Most sit near the top of the outlook, where the company has landed in recent quarters. GLM and Muse Wonder stay at the midpoint, stressing the reasons management gave for slower growth: harder comparisons, less personalized ads in Europe now fully rolled out, and integrity enforcement.

The settlement charge pulls the reported operating margin down to about 16% on average. Adjusted earnings on this page leave out only that charge. Oil climbed above $120 a barrel in September, and the models weigh whether that hurt late-quarter ad budgets, as the Iran conflict did early in the year.

Meta reports the quarter on 21 October 2026, after the market closes, and will give its outlook for the fourth quarter then.

Adjusted earnings per share average $6.86, up from $6.18 in the second quarter, with the $10B settlement charge added back and tax near the guided 15% to 17%. Muse Wonder is highest at $7.84, with a 22% reported margin against about 16% for the rest.

#### Outlook against result

Q1 2025 +1.2% above $39.5B–$41.8B → $42.3B guided “$39.5-41.8 billion”

Q2 2025 +4.4% above $42.5B–$45.5B → $47.5B guided “$42.5-45.5 billion”

Q3 2025 +1.5% above $47.5B–$50.5B → $51.2B guided “$47.5-50.5 billion”

Q4 2025 +1.5% above $56.0B–$59.0B → $59.9B guided “$56-59 billion”

Q1 2026 inside $53.5B–$56.5B → $56.3B guided “$53.5-56.5 billion”

Q2 2026 inside $58.0B–$61.0B → $60.8B guided “$58-61 billion”

Q3 2026 inside $61.0B–$64.0B → $63.1B guided “$61-64 billion”

Each outlook is the one the company gave before the quarter. The last row is the models' forecast.

#### The quarter forecast, line by line

| Line | Q2 2026 reported | Q3 2025 reported | Q3 2026 forecast | Q4 2025 reported | Q4 2026 forecast |
| --- | --- | --- | --- | --- | --- |
| Revenue | $60.8B | $51.2B | $63.1B | $59.9B | $72.2B |
| Sales growth, year on year | +28% | +26% | +23% | +24% | +21% |
| Family of Apps | $60.4B | $50.8B | $62.6B | $58.9B | $71.3B |
| Reality Labs | $431M | $470M | $493M | $955M | $908M |
| Total costs and expenses | $42.0B | $30.7B | $52.8B | $35.1B | $46.6B |
| Income (loss) from operations | $18.8B | $20.5B | $10.4B | $24.7B | $25.5B |
| Operating margin | 30.9% | 40.1% | 16.4% | 41.3% | 35.4% |
| Interest and other income (expense), net | −$0.02B | $1.13B | $0.02B | $0.61B | $0.09B |
| Income before income taxes | $18.8B | $21.7B | $10.4B | $25.4B | $25.6B |
| Provision (benefit) for income taxes | $2.9B | $19.0B | $2.2B | $2.6B | $4.1B |
| Tax rate | 15.5% | 87.5% | 21.6% | 10.2% | 16.0% |
| Net income | $15.8B | $2.7B | $8.2B | $22.8B | $21.5B |
| Diluted (in shares) | 2.57B | 2.57B | 2.57B | 2.56B | 2.57B |
| Adjusted EPS | $6.18 | $1.05 | $6.86 | $8.88 | $8.37 |

The lines as the company's statement shows them. The forecast columns are the average of the models, line by line. Sales growth is the change on the same quarter a year earlier. Earnings per share is the headline's: the company's own for the reported quarter, and for a forecast quarter worked out from the averaged lines with the company's adjustments.

#### What drove second-quarter 2026 growth

Total revenue growth 28%

Ad impressions growth 14%

Average price per ad growth 12%

Other app revenue growth 73%

Reality Labs revenue growth 16%

**Where each number comes from**

**Total revenue growth**

“Moving now to our consolidated results. Q2 total revenue was $60.8 billion, up 28% or 27% on a constant currency basis. Q2 total expenses were $42 billion, up 55% compared to last year, and included $2.4 billion in charges related to legal proceedings and $1.2 billion in severance expenses in connection with the May 2026 headcount reduction. Year-over-year growth was primarily driven by increases in employee compensation, infrastructure costs, legal-related costs, and third-party AI token costs.”

**Ad impressions growth**

“In Q2, the total number of ad impressions served across our services increased 14%.”

**Average price per ad growth**

“The global average price per ad increased 12% year-over-year, driven by ad performance gains, improvements in macro conditions relative to Q2 of last year, and currency tailwinds.”

**Other app revenue growth**

“For the first time, quarterly family of apps other revenue reached $1 billion and grew 73% year-over-year”

**Reality Labs revenue growth**

“Within our Reality Lab segment, Q2 revenue was $431 million, up 16% year-over-year due to strong growth in AI glasses revenue”

The second quarter's growth by part, which the models carry, slowed, into the third quarter.

#### What it rests on

**Third-quarter sales outlook**

$61B to $64B, with currency about a 1% headwind “We expect third quarter 2026 total revenue to be in the range of $61-64 billion. Our guidance assumes foreign currency is an approximately 1% headwind to year-over-year total revenue growth, based on current exchange rates.” Second-quarter earnings release, July 2026

**Settlement charge**

A legal expense of about $10B booked in the third quarter “annualized evenly. We expect to accrue a legal expense of approximately $10” Attorneys general settlement call, August 2026

**Outlook kept after settlement**

Third-quarter sales outlook left unchanged in August “On this question, our Q3 revenue outlook remains unchanged. We have not” Attorneys general settlement call, August 2026

**Ad impressions**

Up 14% in the second quarter “In Q2, the total number of ad impressions served across our services increased 14%.” Second-quarter earnings call, July 2026

**Europe ad headwind**

Less personalized ads in Europe, now fully rolled out, weigh on growth “Second, we’re seeing the impact of less personalized ads offering in Europe” Second-quarter follow-up call, July 2026

**Teen revenue share**

Teens bring in less than 1% of revenue “for less than 1% of Meta's revenue.” Attorneys general settlement call, August 2026

#### Low and high

Base the middle forecast

Key assumptions

- ****The roughly $10B settlement charge is booked this quarter and left out of adjusted earnings.** The company said in August it would accrue about $10B in the third quarter. *6 of 6***
  - **Opus 5.5** I put it in third-quarter costs ($53.3 billion in total) and take it out of adjusted earnings per share as signed
  - **GPT-6.1 Sol** I remove that $10 billion only from the requested adjusted earnings in the quarter and year
  - **Grok 4.7** I put that charge in third-quarter costs and removed it, after tax, from adjusted earnings
  - **GLM 5.3** is excluded from adjusted earnings per share
  - **Gemini 4 Argon** our corresponding 10 billion dollar adjustment to exclude this one-time charge
  - **Muse Wonder** I put the full accrual in third quarter costs and remove it, with its tax effect, for adjusted earnings
- ****Sales land in the upper half of the $61B to $64B outlook.** The company reaffirmed the range in August and has recently finished near the top of its outlooks. *4 of 6***
  - **Opus 5.5** I put the third quarter at $63.2 billion: near the top
  - **Grok 4.7** I expect the third quarter to land near the top of the company 61 to 64 billion dollar revenue range
  - **GPT-6.1 Sol** My $64 billion middle is above the $62.5 billion guidance midpoint
  - **Gemini 4 Argon** supported our middle forecast of 63.2 billion dollars for third quarter 2026 revenue in the upper half of management guidance
- ****Growth slows from the second quarter's 28% on a year earlier.** Management named lapping strong impression growth, less personalized ads in Europe and integrity enforcement. *4 of 6***
  - **Opus 5.5** I carry these forward and slow growth to about 24% in the third quarter
  - **GLM 5.3** That is why my Q3 grows about 22 percent and Q4 about 21 percent against Q2's 28 percent
  - **GPT-6.1 Sol** I temper advertising growth to about 25% in the September quarter
  - **Muse Wonder** the third quarter guide embeds a modest constant currency deceleration
- ****No sales cut for the teen time limits in the settlement.** Teens bring in less than 1% of revenue, and the outlook was left unchanged. *4 of 6***
  - **Opus 5.5** Teens are less than 1% of revenue, so I make no revenue cut for the two-hour limit
  - **Grok 4.7** The third-quarter revenue range was left unchanged, so I did not cut sales for the teen rules
  - **GLM 5.3** so I left revenue untouched
  - **Gemini 4 Argon** our decision not to reduce third quarter or future revenue for the new two-hour teen daily time limit
- ****Tax on normal profit near 16%, inside the guided 15% to 17%.** The July release raised the tax outlook for the rest of 2026. *3 of 6***
  - **GLM 5.3** I used the guided 15-17 percent rate for Q3 and Q4
  - **Muse Wonder** a 16% tax rate for the second half
  - **GPT-6.1 Sol** I use a 16% tax rate on normal second-half profit

