Meta Platforms (NASDAQ:META) Announces Earnings Results

Meta Platforms (NASDAQ:META) posted its quarterly earnings results on Wednesday. The social networking company reported $7.40 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $6.54 by $0.86, FiscalAI reports. The company had revenue of $64.60 billion for the quarter, compared to analyst estimates of $63.34 billion. Meta Platforms had a return on equity of 31.74% and a net margin of 31.15%. Meta Platforms’s revenue for the quarter was up 26.1% compared to the same quarter last year. During the same quarter last year, the company earned $7.25 EPS.

Here are the key takeaways from Meta Platforms’ conference call:

• Core business momentum remained strong: Q3 revenue rose 26% to $64.6 billion, with ad revenue up 26%, engagement reaching records across Instagram and Facebook, and ad pricing increasing 14%.
• Muse showed rapid early adoption with more than 10 million U.S. and Canadian users setting up personal agents in roughly six weeks, while Meta outlined monetization opportunities spanning commerce, subscriptions, business services, and enterprise APIs.
• AI expansion is driving substantial near-term costs. Q3 expenses rose 68%, including a $9.9 billion legal charge, while capital expenditures reached $34.9 billion and free cash flow was negative $2.1 billion; Muse also remains highly compute-intensive despite expected efficiency improvements.
• Reality Labs losses are expected to narrow to approximately $15 billion in 2027 as Meta reallocates investment toward AI, while AI glasses sales continue to grow and Muse integration is expected to support future subscriptions.

Meta Platforms Stock Down 0.5%

META traded down $3.51 during trading on Friday, reaching $645.34. 4,845,675 shares of the stock traded hands, compared to its average volume of 17,614,477. The stock has a market cap of $1.64 trillion, a price-to-earnings ratio of 24.25, a price-to-earnings-growth ratio of 1.33 and a beta of 1.19. The stock’s 50-day simple moving average is $663.35 and its two-hundred day simple moving average is $629.62. The company has a debt-to-equity ratio of 0.32, a current ratio of 2.23 and a quick ratio of 2.23. Meta Platforms has a fifty-two week low of $520.26 and a fifty-two week high of $779.82.

Meta Platforms Announces Dividend

The business also recently announced a quarterly dividend, which was paid on Monday, September 28th. Shareholders of record on Monday, September 21st were paid a dividend of $0.5250 per share. The ex-dividend date of this dividend was Monday, September 21st. This represents a $2.10 dividend on an annualized basis and a dividend yield of 0.3%. Meta Platforms’s dividend payout ratio (DPR) is 7.91%.

More Meta Platforms News

Here are the key news stories impacting Meta Platforms this week:

• Positive Sentiment: Meta reported third-quarter revenue of $64.6 billion, up 26.1% year over year, and adjusted earnings of $7.40 per share, exceeding analyst expectations. AI-powered advertising helped improve engagement, conversions, click-through rates, and ad pricing. Meta falls as investors balance Muse growth with rising AI costs
• Positive Sentiment: Meta’s Muse AI assistant has surpassed 10 million users shortly after launch, supporting the long-term thesis that the product could become a new revenue source alongside Facebook and Instagram. Several analysts raised their price targets and maintained bullish ratings after the earnings report. Meta says Muse has over 10M users
• Neutral Sentiment: Meta approved a new non-voting Class C share class and announced a 2-for-1 stock split. The structure could help finance the AI buildout and allow CEO Mark Zuckerberg to raise capital without surrendering voting control, but it also raises concerns about future dilution and corporate governance. Why is Meta creating a new class of non-voting shares amid its AI growth?
• Negative Sentiment: Investors are alarmed by Meta’s substantially higher AI infrastructure spending, including capital expenditures that pushed free cash flow negative for the first time since its IPO. Rising borrowing needs have also driven the company’s credit-default-swap costs to record highs, increasing doubts about when Muse and other AI investments will generate adequate returns. Steep bill for AI buildout punishes Meta
• Negative Sentiment: Legal exposure is another major overhang. A New Mexico judge ordered Meta to pay a $25 billion penalty in a data-privacy case tied to Cambridge Analytica; Meta plans to appeal. The company also recorded a roughly $9.9 billion legal charge related to a teen social-media lawsuit settlement, weighing on reported profitability. Meta ordered to pay $25 billion penalty to New Mexico

Analyst Upgrades and Downgrades

META has been the subject of a number of recent research reports. New Street Research decreased their price objective on Meta Platforms from $730.00 to $700.00 and set a “buy” rating for the company in a research report on Friday, July 31st. UBS Group reiterated an “outperform” rating and issued a $920.00 price target on shares of Meta Platforms in a report on Thursday. Evercore reissued an “outperform” rating on shares of Meta Platforms in a research report on Thursday. Wedbush boosted their price objective on shares of Meta Platforms from $700.00 to $730.00 and gave the stock a “neutral” rating in a report on Thursday. Finally, Roth Capital cut their price objective on Meta Platforms from $820.00 to $750.00 and set a “buy” rating on the stock in a research note on Monday, August 3rd. Three analysts have rated the stock with a Strong Buy rating, forty-seven have issued a Buy rating and eight have issued a Hold rating to the company. Based on data from MarketBeat.com, the company has a consensus rating of “Moderate Buy” and an average target price of $833.12.

Insider Activity at Meta Platforms

In related news, insider Christopher Cox sold 40,000 shares of the firm’s stock in a transaction that occurred on Monday, September 21st. The stock was sold at an average price of $712.76, for a total value of $28,510,400.00. Following the transaction, the insider directly owned 184,516 shares of the company’s stock, valued at approximately $131,515,624.16. This trade represents a 17.82% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Susan Li sold 9,196 shares of the company’s stock in a transaction dated Tuesday, August 18th. The shares were sold at an average price of $550.61, for a total transaction of $5,063,409.56. Following the transaction, the chief financial officer directly owned 13,186 shares of the company’s stock, valued at $7,260,343.46. This represents a 41.09% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last quarter, insiders sold 149,906 shares of company stock valued at $102,347,409. Insiders own 13.53% of the company’s stock.

Meta Platforms Company Profile

Meta Platforms, Inc is a technology company that develops social networking, messaging, virtual and augmented reality, and artificial intelligence products. The company’s principal platforms include Facebook, Instagram, Messenger, WhatsApp, and Threads, which enable users to connect, communicate, share content, and discover products and services.

Meta also operates Reality Labs, its division focused on virtual, augmented, and mixed reality technologies. Reality Labs develops products such as Meta Quest virtual reality headsets and related software and experiences, along with research and hardware intended to support immersive computing.