Earnings call transcript: Tesla beats Q3 2026 estimates as stock slips after hours

Tesla reported strong Q3 2026 earnings, beating Wall Street estimates with adjusted earnings of $0.48 per share on revenue of $28.05 billion. The stock rose 3.41% in regular trading before slipping 2.22% after hours as investors weighed the company's ambitious spending plans against its improving margins and cash flow. Automotive gross margin excluding credits improved to 18.1% from 16.3% in the previous quarter, while the energy business posted its second-best quarter with 13.7 GWh of deployments and a 33.1% gross margin.

Free cash flow stayed positive at over $1.5 billion, and cash and investments topped $45 billion. Tesla's results reflected a mix of operating strength and non-operating factors, including a $142 million mark-to-market loss on SpaceX holdings offset by a $290 million Bitcoin gain. The company's current ratio of 1.94 and debt-to-equity ratio of 0.19 reflect a conservative capital structure.

Despite the earnings beat, investors were cautious about the company's near-term valuation, with the stock falling after hours. Tesla plans major investments in autonomy, robotics, and chip manufacturing, and expects demand for its vehicles to continue outpacing production capacity.