TREE NEWS reports: Meta closed at $648.85 on October 22, down 6.98%, despite third-quarter revenue of $64.601 billion, up 26% year over year. Free cash flow turned negative at $2.12 billion as capital expenditure and finance lease payments of $34.91 billion exceeded operating cash flow of $32.79 billion. The company also booked about $9.89 billion in legal-related expenses and raised the lower end of its 2026 capex guidance to $135 billion.
Meta Q3 revenue rises 26% but stock falls 6.98% on capex, negative cash flow
AI take
The market's reaction is less about Meta's top-line strength than about the quality of its cash generation: negative free cash flow, driven by capex and finance lease payments outpacing operating cash flow, marks a structural shift in how the company funds its buildout. The raised floor on 2026 capex guidance and the sizeable legal-related charge compound the concern that spending discipline is eroding. This matters most for investors valuing Meta on cash returns rather than growth alone. Whether free cash flow recovers as capex normalizes, or the legal overhang persists, is the open question.
Generated by AI for reference only.
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