Meta (META) posted third-quarter non-GAAP earnings of $7.40 a share. Its GAAP EPS topped $1.63. Its revenue of $64.6 billion is impressive, too. It grew by 26.1% Y/Y.
In Q4, Meta issued guidance for total revenue of between $73 and $76 billion, above expectations. But the firm also increased its expense outlook again. It will take a $9.9 billion charge related to legal proceedings recognized in Q3. FY 2026 costs will be between $175 and $179 billion.
Capital expenditure topped $34.9 billion in the quarter, causing Meta’s free cash flow to turn negative to $2.1 billion. The firm is still suffering from losses for its hardly used Metaverse (Reality Labs). Still, its augmented reality unit has potential. Consumers are buying the Ray-Ban smart glasses.
Muse AI is an impressive AI assistant that has enjoyed strong traction. Yet Meta, WhatsApp, and Facebook users are unlikely to sign up for its monthly/yearly subscription.
Meta will add Muse to Meta Glasses starting next month. That might spur higher Muse subscriptions.
After the report, META stock erased its September – October rally from $540 to $779.82. The stock closed at $642.62, down 9.4% for the week.
Your Takeaway
Muse has over 10 million people using Muse. Assume that most of the users in the U.S. and Canada will not subscribe. In time, those who keep using it might grow dependent on it. The global rollout of Muse should also increase subscriptions for Muse.
