Tesla Reports Q3 Earnings Beat, Positive Free Cash Flow

Tesla reported better-than-expected third-quarter earnings, with free cash flow exceeding Wall Street estimates and capital spending coming in below forecasts, Pras Subramanian reported for Yahoo Finance.

Tesla reported higher-than-expected adjusted earnings and positive free cash flow for the third quarter while lowering its full-year capital spending forecast. [Photo: ]Tesla X

Tesla reported third-quarter revenue of $28.05 billion, compared with the Bloomberg consensus estimate of $28.13 billion.

Adjusted earnings per share came in at $0.48, above the $0.44 estimate, while adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) reached $3.90 billion, compared with the $3.66 billion estimate.

Tesla shares fell nearly 5% in premarket trading on Thursday.

The company reported free cash flow of $1.53 billion, compared with analysts’ estimated outflow of $4.92 billion. Capital expenditures totaled $4.732 billion, below the $7.96 billion estimate.

During its earnings call, Tesla lowered its full-year 2026 capital expenditure guidance to $20 billion from a previously indicated $25 billion.

Chief Financial Officer Vaibhav Taneja said the company planned to manage capital deployment efficiently and fund spending primarily through cash flow from operations.

Chief Executive Elon Musk said capital spending was ending up lower than anticipated but would become more substantial in subsequent years, with spending reaching tens of billions of dollars in 2028.

The lower spending forecast and stronger-than-expected free cash flow came as investors assessed Tesla’s investment plans for its automotive, artificial intelligence and robotics businesses.