Meta Platforms rises after hours as quarterly results beat estimates

What did Meta report?

Meta Platforms (Nasdaq: META) reported third-quarter revenue and adjusted earnings above analyst estimates after Wednesday's close. Its shares rose 2.2% in after-hours trading to $712.65.

Why it matters: After-hours trading takes place after the regular session ends, with far fewer buyers and sellers. Earlier, in the regular session, the stock rose 0.5% to close at $697.52.

Revenue grew from a year earlier, the company said. Its count of daily users across its apps also increased. Meta showed more ads than a year before and charged more for each one. Its headcount was lower than a year earlier.

Why did the shares rise after the report?

Meta topped estimates on both revenue and profit per share. Its forecast range for fourth-quarter revenue also straddles what analysts had expected. That forecast is known as guidance: the company's own outlook for its next results.

Chief executive Mark Zuckerberg pointed to progress on artificial intelligence, including the launch of its Muse Wonder model. "Our investments are paying off, the core business is strong, and we're seeing velocity across the board," he said.

On the earnings call, Zuckerberg told analysts he believes Meta can "build superintelligence through scaling," with larger models already in training.

What risks could weigh on the stock?

The other side: Spending is the main open question. Meta raised its forecast for full-year 2026 expenses. The company tied the increase to a charge for legal proceedings recognized in the third quarter.

Meta also narrowed its forecast for capital spending, the money it puts into equipment and facilities, by lifting the bottom of the range. Chief financial officer Susan Li said the company will "continue investing aggressively" in its core business and AI.

Free cash flow, the cash left after running and investing in the business, was negative for the quarter.

Before the report, the stock was down 10.3% from its 52-week high of $777.59, its highest price in the past year.

What is Meta's new Class C stock?

Meta's board declared a one-time stock dividend: a Class C share for each Class A and Class B share held. The change takes effect Jan. 19, 2027. The new shares are non-voting, according to a Meta filing.

The move works much like a stock split, which gives holders more shares at a lower price with the same total value. Meta said the new shares let it raise money, pay employees and fund deals without weakening existing voting power. It also said it expects to sell Class C stock from time to time.

Shareholders will not vote on the plan. Entities tied to Zuckerberg and his wife, Priscilla Chan, which hold most of the voting power, approved it.

Reactions were mixed. Nicholas Mugalli, chief executive of World Trade Securities, read the plan as a sign of "more capex coming," meaning more capital spending. Equity investor Sandeep Anand argued that ordinary shareholders bear the cost of future share sales while Zuckerberg keeps full control. Technical analyst Helene Meisler welcomed the split but called its ratio "paltry" for a stock at this price.

What could come next for the stock?

What’s next: The test comes at Thursday's open at 9:30 a.m. ET. After-hours moves often shrink or reverse once the full market trades.

The Class C shares take effect Jan. 19, 2027. Before then, the Fed's rate decision on Wednesday, Oct. 28, at 2:00 p.m. ET could sway large technology stocks broadly.