Meta Platforms' operating margin was 20.1% in 2026Q3. Sales were not the problem: revenue still grew 26.1% from a year earlier. The costs did the damage.
Record sales, and that is not the story
Meta Platforms sold more than ever last quarter. Revenue was $64.6bn in 2026Q3, the highest bar on the chart. That is 26.1% more than the same quarter a year earlier and 6.2% more than the quarter before. Growth has bounced around in recent years rather than moving in one direction, and my reading is that a slightly slower growth rate here is noise, not a warning.
Data table
| period | revenue | yoy |
|---|---|---|
| 2023Q4 | $40.1bn | 24.7% |
| 2024Q1 | $36.5bn | 27.3% |
| 2024Q2 | $39.1bn | 22.1% |
| 2024Q3 | $40.6bn | 18.9% |
| 2024Q4 | $48.4bn | 20.6% |
| 2025Q1 | $42.3bn | 16.1% |
| 2025Q2 | $47.5bn | 21.6% |
| 2025Q3 | $51.2bn | 26.2% |
| 2025Q4 | $59.9bn | 23.8% |
| 2026Q1 | $56.3bn | 33.1% |
| 2026Q2 | $60.8bn | 28.0% |
| 2026Q3 | $64.6bn | 26.1% |
The money went out faster than it came in
Profit is where the quarter breaks. Meta Platforms' operating margin The share of sales left as profit after the normal costs of running the business. Higher means more of each sale stays with the company. was 20.1% in 2026Q3, against 30.9% in 2026Q2, a fall of -10.8 pp in three months. A thinner gross margin The share of sales left after the direct cost of delivering the product or service, before research, marketing and admin costs. explains only -2.1 pp of that. The rest is operating costs, which took 8.7 pp more of each sales dollar than in the previous quarter. Measured against the same quarter a year earlier, the operating margin is -20.0 pp lower, so this is not a rounding issue.
How much of Meta Platforms' quarterly revenue went into property and equipment?
Actual52.5%
It was 52.5% of revenue in 2026Q3. More than half of every sales dollar went into property and equipment, and that spending was 4.7x the depreciation charge booked in the quarter.
Show answer
52.5% It was 52.5% of revenue in 2026Q3. More than half of every sales dollar went into property and equipment, and that spending was 4.7x the depreciation charge booked in the quarter.
Data table
| order | category | amount | kind |
|---|---|---|---|
| 0 | 2026Q2 operating margin | 30.9% | total |
| 1 | Gross margin change | -2.1% | delta |
| 2 | Opex ratio change | -8.7% | delta |
| 3 | 2026Q3 operating margin | 20.1% | total |
Spending on buildings and machines is running hot as well. capex Short for capital expenditure: cash spent on long-lived things like buildings, servers and chips., the cash paid for property and equipment, was 52.5% of revenue in 2026Q3, while depreciation The accounting way of spreading the cost of those long-lived assets over the years they are used., the slow accounting cost of assets already bought, was 11.1% of revenue. My reading is that the bills for this build-out are arriving long before the machines earn anything back.
Glossary
- operating margin
- The share of sales left as profit after the normal costs of running the business. Higher means more of each sale stays with the company.
- gross margin
- The share of sales left after the direct cost of delivering the product or service, before research, marketing and admin costs.
- capex
- Short for capital expenditure: cash spent on long-lived things like buildings, servers and chips.
- depreciation
- The accounting way of spreading the cost of those long-lived assets over the years they are used.
Shareholders have already had a rough year
In the same window as the release, Meta Platforms' shares lagged a basket of peer stocks by -6.4% on the day the numbers came out. That basket holds 4 companies: Amazon, Alphabet, Netflix and Uber. Counting from that day onwards the shortfall against the peers is -5.5%, and analysts call this gap an abnormal return The part of a share's move that is left over after you strip out how similar companies moved in the same days., meaning the part of a share move the peer group cannot explain. Only 2 trading days after the release sit in the price data, so this picture is still early.
Over the year to 2026-10-23 the stock returned -12.2%, while the market returned 14.4%. Even so, the shares are not cheap next to the group: Meta Platforms trades at a trailing P/E The share price divided by the profit per share earned over the past year. A rough measure of how much investors pay for each unit of past profit. of 21.7x against a peer median of 17.3x, a premium of 25.1%. Peer earnings data reaches 2026Q2 for some of those companies, so the comparison mixes periods.
Glossary
- trailing P/E
- The share price divided by the profit per share earned over the past year. A rough measure of how much investors pay for each unit of past profit.
- abnormal return
- The part of a share's move that is left over after you strip out how similar companies moved in the same days.
Risks
- One-off cost or tax items in this quarter can distort the comparison with earlier quarters.
- The peer basket is small and mixed, so the price comparison around the release means little.
- Accounting changes or currency swings can bend the year-on-year comparison.
Sources
- SEC EDGAR XBRL companyfacts, Meta Platforms, Inc. — data as of 2026-09-30; fetched 2026-10-25 16:04 UTC