Meta Q3 2026 Earnings Results
Meta released its Q3 2026 earnings results yesterday:
- Advertising revenue increased by 25.9% on a year-over-year basis, to $63.1BN;
- Impressions served across the company’s Family of Apps increased by 10% on a year-over-year basis, a decrease from 14% in Q2 2026;
- The average price per ad grew by 14% on a year-over-year basis, up from 12% in Q2 2026;
- Net Income of $9.9BN (which isn’t comparable to Q3 2025 due to a $15.93 billion one-time, non-cash income tax charge incurred in that quarter, as well as the $9.9BN charge incurred in Q3 2026 related to Meta’s recent youth safety settlement. Net income was down 37.8% quarter-over-quarter).
Meta beat analyst expectations on revenue as well as on Q4 revenue guidance.
The company’s impression economics saw a continuation of the recent trend of decelerating impression growth alongside accelerating average price per ad growth. I interpret this as the company seeing a moderation in the incremental impression growth generated with the deeper engagement that has been unlocked through the transition to an open graph and the adoption of short-form video as the company’s core social media content interaction format.
These two tactics formed one pillar in Meta’s two-pillar ATT remediation strategy; the second pillar was investment in core advertiser-facing infrastructure like Advantage+ as well as in retrieval and ranking infrastructure like Andromeda, GEM, Lattice, the Adaptive Ranking Model, and other initiatives like the recently revealed GenRecs Tokenization. All of this work is structural and, critically, expensive.
And breaking price per ad growth out by geography, the acceleration is particularly notable in UCAN, Meta’s largest and highest-ARPU revenue region.
This is an important lens through which to read Meta’s Q3 2026 earnings call transcript, because Meta has to carefully balance two narratives:
- The consumer narrative, which must assuage broad public anxieties around AI, particularly with respect to privacy and the proper treatment of sensitive information.
- The Wall Street narrative, which must contend with the fact that some public market investors view the digital advertising economy as zero-sum.
I can appreciate the challenge of constructing messaging that navigates and adheres to the sensitivities of both of these groups, particularly in an earnings call environment. On the one hand, the investments being made into advertising are visibly delivering impressive performance to the company’s core business, which is advertising. On the other hand, explaining how that core business could extend to the new product the company believes can win a once-in-a-decade human-computer paradigm transition — Muse — might inflame consumer anxieties around AI.
I don’t think I’ve ever been tagged in as many X posts as I was yesterday when Mark Zuckerberg made this statement in the earnings call:
In just a month and a half, more than 10 million people in the US and Canada have set up Muse personal agents. Growth continues to be strong and we have been #1 in the App Store almost every day. Engagement and retention are also off to a strong start. About 25% of people who have set up Muse use it on any given day. For our earliest adopters, the longer that they use Muse, the better that retention seems to get. The most common use case for Muse is shopping, with more than a quarter of people who are using Muse engaging in this with an average purchase size over $200.
Using these rough numbers, and assuming that the average Muse shopper uses it once per week for a shopping transaction, Muse is processing $250MM in GMV each week, for roughly $1BN in GMV each month and $13BN in GMV each year.
At a 5% take rate, that represents $26BN in annual revenue, or 13% of what Meta generated in advertising revenue in 2025. Muse currently skews to the company’s highest value users, indicating strong commercial intent.
Meta’s focus is on driving consumer adoption and getting the data flywheel going as their first priority. Susan Li, Meta’s CFO, highlighted that there's a long list on the roadmap to scale Muse further. Therefore, while advertising monetization isn’t ruled out, the immediate focus remains on growth and user adoption.