If all of this happens

**$63.1B** sales

**$6.86** adjusted EPS

**$41.1B** Capital spending

**−$9.05B** Free cash flow

Cash walk not supplied by every model.

Low about 1 chance in 10 of worse

What the low case assumes

- ****Advertisers pull back after the oil spike, pushing sales to the bottom of the outlook.** Advertisers cut spending when the Iran conflict began early in 2026. *4 of 6***
  - **Opus 5.5** The autumn oil shock cuts advertiser budgets the way the Iran conflict did in early 2026
  - **Grok 4.7** A lasting energy shock and weak household confidence cut advertiser budgets
  - **GLM 5.3** ad demand softens with a weak consumer
  - **Muse Wonder** Weaker advertiser demand and pricing
- ****Less personalized ads in Europe and integrity enforcement bite harder than planned.** Management flagged both as headwinds now that the European offering is fully rolled out. *3 of 6***
  - **GLM 5.3** European less-personalized-ads and integrity enforcement dragging more than expected
  - **Muse Wonder** Europe's less personalised ads and integrity work bite harder
  - **GPT-6.1 Sol** Slower engagement growth and tighter data-use restrictions
- ****Costs run at the top of the range, or further legal charges arrive.** Youth-related trials continue, and only the signed settlement is removed from adjusted earnings. *3 of 6***
  - **Muse Wonder** costs stay at the top of the range
  - **GPT-6.1 Sol** other legal or tax losses can still depress results
  - **GLM 5.3** Further material legal accruals from the youth-litigation docket

If all of this happens

**$60.9B** sales · −4% vs base

**$5.85** EPS · −15% vs base

Sales would have to come in near the bottom of the outlook, about $60.9B on average, 3.6% under the base, with adjusted earnings per share near $5.85, 15% lower. That needs late-quarter ad budgets to buckle after oil climbed above $120 a barrel in September, as advertisers pulled back when the Iran conflict began, plus a heavier drag from Europe and integrity enforcement. Muse Wonder's sales low is furthest at $60.0B because it pairs weak demand with 'new legal charges follow the attorneys general accrual', so 'costs stay at the top of the range'. Sol's earnings low is furthest at $5.20: it removes only the signed settlement, so 'other legal or tax losses can still depress results'.

In early 2026 advertisers cut spending when the Iran conflict began, then recovered into April; the second quarter still grew 28%. The company reaffirmed its third-quarter outlook in late August, before oil jumped again.

The six lows run from $60.0B (Muse Wonder) to $61.5B (GPT-6.1 Sol).

First sign Third-quarter sales near or below $61.5B in the 21 October 2026 release.

High about 1 chance in 10 of better

What the high case assumes

- ****Ad performance gains keep prices and conversions climbing.** The price per ad rose 12% in the second quarter, driven by ad performance gains. *4 of 6***
  - **GLM 5.3** Ads performance gains compounding faster than expected
  - **GPT-6.1 Sol** Stronger engagement and sustained advertising pricing
  - **Grok 4.7** Ad demand and performance gains hold near the top of recent growth
  - **Muse Wonder** Stronger engagement and advertiser returns from large language model based recommendations
- ****Paid messaging and business agents add visible revenue.** Other app revenue reached $1 billion in the second quarter, up 73%. *4 of 6***
  - **GPT-6.1 Sol** Faster monetization of messaging and business agents
  - **Grok 4.7** Paid messaging, subscriptions, and business agents scale faster than expected
  - **Muse Wonder** New revenue from business agents, subscriptions, paid messaging and AI glasses
  - **Gemini 4 Argon** Rapid enterprise and small business adoption of paid Meta Business Agents
- ****The September oil spike leaves ad budgets untouched.** The second quarter still grew 28% despite high oil prices after the Iran conflict. *2 of 6***
  - **Grok 4.7** with the late-summer rise in oil prices not hitting budgets
  - **Opus 5.5** and the oil shock fades

If all of this happens

**$65.1B** sales · +3% vs base

**$7.81** EPS · +14% vs base

Sales would have to beat the top of the outlook, about $65.1B on average, 3.1% above the base, with adjusted earnings per share near $7.81, 14% higher. Ad demand would need to keep its first-half strength, with the September oil spike not denting budgets and the new ranking systems lifting prices. Sol's high is furthest, at $66.5B in sales and $8.20 in earnings per share, because it alone has 'September sales exceed guidance' as 'subscriptions and business agents scale faster'; the others stop at $65.2B or below.

The second quarter grew 28%, with the price per ad up 12% on ad performance gains. Business agent charging began only in the second half, so new paid products are small this quarter.

The six highs run from $64.5B (GLM 5.3) to $66.5B (GPT-6.1 Sol).

First sign Third-quarter sales above $64B in the 21 October 2026 release, with price per ad still growing strongly.

#### Watch

On 21 October 2026, after the close: sales against the $61B to $64B outlook, the fourth-quarter outlook, and any change to the $165B to $169B expense range. Sales near $61B or a new legal charge point lower; sales above $64B with strong ad prices point higher.

##### Sales

PricedIn **$72.2B** $67.9B – $76.2B

$67.9B $72.2B $76.2B

##### adjusted EPS

PricedIn **$8.37** $6.87 – $9.73

$6.87 $8.37 $9.73

**Middle** the forecast **80% range** 1 in 10 chance below this bar, 1 in 10 above it. These are the low and high printed by each number.

All six see a strong holiday quarter, from $70.5B to $74.5B. Muse Wonder is lowest at $70.5B, building from a third quarter 'near the middle of guidance'. Sol is highest at $74.5B, holding ad growth at 'about 25% in the September quarter and 24% in the holiday quarter'. Sol's range is much the widest: its $69.0B low starts from 'weaker holiday sales guidance'; its $80.0B high has 'holiday sales approach $80 billion'.

Holiday-quarter sales of about $72.2B, a smaller seasonal jump than usual as oil prices and a weaker euro weigh.

Sales **$72.2B** $67.9B – $76.2B · +21% on Q4 2025 ($59.9B)

Adjusted EPS **$8.37** $6.87 – $9.73 · −6% on Q4 2025 ($8.88)

#### Investment and cash generation

Capital spending: not supplied by every model

Free cash flow: not supplied by every model

Free cash flow: operating cash flow less capital spending.

The fourth quarter is the company's strongest season: last year it brought sales of $59.9B, up 17% on the third quarter. The company gives its outlook for this quarter with its third-quarter release on 21 October 2026, so the models forecast it before any guidance.

The six AI models put holiday sales between $70.5B and $74.5B, averaging $72.2B, about 14% above their third-quarter forecasts. Most hold the step-up below a normal holiday jump, because oil climbed above $120 a barrel in September and October and the euro weakened to about $1.12.

