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TSLA · Q2 2026
Archived report (Q2 2026). Latest deep dive →
The quarter in brief
Tesla grew revenue 26% YoY to $28.2B on record deliveries and a Services rebound, but GAAP operating income collapsed 57% to $398M as opex surged 47% on AI/R&D spend and SBC while regulatory-credit revenue and vehicle ASP fell, and net income of $1,114M was only preserved by a $590M other-income swing tied to the SpaceX equity gain.
Net Income
$1,114M
down 5% y/y
Total Revenue
$28,236M
up 26% y/y
Operating Income
$398M
down 57% y/y
Gross Profit
$4,751M
up 23% y/y
All figures in $M.
| Line item | Amount and change |
|---|---|
| Automotive | $20,516 · +23% |
| Energy Gen & Storage | $3,139 · +13% |
| Services & Other | $4,581 · +50% |
| Total Revenue | $28,236 · +26% |
| Cost of Revenues | $23,485 · +26% |
| Gross Profit | $4,751 · +23% · 16.8% margin |
| R&D | $2,371 · +49% |
| SG&A | $1,982 · +45% |
| Operating Income | $398 · −57% · 1.4% margin |
| Interest & Other Income* | $931 · +187% · incl. $1,005M SpaceX gain* |
| Pre-Tax Income | $1,329 · −14% |
| Income Tax | $201 · −44% |
| Net Income | $1,114 · −5% · $0.32 diluted EPS |
Verdict: Tesla grew revenue 26% YoY to $28.2B on record deliveries and a Services rebound, but GAAP operating income collapsed 57% to $398M as opex surged 47% on AI/R&D spend and SBC while regulatory-credit revenue and vehicle ASP fell, and net income of $1,114M was only preserved by a $590M other-income swing tied to the SpaceX equity gain.
Operating cash flow $4,697M; free cash flow −$1,092M (capex $5,789M); cash & investments $43.5B (−$1.2B seq.); no dividend/buyback disclosed this quarter.
Source and notation
* marks non-cash / ≈ estimated. Source: Tesla press release / 10-Q (SEC EDGAR).
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- Operating income fell 57% YoY despite revenue growth, driven by opex up 47% (AI/R&D projects, SBC incl. 2025 CEO Performance Award, SG&A) plus energy warranty charges from a vendor cell issue.
- Non-GAAP net income of $1,153M is actually below GAAP net income of $1,114M once you exclude the one-off SpaceX equity gain (+$763M net of tax) and a one-time tax benefit (+$274M) that boosted GAAP results but are excluded from non-GAAP.
- Other income (expense), net swung from +$320M in Q2'25 to +$590M in Q2'26, driven mainly by a $1,005M unrealized gain on the SpaceX equity investment — a large non-cash, non-operating item propping up pre-tax income.
- Automotive regulatory credit revenue dropped to $146M from $439M YoY, a meaningful drag on both revenue and gross margin quality.
- Services and Other revenue jumped 50% YoY to $4,581M with record gross profit of $648M (14% margin), the strongest-performing segment this quarter.
- Free cash flow turned negative (−$1,092M) as capex spiked 142% YoY to $5,789M for AI compute, battery, and factory capacity expansion — a sign of heavy investment phase, not a profitability problem per se.
What distorts the picture in this report and what to watch beyond the headlines.
TSLA — Tesla designs and manufactures electric vehicles, battery energy storage systems, and solar energy products.
Headquartered in Austin, Texas, it also develops autonomous driving technology.
Heads-up
- profit is growing slower than revenue: −5% vs +26% y/y in Q2 2026
Net income −5% y/y against revenue +26% y/y. In the report's figures: costs grew faster than revenue: r&d +49% y/y, sg&a +45% y/y. Based on the Q2 2026 report.
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