Meta beats revenue expectations but legal penalties hit profit
The company reported its earnings just hours after another financial penalty was announced related to a case in New Mexico.
Meta reported stronger-than-expected revenue for the third quarter, exceeding investor projections, but faced a significant dent in profits due to a staggering US$18 billion legal settlement with nearly all US states. The social media giant's earnings for July to September stood at US$9.86 billion, nearly 50% shy of the US$19.1 billion investors anticipated.
Meta disclosed the earnings only hours after a fresh penalty was announced in New Mexico, where a judge ordered the tech behemoth to pay US$25 billion following a jury's finding that Meta had misled users in a case stemming from the Cambridge Analytica scandal.
In addition to the legal woes, Meta has been ramping up investments in artificial intelligence (AI) capabilities. During the September quarter, the company disclosed spending of US$35 billion on capital expenditures, which fell short of the US$41 billion investors had expected. Earlier in July, Meta had raised its annual capital spending estimate to US$145 billion, from US$130 billion, marking a near doubling of expenditures compared to 2025.
Despite these challenges, Meta's shares surged more than 4% in response to the positive revenue outlook.
Written by urgent.news from Free Malaysia Today's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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