Tesla And SpaceX Earnings Call Transcripts (TSLA; SPCX)

First up, from Investing.com, October 21:

Earnings call transcript: Tesla beats Q3 2026 estimates as stock slips after hours 

Tesla posted a modest earnings beat for Q3 2026, reporting adjusted earnings of $0.48 a share on revenue of $28.05 billion, topping Wall Street expectations of $0.45 and $27.92 billion, respectively. The shares rose 3.41% in the regular session to $386.47, but fell 2.22% after hours to $377.88 as investors weighed the company’s improving margins and cash flow against heavy spending plans and a long list of ambitious product targets.

Key Takeaways

• Tesla beat expectations on both earnings and revenue, though the sales surprise was small.
• Automotive gross margin excluding credits improved to 18.1% from 16.3% in the prior quarter.
• The energy business posted its second-best quarter, with 13.7 GWh of deployments and gross margin of 33.1%.
• More than 75% of North American deliveries included a paid FSD subscription at delivery.
• Free cash flow stayed positive at more than $1.5 billion, while cash and investments topped $45 billion.

Company Performance
Tesla said Q3 was a strong quarter across several businesses, with record production rates at its factories and two straight quarters of vehicle deliveries above 480,000 units. Management said demand continues to outpace supply, helped by Full Self-Driving, which it described as the main driver of customer interest.

The company also pointed to strength outside the core auto business. Energy storage deployments reached 13.7 GWh, near the high end of Tesla’s recent history, while services and other margins hit an all-time high of 15.9%. That segment benefited from Supercharging, insurance and early Robotaxi activity.

Tesla’s results also reflected a mix of operating strength and non-operating noise. Net income was affected by a $142 million mark-to-market loss on SpaceX holdings, partly offset by a $290 million Bitcoin mark-to-market gain. Even so, the company ended the quarter with more than $45 billion in cash and investments.

Financial Highlights

• Revenue: $28.05 billion, up slightly from the forecast of $27.92 billion.
• Earnings per share: $0.48, versus $0.45 expected.
• EPS surprise: 6.67%.
• Revenue surprise: 0.47%.
• Automotive gross margin excluding credits: 18.1%, up from 16.3% in the prior quarter.
• Energy gross margin: 33.1%, up from 20.4% sequentially.
• Energy deployments: 13.7 GWh, the company’s second-best quarter.
• Services and other margin: 15.9%, up from 14.1%.
• Free cash flow: more than $1.5 billion.
• Cash and investments: more than $45 billion at quarter-end.
• Current ratio: 1.94, indicating liquid assets comfortably exceed short-term obligations.
• Debt-to-equity ratio: 0.19, reflecting Tesla’s conservative capital structure.

Earnings vs. Forecast
Tesla’s $0.48 per-share profit beat the consensus estimate by $0.03, or 6.67%, while revenue came in $130 million above forecast. The earnings beat was more meaningful than the sales beat, since the top-line surprise was relatively small.

The quarter suggests Tesla is still executing better than expected, but not by a wide margin. The result fits a pattern of steady improvement rather than a dramatic upside shock. Investors appeared to reward the report at first, but the after-hours decline suggests some caution about how much of the company’s long-term story is already priced in.

Market Reaction
Tesla shares closed the regular session at $386.47, up 3.41% from the previous close of $373.71. In after-hours trading, the stock fell to $377.88, down 2.22% from the close and about 1.53% below the prior day’s level.

The stock remains well above its 52-week low of $297.38, but still below the high of $498.83. The move suggests investors liked the quarter’s operating trends, especially margin improvement and FSD adoption, but were less certain about the company’s near-term valuation after a strong regular-session move. No unusual volume data was provided.

Outlook & Guidance
Tesla cut its full-year capital expenditure outlook to about $20 billion, down from earlier expectations, and said the spending will be funded mainly through operating cash flow. The company also said it has secured borrowing capacity of up to $30 billion, though it does not plan to draw on it this year.

Looking ahead, Tesla outlined a wide range of product and growth milestones:

• First customer activation of unsupervised FSD in vehicles is targeted for Q2 2027.
• Cybercab customer availability is targeted for the end of 2026.
• Robotaxi expansion to Dallas is planned for the month after the call, with more cities before year-end.
• 24/7 Robotaxi operation is targeted by year-end 2026.
• Optimus commercial delivery is still aimed for the end of 2027.
• Tesla said its Megapack business is nearly sold out for 2027.
• A research fab for semiconductors is expected in the first half of 2027, with a first test chip targeted for May or June 2027.

