Tesla shares have risen about 11.8% over the past month since the company’s last earnings report, outperforming the S&P 500 as investors weigh improving demand against a still-challenging outlook ahead of the next results. The latest quarter showed a strong beat on both earnings and revenue, with Tesla reporting first-quarter 2026 adjusted earnings of 41 cents per share, up 52% year over year and above analyst estimates of 36 cents. Revenue increased 15.8% to $22.39 billion, also topping expectations, supported by stronger vehicle deliveries and growth in Services and Other revenue.
Automotive remained Tesla’s largest business, generating $16.23 billion in revenue, including $15.47 billion from automotive sales, $380 million from regulatory credits and $381 million from automotive leasing. Energy Generation and Storage revenue declined to $2.4 billion from $2.7 billion a year earlier, even as storage deployed reached 8.8 GWh. A major bright spot was Services and Other, which climbed to $3.75 billion from $2.64 billion, reflecting higher activity in paid Supercharging, service operations, used vehicles, insurance and early Robotaxi-related offerings. Tesla also said growth in Full Self-Driving (Supervised) sales and subscriptions helped the revenue mix.
Operationally, Tesla produced 408,386 vehicles in the quarter and delivered 358,023, led by Model 3/Y volume. However, inventory days of supply rose to 27 from 22 a year earlier, suggesting a less favorable inventory position. The company said it ended the quarter with 1.28 million active paid FSD subscriptions, while its Supercharger network expanded to 8,463 stations and 79,918 connectors, underscoring continued growth in charging infrastructure and software adoption.
Profitability improved on a GAAP basis. Gross profit totaled $4.72 billion, with a gross margin of 21.1%. Operating income came in at $941 million, producing an operating margin of 4.2%. Tesla said higher deliveries, a better average selling price excluding foreign exchange impacts, lower per-vehicle costs and stronger Services and Other gross profit all supported the result. The company also cited warranty true-downs and some tariff relief as margin tailwinds, while high interest rates continued to pressure financing-related costs.
Cash generation remained solid despite heavier investment. Tesla reported $3.94 billion in operating cash flow, $2.49 billion in capital expenditures and $1.44 billion in free cash flow. Cash, cash equivalents and short-term investments reached $44.74 billion at quarter-end, while debt and finance leases net of the current portion stood at $7.78 billion. Management indicated that 2025-2026 capital spending could exceed $25 billion as the company prepares for a more capital-intensive phase focused on factories and AI infrastructure.
Looking ahead, Tesla’s story remains centered on autonomy, Robotaxi expansion, and new product ramps. The company reported approval for FSD (Supervised) in the Netherlands and launched unsupervised Robotaxi rides in Dallas and Houston, while expanding operations in Austin. It also said Cybercab, Tesla Semi and Megapack 3 remain on track for volume production starting in 2026, alongside first-generation Optimus production lines. Still, analysts note mixed momentum: estimate revisions have weakened, Tesla’s momentum score is low, and the stock carries a Zacks Rank #4 Sell, pointing to expectations for below-average returns in the months ahead.
