Tesla posts revenue beat but earnings miss in Q2 2026

Tesla reported adjusted earnings of $0.33 per share for the second quarter, missing analysts' expectations of $0.51, while revenue reached $28.24 billion, above the $25.71 billion forecast. The results were released as the company's shares fell about 3% in after-hours trading.

Revenue grew 26% year over year, driven by a 23% increase in automotive sales, a 13% rise in the energy segment, and a 50% jump in services and other revenue. Despite higher sales, the automaker's gross margin slipped to 16.8% from 17.2% a year earlier, below the 19.4% analysts had projected.

Operating expenses surged 47% to $4.35 billion as Tesla invested heavily in artificial-intelligence research and development. Capital expenditures more than doubled to $5.79 billion, reflecting ongoing expansion of production capacity and infrastructure projects.

Free cash flow turned negative, showing a $1.1 billion deficit compared with a $146 million surplus a year earlier. The company said it will manage its balance sheet to maintain sufficient liquidity for its product roadmap and capacity-expansion plans.

"Capacity build out and ramp related to our multi-year infrastructure initiatives, including AI compute, solar, battery material and semiconductor manufacturing are underway," the earnings deck stated.

The earnings call began at 5:30 p.m. Eastern time.