Meta's Q3 Revenue Rises 26%; Court Orders $25 Billion Penalty in Privacy Lawsuit

Revenue Beats Market Expectations, but Free Cash Flow Turns Negative

Meta, which operates Facebook and Instagram, posted third-quarter revenue that beat market expectations. However, amid settlement costs related to protecting teenagers and the burden of AI (artificial intelligence) investment, its free cash flow (FCF) turned negative. Meanwhile, a New Mexico state court ordered Meta to pay $25 billion (approximately KRW 33 trillion) in penalties in a separate lawsuit over its handling of users' personal information.

Meta reported third-quarter revenue of $64.6 billion, up 26% year over year.

On Oct. 21 (local time), Meta reported third-quarter revenue of $64.6 billion, up 26% year over year. The figure exceeded the market forecast of $63.37 billion compiled by the London Stock Exchange Group (LSEG). Adjusted earnings per share (EPS) came to $3.83.

Meta posted an FCF deficit of $2.1 billion in the third quarter. It was the company's first quarterly deficit since going public, but was smaller than the $9.4 billion deficit the market had expected, The Wall Street Journal (WSJ) reported.

Meta forecast fourth-quarter revenue of $73 billion to $76 billion. The upper end of the forecast exceeds market expectations. The company raised the lower end of its capital expenditure forecast for this year, revising the range from $130 billion to $145 billion to $135 billion to $145 billion.

Chief Financial Officer (CFO) Susan Li did not provide a capital expenditure forecast for 2027, but said the company "expects to continue investing aggressively" to support its core business and AI investments.

On the same day Meta reported its third-quarter results, a New Mexico state court ordered the company to pay $25 billion in a separate lawsuit concerning its handling of personal information.

A jury had previously found that Meta misled Facebook users about privacy protections, its response to hate speech and misinformation, and third-party app access to data, thereby violating New Mexico's Consumer Protection Act approximately 43.9 million times.

The lawsuit was filed in 2021 in connection with the 2018 Cambridge Analytica scandal, in which the information of tens of millions of Facebook users was collected without their consent.

Judge Francis Matthew ordered Meta to pay $25 billion, saying that state law allows penalties of up to $5,000 for each violation, but also gives the court discretion to set an amount it considers justified. New Mexico had pursued its own lawsuit rather than joining settlements with other states.

This content was produced with the assistance of AI translation services.