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Meta Platforms expects to book roughly $10 billion in legal expenses during the third quarter of 2026. The company recorded a $2.4 billion charge related to legal proceedings in Q2 2026 alone, helping push total expenses for the quarter to $42.03 billion, a 55% jump compared to the same period a year earlier.
The central threat is a multi-state lawsuit brought by 29 attorneys general alleging that Meta designed Facebook and Instagram to be addictive to minors. The states argue the platforms’ recommendation algorithms, notification systems, and engagement loops were built with the knowledge that they would hook young users, and that Meta chose growth over child welfare.
Estimates of potential penalties in that case stretch as high as $1.4 trillion. Earlier in 2026, a New Mexico jury ordered Meta to pay approximately $942 million over related youth-safety claims, a verdict the company is appealing.
CFO Susan Li noted during the company’s July 2026 earnings call that ongoing legal matters could lead to a “significant financial impact.”
How Meta’s expenses are ballooning
Legal charges are only one ingredient in Meta’s rapidly expanding cost base. The company also absorbed $1.18 billion in severance costs during Q2, tied to headcount reductions. Meta has projected capital expenditures of $130 billion to $145 billion for full-year 2026, the vast majority directed toward AI infrastructure.
Meta’s full-year 2026 total expense outlook has been raised to $165 billion to $169 billion. That guidance explicitly accounts for potential losses from several youth-safety trials scheduled for later in the year, including the proceedings that underpin the anticipated $10 billion Q3 charge.
Meta reported $60.8 billion in Q2 2026 revenue, a 28% year-over-year increase powered by its advertising machine and early AI-driven ad targeting improvements.
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