The company's reasons for slower growth carry into this quarter: lapping a year of strong impression gains, less personalized ads in Europe now fully rolled out, and integrity enforcement. Paid business agents began charging in August, but the models expect them to stay small this year.

With the settlement charge behind it, the reported operating margin recovers to about 35% on average. Adjusted earnings per share average $8.37, from $7.64 for Opus to $9.52 for Muse Wonder.

Sol's range is the widest, from $69.0B to $80.0B in sales, while GLM's runs only from $70.0B to $74.0B.

Fourth-quarter earnings per share rest on holiday ad sales, tax near 16% and costs that keep the year within the $165B to $169B expense outlook before the settlement. They average $8.37.

#### The quarter forecast, line by line

| Line | Q2 2026 reported | Q3 2025 reported | Q3 2026 forecast | Q4 2025 reported | Q4 2026 forecast |
| --- | --- | --- | --- | --- | --- |
| Revenue | $60.8B | $51.2B | $63.1B | $59.9B | $72.2B |
| Sales growth, year on year | +28% | +26% | +23% | +24% | +21% |
| Family of Apps | $60.4B | $50.8B | $62.6B | $58.9B | $71.3B |
| Reality Labs | $431M | $470M | $493M | $955M | $908M |
| Total costs and expenses | $42.0B | $30.7B | $52.8B | $35.1B | $46.6B |
| Income (loss) from operations | $18.8B | $20.5B | $10.4B | $24.7B | $25.5B |
| Operating margin | 30.9% | 40.1% | 16.4% | 41.3% | 35.4% |
| Interest and other income (expense), net | −$0.02B | $1.13B | $0.02B | $0.61B | $0.09B |
| Income before income taxes | $18.8B | $21.7B | $10.4B | $25.4B | $25.6B |
| Provision (benefit) for income taxes | $2.9B | $19.0B | $2.2B | $2.6B | $4.1B |
| Tax rate | 15.5% | 87.5% | 21.6% | 10.2% | 16.0% |
| Net income | $15.8B | $2.7B | $8.2B | $22.8B | $21.5B |
| Diluted (in shares) | 2.57B | 2.57B | 2.57B | 2.56B | 2.57B |
| Adjusted EPS | $6.18 | $1.05 | $6.86 | $8.88 | $8.37 |

The lines as the company's statement shows them. The forecast columns are the average of the models, line by line. Sales growth is the change on the same quarter a year earlier. Earnings per share is the headline's: the company's own for the reported quarter, and for a forecast quarter worked out from the averaged lines with the company's adjustments.

#### What it rests on

**Full-year expense outlook**

$165B to $169B for 2026, set before the settlement “We now expect full year 2026 total expenses to be in the range of $165 to $169 billion.” Second-quarter earnings call, July 2026

**Operating income pledge**

2026 operating income to top 2025's “We continue to expect to deliver operating income this year that is above 2025 operating income.” Second-quarter earnings call, July 2026

**Europe headwind**

Less personalized ads in Europe fully rolled out, a further headwind “now that it’s fully rolled out, and that may be an additional headwind. And” Second-quarter follow-up call, July 2026

**Business agent charging**

Charging businesses for Meta Business Agent from the second half “And in the second half, we plan to begin charging businesses for Meta Business” Second-quarter follow-up call, July 2026

**Iran shock precedent**

Advertisers cut spending when the Iran conflict began “advertiser spend coinciding with the beginning of the conflict in Iran at the end” First-quarter follow-up call, April 2026

**Brent oil price**

Brent oil above $120 a barrel in early October 2026 “2026-10-02 135.51” Brent oil price series, October 2026

#### Low and high

Base the middle forecast

Key assumptions

- ****Holiday sales rise about 14% on the third quarter, less than a normal seasonal jump.** Oil above $120 a barrel and a weaker euro weigh on fourth-quarter budgets and revenue. *3 of 6***
  - **Opus 5.5** So I hold the fourth quarter at $71 billion (about 18.5% growth) instead of the 20%+ that extending the trend would give
  - **Grok 4.7** The fourth quarter should rise from the third, but by less than the usual holiday jump
  - **GPT-6.1 Sol** This modestly restrains holiday sales.
- ****Growth on a year earlier keeps easing from the second quarter's 28%.** Harder comparisons and Europe's less personalized ads carry into the holiday quarter. *3 of 6***
  - **GLM 5.3** Q4 about 21 percent against Q2's 28 percent
  - **GPT-6.1 Sol** 24% in the holiday quarter
  - **Opus 5.5** about 18.5% in the fourth
- ****Costs return to a normal run rate, with no new legal charge.** Further charges are possible, but their size and timing are unknown. *3 of 6***
  - **Grok 4.7** I did not put another large charge in the base case beyond the 10 billion dollar accrual already announced
  - **GLM 5.3** so I put no further accrual in the middle
  - **Opus 5.5** I leave it out of the middle
- ****New paid products stay small this year.** Business agent charging began only in the second half of 2026. *3 of 6***
  - **GLM 5.3** I kept them out of 2026 (too late in the year to be material)
  - **Grok 4.7** Newer paid products stay small next to advertising through 2028
  - **GPT-6.1 Sol** Gradual growth of paid messaging, subscriptions and business agents
- ****Tax near 16%, inside the guided 15% to 17%.** The July release set that range for the rest of 2026. *3 of 6***
  - **GLM 5.3** I used the guided 15-17 percent rate for Q3 and Q4
  - **Muse Wonder** a 16% tax rate for the second half
  - **GPT-6.1 Sol** I use a 16% tax rate on normal second-half profit

If all of this happens

**$72.2B** sales

**$8.37** adjusted EPS

Low about 1 chance in 10 of worse

What the low case assumes

- ****The oil spike cuts holiday ad budgets with a lag.** Advertisers pulled back when the Iran conflict began early in 2026. *4 of 6***
  - **Opus 5.5** The autumn oil shock cuts advertiser budgets the way the Iran conflict did in early 2026
  - **Grok 4.7** The jump in oil prices and very weak household confidence would cut holiday budgets
  - **GPT-6.1 Sol** Consumer demand and advertising budgets weaken after the energy shock
  - **Gemini 4 Argon** Elevated energy prices above 100 dollars per barrel
- ****Europe imposes further limits on personalized ads.** The company is appealing the European decision, and further changes may be imposed. *3 of 6***
  - **Opus 5.5** Europe imposes further changes to less personalized ads
  - **Grok 4.7** Europe would impose a harsher limit on personalized ads
  - **Gemini 4 Argon** Stricter European Union regulatory enforcement on less personalized ads
- ****Another large legal charge lands, such as the $5.3B contingent piece of the settlement.** Nearly 30% of the payments depend on YouTube and TikTok joining the deal. *3 of 6***
  - **Grok 4.7** another large legal charge would land
  - **GLM 5.3** including the roughly $5.3 billion contingent piece of the attorneys-general settlement if YouTube and TikTok join
  - **Muse Wonder** new legal charges follow the attorneys general accrual

If all of this happens

**$67.9B** sales · −6% vs base

**$6.87** EPS · −18% vs base

Holiday sales would have to fall to about $67.9B on average, 6.0% under the base, with earnings per share near $6.87, 18% lower. That takes the autumn oil spike cutting holiday ad budgets with a lag, harsher European rules and a weak consumer. Muse Wonder's sales low is furthest at $66.0B, starting from a weaker third quarter and adding 'new legal charges'; Opus's $66.5B low lets fourth-quarter growth slow 'to about 11%'. Sol's earnings low is furthest at $5.70, because it removes only the signed settlement, so 'other legal or tax losses can still depress results'.

The fourth quarter of 2025 rose 17% on the third. Early in 2026, advertisers cut spending when the Iran conflict began, then recovered into April.

The six lows run from $66.0B (Muse Wonder) to $70.0B (GLM 5.3).