Management also said future spending will rise as Tesla expands Robotaxi, Optimus, solar manufacturing and chip production.

Executive Commentary
Chief Executive Elon Musk said demand remains stronger than production capacity. “Demand is growing rapidly for our vehicles. It is exceeding our production by a significant margin,” he said.

Musk also highlighted the role of autonomy in demand. “The biggest driver for demand is Full Self-Driving. Today, there is really no competitor for FSD in any car that you can buy,” he said.

On robotics, Musk repeated his long-term view of the business. “I remain convinced that Optimus will be the biggest product on Earth, and humanoid robots in general will be the biggest product on Earth,” he said.

Chief Financial Officer Vaibhav Taneja said the company is seeing strong customer interest in FSD. He said more than 75% of North American deliveries included a paid FSD subscription at delivery, and added that customers in showrooms are now asking for FSD test drives rather than only vehicle test drives.

Risks and Challenges

• Rising spending: Tesla plans major capital outlays for autonomy, robotics and chip manufacturing, which could pressure near-term free cash flow.
• Execution risk: The company’s Robotaxi, Optimus and Terafab plans are ambitious and still depend on technical and manufacturing milestones.
• Regulatory risk: Expansion of FSD and Robotaxi depends on approval from regulators in the U.S. and abroad.
• Cost pressure: Management cited higher commodity prices and interest rates as ongoing headwinds.
• Supply chain constraints: Tesla said production is still limited by the least efficient component or process in the system.
• Valuation risk: With a market cap of $1.48 trillion and trading at high multiples across earnings, revenue and book value, the stock leaves little room for execution missteps.

Q&A
Analysts focused on how fast Tesla can scale Robotaxi, FSD and Optimus, and what those businesses could mean for revenue.

One major topic was Robotaxi expansion beyond Austin. Management said the company plans to launch in Dallas next and expects to scale to other cities using the same software stack. It also said the business is not limited to Austin.

Another focus was FSD. Tesla said the same software used in Cybercab and Model Y will be rolled into customer vehicles, with the first activation targeted for Q2 2027. The company also said it is building its own mapping and navigation system rather than relying on third-party maps.

Questions about Optimus centered on training data, hardware design and timing. Tesla said the hand remains the most difficult part of the robot, while the broader electromechanical system is more mature. The company said a demo video showing non-pre-programmed behavior should arrive within one to two months.

Analysts also asked about Robotaxi economics. Tesla said it is not yet at its target of $0.30 per paid mile, but believes it has a clear path as utilization improves. For Optimus, the company said costs are trending lower as the design matures.

Full transcript - Tesla Inc (TSLA) Q3 2026:....

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And from Motley Fool Transcribing, October 20: 

SpaceX (SPCX) Q3 2026 Earnings Call Transcript

Revenue surged 161% to $14.6 billion as compute and Starlink subscriber growth accelerated

DATE
Tue, Oct 20, 2026

CALL PARTICIPANTS

• Head of Investor Relations - Andrea Williams
• Chief Executive Officer - Elon Musk
• President and Chief Operating Officer - Gwynne Shotwell
• Chief Financial Officer - Bret Johnsen

