Tesla Q2 Earnings Miss: EPS $0.33 vs $0.51 Expected, Margins Squeezed, Shares Drop 6%
TSLA sits 16% above its 52-week low of $297.82.
Summary
Tesla's Q2 adjusted EPS of $0.33 badly missed the $0.51 consensus, driven by a 47% surge in operating expenses to $4.35B as AI and R&D spending ramped. Revenue grew 26% to $28.24B, but gross margins slipped to 16.8% from 17.2% on lower ASPs and softer regulatory credit revenue. Operating margin collapsed to 1.4% from 4.1%, free cash flow swung to a $1.1B outflow, and capex more than doubled to $5.79B with full-year guidance reiterated above $25B. Shares fell nearly 6% pre-market, reflecting the sharp profitability deterioration. This follows a 10-Q that already flagged heavy AI investment pressure, but the magnitude of the margin and cash flow erosion is worse than feared. The core auto business remains under pricing pressure while the energy and services segments showed solid growth. With capex staying elevated and no near-term relief on spending, the cash burn trajectory is a serious concern.
At the time of this announcement, TSLA was trading at $344.25 on NASDAQ in the Manufacturing sector, with a market capitalization of approximately $1.4T. The 52-week trading range was $297.82 to $498.83. This news item was assessed with negative market sentiment and an importance score of 9 out of 10. Source: ShareCast.