First sign A fourth-quarter outlook implying growth under 15%, given in the 21 October 2026 release.

High about 1 chance in 10 of better

What the high case assumes

- ****Ad performance keeps compounding through the holidays.** New ranking systems lifted ad clicks and conversions in the second quarter. *3 of 6***
  - **GLM 5.3** Ads performance gains compounding faster than expected
  - **GPT-6.1 Sol** Recommendation improvements keep compounding
  - **Grok 4.7** Ad demand and performance gains hold near the top of recent growth
- ****Business agents and subscriptions scale faster.** Business agent charging began in August, and other app revenue grew 73% in the second quarter. *3 of 6***
  - **GPT-6.1 Sol** subscriptions and business agents scale faster
  - **Gemini 4 Argon** Rapid enterprise and small business adoption of paid Meta Business Agents, MetaOne subscriptions
  - **Muse Wonder** business agents, paid messaging, subscriptions and the model API start to add visible revenue
- ****The oil shock fades without hitting budgets.** Performance ads kept growing through the earlier oil spike. *2 of 6***
  - **Opus 5.5** and the oil shock fades
  - **Grok 4.7** with the late-summer rise in oil prices not hitting budgets

If all of this happens

**$76.2B** sales · +6% vs base

**$9.73** EPS · +16% vs base

Holiday sales would have to reach about $76.2B on average, 5.6% above the base, with earnings per share near $9.73, 16% higher. Ad gains from the new ranking systems would need to keep growth near the first half's pace, with the oil spike fading. Sol's high is furthest at $80.0B, because it alone lets holiday sales approach that level as 'subscriptions and business agents scale faster'; Grok stops at $78.2B and the rest at $75.8B or below.

The fourth quarter of 2025 rose 17% on the third. GLM's high has this fourth quarter growing about 24% on a year earlier.

The six highs run from $74.0B (GLM 5.3) to $80.0B (GPT-6.1 Sol).

First sign A fourth-quarter outlook in the 21 October 2026 release implying growth above 22%.

#### Watch

The fourth-quarter outlook in the 21 October 2026 release: growth implied above 22% points higher, under 15% lower. Also watch for any new legal accrual and for early revenue from business agents.

##### Sales

PricedIn **$252B** $246B – $258B

$246B $252B $258B

##### adjusted EPS

PricedIn **$31.84** $28.78 – $34.43

$28.78 $31.84 $34.43

**Middle** the forecast **80% range** 1 in 10 chance below this bar, 1 in 10 above it. These are the low and high printed by each number.

The six agree closely, from $250B to $256B. Muse Wonder is lowest on sales at $250B, with a third quarter 'near the middle of guidance', yet highest on earnings at $33.94, keeping 'costs inside the guided range even after the $10 billion legal accrual'. Sol is highest on sales at $256B, with 'holiday revenue $74.5 billion'. Opus is lowest on earnings at $30.80, holding the holiday quarter back because 'Brent oil climbed again'.

2026 sales of about $252B, with profit held back by heavy data-center spending and a settlement charge.

Sales **$252B** $246B – $258B · +26% on FY2025

Adjusted EPS **$31.84** $28.78 – $34.43 · $16.62 reported so far

Base case

Operating margin **30.7%** 41.4% in FY2025

#### Investment and cash generation

Base case

Capital spending **$136B**

Free cash flow **−$1.65B**

Free cash flow: operating cash flow less capital spending.

The first half brought $117B of sales and $16.62 of earnings per share. The first quarter's $10.44 included an $8.03B tax benefit; without it, the company said, earnings per share would have been $7.31. Adjusted figures on this page remove only the August settlement charge, so that benefit stays in.

The company expects 2026 expenses of $165B to $169B before the settlement, capital spending of $130B to $145B, and operating income above 2025's. Reality Labs, its glasses and headset unit, is expected to lose about as much as in 2025, when it cut operating profit by $19.19B.

The six AI models put 2026 sales between $250B and $256B, averaging $252B, about 26% above 2025's $201B. Their differences come almost entirely from the second half, where they weigh how much oil prices, Europe and harder comparisons slow growth.

Reported operating margin averages about 31%, down from 41% in 2025, because of the settlement charge, depreciation and cloud costs. Capital spending averages $136B, against $69.7B in 2025, so free cash flow is about −$1.7B on average, against $46.1B in 2025.

The capital spending outlook rose through the year: from $115B to $135B in January, to $125B to $145B in April on higher memory prices, then narrowed to $130B to $145B in July.

Adjusted earnings per share average $31.84, from $30.80 for Opus to $33.94 for Muse Wonder. The first half's $16.62, tax benefit included, is fixed; the second half rests on holiday sales and costs near the expense outlook.

#### Sales by quarter

Q1 2025 $42.3B +16%

Q2 2025 $47.5B +22%

Q3 2025 $51.2B +26%

Q4 2025 $59.9B +24%

Q1 2026 $56.3B +33%

Q2 2026 $60.8B +28%

Q3 2026 $63.1B +23%

Q4 2026 $72.2B +21%

Each percent is on the same quarter a year earlier. The forecast rows are the models' average.

#### What it rests on

**Expense outlook**

$165B to $169B for 2026, before the settlement charge “We now expect full year 2026 total expenses to be in the range of $165 to $169 billion.” Second-quarter earnings call, July 2026

**Capital spending outlook**

$130B to $145B, narrowed from $125B to $145B “We anticipate 2026 capital expenditures, including principal payments on finance leases, to be in the range of $130 to $145 billion, narrowed from our prior outlook of $125 to $145 billion.” Second-quarter earnings call, July 2026

**Tax rate outlook**

15% to 17% for the rest of 2026 “Absent any changes to our tax landscape, we expect our tax rate for the remaining quarters of 2026 to be between 15-17%, an increase from our prior outlook of 13-16%.” Second-quarter earnings release, July 2026

**First-quarter tax benefit**

An $8.03B benefit lifted first-quarter earnings “Our tax rate for the quarter was negative 23%, which was favorably impacted by a tax benefit of $8.03 billion.” First-quarter earnings call, April 2026

**Reality Labs losses**

Cut 2025 profit by $19.19B; 2026 expected similar “our investments in Reality Labs reduced our 2025 overall operating profit by approximately $19.19 billion, and we expect our 2026 Reality Labs operating losses to remain similar to 2025.” 2025 annual report

**Operating income pledge**

2026 operating income to top 2025's “We continue to expect to deliver operating income this year that is above 2025 operating income.” Second-quarter earnings call, July 2026

#### Low and high

Base the middle forecast

Key assumptions

- ****Capital spending of about $136B, inside the $130B to $145B outlook.** The company narrowed its outlook in July after raising it on memory prices. *5 of 6***
  - **GLM 5.3** capital spending at $137.5 billion (middle of $130-145 billion)
  - **GPT-6.1 Sol** the middle uses $134 billion in 2026
  - **Muse Wonder** capital spending at $137.5 billion
  - **Grok 4.7** Capital spending stays inside 130 to 145 billion dollars
  - **Gemini 4 Argon** Heavy capital spending of 134 billion dollars in 2026
- ****Expenses land in the $165B to $169B range plus the roughly $10B charge.** The settlement came after the July expense outlook was set. *4 of 6***
  - **Opus 5.5** It comes on top of the July expense range, which was set before the agreement
  - **GLM 5.3** I put full-year 2026 total expenses at roughly $176 billion
  - **GPT-6.1 Sol** taking my full-year costs to about $177 billion
  - **Grok 4.7** Full-year costs land near the middle of the July range plus that accrual
- ****The first-quarter tax benefit stays in adjusted earnings.** Only the signed settlement charge is removed from adjusted earnings. *4 of 6***
  - **GPT-6.1 Sol** my 2026 earnings retain the first-quarter $8 billion tax benefit
  - **GLM 5.3** the full-year 2026 adjusted figure of about $32 keeps that benefit in
  - **Gemini 4 Argon** the first quarter reported earnings per share of 10.44 dollars is carried directly into our full year 2026
  - **Opus 5.5** which still includes the first-quarter tax benefit
- ****Reality Labs loses about $19B, as in 2025.** The company expects 2026 losses similar to 2025 and likely the peak. *4 of 6***
  - **Opus 5.5** I hold Reality Labs losses near $19 billion in 2026
  - **GPT-6.1 Sol** I use about $19 billion of losses in 2026
  - **GLM 5.3** I kept roughly $19 billion of Reality Labs losses in my 2026 cost lines
  - **Grok 4.7** so I did not fade those losses in 2026
- ****Third-quarter sales near the top of the outlook and a strong, if muted, holiday quarter.** First-half sales of $117B are reported, so only the second half is open. *3 of 6***
  - **Opus 5.5** Third-quarter revenue is about $63.2 billion, near the top of the $61-64 billion guide
  - **GPT-6.1 Sol** September revenue reaches $64 billion and holiday revenue $74.5 billion
  - **Grok 4.7** I expect the third quarter to land near the top of the company 61 to 64 billion dollar revenue range

