# META Release review · Q3 2026 > Meta reported. Sales $64.6B vs our $63.1B, beat +2.3%. Adjusted EPS $7.40 vs our $6.86, beat +54¢. After the call we forecast again. Canonical: https://pricedin.markets/meta/fq3-2026/result/ Wednesday 21 October, 16:03 ET · released Meta reported. Sales $64.6B vs our $63.1B, beat +2.3%. Adjusted EPS $7.40 vs our $6.86, beat +54¢. After the call we forecast again. [After the call →](https://pricedin.markets/meta/fq3-2026/after-call/) META · Q3 2026 results · release accepted 2026-10-21 16:03:35 ET ## The quarter against our forecast Q3 2026 sales **$64.6B** our forecast $63.1B · +2.3% · outlook $61.0B–$64.0B adjusted EPS **$7.40** our forecast $6.86 · +54¢ #### Q3 2026 line by line, as the income statement shows it | Line | Outlook | Our forecast | Reported | Against our forecast | | --- | --- | --- | --- | --- | | Revenue | $61.0B–$64.0B | $63.1B | $64.6B | +2.3% beat | | Family of Apps | — | $62.6B | $64.2B | +2.4% beat | | Reality Labs | — | $493M | $443M | −10.2% miss | | Total costs and expenses | — | $52.8B | $51.6B | −2.2% beat | | Income (loss) from operations | — | $10.4B | $13.0B | +25.1% beat | | Operating margin | — | 16.4% | 20.1% | +3.7 pt beat | | Interest and other income (expense), net | — | $16.7M | $13.0M | −22.0% miss | | Income before income taxes | — | $10.4B | $13.0B | +25.0% beat | | Provision (benefit) for income taxes | — | $2.24B | $3.14B | +39.9% miss | | Tax rate | — | 21.6% | 24.2% | +2.6 pt miss | | Net income | — | $8.16B | $9.86B | +20.9% beat | | Diluted (in shares) | — | 2.57B | 2.57B | +0.01B miss | | Adjusted EPS | — | $6.86 | $7.40 | +54¢ beat | Our forecast was frozen before the release: the average of 6 models as of 2026-10-21 07:41:37 ET. Each reported number is quoted from the release; the 10-Q's tagged facts confirm the statement's lines when it is filed. Read before our lock: the SEC lists the release in its index that night, and the next check confirms its bytes. A cost above our forecast is a miss. #### Why adjusted EPS differs: $7.40 against our $6.86 Sales, at the forecast's gross margin +18.5¢ Gross margin +78.7¢ Interest and other income (expense), net −0.1¢ Provision (benefit) for income taxes −14.1¢ Diluted (in shares) −1.5¢ Tax on the adjustments, the share count and rounding −27.6¢ Total +53.8¢ Like for like: each line as reported against ours, with each of the company's adjustments on the line it adjusts and ours on ours. The last bar is what remains: the tax on the adjustments, the share count and rounding. #### Why the quarter differed from our forecast ##### Provision (benefit) for income taxes −14¢ **What we assumed** Forecasts set tax near $2.2B, about 22% of reported profit, some assuming the legal charge cut tax. “a 15 percent book minimum tax reduction on the third quarter legal accrual” gemini **What the company printed** Meta printed a $3.1B tax provision for the quarter, on higher profit than forecast. “Provision for income taxes 3,141 18,954 1,028 22,888” **Known before our cutoff?** No: The August settlement call says nothing on the charge's tax treatment; a search for tax there found nothing. ##### Diluted (in shares) −1¢ **What we assumed** Forecasts held diluted shares flat near the first-half level, with no buybacks. “I therefore hold the diluted share count flat at 2.56 billion in both forecast quarters” glm **What the company printed** Meta printed diluted shares of 2,573 million for the quarter. “Diluted 2,573 2,572 2,568 2,578” **Known before our cutoff?** Yes: The second-quarter earnings release showed a nearly identical diluted share count. “Diluted 2,566 2,570 2,565 2,580” ##### Interest and other income (expense), net −0¢ **What we assumed** Forecasts put other income near zero, while flagging equity-stake swings as a risk. “unrealized gains and losses on about $30 billion of non-marketable equity stakes can swing other income by $1 billion or more in a quarter” opus **What the company printed** Meta printed other income close to zero for the quarter. “Interest and other income (expense), net 13 1,128 (1,126) 2,047” **Known before our cutoff?** Yes: The second-quarter earnings release showed other income near zero. “Interest and other income (expense), net (19) 93 (1,139) 919” #### The company's new outlook Q4 2026 Total revenue GAAP · Q4 2026 $73-76 billion Our forecast $72.2B: ours is $817M below the bottom of the range “We expect fourth quarter 2026 total revenue to be in the range of $73-76 billion. Our guidance assumes foreign currency is an approximately 1% headwind to year-over-year total revenue growth, based on current exchange rates.” Foreign currency headwind to year-over-year total revenue growth assumption, current exchange rates · Q4 2026 approximately 1% “We expect fourth quarter 2026 total revenue to be in the range of $73-76 billion. Our guidance assumes foreign currency is an approximately 1% headwind to year-over-year total revenue growth, based on current exchange rates.” Tax rate absent changes to tax landscape · Q4 2026 15-17% “Absent any changes to our tax landscape, we expect our fourth quarter 2026 tax rate to be between 15-17%.” Our Q4 2026 forecast, made 2026-10-21 before this release sales $72.2B · adjusted EPS $8.37 FY2026 Total expenses GAAP, including the $9.9 billion Q3 legal charge · full year 2026 $175-179 billion “We are raising our expense outlook to incorporate the $9.9 billion charge related to legal proceedings recognized in the third quarter. We now expect full year 2026 total expenses to be in the range of $175-179 billion.” Reality Labs operating losses segment · full year 2026 $18-19 billion “At a segment level, we now expect Reality Labs losses to decline compared to 2025 to a range of $18-19 billion.” Capital expenditures, including principal payments on finance leases GAAP cash · full year 2026 $135-145 billion Prior: $130-145 billion “We anticipate 2026 capital expenditures, including principal payments on finance leases, to be in the range of $135-145 billion, narrowed from our prior outlook of $130-145 billion.” Other periods Reality Labs operating losses segment · 2027 around $15 billion “Separately, we remain focused on improving Reality Labs profitability and expect losses to narrow next year to around $15 billion as we reallocate investment toward other priority areas, primarily AI.” Each item as the release prints it. Our forecast stands beside an item only when the item is one of our two numbers, for our quarter or year, in our unit. #### The company's reasons, from the release - **Costs and expenses up 68% include litigation charge** “•Costs and expenses – Total costs and expenses were $51.61 billion, an increase of 68% year-over-year. This includes the litigation charge as discussed above.” - **G&A expense increase from attorneys general charge** “(1) The third quarter 2026 general and administrative expenses include a $9.89 billion charge related to the August 2026 agreement with U.S. State Attorneys General to resolve litigation related to teen mental health and social media.” - **Operating income and EPS reduced by charge** “Third quarter 2026 costs and expenses includes a $9.89 billion charge related to this agreement. Excluding this charge, the third quarter 2026:”