Tesla Q3 Revenue Holds Flat at $28.05 Billion as Operating Profit Falls 56 Percent

Tesla reported its third quarter results after the United States market close on Wednesday, Oct. 21, 2026, with revenue of $28.05 billion, roughly flat from $28.10 billion a year earlier. Adjusted earnings came in at $0.48 per share, ahead of analyst estimates of $0.44 to $0.45. Earnings under generally accepted accounting principles were $0.22 per share, and GAAP net income was $787 million.

Profit squeezed by higher spending

Operating income fell 56 percent from a year earlier to $718 million, an operating margin of 2.6 percent, as operating expenses climbed 39 percent to $4.78 billion. The car business itself held up better. Automotive gross margin rose to 18.5 percent, or 18.1 percent excluding regulatory credits, up from 16.9 percent and 16.3 percent in the second quarter. Total gross margin reached 19.6 percent, and non-GAAP net income was $1.70 billion.

Cash flow turns positive again

Operating cash flow was $6.26 billion. Free cash flow was $1.53 billion after $4.73 billion in capital spending, a return to positive territory after free cash flow went negative in the second quarter. Tesla ended the quarter with $45.45 billion in cash, cash equivalents and short term investments, up $1.9 billion from the end of June.

Deliveries slip, backlog grows

Tesla delivered 486,532 vehicles in the quarter, down 2 percent from 497,099 a year earlier, and produced 464,391. The delivery figure was first reported on Oct. 2. Energy storage deployments were 13.7 GWh. The company produced and delivered its 10 millionth vehicle during the quarter. It said it ended the quarter with the largest passenger vehicle backlog in four years, and with record deliveries in Canada, Australia, Japan and Taiwan.

Software, robotaxis and robots

More than 75 percent of new vehicle deliveries in North America included Full Self-Driving (Supervised), a jump of nearly 20 percentage points from the quarter before. Active FSD subscriptions grew 67 percent from a year earlier to 1.74 million. Four more European countries approved FSD during the quarter, taking the total to nine. Cybercab robotaxi rides began in Austin on Sept. 3, and cumulative unsupervised robotaxi miles grew eightfold in the quarter to nearly 2 million. Optimus robot production started on high volume lines at the Fremont factory, and the Tesla Semi went into volume production in Nevada. Energy storage revenue fell 16 percent from a year earlier to $2.88 billion, though the company said storage orders and backlog reached record levels.

Outlook

Tesla again gave no specific delivery or volume target. The company said it is focused on maximum capacity utilization at its factories, and that it expects hardware profits to be accompanied over time by faster growth in software and fleet based profits. Tesla shares rose more than 3 percent in regular trading on Wednesday before the report. The company scheduled its earnings call for 5:30 p.m. Eastern time.