If all of this happens

**$252B** sales

**$31.84** adjusted EPS

**$136B** Capital spending

**−$1.65B** Free cash flow

Cash walk not supplied by every model.

Low about 1 chance in 10 of worse

What the low case assumes

- ****Advertisers pull back after the oil spike, in both remaining quarters.** Advertisers cut spending when the Iran conflict began early in 2026. *3 of 6***
  - **Opus 5.5** The autumn oil shock cuts advertiser budgets the way the Iran conflict did in early 2026
  - **Grok 4.7** A lasting energy shock and weak household confidence cut advertiser budgets
  - **Muse Wonder** Weaker advertiser demand and pricing
- ****Further legal charges beyond the settlement.** Youth trials continue, and nearly 30% of settlement payments are contingent. *3 of 6***
  - **GLM 5.3** Further material legal accruals from the youth-litigation docket
  - **Grok 4.7** another large legal charge would land
  - **GPT-6.1 Sol** other legal or tax losses can still depress results
- ****Spending and costs run at the top of their ranges.** Memory and component prices already pushed the spending outlook up twice this year. *3 of 6***
  - **GLM 5.3** memory and component costs push capital spending to the top of the range
  - **Grok 4.7** Spending on data centers would stay at the top of the company range
  - **Muse Wonder** costs stay at the top of the range

If all of this happens

**$246B** sales · −3% vs base

**$28.78** EPS · −10% vs base

2026 sales would have to slip to about $246B, 2.5% under the base, with earnings per share near $28.78, 9.6% lower. That takes a third quarter at the bottom of the outlook and a holiday quarter hit by the oil spike, with costs at the top of their range. Muse Wonder's sales low is furthest at $242B, adding 'new legal charges' to weak demand. Sol and Grok go furthest on earnings, at $27.00: Sol because 'other legal or tax losses can still depress results', Grok because 'another large legal charge would land'.

2025 sales grew 22% to $201B. Half of 2026 is already reported, $117B of sales, which keeps the full-year range narrow.

The six lows run from $242B (Muse Wonder) to $250B (GPT-6.1 Sol).

First sign Third-quarter sales near or below $61.5B in the 21 October 2026 release.

High about 1 chance in 10 of better

What the high case assumes

- ****Ad demand and performance hold near the first half's pace.** The second quarter grew 28% with the price per ad up 12%. *3 of 6***
  - **Grok 4.7** Ad demand and performance gains hold near the top of recent growth
  - **GLM 5.3** Ads performance gains compounding faster than expected
  - **GPT-6.1 Sol** Stronger engagement and sustained advertising pricing
- ****Paid messaging and business agents scale faster.** Other app revenue grew 73% in the second quarter. *3 of 6***
  - **GPT-6.1 Sol** Faster monetization of messaging and business agents
  - **Grok 4.7** Paid messaging, subscriptions, and business agents scale faster than expected
  - **Muse Wonder** New revenue from business agents, subscriptions, paid messaging and AI glasses
- ****Spending and legal costs come in lighter than the base.** The capital spending outlook still runs as low as $130B. *2 of 6***
  - **Grok 4.7** Spending and legal costs come in lighter than in the base case
  - **GPT-6.1 Sol** Better operating leverage and narrowing hardware losses

If all of this happens

**$258B** sales · +2% vs base

**$34.43** EPS · +8% vs base

2026 sales would have to reach about $258B, 2.4% above the base, with earnings per share near $34.43, 8.2% higher. Both remaining quarters would need to beat, with third-quarter sales above $64B and spending toward the low end of its ranges. Sol's sales high is furthest at $263B, because it alone has 'September sales exceed guidance' and a holiday quarter nearing $80 billion. Muse Wonder's earnings high is furthest at $36.50, from its higher margin, 33% in its base against 31% on average.

The company has recently landed near the top of its sales outlooks: second-quarter sales of $60.8B sat just under the top of $58B to $61B.

The six highs run from $256B (GLM 5.3) to $263B (GPT-6.1 Sol).

First sign Third-quarter sales above $64B in the 21 October 2026 release.

#### Watch

The 21 October 2026 release: third-quarter sales, the fourth-quarter outlook, and any change to the $165B to $169B expense or $130B to $145B spending ranges. A new legal accrual or a weak holiday outlook points lower; sales above $64B point higher.

##### Sales

PricedIn **$296B** $269B – $324B

$269B $296B $324B

##### adjusted EPS

PricedIn **$31.43** $23.33 – $39.25

$23.33 $31.43 $39.25

**Middle** the forecast **80% range** 1 in 10 chance below this bar, 1 in 10 above it. These are the low and high printed by each number.

All see 2027 sales growth slowing, to between 15% and 20%. Opus is lowest at $290B, holding that 'expenses grow about 23% as depreciation catches up with capital spending'. Sol is highest at $307B, with 'about 20% total sales growth in 2027'. Sol's range is much the widest: its $268B low has 'Committed computing costs and depreciation outrun revenue'; its $347B high has 'new services profitably use the computing capacity'.

Sales grow about 17% to $296B in 2027, but earnings per share stay roughly flat as data-center costs catch up.

Sales **$296B** $269B – $324B · +17% on FY2026

Adjusted EPS **$31.43** $23.33 – $39.25 · −1% on FY2026

Base case

Operating margin **33.0%** 30.7% in FY2026

#### Investment and cash generation

Base case

Capital spending **$163B**

Free cash flow **−$7.33B**

Free cash flow: operating cash flow less capital spending.

The company has given no outlook for 2027 yet; GLM expects one with the January 2027 results. It has said its plans are geared to maximizing 2026 and 2027 capacity, and at the end of June it held $349.31B of non-cancelable commitments, $81.65B of them due in 2027.

The six AI models put 2027 sales between $290B and $307B, averaging $296B, about 17% above 2026. All expect ad growth to slow as this year's gains are lapped, with new paid products such as business agents and subscriptions adding a few billion dollars.

Costs are the crux. Capital spending averages $163B, against $136B in 2026, and servers depreciate over five to 5.5 years. So expenses grow faster than sales, and adjusted earnings per share average $31.43, about 1.3% below 2026, which still holds the one-time first-quarter tax benefit.

Operating margin recovers to about 33% from about 31%, since the settlement charge does not recur. Free cash flow averages −$7.3B, from −$20.0B for Muse Wonder to $6.0B for Grok, depending mostly on how far they let capital spending climb.

The ranges are wide: sales from $269B to $324B on average, earnings per share from $23.33 to $39.25. Sol's range is much the widest.

