Free cash flow at Meta Platforms (META) turned negative in the third quarter ended Sept. 30, 2026, at -$1.16B, even as revenue of $64.60B beat the analyst estimate of $63.34B. Capital expenditure was larger than the operating cash flow the business generated. Separately, the stock traded at 641.39 USD on the latest quote (Nov. 10, 2026), with a 0.00% change that day.
Figures are current as of Nov. 10, 2026 and cover the third quarter ended Sept. 30, 2026 unless stated. Tags: META | technology, digital advertising and AI infrastructure | earnings recap.
Key facts
- Earnings line, Oct. 21, 2026: FMP shows EPS of 7.4 against an analyst estimate of 6.54, a difference of +$0.86, or 13.1%. Revenue of $64.60B compared with an estimate of $63.34B, a difference of +$1.26B, or 2.0%.
- Quarter ended Sept. 30, 2026: revenue of $64.60B, up 26.1% from the year-ago quarter. Operating income was $12.99B and net income was $9.86B.
- Cash flow, same quarter: operating cash flow of $32.79B, capital expenditure of -$33.94B and free cash flow of -$1.16B.
- Margins: operating margin of 20.1%, against 40.1% in the third quarter ended Sept. 30, 2025.
- Share price, Nov. 10, 2026: 641.39 USD on the latest quote, inside a 52-week range of 520.26-779.82 USD.
- Next earnings date: Jan. 27, 2027, with an EPS estimate of 8.38 and a revenue estimate of $75.02B.
| Metric | Q3 FY2026 (ended Sept. 30, 2026) | Q3 FY2025 (ended Sept. 30, 2025) |
|---|---|---|
| Revenue | $64.60B | $51.24B |
| Operating income | $12.99B | $20.54B |
| Net income | $9.86B | $2.71B |
| Operating margin | 20.1% | 40.1% |
| Free cash flow | -$1.16B | $11.17B |
What happened
The headline numbers beat. Revenue of $64.60B was above the analyst estimate of $63.34B and 26.1% higher than the year-ago quarter. FMP's earnings line shows EPS of 7.4 against an estimate of 6.54. The quarterly filing data lists diluted EPS of 3.83 for the same quarter. We could not reconcile the two EPS figures from our data, so treat the 7.4 as the number FMP compares with the estimate and the 3.83 as the filing's diluted figure.
Profitability is where the quarter looks different. Operating income of $12.99B was lower than the $20.54B of a year earlier, even though revenue was much higher. Net income of $9.86B was up 264.0% from $2.71B a year earlier, a comparison that starts from a low base in the year-ago quarter.
In the company's segment reporting, Family of Apps produced revenue of $64.16B. Reality Labs, the VR and smart-glasses unit, remained very small next to it and brought in less than in the year-ago quarter. By region, US & Canada revenue was $26.22B, Asia Pacific was $16.99B, Europe was $14.02B and Rest of World was $7.37B.
On Nov. 10, 2026, Meta and IMAX said in a joint release that Meta's upcoming VR glasses will be the first VR device to be IMAX Enhanced certified, with an updated IMAX app arriving when the glasses launch next spring. Separately, TechCrunch reported the same day that Meta's AI agent Muse is now available on Apple Watch and Android Wear OS. Neither item changes the third-quarter results.
Why it matters for investors
The five-quarter trend is the story. Here is how margins and cash flow moved, oldest to newest:
| Quarter ended | Gross margin | Operating margin | Free cash flow |
|---|---|---|---|
| Sept. 30, 2025 | 82.0% | 40.1% | $11.17B |
| Dec. 31, 2025 | 81.8% | 41.3% | $14.83B |
| March 31, 2026 | 81.9% | 40.6% | $13.23B |
| June 30, 2026 | 81.4% | 30.9% | $1.75B |
| Sept. 30, 2026 | 79.3% | 20.1% | -$1.16B |
Three things changed. Operating margin fell in each of the last two quarters, from 40.6% in the quarter ended March 31, 2026 to 20.1%. Gross margin slipped to 79.3%. And capital expenditure rose in each of the last two quarters, reaching -$33.94B in the latest one, which was larger than operating cash flow of $32.79B. Operating cash flow itself has been steady between $30.00B and $36.21B across the five quarters, so the swing in free cash flow came from the spending side. Our data does not include a management call digest for this quarter, so we cannot attribute the spending or margin change to a stated driver. Check the company's release and call for management's own explanation.
Buybacks have been $0.00 in every quarter since the year-ago quarter, when they were -$3.33B. Dividends were -$1.36B in the latest quarter, and the dividend yield is 0.3%.
