Tesla Q3 earnings: Revenue flat year-over-year, net profit down 43%, operating expenses surge 39%

BlockBeats news, October 22 - Tesla announced its Q3 2026 financial results in the early hours of today Beijing time, with revenue of $28.046 billion, essentially flat year-over-year; net income attributable to common stockholders was $787 million, down approximately 43% year-over-year, with GAAP diluted earnings per share of $0.22, below $0.39 in the same period last year. Operating income fell approximately 56% year-over-year to $718 million, with an operating margin of 2.6%, down 3.2 percentage points year-over-year. This was mainly due to significant increases in spending on R&D, AI, robotics, and other areas (operating expenses rose approximately 39%).

Overall GAAP gross margin rose to 19.6% (up approximately 1.6 percentage points year-over-year, and also notably higher than the previous quarter). Automotive gross margin excluding regulatory credits was approximately 18.1%, showing significant improvement compared to both the previous quarter and the same period last year.

Vehicle deliveries for the quarter were 486,500 units, down 2% year-over-year; production was 464,400 units, up 4% year-over-year. Automotive revenue declined approximately 3% year-over-year, energy generation and storage revenue fell approximately 16%, while services and other revenue grew approximately 33%. The company stated that increased R&D and other operating expenses, reduced regulatory credit revenue, and lower energy business gross margins put pressure on operating income.

Tesla's Q3 operating cash flow was $6.263 billion, with free cash flow of $1.531 billion, below $3.990 billion in the same period last year. The company stated that battery supply continues to constrain vehicle production ramp-up; meanwhile, Semi mass production has commenced in Nevada, Optimus production has begun in Fremont, and Cybercab has been deployed in the Austin Robotaxi fleet operations.

According to BIT (bit.com) market data, possibly affected by the earnings information, SPCX fell 3.32% in after-hours trading.