2027 earnings per share turn on whether sales outrun depreciation and cloud costs. They average $31.43; Opus expects a dip to $28.60 as expenses rise about 23%, Muse Wonder a rise to $35.40.

#### Sales by year

FY2023 $135B

FY2024 $165B +22%

FY2025 $201B +22%

FY2026 $252B +26%

FY2027 $296B +17%

FY2028 $340B +15%

The forecast years are the models' average.

#### Non-cancelable commitments at the end of June 2026

Total commitments $349B

Due in rest of 2026 $54B

Due in 2027 $82B

Contingent cloud purchases $15B

**Where each number comes from**

**Total commitments**

“As of June 30, 2026, we had $349.31 billion of non-cancelable contractual commitments, comprising both short-term and long-term arrangements. These commitments mostly relate to third-party cloud capacity arrangements and investments in servers and network infrastructure, data centers, and consumer hardware products in Reality Labs, with approximately $53.52 billion and $81.65 billion due in 2026 and 2027, respectively. In addition, as of June 30, 2026, we have contingent obligations to purchase up to $14.72 billion of cloud capacity over a five-year period, which may be reduced if the cloud service provider is able to sell such capacity to other customers. For agreements with variable terms, we do not estimate the total obligation beyond minimum quantities and/or pricing, as of the reporting date.”

**Due in rest of 2026**

“As of June 30, 2026, we had $349.31 billion of non-cancelable contractual commitments, comprising both short-term and long-term arrangements. These commitments mostly relate to third-party cloud capacity arrangements and investments in servers and network infrastructure, data centers, and consumer hardware products in Reality Labs, with approximately $53.52 billion and $81.65 billion due in 2026 and 2027, respectively. In addition, as of June 30, 2026, we have contingent obligations to purchase up to $14.72 billion of cloud capacity over a five-year period, which may be reduced if the cloud service provider is able to sell such capacity to other customers. For agreements with variable terms, we do not estimate the total obligation beyond minimum quantities and/or pricing, as of the reporting date.”

**Due in 2027**

“As of June 30, 2026, we had $349.31 billion of non-cancelable contractual commitments, comprising both short-term and long-term arrangements. These commitments mostly relate to third-party cloud capacity arrangements and investments in servers and network infrastructure, data centers, and consumer hardware products in Reality Labs, with approximately $53.52 billion and $81.65 billion due in 2026 and 2027, respectively. In addition, as of June 30, 2026, we have contingent obligations to purchase up to $14.72 billion of cloud capacity over a five-year period, which may be reduced if the cloud service provider is able to sell such capacity to other customers. For agreements with variable terms, we do not estimate the total obligation beyond minimum quantities and/or pricing, as of the reporting date.”

**Contingent cloud purchases**

“As of June 30, 2026, we had $349.31 billion of non-cancelable contractual commitments, comprising both short-term and long-term arrangements. These commitments mostly relate to third-party cloud capacity arrangements and investments in servers and network infrastructure, data centers, and consumer hardware products in Reality Labs, with approximately $53.52 billion and $81.65 billion due in 2026 and 2027, respectively. In addition, as of June 30, 2026, we have contingent obligations to purchase up to $14.72 billion of cloud capacity over a five-year period, which may be reduced if the cloud service provider is able to sell such capacity to other customers. For agreements with variable terms, we do not estimate the total obligation beyond minimum quantities and/or pricing, as of the reporting date.”

Mostly cloud capacity, servers and data centers; costs the company cannot quickly switch off if sales slow.

#### What it rests on

**Commitments due 2027**

$81.65B of non-cancelable commitments fall due in 2027 “As of June 30, 2026, we had $349.31 billion of non-cancelable contractual commitments, comprising both short-term and long-term arrangements. These commitments mostly relate to third-party cloud capacity arrangements and investments in servers and network infrastructure, data centers, and consumer hardware products in Reality Labs, with approximately $53.52 billion and $81.65 billion due in 2026 and 2027, respectively. In addition, as of June 30, 2026, we have contingent obligations to purchase up to $14.72 billion of cloud capacity over a five-year period, which may be reduced if the cloud service provider is able to sell such capacity to other customers. For agreements with variable terms, we do not estimate the total obligation beyond minimum quantities and/or pricing, as of the reporting date.” Second-quarter 2026 quarterly report

**Capacity plans**

Plans geared to maximizing 2026 and 2027 capacity “Consequently, our current plans are geared towards maximizing 2026 and 2027 capacity. When we have had incremental capacity in the past, it has proven extremely valuable in scaling experiences like reels, and we are confident that this will be true in this timeframe as well. Longer term, it's harder to predict the exact usage scaling curves, but we believe that our distribution advantages will give us the opportunity to serve AI products that are valuable for everyone, both our 3.6 billion users and millions of businesses.” Company earnings call

**Server depreciation life**

Servers and network assets depreciate over five to 5.5 years “Servers and network assets Five to 5.5 years” 2025 annual report

**No margin target**

The company does not manage to a target margin “On your second question, we don’t manage to a target margin. We believe that” Fourth-quarter 2025 follow-up call, January 2026

**Automated ad tools**

Advantage Plus tools above $75B annual revenue run rate “Our AI-powered Advantage Plus end-to-end solutions continue to grow, reaching over $75 billion in annual revenue run rate this quarter.” Second-quarter earnings call, July 2026

#### Low and high

Base the middle forecast

Key assumptions

- ****Capital spending rises to about $163B, from about $136B.** Plans are geared to maximizing 2026 and 2027 capacity. *6 of 6***
  - **Opus 5.5** capital spending rising to about $165 billion in 2027
  - **GLM 5.3** about $170 billion in 2027
  - **GPT-6.1 Sol** $170 billion in 2027
  - **Muse Wonder** I therefore keep capital spending very high in 2027
  - **Gemini 4 Argon** 150 billion dollars in 2027
  - **Grok 4.7** They also said they remain supply constrained through 2027, which keeps 2027 spending high
- ****Ad growth slows toward the mid-to-high teens as this year's gains are lapped.** Management named harder comparisons and Europe's rules as reasons growth is easing. *4 of 6***
  - **Grok 4.7** In 2027 and 2028 advertising growth slows into the mid-teens and then the low teens
  - **GLM 5.3** In 2027 revenue grows about 16 percent to roughly $292 billion
  - **Opus 5.5** ad growth slowing from 28% to about 18-20% as comparisons get harder
  - **GPT-6.1 Sol** about 20% total sales growth in 2027
- ****Depreciation and cloud costs grow faster than sales, holding earnings roughly flat.** Servers depreciate over about five years, so this year's spending hits profit from 2027. *4 of 6***
  - **Grok 4.7** That is why 2027 earnings grow little despite mid-teens sales growth
  - **GLM 5.3** why depreciation holds 2027 earnings per share roughly flat despite 16 percent revenue growth
  - **Opus 5.5** That makes depreciation the main reason 2027 expenses grow about 23%
  - **GPT-6.1 Sol** Rising depreciation and third-party computing costs offset much of the sales growth
- ****New paid products add a few billion dollars.** Business agent charging began in August 2026. *3 of 6***
  - **GLM 5.3** gave them a few billion dollars by 2027-28 in the middle
  - **GPT-6.1 Sol** roughly $8 billion in 2027
  - **Grok 4.7** newer paid products add only a little
- ****Tax near 16% to 17%, with no repeat of the 2026 benefit.** The 15% minimum tax now limits share-based tax benefits. *2 of 6***
  - **Opus 5.5** So I hold the tax rate at 16-17% in 2027 and 2028
  - **GPT-6.1 Sol** I do not repeat the benefit in 2027

If all of this happens

**$296B** sales

**$31.43** adjusted EPS

**$163B** Capital spending

**−$7.33B** Free cash flow

Cash walk not supplied by every model.

