Tesla Q2 Revenue at $28.24 Billion, EPS at $0.33, Free Cash Flow Turns Negative at $1.1 Billion

Tesla has released its second-quarter financial report, with revenue of $28.24 billion, exceeding market expectations of $25.71 billion and representing a year-on-year increase of 26%. Adjusted earnings per share (EPS) were $0.33, below the expected $0.51. Net profit was $1.11 billion, a 5% decrease compared to the same period last year. The gross margin fell to 16.8%, down from 17.2% a year ago and below the market expectation of 19.4%. Operating expenses increased by 47% year-on-year to $4.35 billion, and the operating profit margin dropped from 4.1% to 1.4%, primarily due to investments in AI and R&D. Free cash flow turned negative at $1.1 billion, compared to a positive $146 million in the same period last year, with capital expenditures surging 142% year-on-year to $5.79 billion. The company stated that investments in capacity building, AI computing power, battery materials, and semiconductor manufacturing infrastructure are ongoing. Revenue from the automotive business was $20.52 billion, a 23% year-on-year increase; energy business revenue was $3.14 billion, up 13%; and revenue from services and other businesses was $4.58 billion, a 50% increase. The number of FSD subscription users reached 1.48 million, a 56% quarter-on-quarter increase. Tesla's stock price has fallen approximately 17% year-to-date.