Meta records $9.89 billion child-safety settlement

Meta put $9.89 billion on its third-quarter books for a settlement over allegations that it built social media products that harmed children, a charge nearly as large as the company's reported operating income for the quarter.

The company reported $64.6 billion in revenue, up 26% from a year earlier, and $12.98 billion in operating income. Without the settlement-related cost, Meta said operating income would have been about $22.88 billion. Its total quarterly costs and expenses reached about $51.6 billion.

What the money is for: Meta reached a nationwide settlement with state attorneys general in August over claims that it designed platforms including Instagram with addictive features, harmed young users and misled the public about platform safety. Reports differ on the settlement's full value: The Verge put it at $17.1 billion, while Variety reported $18 billion.

The $9.89 billion is the amount Meta recorded this quarter, not necessarily the final measure of the legal fight. The allegations behind the settlement remain serious: that the company knew about risks to their mental health and did not level with the public about them.

The earnings picture: Meta reported net income of $9.86 billion and earnings per share of $3.83, according to Variety. Analysts surveyed by LSEG had expected $63.4 billion in revenue and earnings per share of $5.46. Meta shares rose about 5% in after-hours trading, a revenue beat and an earnings miss in the same release.

What Meta is selling now: Mark Zuckerberg used the earnings release to highlight Meta's push into artificial intelligence, saying the company had reached major milestones toward delivering “personal superintelligence for everyone.” Meta has introduced its Muse personal assistant, related hardware and software products, and a new line of Meta-branded eyeglasses. Variety reported that Zuckerberg said more than 10 million people in the U.S. and Canada had set up Muse agents, with 25% of them using the product daily.

Separately, a New Mexico court ordered Meta to pay $25 billion on Oct. 21, a second large legal number in a quarter already dominated by one.