Meta unveils $64 billion revenue quarter and new non-voting stock

Shareholders of Meta will soon hold a new type of financial instrument designed to help finance the company's aggressive expansion into artificial intelligence. On Wednesday, the company confirmed plans to issue non-voting capital stock to all existing owners. This move aims to provide the corporation with greater flexibility in raising capital without diluting the voting control currently held by its founders and major investors.

During the third-quarter earnings call, Chief Financial Officer Susan Li detailed the structure of this new share class. She explained that the company intends to distribute these shares via a stock dividend to current holders. The primary goal is to create a publicly traded instrument that can be used for acquisitions, employee compensation, and general corporate funding. Li noted that this approach preserves the voting power of the existing Class A and B shareholders while allowing Meta to maintain its founder-led structure.

The announcement came alongside strong financial results for the third quarter. The company reported total revenue of $64 billion, marking a 26 percent increase compared to the same period last year. This performance exceeded expectations set by Wall Street analysts. However, the surge in revenue came with a significant increase in spending. Costs and expenses rose by 68 percent year over year, reflecting the heavy investment required for its new technology initiatives.

Meta's Reality Labs division, which handles virtual reality headsets and augmented reality glasses, continues to operate at a loss. Nevertheless, the company expects these losses to narrow in the coming year. The earnings report projects that the division's losses will shrink from their 2025 levels to a range between $18 billion and $19 billion. This improvement suggests a gradual stabilization for a unit that has historically drained significant resources from the parent company.

The AI push has been a central focus for Meta over the past year. The company has released several models, including Muse Spark and Muse Glimmer earlier in the year. Recently, it added Muse Wonder and Muse Spark Open, the latter being an open-weight model that allows outside developers to build upon its parameters. Meta also introduced Muse Code, a coding agent for software developers, and announced new avatar options for its AI assistant at its Connect event. These moves are part of a broader strategy to make the technology more accessible and relatable to the general public.

CEO Mark Zuckerberg reported that adoption rates for these new tools are high. He stated that more than 10 million people in the United States and Canada have set up personal agents in just six weeks. Zuckerberg claimed the product has achieved clear market fit and that the company is now entering a scaling phase. He expressed confidence that the service could eventually serve billions of users as it continues to expand its operational reach.

Despite the strong growth, the company faces ongoing challenges in the legal and regulatory arenas. Li warned that active legal matters could significantly impact future financial results. She highlighted increasing scrutiny regarding youth-related issues in several markets. The company has multiple trials scheduled in the United States in the coming months, which will require continued monitoring and attention from leadership.