Balance sheet. Cash and short-term investments were $82.45B and total debt was $112.09B as of Sept. 30, 2026. FMP separately reports net debt of $100.87B. Shareholders' equity was $272.39B and debt/equity is 0.41. FMP's Altman Z score, a bankruptcy-risk gauge where higher is safer, is 6.44, and its Piotroski score, a 0-9 measure of financial health, is 4.
Valuation against peers. Meta trades at a trailing P/E of 21.60, price/sales of 6.79 and EV/EBITDA of 16.31, with a net margin of 31.1%. Its price/free cash flow of 57.23 reflects the weaker cash flow of recent quarters. Alphabet (GOOG) has a P/E of 14.69 and a net margin of 50.0%. JOYY Inc. (JOYY) has a P/E of 18.94 and a net margin of 9.6%. Kuaishou Technology (KSHTY) has a P/E of 6.68 and a net margin of 10.9%. Meta's P/E is higher than all three, and its net margin is above JOYY's and Kuaishou's but below Alphabet's.
Analysts. Wall Street's consensus rating is Buy, from 69 ratings: 2 strong buy, 54 buy, 11 hold, 2 sell and 0 strong sell. Analysts' average price target is 834.36 USD and the median target is 862.50 USD, with a high target of 1000.00 USD and a low target of 595.00 USD. Several firms, including Evercore ISI, JP Morgan, TD Cowen and Cantor Fitzgerald, maintained their ratings on Oct. 22, 2026. FMP's discounted cash flow model, a rough model estimate, gives 247.83 USD per share, far below the market price. Such models are sensitive to their assumptions.
Stock Expert AI MoonshotScore. Our MoonshotScore V2 for Meta is 84.6, rated Exceptional. Within its sector, quality scores 94, growth 85, safety 81 and momentum 77. Valuation is the weak pillar at 23, which says the shares look expensive relative to sector peers on our measures.
What could go wrong. The risks visible in the data are these:
- Margins have fallen for two straight quarters.
- Net income fell in each of the last two quarters, from $26.77B to $15.85B to $9.86B, so the 264.0% year-over-year rise reflects a low year-ago base rather than the recent trend.
- Free cash flow is now negative.
- Buybacks have been zero in each quarter since the year-ago quarter.
- The valuation pillar is weak.
- Among the 30 most recent insider filings, those dated in the last 90 days show 29 sales and 0 open-market purchases. Insider sales are common for large companies and are not a signal on their own.
What to watch next
- Jan. 27, 2027: the next earnings date, with an EPS estimate of 8.38 and a revenue estimate of $75.02B.
- Capital expenditure versus operating cash flow: whether free cash flow returns to positive or spending keeps matching cash generation.
- Operating margin: whether it stabilizes near 20.1% or moves lower again.
- Buybacks: whether the company resumes repurchases after buybacks of $0.00 in every quarter since the year-ago quarter.
- Reality Labs: the IMAX-certified VR glasses are due to launch next spring, but Reality Labs revenue is small next to Family of Apps.
Frequently asked questions
Q: Did Meta beat earnings estimates in the third quarter of 2026?
Yes, on FMP's earnings line dated Oct. 21, 2026. EPS of 7.4 was above the analyst estimate of 6.54, a difference of +$0.86, or 13.1%. Revenue of $64.60B for the quarter ended Sept. 30, 2026 was above the estimate of $63.34B. The quarterly filing lists diluted EPS of 3.83, a different measure.
Q: Why is Meta's free cash flow negative?
In the quarter ended Sept. 30, 2026, Meta's operating cash flow was $32.79B, while capital expenditure was -$33.94B. That left free cash flow at -$1.16B, against $11.17B in the year-ago quarter. Our data shows the numbers but not management's stated reasons, so see the company's release and call for those.
Q: Is Meta stock expensive compared with other tech companies?
On trailing 12-month data, Meta's P/E of 21.60 is higher than Alphabet (GOOG) at 14.69, JOYY Inc. (JOYY) at 18.94 and Kuaishou Technology (KSHTY) at 6.68. Our MoonshotScore valuation pillar for Meta is 23, its weakest area. This is a description of the data, not advice.
What our data could not verify
We did not have a management call transcript or digest for the third quarter, so we cannot report management's stated reasons for the margin and spending changes. We also could not reconcile FMP's earnings-line EPS with the filing's diluted EPS.
Sources: Stock Expert AI data (FMP financial data, MoonshotScore V2) for all figures. Third-party and company items, the Meta and IMAX release and the TechCrunch report on Muse, are used for context only.
This is educational content, not investment advice. Past performance does not guarantee future results.