Meta Platforms (NASDAQ:META) Releases Quarterly Earnings Results, Beats Expectations By $0.86 EPS

Meta Platforms (NASDAQ:META) posted its quarterly earnings data on Wednesday. The social networking company reported $7.40 earnings per share (EPS) for the quarter, beating the consensus estimate of $6.54 by $0.86, FiscalAI reports. The business had revenue of $64.60 billion during 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%. The company’s revenue for the quarter was up 26.1% on a year-over-year basis. During the same period 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 Trading Down 0.4%

Shares of NASDAQ:META traded down $2.74 on Friday, hitting $646.11. 4,223,598 shares of the company’s stock were exchanged, compared to its average volume of 17,614,477. The stock has a market capitalization of $1.65 trillion, a price-to-earnings ratio of 24.32, a price-to-earnings-growth ratio of 1.33 and a beta of 1.19. Meta Platforms has a 12 month low of $520.26 and a 12 month high of $779.82. The company has a debt-to-equity ratio of 0.32, a current ratio of 2.23 and a quick ratio of 2.23. The business’s 50 day simple moving average is $663.35 and its two-hundred day simple moving average is $629.62.

Meta Platforms Announces Dividend

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

Key Stories Impacting Meta Platforms

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

Analysts Set New Price Targets

Several equities analysts have recently weighed in on the company. China Renaissance cut their target price on Meta Platforms from $825.00 to $700.00 and set a “buy” rating on the stock in a research report on Friday, July 31st. Truist Financial raised their price target on Meta Platforms from $763.00 to $1,000.00 and gave the stock a “buy” rating in a research report on Tuesday, October 13th. DA Davidson raised their price target on Meta Platforms from $700.00 to $800.00 and gave the stock a “buy” rating in a research report on Thursday. BMO Capital Markets lifted their price objective on shares of Meta Platforms from $580.00 to $685.00 and gave the stock a “market perform” rating in a research note on Thursday. Finally, Arete Research boosted their price objective on shares of Meta Platforms from $735.00 to $806.00 and gave the company a “buy” rating in a research report on Wednesday, September 16th. Three equities research analysts have rated the stock with a Strong Buy rating, forty-seven have given a Buy rating and eight have issued a Hold rating to the company. According to data from MarketBeat.com, Meta Platforms currently has an average rating of “Moderate Buy” and an average target price of $833.12.

Insider Transactions at Meta Platforms

In related news, CEO Mark Zuckerberg sold 27,474 shares of Meta Platforms stock in a transaction dated Thursday, September 24th. The shares were sold at an average price of $777.44, for a total transaction of $21,359,386.56. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Susan J. Li sold 9,196 shares of the business’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 completion of the sale, the chief financial officer directly owned 13,186 shares of the company’s stock, valued at approximately $7,260,343.46. This trade represents a 41.09% decrease in their ownership of the stock. 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. In the last quarter, insiders sold 149,906 shares of company stock valued at $102,347,409. Company insiders own 13.53% of the company’s stock.

About Meta Platforms

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.