Low about 1 chance in 10 of worse

What the low case assumes

- ****Ad prices stall as the energy shock and weak consumers cut budgets.** Advertisers cut spending when the Iran conflict began early in 2026. *4 of 6***
  - **Opus 5.5** advertiser pullback from the energy shock and weak consumer sentiment
  - **GPT-6.1 Sol** Weaker advertiser demand and smaller pricing gains
  - **Grok 4.7** hold growth in 2027 and 2028 to the high single digits
  - **Gemini 4 Argon** Macroeconomic pressure from high oil prices and elevated interest rates
- ****Legal charges beyond the settlement land in reported earnings.** Youth cases and mass arbitrations remain open. *3 of 6***
  - **Opus 5.5** new legal charges beyond the $10 billion accrual
  - **GLM 5.3** Further material legal accruals from the youth-litigation docket
  - **Grok 4.7** A worse European ads rule or another large legal charge
- ****Committed computing costs outrun revenue.** $81.65B of non-cancelable commitments fall due in 2027. *3 of 6***
  - **GPT-6.1 Sol** Committed computing costs and depreciation outrun revenue
  - **Gemini 4 Argon** Rapid growth in server depreciation and third-party cloud commitments outpacing revenue
  - **Opus 5.5** depreciation from $130-185 billion a year of capital spending
- ****Europe imposes further limits on personalized ads.** The European decision is under appeal, and further changes may be imposed. *2 of 6***
  - **Opus 5.5** further European restrictions on personalized ads
  - **Gemini 4 Argon** Stricter European Union regulatory enforcement on less personalized ads

If all of this happens

**$269B** sales · −9% vs base

**$23.33** EPS · −26% vs base

Sales would have to stall at about $269B, 9.2% under the base and about 6.5% growth, with earnings per share near $23.33, 26% lower. That takes ad prices stalling after the oil shock, further European limits and costs locked in by commitments. Opus's sales low is furthest at $260B: 'Ad prices stall while impressions keep growing, so 2027 sales grow only about 3-4%', and its margin 'sinks into the mid-20s'. Sol's earnings low is furthest at $18.00, because 'Committed computing costs and depreciation outrun revenue' while only the settlement is removed from earnings.

Opus notes the 2022 slowdown had special causes: Apple's tracking changes, a strong dollar and a Reels mix shift. Today $81.65B of commitments fall due in 2027, so costs cannot quickly shrink.

The six lows run from $260B (Opus 5.5) to $277B (GLM 5.3).

First sign A fourth-quarter outlook implying growth under 15% in the 21 October 2026 release.

High about 1 chance in 10 of better

What the high case assumes

- ****Ad performance gains from the new ranking systems keep growth near 25%.** The company says it sees further room to improve recommendations into 2027. *3 of 6***
  - **Opus 5.5** ad performance gains from the new ranking systems
  - **GLM 5.3** Ads performance gains compounding faster than expected
  - **Gemini 4 Argon** Unified foundation models across organic content and advertising
- ****New paid products become a visible revenue line.** Business agents, subscriptions and the model API began charging in 2026. *3 of 6***
  - **Opus 5.5** new paid products: business agents, subscriptions, the model API, and compute sales
  - **GLM 5.3** New AI revenue lines scaling quickly
  - **GPT-6.1 Sol** Faster monetization of messaging and business agents
- ****Expenses grow no faster than sales.** The May job cuts and AI coding tools hold headcount costs down. *3 of 6***
  - **Opus 5.5** operating leverage from a leaner workforce
  - **Gemini 4 Argon** Strong engineering productivity gains from agentic coding tools
  - **GPT-6.1 Sol** Better operating leverage and narrowing hardware losses

If all of this happens

**$324B** sales · +9% vs base

**$39.25** EPS · +25% vs base

Sales would have to reach about $324B, 9.3% above the base and about 28% growth, with earnings per share near $39.25, 25% higher. That takes the new ranking systems keeping growth near 25%, new paid products scaling, and expenses growing no faster than sales. Sol's high is furthest, at $347B and $46.00, because it alone has 'Profitable use of added capacity rather than idle infrastructure' and 'glasses losses narrow more quickly'; GLM caps at $306B, treating such a path as 'the upside tail'.

Second-quarter 2026 sales grew 28%, with the price per ad up 12%. Other app revenue reached $1 billion a quarter for the first time, up 73%.

The six highs run from $306B (GLM 5.3) to $347B (GPT-6.1 Sol).

First sign Third-quarter sales above $64.5B on 21 October 2026, with a fourth-quarter outlook implying growth above 22%.

#### Watch

The 21 October 2026 release, then the first 2027 expense and capital spending outlook, which GLM expects in January 2027. Capital spending above $180B or expenses growing above 30% point lower; disclosed business agent revenue points higher.

##### Sales

PricedIn **$340B** $294B – $387B

$294B $340B $387B

##### adjusted EPS

PricedIn **$37.03** $24.00 – $48.42

$24.00 $37.03 $48.42

**Middle** the forecast **80% range** 1 in 10 chance below this bar, 1 in 10 above it. These are the low and high printed by each number.

All expect 2028 sales growth of 13% to 18%. Opus is lowest at $328B in sales and $31.90 in earnings, keeping capital spending high so 'Free cash flow stays near zero'. Sol is highest at $363B, with 'about 20% total sales growth in 2027 and 18% in 2028'. Sol's range is much the widest: at its $280B low 'low-case earnings can decline despite growing sales'; its $435B high needs 'new services profitably use the computing capacity'.

Earnings per share return to growth in 2028, about 18%, as sales outpace a slowing data-center build-out.

Sales **$340B** $294B – $387B · +15% on FY2027

Adjusted EPS **$37.03** $24.00 – $48.42 · +18% on FY2027

Base case

Operating margin **34.2%** 33.0% in FY2027

#### Investment and cash generation

Base case

Capital spending **$166B**

Free cash flow **$17.0B**

Free cash flow: operating cash flow less capital spending.

2028 lies beyond any company outlook. Management has said its visibility declines for 2028 and beyond, and Grok reads its plan for that year as flexibility in land and power rather than locking in chips now.

The six AI models put 2028 sales between $328B and $363B, averaging $340B, about 15% above 2027. Ad growth slows into the low or mid teens, while new paid products grow from a small base.

Earnings per share average $37.03, up about 18% on 2027, because capital spending levels off: it averages $166B against $163B in 2027. Operating margin edges up to about 34%, and free cash flow turns positive at about $17.0B on average.

The spread is wide. Grok cuts capital spending to $135B and expects free cash flow of $38.0B; Sol raises it to $185B. Average earnings per share run from $24.00 in the low case to $48.42 in the high, and Sol's own range from $13.00 to $60.00.

Reality Labs losses are expected to ease gradually from a 2026 peak, and the 15% minimum tax keeps the tax rate near 16% to 17%.

2028 earnings per share rest on sales outpacing depreciation once the build-out levels off. They average $37.03, from $31.90 for Opus, which holds margin near 31%, to $42.50 for Muse Wonder.

#### Each model's growth in FY2028

Opus 5.5 +13%

GPT-6.1 Sol +18%

Grok 4.7 +13%

GLM 5.3 +13%

Gemini 4 Argon +16%

Muse Wonder +15%

Growth of each model's middle on its own forecast for the year before.

