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Tesla Q3 2026 Earnings Results: Revenue Beats at $28 Billion With Surprise $1.5 Billion Free Cash Flow

Tesla Canada
Long grey concrete and glass wall of Tesla Gigafactory Texas Building 1 near Austin under a clear sky

Tesla Q3 2026 earnings results beat Wall Street on both revenue and adjusted profit, and the company surprised analysts with $1.5 billion in positive free cash flow. Tesla reported after the close on October 21 and cut its 2026 spending plan. Figures are in U.S. dollars.

Tesla Q3 2026 earnings results: the headline numbers

From Tesla’s Q3 2026 update deck, filed with the SEC:

  • Revenue: $28.05 billion, flat with $28.10 billion a year ago, and above the $27.9 billion analysts expected (LSEG, via CNBC)
  • Adjusted (non-GAAP) EPS: $0.48, versus $0.43 expected and $0.50 a year ago
  • GAAP net income: $787 million ($0.22 per share), down 43% from $1.37 billion
  • Total gross margin: 19.6%, up 1.6 points year over year; operating margin 2.6%
  • Operating cash flow of $6.26 billion, capital spending of $4.73 billion, and free cash flow of $1.53 billion
  • Cash and investments: $45.4 billion

By segment, automotive revenue fell 3% to $20.56 billion and energy revenue fell 16% to $2.88 billion, while services and other revenue jumped 33% to $4.61 billion.

The surprises: cash flow and lower capex

Analysts had expected a cash burn of about $4.92 billion, Reuters reported, citing LSEG data, and capex of about $7.5 billion. Tesla now expects roughly $20 billion in 2026 capital spending, down from its earlier guidance of more than $25 billion. CFO Vaibhav Taneja said on the call that Tesla also secured capacity to borrow up to $30 billion, but does not plan to draw on it this year.

Automotive gross margin excluding regulatory credits rose to 18.1% from 16.3% in Q2, beating the 16.7% estimate (Visible Alpha, via Reuters). Energy gross margin jumped to 33.1%, helped by tariff refunds.

Demand, FSD and a record quarter in Canada

Tesla said it achieved record quarterly deliveries in several markets, including Canada, Australia, Japan and Taiwan, and ended the quarter with its largest passenger-vehicle backlog in four years. Battery supply was still the main limit on production. Quarterly deliveries were 486,532, down 2% from a year ago.

Active FSD subscriptions, which count both purchases and monthly plans, reached 1.74 million, up from 1.04 million a year earlier. Tesla said over three quarters of new North American deliveries signed up for paid FSD (Supervised) at delivery, nearly 20 points higher than Q2.

On the call, Elon Musk said demand “is exceeding our production by a significant margin” and that Tesla is aiming for about 5 million vehicles a year by around 2030. He also said Megapack production for 2027 is “almost sold out.” He declined to add anything on a possible SpaceX merger.

Tesla shares rose about 2% after hours before turning lower, Reuters reported. See our Cybercab and unsupervised FSD story and our Q3 earnings preview.

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