Meta Expects $10 Billion Legal Expense Ahead of Third-Quarter Results

Meta Platforms (META) is set to release third-quarter earnings with an expected $10 billion legal accrual that may weigh on profit despite projected revenue growth of about 24%.

Analysts expect about $63.3 billion in revenue, near the upper end of Meta’s $61 billion to $64 billion forecast. That estimate compares with $51.24 billion in revenue a year earlier. Meta is scheduled to release its results after the U.S. market close Wednesday, Oct. 21.

The expected legal expense stems from Meta’s agreement with state attorneys general over teen safety. Meta did not include the charge in the expense range it provided in July. The accrual would affect third-quarter results, while payments under the agreement are spread over 10 years.

Those payments total about $18 billion. Approximately $5.3 billion depends on TikTok and YouTube adopting specified protections and each making a matching payment. The conditional amount is part of the broader agreement, separate from the question of when Meta records the expected expense.

Meta’s costs were already growing faster than sales in the second quarter. Revenue rose 28% from a year earlier to $60.80 billion, while costs and expenses climbed 55% to $42.03 billion. Operating income fell 8% to $18.78 billion, and operating margin narrowed to 31% from 43%.

Capital spending adds another measure of pressure on cash flow. Meta spent $31.08 billion on capital expenditures in the second quarter, including principal payments on finance leases, and recorded $784 million in free cash flow. For all of 2026, it forecasts capital expenditures of $130 billion to $145 billion on the same basis.

Meta’s full-year expense outlook is $165 billion to $169 billion. It also expects 2026 operating income to exceed last year’s, keeping the relationship between revenue growth and its AI spending plans in focus.

The year-earlier earnings comparison has a separate complication. Meta reported third-quarter 2025 diluted earnings per share of $1.05 after a one-time, $15.93 billion noncash tax charge. Without that charge, the company put earnings per share at $7.25.

The new results will show how revenue, operating costs and the expected legal accrual affected the quarter. Meta’s earnings call is scheduled for 4:30 p.m. ET (20:30 UTC) on Oct. 21.