Tesla reported third-quarter results on October 21. Revenue was flat and in line with expectations, adjusted EPS beat, and margins rebounded from a weak second quarter. But reported profit still fell sharply as costs rose. This follows our earlier preview.
The numbers
| Metric | Q3 2026 | Reference |
|---|---|---|
| Revenue | $28.05B | Flat year over year; consensus about $28.06B |
| Non-GAAP EPS | $0.48 | Consensus $0.45; $0.50 a year ago (down 4%) |
| GAAP net income | $787M ($0.22 per share) | Down 43% |
| Total gross margin | 19.6% | 18.0% a year ago; 16.8% in Q2 |
| Operating income | $718M | Down 56%; operating margin 2.6% |
| Operating expenses | $4.78B | Up 39%; R&D up 69% to $2.76B |
| Free cash flow | $1.53B | $3.99B a year ago; negative $1.09B in Q2 |
| Capital expenditure | $4.73B | $2.25B a year ago |
| Cash and investments | $45.4B |
Segments and operations
- Auto margin: gross margin excluding regulatory credits was 18.1%, up from 16.3% in Q2. Regulatory credit revenue was $113 million, down 73%.
- Deliveries: 486,532, down 2.1%. Inventory fell to 11 days of supply.
- Energy: revenue fell 16% to $2.88B, partly due to tariff-related customer refunds. Deployments rose 10% to 13.7 GWh, below the roughly 15.9 GWh analysts expected.
- Services and other: revenue rose 33% to $4.61B, with a record $734M of gross profit.
- FSD: 1.74 million active subscriptions, up 67%, including upfront purchases.
- Robotaxi: nearly 2 million cumulative unsupervised miles. Cybercab joined the Austin fleet about a month before the quarter ended.
- Investments: a $288M unrealised gain on bitcoin holdings and a $142M unrealised loss on the SpaceX equity investment.
Open questions
- Capex guidance. Electrek reports the shareholder letter did not update the “more than $25 billion” 2026 guidance, with year-to-date spending at $13.01B. At least one outlet’s headline says the capex view was cut. Check the letter and call transcript before relying on either.
- SpaceX. Reports say Elon Musk has discussed a possible combination with SpaceX, but no merger agreement exists.
- Margin durability. The rebound partly reflects mix and timing. Operating margin is 2.6%, down from 5.8% a year ago.
Where to be skeptical
An adjusted EPS beat of three cents is small against a 43% fall in GAAP income. Subscription growth is a stronger trend than the headline numbers suggest, but FSD “active subscriptions” include upfront purchases, and robotaxi mileage is a small base. Timelines for broader Cybercab rollout depend on regulators.
This article is informational, not investment advice.
