Tesla's Quarterly Profit Falls 43% as Revenue Stays Roughly Flat

Tesla reported a sharp fall in third-quarter profit on 21 October, even as revenue held close to last year's level. Net income attributable to common shareholders under US accounting rules fell 43% to $787 million, according to its quarterly update.

Revenue was $28.05 billion, compared with $28.10 billion a year earlier. Automotive revenue declined 3% and energy revenue fell 16%, while services and other revenue grew 33%.

Operating profit dropped 56% to $718 million. The operating margin narrowed to 2.6% from 5.8%, as operating expenses rose 39%. Tesla linked higher expenses to research and development, stock-based compensation and administration.

Diluted earnings were 22 cents a share under US accounting rules. Tesla's non-GAAP figure was 48 cents, compared with 50 cents a year earlier.

Cash generation improved from the previous quarter, but remained weaker than a year ago. Free cash flow reached $1.53 billion, versus negative $1.09 billion in the second quarter and positive $3.99 billion a year earlier.

The company ended September with $45.45 billion in cash, cash equivalents and short-term investments.

Sources: Tesla Q3 2026 Update; Tesla Investor Relations.

Archival photo: Tesla sign, Buffalo, New York, 2018. Buffaboy / Wikimedia Commons, CC BY-SA 4.0. Cropped to 16:9 by Morval Universal; cropped image available under the same licence.