10-Q · July 23, 2026
Tesla delivered strong top-line growth in Q2, with revenue up 26% year over year to $28.236 billion, led by a 27% increase in automotive sales and 50% services growth. However, gross margin fell to 16.8% and operating…
Earnings analysis · 10-Q
TSLA earnings analysis
Filed October 22, 2026 · Our reading of the company's report
The latest report
Tesla delivered broadly flat third-quarter revenue of $28.046 billion, while gross margin improved to 19.6% but operating margin fell to approximately 2.6% as R&D and SG&A spending accelerated. Reported diluted EPS…
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Tesla delivered broadly flat third-quarter revenue of $28.046 billion, while gross margin improved to 19.6% but operating margin fell to approximately 2.6% as R&D and SG&A spending accelerated. Reported diluted EPS declined to $0.22 from $0.39 a year earlier, despite stronger automotive gross margin and a 33% increase in services revenue. Liquidity and operating cash flow were strong, but the planned 2026 capital expenditure level above $20 billion, regulatory-credit deterioration and tariff exposure create meaningful forward pressure.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.22
What stood out
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Revenue was broadly flat as services grew
Third-quarter revenue was $28.046 billion, down $49 million, or less than 1%, from $28.095 billion a year earlier and down approximately 1% from $28.24 billion in 2026 Q2. Services and other revenue grew 33% year over year to $4.605 billion, offsetting weaker automotive and energy revenue.
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Gross margin expanded materially
Total gross margin improved to 19.6% from 18.0% year over year and from 16.8% in the prior quarter. Automotive gross margin increased to 18.5% from 17.0% year over year, while energy generation and storage gross margin rose to 33.1% from 31.4%.
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Heavy investment pressured operating earnings
Reported diluted EPS was $0.22, down from $0.39 year over year and $0.32 in 2026 Q2. Operating income declined to $718 million from $1.624 billion a year earlier, with operating margin falling to approximately 2.6% from 5.8%, as R&D rose 69% to $2.761 billion and SG&A rose 29% to $2.015 billion.
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Operating cash flow funded major investment
Nine-month operating cash flow increased to $14.897 billion from $10.934 billion a year earlier, while capital expenditures increased to $13.014 billion from $6.134 billion. Management said it expects 2026 capital expenditures to exceed $20 billion, primarily for SI initiatives, compute infrastructure, manufacturing and R&D facilities.
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Liquidity remained strong
Cash and cash equivalents plus short-term investments totaled $45.447 billion at September 30, 2026, up from $44.059 billion at December 31, 2025. Tesla also had $30.00 billion of unused committed amounts under senior unsecured credit facilities.
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Services diversified the revenue mix
Automotive and services/other revenue increased 2% year over year to $25.165 billion, supported by a 33% increase in services and other revenue to $4.605 billion. Management attributed the services increase to used vehicle sales, maintenance and collision revenue, and paid Supercharging sessions.
What to watch
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Capital intensity may require funding
Management expects 2026 capital expenditures to exceed $20 billion, compared with $13.014 billion incurred in the first nine months. The filing states that heightened capital expenditures and other cost pressures may require additional funding beyond operating cash flow.
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Debt capacity and financing exposure increased
Tesla entered September 2026 credit agreements providing $30.00 billion of aggregate commitments, while aggregate indebtedness was $9.28 billion at September 30, 2026. The increased financing capacity supports investment but raises exposure to borrowing costs and future leverage if facilities are drawn.
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Tariffs threaten energy demand and margins
Energy generation and storage revenue fell 16% year over year to $2.881 billion, and management cited tariffs as a relatively larger risk for that business. The company recorded $526 million of energy cost-of-revenue tariff refunds and recognized $339 million owed contractually to certain energy customers, while warning that tariffs and incentives could increase battery costs and reduce demand.
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Regulatory-credit contribution is shrinking
Automotive regulatory-credit revenue declined 73% year over year to $113 million, and Tesla reversed $475 million of previously delivered credit revenue during the quarter. The filing states that recent governmental and regulatory actions have restricted certain credit programs, reducing a source of automotive profitability.
Management's outlook
No quantitative revenue or EPS guidance was provided. Management expects 2026 capital expenditures to be in excess of $20 billion and stated that current and potential funding sources should provide adequate liquidity during the 12 months following September 30, 2026 and in the long term.
Earlier filings 4
10-K · April 30, 2026
Tesla's 2025 10-K reveals a robust strategy focusing on AI and sustainability, with revenue reaching $115.27 billion, reflecting a 22% growth year-over-year. Key segments include robust sales from electric vehicles and…
10-Q · April 23, 2026
Tesla reported Q1 2026 revenue of $22,387 million, up $3,052 million (16%) year‑over‑year, with total gross margin improving to 21.1% from 16.3% a year earlier. Operating income was $941 million (≈4.2% operating margin)…
10-K · January 29, 2026
Tesla emphasizes a strategic pivot to commercialize AI across vehicles, Robotaxi and humanoid Bots while continuing to scale vehicle and energy businesses. FY2025 revenue was roughly $94.84B (down from ~$97.69B in…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.