Meta spent more on buildings than its business brought in

Meta reported third-quarter revenue of $64.60 billion on Wednesday, up 26% on a year earlier and ahead of the $63.37 billion analysts had expected, according to CNBC^1,2. Its shares rose about 3% in extended trading². That is the podium version. The cash-flow statement tells a plainer story.

The cash. Meta’s operating activities brought in $32.79 billion in the quarter¹. Its capital expenditures, including principal payments on finance leases, were $34.91 billion¹. Free cash flow, the difference, was minus $2.12 billion, against plus $10.63 billion a year earlier¹. Desk arithmetic: purchases of property and equipment rose from $18.83 billion to $33.94 billion, an increase of about 80%¹. Meta ties the spending to the computing capacity it has and “what is scheduled to come online”¹. For one quarter, building it cost more than the business generated.

The balance sheet. None of this is distress. Meta ended September with $82.45 billion in cash and marketable securities¹. But long-term debt stood at $80.92 billion, up from $58.74 billion at the end of 2025, and net property and equipment rose from $176.4 billion to $253.2 billion over the same nine months¹. Headcount fell 15% to 66,775¹. Fewer people, more concrete.

The new share class. Meta’s board approved a new class of listed, non-voting Class C shares, to be issued as a one-for-one stock dividend once the change takes effect on 19 January 2027¹. The company names “capital raising” first among the reasons, alongside pay and possible acquisitions, and says the scale of investment the AI race demands is “significant”¹. Meta says the stock dividend “will not change the voting power of any shareholder”, and the board presents the change as a way to keep the “founder-led model”¹.

The outlook. Meta narrowed its 2026 capital-spending range to $135–145 billion, from $130–145 billion, and said it would keep “investing aggressively” next year without giving a figure¹. Desk arithmetic: nine-month spending was about $85.8 billion, so the range implies roughly $49–59 billion in the fourth quarter alone¹. The quarter’s results also include a $9.89 billion charge for a settlement with US state attorneys general over teen mental health¹.

The constructive reading: a company with an advertising business growing 26% can afford to build. The question for the next few quarters is not whether Meta can pay, but how long it is willing to pay more than it earns in cash. Nothing here is advice.