# Tesla Beats Q3 Non-GAAP EPS Estimate as Operating Income Falls 56%

By John Kim

Canonical URL: https://www.tokenpost.com/news/business/37764
Published: 2026-10-22T11:14:42.000Z
Updated: 2026-10-22T11:14:42.000Z
Section: Business

> Research and development expense rose 69% to $2.761 billion, while revenue was nearly flat year over year at $28.046 billion.

Tesla beat its third-quarter non-GAAP earnings-per-share estimate, while operating income fell 56% as research spending rose across artificial intelligence, vehicle and battery programs.

The automaker posted adjusted diluted earnings of $0.48 a share for the quarter ended Sept. 30, topping its Oct. 19 analyst consensus of $0.45, based on 23 analyst inputs. Revenue reached $28.046 billion, little changed from $28.095 billion a year earlier. The consensus average for revenue was $28.341 billion, putting sales below that benchmark.

Operating income declined to $718 million from $1.624 billion in Q3 2025. Net income attributable to common stockholders fell to $787 million from $1.373 billion, and GAAP diluted earnings were $0.22 a share, down from $0.39.

Research and development costs rose 69% to $2.761 billion from $1.630 billion. Tesla attributed the increase primarily to Super Intelligence and other initiatives spanning Optimus, silicon development, battery technologies and new vehicles, as well as higher stock-based compensation.

Total gross margin improved to 19.6% from 16.8% in Q2. Free cash flow was $1.531 billion, compared with a $1.092 billion outflow in the prior quarter.