Meta Q3 2026 Earnings: Revenue Grows 26% as AI Spending and Legal Costs Pressure Profits

Meta Platforms reported third-quarter 2026 results that underscored the dual forces shaping its business: robust advertising demand that lifted top-line growth and elevated spending on artificial intelligence infrastructure, plus a substantial legal settlement that compressed profitability metrics. Revenue reached $64.60 billion, a 26 percent increase from $51.24 billion in the prior-year period and ahead of consensus estimates near $63.3–$63.4 billion. Advertising revenue, which accounts for the overwhelming majority of sales, rose 26 percent to $63.06 billion, supported by a 10 percent increase in ad impressions and a 14 percent rise in average price per ad. Net income surged 264 percent to $9.86 billion, or $3.83 per diluted share, though the year-earlier comparison was distorted by a large one-time tax item. Operating income fell 37 percent to $12.99 billion, producing a 20 percent operating margin, largely because the company recorded a $9.89 billion charge tied to a multi-state attorneys-general settlement concerning youth mental-health claims. 

Excluding that charge, operating income would have been approximately $22.88 billion and diluted EPS roughly $7.40. Capital expenditures of $34.91 billion outpaced operating cash flow of $32.79 billion, resulting in negative free cash flow of $2.12 billion. Family daily active people averaged 3.64 billion in September, up 3 percent year over year. Management guided fourth-quarter revenue to $73–$76 billion and raised full-year 2026 expense and capital-expenditure ranges to reflect both the legal item and continued AI investment. These figures illustrate a company whose core advertising engine remains resilient while large-scale AI and legal costs reshape near-term profitability and cash generation. Meta’s Q3 2026 results demonstrate that sustained advertising growth can coexist with elevated AI capital intensity and material legal costs, yet the combination has reduced operating margins and turned free cash flow negative even as the company advances its longer-term AI product roadmap.

Meta’s third-quarter performance was driven mainly by advertising, which generated $63.06 billion in revenue, up 26% year over year. Total revenue reached $64.60 billion, also increasing 26% and exceeding analyst expectations. The growth reflected a 10% increase in ad impressions across the Family of Apps and a 14% rise in average advertising prices. Improving market conditions and AI-powered recommendation systems helped strengthen ad performance. Meta’s applications averaged 3.64 billion daily active people in September, representing 3% annual growth and expanding its potential advertising audience. Nearly 10 million advertisers used at least one generative AI creative tool during the quarter, while adoption of video-generation features rose 25% sequentially. These developments supported stronger advertising revenue through improved targeting and creative production. Meanwhile, Reality Labs generated $443 million in revenue, down 6% as weaker Quest headset sales partly offset growth in AI glasses. Advertising remained Meta’s primary growth engine despite substantial investment in long-term AI development.

The strength of Meta’s advertising growth reflects its competitive advantages in ad inventory and targeting. Improvements in engagement and recommendation algorithms increased user activity and advertiser returns, allowing average ad prices to rise alongside impression volumes. This combination supports revenue growth, although rising AI infrastructure costs create additional pressure on spending. The same AI systems that improve advertising performance require substantial computing power and data-center capacity, increasing capital intensity. Technology investment cycles can also influence broader market sentiment, including Bitcoin price movements and equity performance. Nevertheless, Meta’s results demonstrate resilient demand for digital advertising. Its ability to improve advertiser returns while expanding impression volumes remains a key competitive advantage. Fourth-quarter revenue guidance of $73 billion to $76 billion signals continued momentum, with the midpoint exceeding analyst estimates. Although currency headwinds of approximately 1 percent may modestly temper annual growth, strong advertising revenue provides the cash flow needed to finance Meta’s expanding AI infrastructure investments.

Meta’s reported profitability was significantly affected by a $9.89 billion charge tied to an August 2026 agreement with multiple state attorneys general over youth mental health and platform design. Total costs and expenses increased 68% to $51.61 billion, pushing operating income down 37% to $12.99 billion. The operating margin fell from 40% a year earlier to 20%. Without the legal charge, operating income would have reached approximately $22.88 billion, up 11% year over year, while the operating margin would have been around 35%. Diluted earnings per share would also have increased from $3.83 to approximately $7.40 on an adjusted basis. The settlement could involve total liabilities of up to $18 billion. Meanwhile, net income rose to $9.86 billion, partly because the previous year included a nearly $16 billion one-time tax charge. Despite the legal expense, Meta’s underlying advertising performance remained strong.

