0001628280-26-026673
SEC filingTesla's Q1 2026 revenue grew 16% to $22.39B, with automotive margins improving to 21.1%.
Tesla's first quarter 2026 total revenue reached $22.39 billion, a 16% increase year-over-year, driven primarily by a 20% rise in automotive sales revenue to $16.23 billion. The automotive sales growth was underpinned by a 10% increase in cash deliveries and a higher average selling price due to favorable sales mix and foreign exchange tailwinds. Total gross profit surged 49.7% to $4.72 billion, with total gross margin expanding from 16.3% to 21.1%. This margin improvement was largely attributable to automotive segment margins, which benefited from one-time warranty and tariff benefits, lower average cost per unit, and mix effects. Net income attributable to common stockholders grew 16.6% to $477 million, supported by higher operating cash flow of $3.94 billion (up 82.5% from $2.16 billion).
The Automotive & Services and Other segment delivered $19.98 billion in revenue, up 20% YoY. Automotive sales revenue rose 20% to $15.47 billion, while regulatory credits revenue declined 36% to $380 million due to regulatory changes and reduced demand from other automakers. Services and other revenue jumped 42% to $3.75 billion, driven by used vehicle sales, non-warranty services, and Supercharging. Segment gross profit reached $3.77 billion, with gross margin improving from 14.3% to 18.9%. Energy Generation and Storage segment revenue fell 12% to $2.41 billion, primarily due to lower Megapack and Powerwall deployments. However, gross margin expanded sharply from 28.8% to 39.5%, driven by lower materials costs and one-time tariff benefits. This divergence highlights the segment's improving cost structure despite volume headwinds.
Management emphasized a focus on long-term growth through AI initiatives, including FSD (Supervised), Robotaxi (Cybercab), and Optimus. Capital expenditures are expected to exceed $25 billion in 2026, allocated to compute infrastructure, manufacturing expansion, and fleet growth. The company noted that tariff and trade policy uncertainties could impact supply chain costs and demand, particularly for energy storage. Despite near-term challenges, Tesla anticipates continued positive operating cash flow and adequate liquidity, with $44.74 billion in cash and short-term investments as of March 31, 2026. Key priorities include scaling production of Cybercab, ramping new battery technologies, and expanding energy storage manufacturing capacity.
As of March 31, 2026, Tesla's liquidity remains strong with cash and cash equivalents of $16.6B and short-term investments of $28.1B, totaling $44.7B. Accounts receivable stood at $4.0B, while inventory increased to $14.4B (up 16.5% from $12.4B in December 2025), primarily driven by finished goods ($6.8B). Total assets reached $143.7B, supported by $43.2B in net property, plant and equipment, including $7.7B in AI infrastructure. Shareholders' equity rose to $84.1B, with retained earnings of $39.5B.
Tesla disclosed $10.15B in remaining performance obligations for energy generation and storage contracts with original expected length over one year, of which $5.02B is expected to be recognized in the next 12 months. Automotive deferred revenue related to FSD and other services totaled $4.0B, with $941M expected within one year. The company has $3.67B in maximum exposure under resale value guarantees on vehicle leasing programs. Accrued warranty reserve stood at $8.47B, with $508M provision added in Q1 2026.
Debt and finance leases increased to $9.2B from $8.4B at year-end, driven by a net $0.8B increase from $4.3B in debt issuances and $3.5B in repayments. The company also invested $2.0B in SpaceX common stock. Capital expenditures totaled $2.5B (11.1% of revenue), with an additional $2.8B in accrued capital purchases. No share buybacks or dividends were declared.
Automotive segment revenue grew 20.3% YoY to $20.0B, with gross profit of $3.8B (18.9% margin). Energy segment revenue declined 11.8% to $2.4B, though gross margin improved to 39.5%. Geographically, U.S. revenue was $10.7B, China $4.2B, and other international $7.5B. Long-lived assets concentrated in the U.S. ($38.4B), with $4.8B in Germany.
Operating cash flow (OCF) of $3,937M significantly exceeded net income of $491M, indicating strong cash generation from operations. The OCF-to-net income ratio of 8.0x highlights high cash conversion, driven by large non-cash charges (depreciation $1,590M, stock-based compensation $1,030M) and favorable working capital changes (accounts receivable decreased $561M, accounts payable increased $1,401M). However, inventory built up $2,255M, consuming cash.
Capex of $2,493M (63% of OCF) was substantial, reflecting heavy investment in property and equipment. The purchase of SpaceX equity ($2,002M) further boosted investing cash outflows. Despite this, the company relied on debt issuance ($4,331M) to fund capex and investments, as free cash flow (OCF minus capex) was approximately $1,444M (not disclosed, computed). No share repurchases or dividends were paid.
Overall, cash flow quality is moderate: strong operational cash generation but heavy capital spending and reliance on financing. Watch inventory buildup and large investing outflows.