Meta misses profit on $15.9 bln tax charge, warns of rising regulatory risks

Investing.com -- Meta Platforms posted a steep drop in quarterly profit after taking a $15.9 billion non-cash tax charge. Shares fell 8% in after-hours trading.

Third-quarter earnings fell to $1.05 per share from $6.03 a year earlier. Excluding the tax charge, Meta’s operating margin was 40%.

Meta also warned of potential regulatory risks in the European Union and the United States, including possible restrictions on its ad products and ongoing youth-related lawsuits.

"We continue to monitor active legal and regulatory matters, including the increasing headwinds in the EU and the U.S. that could significantly impact our business and financial results," the company said in the statement.

Revenue rose 22% to $51.24 billion, topping analyst estimates of $49.36 billion, driven by strong advertising demand. Advertising sales grew to $50.1 billion, while daily active users across its family of apps climbed 8% to 3.54 billion in September.

The company forecast fourth-quarter revenue between $56 billion and $59 billion, roughly in line with market expectations.

It raised its full-year expense outlook to $116 billion–$118 billion, up from a prior range of $114 billion–$118 billion, and lifted its capital spending forecast to $70 billion–$72 billion saying there was greater infrastructure requiremets to support AI development.

Meta said it expects both capital expenditures and total expenses to grow “at a significantly faster rate” in 2026 as it expands compute capacity and hires more technical staff.

CFO Susan Li said higher spending will be driven mainly by infrastructure and cloud costs, along with increased compensation for AI talent.

CEO Mark Zuckerberg said Meta’s AI and augmented reality initiatives, including its “Superintelligence Labs” and AI-powered glasses, were gaining traction.

"Meta Superintelligence Labs is off to a great start and we continue to lead the industry in AI glasses. If we deliver even a fraction of the opportunity ahead, then the next few years will be the most exciting period in our history," Zuckerberg said.

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