The settlement shows the continued legal and regulatory scrutiny facing social media platforms. Meta recognized the charge in the third quarter following an agreement reached earlier in the year, demonstrating how legal resolutions can create significant expenses across reporting periods. Although the charge is non-recurring, it reduces reported operating income and may affect equity value and future capital-return decisions. Investors monitoring cryptocurrency market volatility may also consider how regulatory uncertainty influences technology companies and digital asset markets. Meta generated $32.79 billion in operating cash flow, indicating that its underlying cash generation remained strong despite the accounting impact. Management also raised its full-year expense guidance to $175–$179 billion, incorporating the settlement into its financial outlook and reducing the likelihood of an equivalent unexpected expense in subsequent periods. While the agreement removes some uncertainty, future litigation and regulatory developments will remain important considerations for investors assessing Meta’s financial risks and long-term growth prospects.

Meta Platforms’ capital expenditures reached $34.91 billion in the third quarter, exceeding half of quarterly revenue and surpassing operating cash flow of $32.79 billion. Consequently, free cash flow turned negative at $2.12 billion, reversing the positive $10.63 billion recorded a year earlier. The company raised the lower end of its 2026 capital expenditure guidance, setting a range of $135 billion to $145 billion. The spending supports expanded data-center capacity, networking infrastructure, and specialized artificial intelligence accelerators. Management expects these investments to take longer to generate returns, although AI improvements already contribute to advertising revenue. Meta held $82.45 billion in cash and marketable securities at quarter-end, providing a substantial liquidity buffer. Dividends and related payments totaled $1.36 billion during the quarter. This spending reflects the growing computational demands of training advanced AI models and delivering AI-powered features across Facebook, Instagram, and WhatsApp.

Meta’s negative free cash flow reflects accelerated infrastructure investment rather than weakening operating performance. Although management has not finalized its 2027 capital expenditure plans, it expects substantial spending to continue across its core business and emerging artificial intelligence initiatives. These investments may temporarily pressure cash flow while creating opportunities for future efficiency and revenue growth. Meta’s strong cash position provides financial flexibility to support its spending plans without immediately compromising its stability. Reality Labs also contributes to the company’s capital intensity, with projected 2026 operating losses of $18 billion to $19 billion. However, growing revenue from AI-powered glasses offers a potential, though modest, offset. Advertising remains the primary source of cash generation, helping finance infrastructure expansion and product development. Investors will closely monitor whether capital expenditure growth moderates relative to revenue or remains elevated as Meta develops new AI models, expands computing capacity, and launches additional products in subsequent quarters.

User metrics provided a strong foundation for Meta’s advertising growth. Family daily active people averaged 3.64 billion in September 2026, marking a 3 percent increase year over year. This figure represents the combined audience across Facebook, Instagram, WhatsApp, and Messenger, giving Meta access to one of the largest user bases in digital media. AI-powered ranking and recommendation systems improved engagement, increased time spent on its platforms, and enhanced advertising effectiveness. The 10 percent growth in ad impressions reflected both audience expansion and stronger engagement. Management emphasized that AI improvements in recommendations, engagement, and monetization were already generating substantial additional advertising revenue. Meanwhile, Meta’s workforce declined 15 percent year over year to 66,975 employees at the end of September, highlighting ongoing efficiency measures alongside heavy AI infrastructure investments. Together, moderate user growth, stronger engagement, and higher advertising prices supported the company’s accelerating revenue growth during the quarter.

Meta’s stable daily active user base shifts its growth strategy toward stronger monetization and improved advertising performance rather than relying solely on acquiring new users. Artificial intelligence tools that support creative production and campaign optimization are helping advertisers generate greater value from each impression. Nearly 10 million advertisers tested Meta’s generative AI creative features during the third quarter, demonstrating widespread commercial adoption. Video-generation tools also recorded sequential growth, complementing infrastructure investments that support more advanced AI models. Daily active people grew by 3 percent, reflecting a mature platform that continues to attract users in emerging markets while strengthening engagement in established regions. For investors, monitoring digital asset trading volumes, user engagement, and network activity offer different measures of growth. Meta’s expanding user base, combined with rising advertising prices and AI-driven efficiency improvements, supports its long-term revenue potential. However, sustaining this model will depend on keeping substantial infrastructure spending manageable relative to cash generation over time.

