Q3 2026 · the quarter META reports
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
Middlethe forecast80% range1 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 → $42.3Bguided “$39.5-41.8 billion”
Q2 2025+4.4% above$42.5B–$45.5B → $47.5Bguided “$42.5-45.5 billion”
Q3 2025+1.5% above$47.5B–$50.5B → $51.2Bguided “$47.5-50.5 billion”
Q4 2025+1.5% above$56.0B–$59.0B → $59.9Bguided “$56-59 billion”
Q1 2026inside$53.5B–$56.5B → $56.3Bguided “$53.5-56.5 billion”
Q2 2026inside$58.0B–$61.0B → $60.8Bguided “$58-61 billion”
Q3 2026inside$61.0B–$64.0B → $63.1Bguided “$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
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 growth28%
Ad impressions growth14%
Average price per ad growth12%
Other app revenue growth73%
Reality Labs revenue growth16%
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
Basethe 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 5.5I 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 SolI remove that $10 billion only from the requested adjusted earnings in the quarter and year
- Grok 4.7I put that charge in third-quarter costs and removed it, after tax, from adjusted earnings
- GLM 5.3is excluded from adjusted earnings per share
- Gemini 4 Argonour corresponding 10 billion dollar adjustment to exclude this one-time charge
- Muse WonderI 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 5.5I put the third quarter at $63.2 billion: near the top
- Grok 4.7I expect the third quarter to land near the top of the company 61 to 64 billion dollar revenue range
- GPT-6.1 SolMy $64 billion middle is above the $62.5 billion guidance midpoint
- Gemini 4 Argonsupported 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 5.5I carry these forward and slow growth to about 24% in the third quarter
- GLM 5.3That is why my Q3 grows about 22 percent and Q4 about 21 percent against Q2's 28 percent
- GPT-6.1 SolI temper advertising growth to about 25% in the September quarter
- Muse Wonderthe 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 5.5Teens are less than 1% of revenue, so I make no revenue cut for the two-hour limit
- Grok 4.7The third-quarter revenue range was left unchanged, so I did not cut sales for the teen rules
- GLM 5.3so I left revenue untouched
- Gemini 4 Argonour 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 5.3I used the guided 15-17 percent rate for Q3 and Q4
- Muse Wondera 16% tax rate for the second half
- GPT-6.1 SolI use a 16% tax rate on normal second-half profit
If all of this happens
$63.1Bsales
$6.86adjusted EPS
$41.1BCapital spending
−$9.05BFree cash flow
Cash walk not supplied by every model.
Lowabout 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 5.5The autumn oil shock cuts advertiser budgets the way the Iran conflict did in early 2026
- Grok 4.7A lasting energy shock and weak household confidence cut advertiser budgets
- GLM 5.3ad demand softens with a weak consumer
- Muse WonderWeaker 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 5.3European less-personalized-ads and integrity enforcement dragging more than expected
- Muse WonderEurope's less personalised ads and integrity work bite harder
- GPT-6.1 SolSlower 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 Wondercosts stay at the top of the range
- GPT-6.1 Solother legal or tax losses can still depress results
- GLM 5.3Further material legal accruals from the youth-litigation docket
If all of this happens
$60.9Bsales · −4% vs base
$5.85EPS · −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 signThird-quarter sales near or below $61.5B in the 21 October 2026 release.
Highabout 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 5.3Ads performance gains compounding faster than expected
- GPT-6.1 SolStronger engagement and sustained advertising pricing
- Grok 4.7Ad demand and performance gains hold near the top of recent growth
- Muse WonderStronger 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 SolFaster monetization of messaging and business agents
- Grok 4.7Paid messaging, subscriptions, and business agents scale faster than expected
- Muse WonderNew revenue from business agents, subscriptions, paid messaging and AI glasses
- Gemini 4 ArgonRapid 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 4.7with the late-summer rise in oil prices not hitting budgets
- Opus 5.5and the oil shock fades
If all of this happens
$65.1Bsales · +3% vs base
$7.81EPS · +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 signThird-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.
Q4 2026 · the quarter after
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
Middlethe forecast80% range1 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.
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
Basethe 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 5.5So I hold the fourth quarter at $71 billion (about 18.5% growth) instead of the 20%+ that extending the trend would give
- Grok 4.7The fourth quarter should rise from the third, but by less than the usual holiday jump
- GPT-6.1 SolThis 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 5.3Q4 about 21 percent against Q2's 28 percent
- GPT-6.1 Sol24% in the holiday quarter
- Opus 5.5about 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 4.7I did not put another large charge in the base case beyond the 10 billion dollar accrual already announced
- GLM 5.3so I put no further accrual in the middle
- Opus 5.5I 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 5.3I kept them out of 2026 (too late in the year to be material)
- Grok 4.7Newer paid products stay small next to advertising through 2028
- GPT-6.1 SolGradual 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 5.3I used the guided 15-17 percent rate for Q3 and Q4
- Muse Wondera 16% tax rate for the second half
- GPT-6.1 SolI use a 16% tax rate on normal second-half profit
If all of this happens
$72.2Bsales
$8.37adjusted EPS
Lowabout 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 5.5The autumn oil shock cuts advertiser budgets the way the Iran conflict did in early 2026
- Grok 4.7The jump in oil prices and very weak household confidence would cut holiday budgets
- GPT-6.1 SolConsumer demand and advertising budgets weaken after the energy shock
- Gemini 4 ArgonElevated 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 5.5Europe imposes further changes to less personalized ads
- Grok 4.7Europe would impose a harsher limit on personalized ads
- Gemini 4 ArgonStricter 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 4.7another large legal charge would land
- GLM 5.3including the roughly $5.3 billion contingent piece of the attorneys-general settlement if YouTube and TikTok join
- Muse Wondernew legal charges follow the attorneys general accrual
If all of this happens
$67.9Bsales · −6% vs base
$6.87EPS · −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 signA fourth-quarter outlook implying growth under 15%, given in the 21 October 2026 release.
Highabout 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 5.3Ads performance gains compounding faster than expected
- GPT-6.1 SolRecommendation improvements keep compounding
- Grok 4.7Ad 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 Solsubscriptions and business agents scale faster
- Gemini 4 ArgonRapid enterprise and small business adoption of paid Meta Business Agents, MetaOne subscriptions
- Muse Wonderbusiness 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 5.5and the oil shock fades
- Grok 4.7with the late-summer rise in oil prices not hitting budgets
If all of this happens
$76.2Bsales · +6% vs base
$9.73EPS · +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 signA 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.