Meta narrows 2026 capex forecast to $135-145 billion as Q3 free cash flow turns negative

Meta closed the third quarter of 2026 with revenue of $64.6 billion, up 26 percent year over year, but spent more on investment than it generated from operations. The company narrowed its full-year capital expenditure forecast to $135-145 billion, raising the lower end of the range.

The figures come from the company's earnings release for the quarter ended September 30, 2026, and from the call with analysts, which featured Mark Zuckerberg and CFO Susan Li. CNBC also covered the results.

Spending outpaces cash

Meta's Q3 capital expenditures, including principal payments on finance leases, came to $34.91 billion. Cash flow from operating activities reached $32.79 billion, leaving free cash flow at negative $2.12 billion. At the end of the quarter the company held $82.45 billion in cash and marketable securities.

Li said the spending goes toward servers, data centers and network infrastructure. The new range for all of 2026 is $135-145 billion. The company had previously pointed to $130-145 billion, so the upper end is unchanged.

Profit hit by settlement

Operating income fell to $12.99 billion, and the operating margin was 20 percent, compared with 40 percent a year earlier. Costs and expenses rose 68 percent to $51.61 billion. The result absorbed a $9.89 billion charge tied to the August settlement with 52 U.S. state attorneys general over teen mental health and social media.

According to the company, without that charge operating income would have been $22.88 billion, and earnings per share $7.40 instead of the reported $3.83. Total payments under the settlement could reach about $18.59 billion. The forecast for total 2026 expenses is $175-179 billion and includes the charge.

Muse and the cost of serving users

Zuckerberg said more than 10 million people in the U.S. and Canada set up Muse in about six weeks, and roughly 25 percent of them use the assistant on any given day. These figures were provided by the company.

Zuckerberg explained that Muse has not yet launched globally partly because it is compute-intensive to run and the company wants to improve efficiency first, and partly because the service and its connectors need to be adapted to individual markets. He said the company expects to improve cost efficiency by more than 10x within a year, which should allow Muse to become profitable once revenue reaches scale. Li added that this quarter the company began moving its content understanding models to the Muse model family, and in offline evaluations they cut per-unit content processing costs by more than 80 percent. She said total serving costs will rise as the user base grows.

Our investments are paying off, the core business is strong, and we're seeing velocity across the board. - Mark Zuckerberg, CEO of Meta

What comes next

Li said formal 2027 guidance will come only with Q4 results, because the company is still developing its budget and compute capacity plans. Meta expects to keep investing aggressively in its core business and AI initiatives. Reality Labs losses are expected to be $18-19 billion in 2026 and around $15 billion in 2027.

The board also approved a new non-voting class of stock, Class C. The charter changes are set to take effect on January 19, 2027, and according to the CFO trading is expected to begin in late January 2027. The company cites capital raising, employee compensation and acquisitions as the purposes, and says the voting power of existing shareholders is unchanged. For Polish companies that use Meta's advertising, the key point is that AI infrastructure costs are growing faster than the cash the business generates, which will be watched in upcoming reports.