Chief Executive Officer Mark Zuckerberg stated that the company hit major milestones toward delivering personal superintelligence, including the launch of Muse and Muse Wonder, described as its first frontier model. More than 10 million people in the United States and Canada set up Muse agents within six weeks of availability. These product introductions represent the public-facing expression of the large-scale infrastructure and research investments that have driven capital expenditures higher. Management noted that AI investments are already delivering substantial incremental advertising revenue through improved ranking, recommendation, and creative tools, even while the larger infrastructure outlays will require longer periods to generate full returns. The rapid early adoption of Muse agents suggests user interest in AI-assisted personal assistants integrated into the existing family of applications. Reality Labs revenue of $443 million included growth in AI glasses that partially offset declines in traditional Quest headset sales, indicating an early hardware vector for AI experiences. The product roadmap therefore spans software agents, creative tools for advertisers, and hardware form factors.

Meta’s focus on personal superintelligence reflects a long-term technological strategy rather than a push for incremental product improvements. Developing advanced AI models requires powerful computing clusters, high-speed networking, and significant electricity and cooling capacity, supporting the company’s elevated capital expenditure. In the near term, AI improvements are already strengthening advertising performance, while future revenue opportunities could emerge through AI agents and hardware products. For investors, the key question is how quickly infrastructure spending translates into measurable financial returns. Meta’s advertising gains offer early evidence of value, while its reported milestone of 10 million agents within six weeks signals initial adoption. However, sustained engagement and monetization data remain necessary to assess commercial potential. The company also reduced its workforce by 15 percent while launching new products, showing its simultaneous focus on operational efficiency and targeted AI investment. Future earnings reports should clarify Muse adoption, user engagement, and revenue generated through AI-powered services.

Management issued fourth-quarter 2026 revenue guidance of $73–$76 billion. The midpoint of that range exceeds prevailing analyst estimates near $73.6–$73.7 billion. Current exchange rates are expected to impose an approximate 1 percent year-over-year headwind. The guidance implies sequential growth from the third-quarter run rate and continued year-over-year expansion, consistent with seasonal patterns in digital advertising and with the ongoing benefits from AI-driven monetization improvements. Full-year 2026 expense guidance was raised to $175–$179 billion to incorporate the $9.89 billion legal charge recognized in the third quarter. Capital-expenditure guidance was narrowed to $135–$145 billion. Reality Labs is expected to generate operating losses of $18–$19 billion for the full year, with losses projected to narrow to approximately $15 billion in 2027. These forward-looking statements provide investors with a clearer map of near-term financial trajectories while acknowledging the continued cost of AI infrastructure and the one-time legal item.

The revenue outlook is particularly informative because it embeds management’s assessment of advertising demand, pricing power, and the contribution of AI tools through the seasonally important fourth quarter. Past patterns show that holiday-period advertising intensity typically lifts both impression volume and pricing. The fact that the guided midpoint sits above consensus suggests confidence in the durability of the trends observed in the third quarter. Currency effects remain a modest headwind rather than a dominant variable. On the cost side, the incorporation of the legal charge into full-year expense guidance removes the risk of a subsequent surprise, while the capital-expenditure range confirms that infrastructure investment will remain elevated through year-end. Reality Labs losses, although still large in absolute terms, are expected to moderate in 2027, offering a potential multi-year improvement in that segment’s contribution. Collectively, the guidance framework indicates that Meta expects advertising growth to continue funding both legal settlements and AI capacity expansion without requiring a material change in overall strategy. Investors will monitor sequential revenue realization and any updates to the 2027 capital plan as additional data points.

Reported operating margin compressed to 20 percent from 40 percent a year earlier, driven primarily by the legal charge. Excluding that item, the margin would have been approximately 35 percent, still down from the prior-year level. The residual compression reflects higher research and development spending, the elevated cost of revenue associated with infrastructure, and the ongoing Reality Labs losses. Research and development expense rose to $20.05 billion from $15.14 billion, while cost of revenue increased to $13.37 billion from $9.21 billion. These increases outpaced revenue growth even after adjusting for the legal charge, producing the 4–5 percentage-point structural margin decline. The company has indicated that larger infrastructure investments will take longer to generate returns, implying that margin recovery may be gradual rather than immediate. Efficiency efforts, including the 15 percent year-over-year headcount reduction, provide a partial offset by lowering personnel-related costs. The net result is an operating profile in which advertising contribution margins remain high while corporate-level margins absorb the cost of AI capacity and hardware experimentation.

