Meta faces $25 billion order over privacy violations

Meta has reported better-than-expected quarterly results, but a new legal battle could have a major impact on the company’s finances.

A New Mexico judge has ordered the parent company of Facebook, Instagram and WhatsApp to pay $25 billion in a case concerning the platform’s privacy practices. Meta has said it will appeal.

The ruling comes as Meta reported a 26% increase in revenue, to $64.601 billion, in the third quarter of 2026. Net profit rose 264%, to $9.86 billion. Forbes reported on both the legal setback and the company’s results.

Case puts users’ data back in the spotlight

The New Mexico case dates back to a 2021 complaint concerning the use and protection of residents’ personal data.

According to the article, a jury found in September that Meta had breached the state’s unfair practices law more than 43 million times.

The case is linked to wider privacy concerns reignited by the Cambridge Analytica scandal, in which data belonging to up to 87 million Facebook users was improperly obtained.

Meta rejects the ruling and will appeal the payment order. The company’s chief legal officer, C. J. Mahoney, has expressed confidence in the appeal process. The case therefore remains ongoing.

The new order adds to other lawsuits facing the technology company over social media’s effects on teenagers and its handling of personal information. The combined value of penalties and legal settlements poses a financial and reputational risk as Meta seeks to make artificial intelligence a key driver of growth.

Advertising continues to drive revenue

From July to September, Meta generated $64.601 billion in revenue, above the $63.37 billion expected by the market. Earnings per share were $3.83, compared with $1.05 in the same period a year earlier.

Advertising brought in $63.061 billion, up from $50.082 billion in the third quarter of 2025. Ad impressions rose by 10% and the average price per ad by 14%. Meta’s apps averaged 3.64 billion daily active users in September, 3% more than a year earlier.

Despite revenue growth, operating income fell 37% to $12.988 billion, while the operating margin dropped from 40% to 20%. The results included a $9.89 billion charge under an agreement with 52 US attorneys general to settle lawsuits concerning teenagers’ mental health and social media.

Meta increases investment in artificial intelligence

Mark Zuckerberg wants artificial intelligence to strengthen the advertising business and usher in a new phase for the company. Meta has introduced the Muse and Muse Wonder models and says its AI investments are already improving recommendations and user engagement.

The company expects fourth-quarter revenue of between $73 billion and $76 billion. It has also forecast total expenses of $175 billion to $179 billion for 2026 and said capital expenditure could reach $145 billion.

Meta continues to report substantial losses at Reality Labs, its virtual and augmented reality division: $4.129 billion in the quarter. The company expects the division’s full-year losses to reach between $18 billion and $19 billion in 2026.

Meta is therefore combining a growing advertising business with increasingly costly AI investment and a portfolio of lawsuits that could still affect its results. The New Mexico ruling, which is subject to appeal, puts a new figure on the legal risks facing the company.