#### What it rests on

**Visibility for 2028**

Management says visibility declines for 2028 and beyond “visibility declines as you get to ‘28 and beyond. And that’s why the ‘28 and” Second-quarter follow-up call, July 2026

**Frontloading capacity**

Build capacity early; spare compute goes to the core ads business “Some people think that we'll get there in a few years. Others think it will be 5, 7 years or longer. I think that it's the right strategy to aggressively frontload building capacity so that way we're prepared for the most optimistic cases. That way, if superintelligence arrives sooner, we will be ideally positioned for a generational paradigm shift in many large opportunities. If it takes longer, then we'll use the extra compute to accelerate our core business which continues to be able to profitably use much more compute than we've been able to throw at it.” Third-quarter 2025 earnings call

**Reality Labs peak**

2026 losses likely the peak, then gradually lower “I expect Reality Labs losses this year to be similar to last year, and this will likely be the peak as we start to gradually reduce our losses going forward while continuing to execute on our vision.” Fourth-quarter 2025 earnings call, January 2026

**Automated ad tools**

Advantage Plus tools above $75B annual revenue run rate “Our AI-powered Advantage Plus end-to-end solutions continue to grow, reaching over $75 billion in annual revenue run rate this quarter.” Second-quarter earnings call, July 2026

#### Low and high

Base the middle forecast

Key assumptions

- ****Sales grow about 15%, slowing as the business gets larger.** Ranking gains are harder to repeat at scale, and visibility for 2028 is limited. *4 of 6***
  - **Grok 4.7** In 2027 and 2028 advertising growth slows into the mid-teens and then the low teens
  - **GPT-6.1 Sol** 18% in 2028
  - **GLM 5.3** by 2028 revenue reaches about $330 billion
  - **Gemini 4 Argon** 345.0 billion dollars in 2028
- ****Capital spending levels off, averaging $166B.** Management's 2028 plan leans on flexibility rather than locking in chips now. *4 of 6***
  - **Grok 4.7** I therefore cut capital spending in 2028 to 135 billion dollars
  - **Muse Wonder** only step it down slightly in 2028
  - **GLM 5.3** $180 billion in 2028
  - **Opus 5.5** $175 billion in 2028
- ****Operating margin edges up to about 34% as Reality Labs losses ease.** Management called 2026 the likely peak for Reality Labs losses. *3 of 6***
  - **Gemini 4 Argon** recovering to 33.0 percent in 2027 and 35.0 percent in 2028 as revenue scales and Reality Labs losses moderate
  - **GPT-6.1 Sol** The middle operating margin recovers only to about 32% and 34%
  - **GLM 5.3** earnings per share about $35 as margins stabilise
- ****New paid products grow into a meaningful revenue line.** Business agent charging and subscriptions began in the second half of 2026. *3 of 6***
  - **GPT-6.1 Sol** $14 billion in 2028
  - **GLM 5.3** gave them a few billion dollars by 2027-28 in the middle
  - **Muse Wonder** the larger contribution only by 2028 in the middle case
- ****Tax stays near 16% to 17%.** The 15% minimum tax limits share-based tax benefits. *2 of 6***
  - **Opus 5.5** So I hold the tax rate at 16-17% in 2027 and 2028
  - **GPT-6.1 Sol** 17% in 2027–2028

If all of this happens

**$340B** sales

**$37.03** adjusted EPS

**$166B** Capital spending

**$17.0B** Free cash flow

Cash walk not supplied by every model.

Low about 1 chance in 10 of worse

What the low case assumes

- ****Ad growth falls to the high single digits or lower.** Higher oil prices and interest rates weigh on advertisers' budgets. *3 of 6***
  - **Grok 4.7** hold growth in 2027 and 2028 to the high single digits
  - **Opus 5.5** Ad prices stall while impressions keep growing
  - **Gemini 4 Argon** slow global consumer spending and advertiser budgets in 2027 and 2028
- ****Committed computing costs and depreciation outrun revenue.** Commitments and data-center leases run for many years and cannot be switched off. *3 of 6***
  - **GPT-6.1 Sol** Committed computing costs and depreciation outrun revenue
  - **Gemini 4 Argon** Rapid growth in server depreciation and third-party cloud commitments outpacing revenue
  - **Opus 5.5** depreciation from $130-185 billion a year of capital spending
- ****Further legal and regulatory charges in the United States and Europe.** Damages sought in youth cases range up to the high tens of billions of dollars. *3 of 6***
  - **Muse Wonder** Further legal and regulatory charges in the United States and Europe
  - **Opus 5.5** new legal charges beyond the $10 billion accrual
  - **GLM 5.3** Further material legal accruals from the youth-litigation docket

If all of this happens

**$294B** sales · −14% vs base

**$24.00** EPS · −35% vs base

Sales would have to stall near $294B, 14% under the base and about flat on 2027, with earnings per share near $24.00, 35% lower. Ad growth would need to fall to the high single digits while depreciation and committed cloud costs keep rising. Opus and Sol go furthest on sales, at $282B and $280B. Sol's earnings low is furthest at $13.00, because it builds the most capital spending, $185B in its base, and holds that 'low-case earnings can decline despite growing sales'.

Grok put a path of about 8% growth in 2028 near its own low case; GLM judged an outcome that weak closer to 1-in-20 than 1-in-10.

The six lows run from $280B (GPT-6.1 Sol) to $312B (GLM 5.3).

First sign A first 2027 outlook, expected with the January 2027 results, implying expense growth above 30% or capital spending above $180B.

High about 1 chance in 10 of better

What the high case assumes

- ****Ad growth stays above 20% on better recommendation models.** Ranking gains lifted conversions, and the company sees further headroom into 2027. *3 of 6***
  - **Gemini 4 Argon** Next-generation unified recommendation models and generative ad creative tools unlock sustained twenty-plus percent advertising revenue growth through 2028
  - **Opus 5.5** keep growth near 25% into 2027
  - **GPT-6.1 Sol** Recommendation improvements keep compounding
- ****Business agents, the model API and compute sales add several billion dollars.** The company says it gets offers for compute at a significant premium. *3 of 6***
  - **Gemini 4 Argon** scales into a multi-billion dollar high-margin revenue stream
  - **Opus 5.5** New revenue lines (business agents, subscriptions, the model API, and selling compute at a premium) add several billion dollars
  - **GLM 5.3** add several billion dollars by 2027-28
- ****Margins rise as Reality Labs losses fall and headcount stays flat.** Management called 2026 the likely peak for Reality Labs losses. *3 of 6***
  - **Gemini 4 Argon** driving operating margins above 38 percent
  - **GPT-6.1 Sol** Better operating leverage and narrowing hardware losses
  - **Muse Wonder** Reality Labs losses gradually falling after 2026

If all of this happens

**$387B** sales · +14% vs base

**$48.42** EPS · +31% vs base

Sales would have to reach about $387B, 14% above the base and about 31% growth, with earnings per share near $48.42, 31% higher. Growth would need to stay above 20% on ad gains, with business agents, the model API and compute sales becoming large, and margins rising. Sol is furthest at $435B and $60.00, because it alone lets 'subscriptions and business agents scale faster' while new services use the capacity profitably; GLM caps at $358B, calling such growth 'demanding'. Gemini's high has margins 'above 38 percent'.

Opus's high reaches 2028 sales of $375B and earnings per share of about $41, from new revenue lines and a leaner workforce.

The six highs run from $358B (GLM 5.3) to $435B (GPT-6.1 Sol).

First sign Disclosed revenue from business agents or compute sales, possibly as early as the 21 October 2026 release.

#### Watch

The first 2027 capital spending plan, the pace of business agent and subscription revenue, and Reality Labs losses. Capital spending leveling off near 2027's level points higher; another step-up toward $185B, or new legal charges, points lower.

The years at a glance · sales

FY2023 **$135B**

FY2024 **$165B**

FY2025 **$201B**

FY2026 **$252B** $246B – $258B

FY2027 **$296B** $269B – $324B

FY2028 **$340B** $294B – $387B

$200B $300B $400B

The years at a glance · adjusted EPS

FY2023 **$14.87**

FY2024 **$23.86**

FY2025 **$23.49**

FY2026 **$31.84** $28.78 – $34.43

FY2027 **$31.43** $23.33 – $39.25

FY2028 **$37.03** $24.00 – $48.42

$20.00 $30.00 $40.00 $50.00