Tesla $TSLA reported second-quarter revenue of $28.24 billion on Wednesday, up 26% from a year earlier, but earnings came in well below what Wall Street had forecast. Shares dropped nearly 3% in after-hours trading.
Record deliveries drove a 26% revenue gain, but earnings per share came in well below analyst forecasts and free cash flow turned negative
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Tesla $TSLA reported second-quarter revenue of $28.24 billion on Wednesday, up 26% from a year earlier, but earnings came in well below what Wall Street had forecast. Shares dropped nearly 3% in after-hours trading.
Adjusted earnings per share were $0.33, well below the $0.51 expected, according to CNBC. GAAP net income dropped 5% from last year to $1.11 billion, or $0.32 per share. Revenue, on the other hand, beat analyst estimates of $25.71 billion.
The results include a $1.005 billion unrealized gain on Tesla's SpaceX equity investment, which the company excluded from its non-GAAP figures. GAAP operating income dropped 57% year over year to $398 million, with operating margin narrowing to 1.4%.
Automotive revenue, Tesla’s biggest segment, increased 23% to $20.52 billion. Automotive gross margin was 16.9%, or 16.3% without regulatory credits. Revenue from regulatory credits was $146 million, down from $439 million a year ago. The energy generation and storage segment brought in $3.14 billion, up 13%. The services and other segment earned $4.58 billion, up 50%, with both gross profit and gross margin reaching record highs.
Tesla’s operating expenses rose 47% to $4.35 billion as the company increased spending on AI infrastructure and other R&D projects. Capital expenditures jumped to $5.79 billion, up 142% from last year. Operating cash flow was $4.70 billion, up 85%. However, Tesla reported a free cash flow deficit of $1.09 billion, compared to a $1.44 billion surplus in the first quarter of 2026.
The record delivery quarter — 480,126 vehicles, up 25% year over year — that came in far above analyst expectations of roughly 406,600 did not translate into stronger profitability. Active Full Self-Driving subscriptions reached 1.48 million, up 56% year over year, and more than 55% of new deliveries in North America included FSD subscriptions.
Tesla said Cybercab production began at Gigafactory Texas and its robotaxi service is now operating in seven major metropolitan areas. The company said Tesla Semi and Megapack 3 remain on schedule for production in 2026, and that first-generation production lines for its Optimus humanoid robot are being installed. The company said it crossed $100 billion in trailing twelve-month revenue for the first time. Cash and short-term investments stood at $43.52 billion, down $1.2 billion from the prior quarter.
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