Third-quarter revenue came in at $64.60 billion, a 26% increase year over year and above the $63.37 billion that analysts had forecast. EPS was $3.83, and Meta said it was not clear if that figure lined up directly with the $5.75 per share number Wall Street was looking for.
Free cash flow was negative $2.12 billion. The stock dropped about 6% Thursday after the results and spending update.
Meta now expects full-year capital expenditures of $135 billion to $145 billion. It also lifted the lower bound of its full-year capex, moving it from $130 billion to $145 billion.
In the credit market, pricing on Meta's five-year credit default swaps hit record highs on Thursday, indicating rising investor unease about the firm's credit as it leans deeper into AI spending plans.
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Meta said it will introduce a fresh series of nonvoting Class C common shares to maintain its "founder-led structure" and "provide Meta the ability to finance its growth." In an SEC filing, the company added that, should the "California Wealth Tax" be enacted, CEO Mark Zuckerberg might relocate out of California because he "could become liable for a significant, multi-billion-dollar tax payment based on his ownership of stock in the Company." The filing noted that the company's new stock plan convinced Zuckerberg to remain in California.
The setup is straightforward: faster revenue growth, negative free cash flow, bigger spending goals, and credit markets flashing caution. Watch how the capex path, CDS levels, and the new stock structure affect Meta's funding costs and stock swings from here.
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