Tesla reports profit beat for Q1, reveals $2B SpaceX investment

Tesla Inc (NASDAQ:TSLA) has delivered an earnings beat for the first quarter, with profit beating Wall Street estimates and revenue growing year-over-year.

The EV-maker reported adjusted earnings per share of $0.41, above the $0.37 expected by analysts.

Revenue came in at $22.39 billion, up 16% year-over-year, but this was only a modest beat to a miss when compared to various estimates that ranged from $22.35 billion to $22.64 billion.

Automotive revenue rose 16% to $16.234 billion, while services and other revenue grew 42% to $3.745 billion. However, energy generation and storage revenue declined 12% to $2.408 billion.

Profitability improved, with total gross profit reaching $4.72 billion and gross margin expanding to 21.1%, up from 16.3% a year earlier. Tesla recorded $0.9 billion in GAAP operating income and $0.5 billion in GAAP net income, alongside $1.5 billion in non-GAAP net income.

The report also revealed that Tesla made a $2 billion investment in CEO Elon Musk's space firm, SpaceX. At the quarter-end, cash, cash equivalents, and short-term investments totaled $44.7 billion, up $0.7 billion sequentially. The increase was primarily driven by $1.4 billion in free cash flow and $1.2 billion in financing inflows, partially offset by the $2 billion SpaceX equity investment.

In its quarterly update, the company highlighted ongoing investments in artificial intelligence infrastructure, battery production, and manufacturing capacity. Tesla said it has begun ramping additional AI compute capabilities and is preparing production lines for upcoming products, including the Megapack 3, Cybercab, and Tesla Semi.

Tesla also pointed to strengthening demand across multiple regions, noting continued growth in Asia-Pacific and South America, as well as a rebound in Europe, the Middle East, Africa, and North America.

The company highlighted its efforts to localize and vertically integrate supply chains amid increasing geopolitical uncertainty. It said these steps are intended to secure access to key materials and components across its vehicle, energy, and AI businesses.

Looking ahead, Tesla cited several factors supporting its outlook for 2026, including continued development of its Full Self-Driving (FSD) technology, expansion of its robotaxi platform, progress on its Optimus robotics program, and growth in energy production capacity.

Shares of Tesla added 3.5% afterhours following the release of the report.