Understanding the distinction between one-time and structural margin pressure is essential for assessing the sustainability of profitability. The legal charge is discrete and has been fully incorporated into guidance; the infrastructure and Reality Labs costs are more persistent. Management’s statement that operating income excluding the charge would have grown 11 percent demonstrates that the core business continues to expand profitably before the heavier capital and research outlays. Over a multi-year horizon, the return on AI infrastructure will determine whether margins stabilize or resume expansion. Early evidence that AI tools already generate incremental advertising revenue offers a pathway to partial self-funding of the investment program. Investors comparing technology operating margins across peers frequently note the wide dispersion created by differing capital-intensity profiles; Meta’s current direction places it toward the higher end of capital intensity while still generating substantial absolute operating income. Subsequent quarters will clarify the pace at which incremental AI-related revenue offsets the associated depreciation, power, and research costs. Until that inflection becomes clearer, reported margins are likely to remain below the peaks of prior years.

Despite negative free cash flow in the third quarter, Meta ended the period with $82.45 billion in cash and marketable securities. This liquidity position provides substantial flexibility to fund the elevated capital-expenditure program, meet legal obligations, and maintain capital-return policies. Operating cash flow of $32.79 billion remained robust, confirming that the core advertising business continues to convert revenue into cash at a high rate. The temporary free-cash-flow deficit is therefore a function of the timing and magnitude of capital outlays rather than a deterioration in cash-generation capacity. Dividends and related payments of $1.36 billion were sustained during the quarter. The announcement of a new non-voting Class C common stock, to be distributed as a stock dividend, adds a structural capital-markets dimension that may facilitate future equity-related transactions while preserving the existing dual-class voting structure. Overall balance-sheet metrics remain conservative relative to the scale of planned investment.

The combination of a large cash buffer and strong operating cash flow allows management to pursue the AI infrastructure build-out without immediate pressure to moderate spending or raise external capital. This financial flexibility is a strategic asset in a period when access to specialized accelerators and power capacity can determine competitive positioning. Legal settlements of the magnitude recently recognized are more readily absorbed when liquidity is ample. Investors assessing technology balance sheets often examine the ratio of cash to planned capital expenditures; Meta’s position remains comfortable on that metric even after the third-quarter outlays. The Class C share authorization provides an additional tool for potential future capital raises or strategic transactions without diluting voting control. Over the medium term, the trajectory of free cash flow will depend on the rate at which capital expenditures stabilize relative to revenue growth and on the pace of any improvement in Reality Labs economics. Until those trends clarify, the existing cash position and cash-generation capacity supply a margin of safety that supports the current investment posture.

Reality Labs generated $443 million in third-quarter revenue, a 6 percent decline year over year, as lower Quest headset sales were only partially offset by growth in AI glasses. The segment continues to incur substantial operating losses; full-year 2026 guidance points to losses of $18–$19 billion, with an expected narrowing to approximately $15 billion in 2027. These losses form a meaningful drag on consolidated operating income and contribute to overall capital intensity. The strategic rationale centers on positioning Meta in emerging computing platforms that integrate artificial intelligence with wearable and immersive hardware. Early revenue from AI glasses indicates that the hardware portfolio is evolving beyond traditional virtual-reality headsets. Nevertheless, the absolute scale of losses remains large relative to the segment’s revenue, underscoring the long-duration nature of the investment. Management has not indicated any near-term change in strategic commitment, treating Reality Labs as a multi-year initiative rather than a short-cycle product line.

The projected narrowing of losses in 2027 offers a potential path toward improved segment economics, yet the absolute figures will still represent a significant allocation of corporate resources. Depreciation and operating costs associated with hardware development, content, and distribution contribute to the loss profile. Investors evaluating hardware-software platforms frequently observe extended periods of investment before positive contribution margins emerge; Meta’s timeline appears consistent with that pattern. The integration of AI capabilities into glasses and related devices may accelerate monetization relative to earlier virtual-reality efforts, but commercial proof points remain limited. Consolidated results therefore continue to reflect a profitable advertising core subsidizing a loss-making hardware and platform experiment. The magnitude of Reality Labs losses relative to total operating income will remain a point of scrutiny, particularly in periods when legal charges or elevated capital expenditures already compress reported profitability. Progress toward the 2027 loss target will provide an important intermediate milestone for assessing the segment’s direction.

