Episode Details

Meta's Q3 2026 was two stories at once. The ad business beat: revenue of $64.6B, up 26%, with ad impressions up 10% and price per ad up 14% as AI targeting lifts the auction. Underlying EPS of $7.40 (excluding a one-time $9.9B legal charge from the state attorneys general settlement) beat the ~$6.54 consensus. But capex hit $34.9B in the quarter, the FY26 guide rose to $135-145B, and free cash flow went negative (-$2.1B) for the first time since the IPO. Reality Labs lost another $4.1B, Q4 revenue was guided to $73-76B, and a new Class C stock signals equity is joining the funding mix. The episode works through the core tension: Meta is the proven AI adopter now spending like an input owner — and whether 26% ad growth can keep funding the largest buildout in corporate history. Key watch item: the 2027 capex guide in January.