Tesla released its third-quarter earnings after the U.S. stock market closed on Oct. 21. According to the shareholder deck the company filed with the U.S. Securities and Exchange Commission, revenue came in at $28.046 billion, flat from a year earlier. Net income attributable to common stockholders was $787 million, down 43% year over year, and adjusted earnings per share reached $0.48.
CNBC, citing LSEG consensus estimates, said Wall Street had expected adjusted EPS of $0.43 and revenue of $27.9 billion. Tesla topped both figures, though the stock still fell more than 3% at one point in after-hours trading.
Automotive revenue fell as capital spending jumped
By segment, automotive revenue was $20.56 billion, down 3% from a year earlier. Revenue from energy generation and storage totaled $2.881 billion, down 16%, while services and other revenue rose 33% to $4.605 billion.
Operating income for the quarter was $718 million, down 56% year over year, with an operating margin of 2.6%. Gross margin was 19.6%, up 1.6 percentage points from the same period last year.
Capital expenditures rose 110% to $4.732 billion. Free cash flow fell 62% to $1.531 billion. At the end of the quarter, cash, cash equivalents and short-term investments totaled $45.447 billion.
CNBC said Tesla attributed weak automotive revenue and profit to lower average selling prices during the quarter and tight battery supply, which left the company unable to produce enough vehicles to work through orders.
Deliveries declined, while FSD subscriptions increased
On operations, Tesla reported third-quarter deliveries of 486,532 vehicles, down 2% year over year. Production reached 464,391 vehicles, up 4%, and energy storage deployments were 13.7 GWh.
Active subscriptions for Full Self-Driving, or FSD, reached 1.74 million, up 67% from a year earlier. CNBC also reported that Tesla posted record quarterly sales in Canada, Japan, Taiwan and Australia.
Musk offered no new update on a Tesla-SpaceX merger
At a SpaceX investor presentation one day before Tesla’s earnings release, Elon Musk said a merger between the two companies was a “good idea” and said both boards had formed special committees to discuss a possible combination.
When the topic came up again on Tesla’s earnings call, Musk did not add new details. He said, “I think I said everything yesterday that needed to be said.”
Speculation around a merger between Tesla and SpaceX has circulated for some time. According to the source material, the probability of a merger on prediction markets briefly rose to 56% in the middle of this month.
Robotaxi and Optimus timelines were also discussed
CNBC reported that Musk said on the earnings call that Tesla’s autonomous Robotaxi fleet will begin contributing to the company’s financials in 2027. “There won’t be a material impact this quarter. I think you’ll start to see it in the second quarter next year, and by the third or fourth quarter it could be quite significant,” he said.
Ashok Elluswamy, Tesla’s vice president of Autopilot, said the company plans to allow some customer vehicles to use an unsupervised version of FSD around the second quarter of next year.
On the humanoid robot Optimus, the shareholder deck said production has started on a mass-production line at the Fremont factory. Musk said on the call that there is still “quite a lot of work to do” on both the AI and the robot itself before it can handle a wide range of open-ended tasks. He said issues involving electromechanical design, reliability, operating time and AI are expected to be resolved around the end of next year.