Employee headcount declined 15 percent year over year to 66,975 as of September 30, 2026. This reduction occurred alongside rising research-and-development and capital expenditures, illustrating a deliberate separation between personnel costs and technology infrastructure outlays. Efficiency initiatives have lowered the absolute number of employees while selective hiring in AI-related roles and continued investment in compute capacity expand the company’s technological capabilities. The net effect is a leaner organizational structure supporting a more capital-intensive operating model. Lower headcount reduces ongoing compensation and related expenses, providing a partial offset to the higher depreciation, power, and research costs associated with AI infrastructure. Management has not framed the headcount reduction as a response to weakening demand; rather, it forms part of a broader productivity agenda that has been underway for several years.

The coexistence of workforce reductions and aggressive capital spending highlights a strategic choice to prioritize scalable technology assets over incremental headcount growth. In an environment where specialized AI talent remains scarce and expensive, concentrating resources on infrastructure and high-impact research roles can produce greater leverage than broad-based hiring. The 15 percent decline also contributes to the structural component of margin dynamics discussed earlier. Investors monitoring technology operating leverage often examine the relationship between revenue growth and headcount trends; Meta’s current pattern shows revenue expanding while headcount contracts, a combination that historically supports margin expansion once capital intensity stabilizes. The durability of this efficiency gain will depend on whether the reduced workforce can sustain product velocity and operational reliability as AI systems grow in complexity. Early evidence from advertising-tool adoption and Muse-agent uptake suggests that product development continues at a rapid pace. Subsequent disclosures on productivity metrics or further headcount changes will clarify whether the current efficiency level is sustainable or represents an intermediate stage in organizational redesign.

Nearly 10 million advertisers used at least one generative-AI creative tool during the third quarter, and video-generation features recorded 25 percent sequential growth in adoption. These figures demonstrate that AI capabilities have moved beyond experimental use into mainstream advertiser workflows. The tools improve creative production speed and, in many cases, campaign performance, contributing to the higher average ad prices observed in the quarter. System-level ranking and recommendation improvements further amplify the value of each impression by increasing relevance and engagement. The combination of advertiser-facing generative tools and backend algorithmic enhancements creates a reinforcing cycle: better ads attract higher bids, while better ranking improves user experience and time spent. Management has explicitly linked these AI improvements to substantial incremental advertising revenue, providing a near-term return on portions of the broader AI investment program.

The scale of advertiser adoption is noteworthy because it indicates product-market fit rather than limited pilot participation. When millions of advertisers incorporate generative tools into regular campaign processes, the resulting data and feedback loops accelerate further model improvement. Video-generation growth of 25 percent quarter over quarter suggests particular momentum in formats that historically command premium pricing. These developments support the thesis that AI can enhance the core advertising business even while larger infrastructure investments await longer-term payoffs. For market participants who also track tokenized asset developments, the parallel between platform-level AI adoption and on-chain application growth is sometimes drawn; in Meta’s case, the commercial uptake is already measurable in advertising metrics. Continued expansion of tool usage and any disclosure of incremental revenue attributable to AI features will serve as important leading indicators of return on the capital being deployed. The current adoption levels already validate the near-term commercial relevance of the AI program.

Meta announced the establishment of a new non-voting Class C common stock to be distributed as a stock dividend of one Class C share for each outstanding Class A and Class B share. The authorization expands the company’s equity capital-structure toolkit while preserving the existing dual-class voting arrangement that concentrates control. Non-voting shares can facilitate future equity issuances, acquisitions, or employee compensation programs without diluting voting power. The timing of the announcement alongside earnings results suggests a desire to maintain strategic flexibility as the company navigates a period of elevated capital intensity and legal resolution. No immediate issuance beyond the stock dividend was detailed, indicating that the primary purpose is structural readiness rather than near-term capital raising.

Capital-structure flexibility becomes particularly relevant when a company is simultaneously funding large infrastructure programs and resolving material legal matters. The ability to issue non-voting equity, if needed, provides an additional funding option that does not alter control dynamics. Investors evaluating dual-class structures often weigh the governance implications against the strategic advantages of founder or insider control during periods of heavy investment. Meta’s move is consistent with practices at other large technology firms that have authorized additional share classes for similar purposes. The stock-dividend distribution itself is non-dilutive in economic terms and simply multiplies the number of shares outstanding while maintaining proportional ownership. Subsequent disclosures will clarify any intended uses of the Class C shares. In the interim, the authorization removes a potential constraint on future capital-markets activity and reinforces the company’s capacity to fund its strategic agenda through a combination of internal cash generation and, if required, external equity.

