Meta will distribute a new class of non-voting stock to existing shareholders as a stock dividend, a move the FT says lets it raise funds without diluting Mark Zuckerberg's control of about 61% of votes.
The New York Times reported the capital expenditure floor rose to $135 billion from $130 billion, while Bloomberg gave a $135 billion to $145 billion range.
Free cash flow was negative $2 billion for the three months ended 30 September, down from $784 million at the end of June, according to the NYT.
Third-quarter revenue reached $64.6 billion, up 26% year on year and above the $61 billion to $64 billion guidance, per the FT, while costs and expenses rose 68%, according to TechCrunch.
Zuckerberg said more than 10 million people have used Muse since its early September rollout in the US and Canada, and about 25% of them use it daily.
Meta said on Wednesday, 21 October, alongside its third-quarter results, that it will create a new class of non-voting capital stock. The shares will go to all existing shareholders as a stock dividend, according to chief financial officer Susan Li, who said the stock would be publicly traded and usable for capital raising, employee compensation and acquisitions. Li said the structure preserves the voting power of existing Class A and B shareholders and keeps the company's "founder-led structure" in place. The Financial Times reported that the shares will be distributed through a two-for-one stock split and begin trading in January, while The Verge put the start of trading in 2027. Zuckerberg controls about 61% of Meta's votes through super-voting shares, and the FT noted that issuing more ordinary stock would steadily erode that majority.
Revenue rose 26% year on year to $64.6 billion in the third quarter, above the company's guidance of $61 billion to $64 billion and analysts' estimate of $63.3 billion, according to the FT. TechCrunch reported that costs and expenses climbed 68% over the same period. Meta expects Reality Labs, the division behind its AR glasses, VR headsets and VR software, to lose between $18 billion and $19 billion, a smaller loss than in 2025. The New York Times reported that Meta raised the floor of its 2026 capital expenditure outlook to $135 billion from $130 billion, while Bloomberg gave a range of $135 billion to $145 billion. Most of that money is going to new data centers, the computing facilities that power advanced AI. Free cash flow, the money left after expenses, turned negative at negative $2 billion for the three months ended 30 September, down from $784 million at the end of June and $8.55 billion in June 2025, according to the NYT.
Muse, the personal agent Meta rolled out in early September in the US and Canada, has more than 10 million users, Zuckerberg told analysts. About 25% of people who set it up use it daily, which the company says helps retention, and shopping is the most common use case. Engadget reported that people spend an average of $200 per purchase through the agent. Meta plans commerce tools that would let it charge businesses fees on transactions the agent facilitates, and it will add AI subscriptions for heavier users.
“Now that Muse has clear product market fit, we are entering a new phase and a more operational phase that is focused on scaling it.”
Zuckerberg predicted that revenue per user from Muse could eventually exceed what Meta's family of apps earns, which he put at "several hundreds of dollars annually" per American user. He also said Muse will be profitable once it scales. Near term, the agent is very compute-intensive to run, and Zuckerberg said Meta expects to improve its cost efficiency by more than 10x in the next year.
The launch has not been free of problems. A tech YouTuber reported that the agent gave his address to a stranger on Facebook Marketplace, raising privacy concerns. Meta paused Muse's conversation-sharing feature after researchers found chats publicly available on the web. The Verge reported that the Muse app reached 10 million downloads in the US by 21 October. Zuckerberg said Meta is building capacity to serve more than a billion people over the next few years, a plan that will require substantial compute as the agent scales.
Pollar is free and carries no ads in the text. Its members keep it going.
Support PollarBusiness
Meta will distribute a new class of non-voting stock to existing shareholders while its Muse personal agent passes 10 million users in the US and Canada. The company also reported 26% revenue growth alongside negative free cash flow.
AI text based on reports by TechCrunch, engadget, Bloomberg Business and other publishers. Published .