Meta wants to pay for its broad AI buildout with a newly created class of stock

Meta Platforms Inc. reported third-quarter revenue of $64 billion on Wednesday, surpassing Wall Street forecasts. The social media giant posted net income of $9.86 billion, a figure that represents a jump of more than threefold compared to the previous period. Revenue increased by 26 percent from a year earlier. However, costs and expenses rose sharply, climbing 68 percent year over year. Chief Financial Officer Susan Li stated that the company intends to create a new class of non-voting capital stock. She explained that these shares will be distributed to all existing shareholders via a stock dividend. The new instrument is designed to serve as a publicly traded vehicle for capital raising, employee compensation, and acquisitions. Li noted that this move preserves the voting power of existing Class A and B shareholders while maintaining the firm's founder-led structure. It provides funding tools to invest in the momentum driven by artificial intelligence across the business. CEO Mark Zuckerberg highlighted the rapid adoption of the company's AI initiatives during the earnings call. He revealed that more than 10 million people in the United States and Canada have set up Muse personal agents in just a month and a half. Zuckerberg claimed the service has ranked number one in the App Store almost every day since launch. With clear product-market fit established, the executive said the company is entering an operational phase focused on scaling the technology. He expressed confidence that the platform will eventually serve billions of users. Meta has aggressively expanded its AI portfolio recently. Releases include Muse Spark, Muse Glimmer, and Muse Wonder. The firm also introduced Muse Spark Open, an open-weight model with publicly available parameters, alongside a coding agent named Muse Code. At its annual Meta Connect event, the company unveiled a line of avatars for its AI assistant to enhance user engagement. Despite overall growth, specific divisions face challenges. Reality Labs, which handles augmented reality glasses and virtual reality headsets, continued to operate at a loss. Although deficits have narrowed, the company projects that losses for the division will range between $18 billion and $19 billion in 2025. Legal and regulatory risks remain present. Li warned that active matters could significantly impact financial results. Specific scrutiny regarding youth-related issues persists in several markets. Several youth-related trials are scheduled in the United States in the coming months. These proceedings represent potential hurdles for the company's operations. The financial results demonstrate robust top-line growth despite rising expenditures. The introduction of non-voting stock signals a strategic shift in how the company manages its balance sheet. Investors watched closely as the firm detailed its path forward. The emphasis on AI monetization contrasts with the persistent cash burn in hardware segments. Regulatory attention on minor users adds another layer of complexity to the quarterly outlook. The market reaction to the earnings release reflected mixed sentiments regarding cost structures versus revenue gains. The new share class aims to decouple economic interest from control rights. This mechanism allows for broader equity distribution without diluting board influence. The expansion of AI tools marks a central pillar of the current strategy. User acquisition metrics for the Muse agents indicate strong initial traction. The company continues to monitor external threats while pursuing internal innovation. Financial performance met expectations, yet expense management remains a focal point for analysts. The upcoming trial dates provide a near-term timeline for potential legal developments. The blend of high-growth AI products and legacy social platforms defines the current corporate landscape. Shareholders will receive the new non-voting instruments as part of standard distributions. This structural change supports long-term investment capacity. The quarter closed with solid profitability figures despite operational headwinds.