Taken together, the third-quarter results present a coherent picture of a company whose advertising franchise continues to expand at a healthy rate while management deliberately accepts near-term margin and free-cash-flow pressure in pursuit of longer-term AI capabilities. Revenue growth of 26 percent, advertising strength, and user-base expansion supply the economic foundation. The $9.89 billion legal charge and elevated capital expenditures explain the compression in reported profitability and the temporary free-cash-flow deficit. Guidance for the fourth quarter and full year indicates that both the advertising momentum and the investment posture are expected to persist. Balance-sheet liquidity remains ample, headcount efficiency provides a cost offset, and early AI-product adoption metrics offer initial validation of the strategic direction. The net assessment is that Meta is navigating a transitional period in which core cash generation funds both legacy legal resolutions and next-generation technological capacity.

The durability of this model will depend on the pace at which AI-related revenue and efficiency gains scale relative to the associated capital and operating costs. Near-term evidence from advertising tools and Muse-agent uptake is encouraging, yet the full return profile of the infrastructure program will unfold over multiple years. Investors will continue to monitor sequential revenue realization, free-cash-flow trends, Reality Labs loss trajectories, and any updates to multi-year capital plans. The third-quarter report supplies a clear baseline against which those future developments can be measured. In an industry where competitive advantage increasingly hinges on computational scale and model capability, Meta has chosen to prioritize capacity expansion while its advertising engine remains robust. The financial results of the coming quarters will reveal how effectively that capacity translates into sustained economic returns.

1. What were the primary drivers of Meta’s 26 percent revenue growth in Q3 2026?  

Advertising revenue rose 26 percent to $63.06 billion on the back of a 10 percent increase in ad impressions and a 14 percent rise in average price per ad. AI-driven improvements in ranking, recommendation, and generative creative tools contributed to both higher volume and stronger pricing. Family Daily Active People of 3.64 billion provided a large and engaged audience base. These factors combined to push total revenue to $64.60 billion, exceeding consensus estimates.

2. How significant was the legal charge to reported profitability?  

The $9.89 billion charge related to the multi-state attorneys-general settlement reduced operating income by a comparable amount and lowered the operating margin from a potential 35 percent to the reported 20 percent. Excluding the charge, operating income would have been approximately $22.88 billion and diluted EPS roughly $7.40 instead of the reported $3.83. The item was incorporated into raised full-year expense guidance, limiting future surprise.

3. Why did free cash flow turn negative?  

Capital expenditures of $34.91 billion exceeded operating cash flow of $32.79 billion, producing free cash flow of negative $2.12 billion. The outlays support data center and AI accelerator capacity required for frontier models and product features. Cash and marketable securities of $82.45 billion still provide a substantial liquidity cushion.

4. What is the outlook for fourth-quarter revenue?  

Management guided fourth-quarter revenue to a range of $73–$76 billion. The midpoint exceeds prevailing analyst estimates. An approximate 1 percent foreign-currency headwind is expected. The guidance implies continued sequential and year-over-year growth consistent with seasonal advertising patterns and ongoing AI monetization benefits.

5. How is Reality Labs performing?  

Reality Labs recorded $443 million in revenue, down 6 percent, with growth in AI glasses partially offsetting lower Quest sales. Full-year 2026 operating losses are expected in the $18–$19 billion range, narrowing to approximately $15 billion in 2027. The segment remains a material drag on consolidated results while representing a long-term strategic investment.

6. What progress has been made on AI products?  

Muse and Muse Wonder were launched as the company’s first frontier model. More than 10 million people in the United States and Canada set up Muse agents within six weeks. Nearly 10 million advertisers used generative-AI creative tools, and video-generation features grew 25 percent sequentially. These metrics indicate early commercial and consumer traction.

7. How has headcount changed?  

Headcount declined 15 percent year over year to 66,975 employees. The reduction reflects efficiency initiatives that lower personnel costs even as capital and research spending on AI infrastructure rise. The combination supports a leaner organizational structure alongside higher technology intensity.

8. What capital-structure change was announced?  

Meta authorized a new non-voting Class C common stock to be distributed as a stock dividend. The authorization expands flexibility for potential future equity issuances or transactions without altering the existing voting-control structure.