Meta Q3 2026 earnings, published on 21 October, showed revenue of $64.60 billion, up 26% year on year, and free cash flow of negative $2.12 billion. The United States owner of Facebook and Instagram spent $34.91 billion in the quarter. A filing the next day disclosed $825 billion of commitments.
What Meta Reported for the Third Quarter
The release covers the three months to 30 September 2026. All figures are in United States dollars and are taken from the company’s own filings with the Securities and Exchange Commission, the United States markets regulator.
| Measure | Q3 2026 | Q3 2025 |
|---|---|---|
| Revenue | $64.60 billion | Up 26% year on year |
| Total costs and expenses | $51.61 billion | $30.71 billion |
| Income from operations | $12.99 billion | $20.54 billion |
| Operating margin | 20% | 40% |
| Diluted earnings per share | $3.83 | — |
| Capital expenditure | $34.91 billion | — |
| Free cash flow | Negative $2.12 billion | — |
| Headcount at quarter end | 66,775 | Down 15% year on year |
Capital expenditure of $34.91 billion, which includes principal payments on finance leases, exceeded operating cash flow of $32.79 billion. That is what turned free cash flow negative. Cash, cash equivalents and marketable securities stood at $82.45 billion on 30 September 2026.
Why Reported Profit Fell While Revenue Rose 26%
A single accounting charge accounts for the gap. Meta booked $9.89 billion in general and administrative expenses for an August 2026 agreement with 52 attorneys general resolving litigation over teen mental health and social media.
The release states that the agreement “provides for payments of up to approximately $18.59 billion”. The charge is the amount recognised this quarter, not the amount paid.
Excluding it, the company said income from operations would have been $22.88 billion rather than $12.99 billion. Reported diluted earnings per share of $3.83 therefore understates the quarter’s underlying trading, and several outlets quoted an adjusted figure near $7.40 instead. Readers comparing headlines should check which basis each one uses.
Inside the $825 Billion of Future Commitments
The number that moved markets on 22 October was not in the earnings release. It came from the quarterly report on Form 10-Q, filed the following day.
- Leases not yet commenced: about $355.73 billion, covering data centres, energy infrastructure, colocation space and some network infrastructure, starting between the rest of 2026 and 2036, on terms of up to 30 years.
- Non-cancellable commitments: $454.52 billion, mostly third-party cloud capacity, servers and network equipment, energy supply agreements for data centres, and Reality Labs hardware.
- Contingent cloud capacity obligation: a further $14.72 billion.
Those three lines are what press coverage adds together to reach roughly $825 billion. In July the comparable total was close to $700 billion.
The timing matters more than the headline sum. Of the $454.52 billion of non-cancellable commitments, about $45.85 billion falls due in 2026 and about $121.41 billion in 2027. A commitment maturing in 2035 is a different proposition from one maturing fourteen months out.
Set that against the quarter just reported. Meta generated $32.79 billion of operating cash flow in three months and held $82.45 billion in cash and marketable securities. The 2027 obligations alone exceed that cash balance by roughly $39 billion. The company has not said how it intends to bridge the difference, and it carried $80.92 billion of long-term debt at quarter end.
Other operators of large artificial-intelligence estates have faced the same arithmetic. Oracle disclosed $28.5 billion of quarterly capital expenditure and a $664 billion backlog in September, and CoreWeave’s interest bill reached $640 million a quarter.
Why the Bond Market Reacted More Than the Equity Market
Credit default swaps on Meta reached their highest level on record on 22 October 2026. A credit default swap is a contract that pays out if a borrower defaults; the price, quoted in basis points a year, rises as lenders judge default more likely or simply demand more to take the risk.
The two published readings differ. ICE Data Services put the five-year spread up as much as 8.9 basis points at about 119.3 basis points, which it described as the highest intraday level since the contracts began trading. Reuters, citing Markit, reported a rise of 7.3 basis points to a record 114.5 basis points. The gap between the two appears to reflect different pricing points in the day. Reuters also reported that Meta’s bonds weakened against United States Treasuries.
A record spread of around 115 to 120 basis points does not imply distress. Meta remains an investment-grade borrower with $82.45 billion of liquid assets. It does indicate that lenders repriced the company’s risk after seeing the commitment schedule.
Equity coverage was less consistent. Shares rose in after-hours trading on 21 October, with one report putting the move at 3.79% to $723.93, then fell during the 22 October session. Reported declines ranged from more than 5%, to about $657.65, up to 7% depending on the outlet and the point in the day. Readers should treat any single percentage as a snapshot rather than a close.
What Meta Has and Has Not Said About 2027
The company gave guidance for the current quarter and withheld most of it for next year.
- Fourth-quarter 2026 revenue: $73 billion to $76 billion.
- Full-year 2026 capital expenditure: $135 billion to $145 billion including finance lease principal payments, narrowed from $130 billion to $145 billion.
- Reality Labs losses: guided to narrow to around $15 billion in 2027, from $18 billion to $19 billion in 2026.
- 2027 revenue, capital expenditure and expense growth: no figures given. The chief financial officer said the company is still developing its budget and capacity plans for next year.
Meta also announced a new class of non-voting Class C common stock, effective January 2027, to be distributed as a one-time stock dividend of one Class C share for each Class A and Class B share. The release says the company expects the market price of its Class A stock to reflect the effect of a two-for-one split after the payment date. Record and payment dates have not been set.
As of 22 October 2026, Meta has disclosed the $825 billion commitment figure and the 2026 capital expenditure range, but has published no 2027 capital expenditure number and no financing plan for the commitments falling due that year. Data centre projects elsewhere have also slipped on infrastructure constraints, as a stalled Microsoft and Nscale site in England showed this week.
Frequently Asked Questions
What Did Meta Q3 2026 Earnings Show?
Revenue of $64.60 billion for the three months to 30 September 2026, up 26% year on year, with income from operations of $12.99 billion and diluted earnings per share of $3.83. Free cash flow was negative $2.12 billion.
Why Was Meta’s Free Cash Flow Negative?
Capital expenditure of $34.91 billion in the quarter, including finance lease principal payments, exceeded operating cash flow of $32.79 billion. The shortfall of $2.12 billion is the negative free cash flow figure.
What Is the $825 Billion Figure?
It is the approximate sum of three disclosures in Meta’s 10-Q for the quarter ended 30 September 2026: $355.73 billion of leases not yet commenced, $454.52 billion of non-cancellable commitments and a $14.72 billion contingent cloud capacity obligation. It is a schedule of future obligations running to 2036, not a debt balance.
How Much Falls Due in 2027?
About $121.41 billion of the $454.52 billion of non-cancellable commitments is scheduled for 2027, with about $45.85 billion in 2026. The lease commitments carry their own separate timetable.
Has Meta Given 2027 Capital Expenditure Guidance?
No. As of 22 October 2026 the company has guided full-year 2026 capital expenditure to $135 billion to $145 billion and said its 2027 budget and capacity plans are still being developed.
