Meta Creates Non-Voting Class C Shares, Narrows 2026 Capex Outlook

Meta Platforms Inc. (Nasdaq: META) said on Wednesday, October 21, 2026, that it will create a new class of publicly listed, non-voting Class C common stock, as the Facebook and Instagram parent reported third-quarter revenue above analyst estimates and raised the lower end of its 2026 capital spending forecast. Shares rose about 3% in extended trading, CNBC reported.

Revenue up 26%, profit hit by legal charge

Revenue for the quarter ended September 30 rose 26% to $64.60 billion from $51.24 billion a year earlier, according to Meta's earnings release. That compared with an average analyst estimate of $63.37 billion compiled by LSEG, Reuters reported. Advertising revenue grew 26% to $63.06 billion, with ad impressions up 10% and the average price per ad up 14%. Family daily active people averaged 3.64 billion in September, an increase of 3%.

Total costs and expenses rose 68% to $51.61 billion, including a $9.89 billion charge tied to an August agreement with 52 U.S. state attorneys general to resolve litigation over teen mental health and social media, which provides for payments of up to about $18.59 billion. As a result, operating income fell 37% to $12.99 billion and the operating margin narrowed to 20% from 40%. Excluding the charge, Meta said operating income would have been $22.88 billion and diluted earnings per share $7.40.

Reported net income rose to $9.86 billion, or $3.83 a share, from $2.71 billion, or $1.05 a share, a year earlier. The prior-year quarter included an income tax provision of $18.95 billion, which pushed the effective tax rate to 87%; this year's rate was 24%.

Spending outlook and cash flow

Capital expenditures, including principal payments on finance leases, were $34.91 billion in the quarter. Meta now expects 2026 capital expenditures of $135 billion to $145 billion, narrowed from a prior range of $130 billion to $145 billion. It raised its full-year total expense outlook to $175 billion to $179 billion to reflect the legal charge.

The heavier investment showed up in cash generation. Operating cash flow was $32.79 billion, but free cash flow was negative $2.12 billion, compared with positive $10.63 billion a year earlier. Meta ended September with $82.45 billion in cash, cash equivalents and marketable securities and $80.92 billion in long-term debt. Headcount was 66,775, down 15% from a year earlier.

For the fourth quarter, Meta forecast revenue of $73 billion to $76 billion. CNBC reported that the midpoint was above analysts' estimates. The company said it expects losses at its Reality Labs unit of $18 billion to $19 billion in 2026, narrowing to around $15 billion next year.

What the Class C stock means

Meta's board declared a one-time dividend of one Class C share for each outstanding Class A and Class B share, contingent on an amended certificate of incorporation with an effective date of January 19, 2027. The company said it expects the Class A share price to reflect the effect of a two-for-one stock split after the dividend is paid, and that the dividend will not change any shareholder's voting power. Record and payment dates have not been set.

Meta said the new class would give it a way to raise capital, compensate employees and pursue acquisitions while continuing what it called the founder-led model under Chief Executive Mark Zuckerberg. The decision followed a unanimous recommendation from a special committee of independent directors, and the amended certificate has been approved by shareholder written consent. Meta also entered into a Founder Alignment Agreement with Zuckerberg covering his sales of Class C shares, his service at the company and conditions for any future Class C dividends. Meta said it intends to list the Class C shares on Nasdaq.

Reuters reported that the structure could let Meta fund acquisitions and attract talent without diluting Zuckerberg's voting control. The agency also noted that a New Mexico judge earlier on Wednesday ordered a $25 billion penalty against Meta after a jury found it misled the state's residents in a case related to Cambridge Analytica.

Sources

• Meta: Meta Reports Third Quarter 2026 Results (press release via Nasdaq, Oct. 21, 2026)
• Reuters via Investing.com: Meta to issue new class of shares as it tightens AI spending forecast (Oct. 21, 2026)
• CNBC: Stocks making the biggest moves after hours (Oct. 21, 2026)