TAKEAWAYS

• Revenue -- $14.6 billion, up 161% year over year driven by the ramp of cloud services agreements and Starlink subscriber growth.
• Net Income -- $4.4 billion, representing an improvement of $5.5 billion compared to a net loss of $1.1 billion in the prior year period.
• Adjusted EBITDA -- $8.8 billion, a 306% increase year over year reflecting operating leverage in the Connectivity and Super Intelligence segments.
• Super Intelligence Revenue -- $7.6 billion, up from $813 million last year due to the activation of new nameplate compute capacity and the Cursor acquisition.
• Connectivity Revenue -- $5.2 billion, growing 69% year over year supported by a 57% increase in consumer revenues and a 91% rise in enterprise and government revenues.
• Space Revenue -- $1.8 billion, a 6% increase year over year anchored by a favorable customer launch mix despite a lower total launch count compared to the prior year.
• Starlink Consumer Subscribers -- 13.6 million, with 1.6 million net additions in the third quarter primarily from developed markets.
• Starlink Mobile Users -- 22 million monthly users, a 37% increase quarter over quarter following service expansions in countries such as Uganda and Kazakhstan.
• Nameplate Compute Capacity -- 1.7 gigawatts, an increase from 1.4 gigawatts in the second quarter as the company continued building out the Colossus II cluster.
• Capital Expenditures -- $19.6 billion, focused on the buildout of Super Intelligence infrastructure, Starship development, and satellite production.
• Q4 Capital Expenditure Guidance -- $35 billion to $40 billion, reflecting the accelerated build path for compute infrastructure at sites in Memphis and Southaven.
• Q1 2027 Revenue Guidance -- $33 billion to $37 billion, based on increased visibility into the compute contract pipeline over the next six months.
• Starlink Consumer ARPU -- $69 per month, a 5% sequential increase attributed to shifting customer mix dynamics.
• Cursor Acquisition Contribution -- $608 million in revenue, representing the post-acquisition results from Aug. 14 to Sept. 30.
• Backlog -- $63 billion, with $42 billion expected to be recognized as revenue within the next 12 months.
• Enterprise and Government Aviation -- 12,000 aircraft contracted, with over 3,800 planes currently equipped with Starlink hardware as of the end of the quarter.
• Starship Bandwidth Deployment -- 26 terabits per second, delivered by the Starlink V3 satellites launched during the Flight 14 mission.
• Mass to Orbit Share -- 90%, representing the company's portion of total global mass launched to orbit during the third quarter.
• Grok Bot Weekly Users -- 800,000 paid users, more than doubling over the previous month following its launch in August.
• Compute Nameplate Target -- 2.5 gigawatts to 3 gigawatts, expected to be online by the end of the fourth quarter.
• 2027 ARR Target -- $500 billion to $1 trillion, representing management's goal for the annualized recurring revenue run rate by the end of 2027.
• Compute Deployment Pace -- 20,000 GB300 units per month, representing the current rate of bringing new graphics processing units online.
• Grok Enterprise Growth -- 50% quarter-over-quarter increase in customers with more than $1 million in run-rate revenue on a pro forma basis.
• Launch Count -- 35 total launches, consisting of 12 customer missions and 23 internal flights during the third quarter.
• Advertising Revenue -- $538 million, representing a 19% year-over-year increase as the company builds momentum on its new advertising technology platform.

 RISKS

• Musk warned that the success of the upcoming Flight 15 booster and ship catch is uncertain, noting that while the company has a steady stream of attempts planned, a positive outcome is not assured for the initial flight.
• Musk stated, "the special committees have not reached agreement on the terms of any transaction. And obviously, there's no guarantee that they will," regarding the possible combination of SpaceX and Tesla.
• Musk stated, "I think we're going to face a shortage of super intelligence compute. And that shortage is going to remain for a long time," identifying infrastructure and power as primary constraints.

SUMMARY

Space Exploration Technologies Corp. (SPCX +7.80%) reported a period of significant scaling as management transitioned the company toward a vertically integrated infrastructure provider across launch, connectivity, and super intelligence. The company achieved a record 90% share of global mass to orbit while simultaneously accelerating the deployment of its terrestrial compute clusters to reach 1.7 gigawatts of nameplate capacity. Management stated that the combination of launch leadership, recurring Starlink revenue, and the expansion of Super Intelligence infrastructure is driving meaningful operating leverage. The company is aggressively investing in Starship development and next-generation satellite constellations, with fourth-quarter capital expenditures projected to nearly double sequentially to support the accelerated build path of its compute centers.

Management announced the development of the Louisiana spaceport, with Musk stating the facility will eventually include "on the order of 20 or more launch towers" to enable millions of tonnes to orbit annually.

The company expects Starship to reach a weekly launch cadence in the first half of 2027, accelerating to twice weekly or higher by the end of that year as rapid reusability is finalized.

Musk indicated that the company prefers short-term compute rental contracts at spot market rates, stating, "our belief is that the value of compute per watt will increase over time, not decrease."

SpaceX is leveraging its proprietary rocket engine casting technology to manufacture terrestrial turbine components, which Musk claimed allows the company to bring power online 12 to 18 months faster than competitors.

Management detailed a multi-year semiconductor road map, aiming for a test chip in mid-2027 and volume production at the Terafab facility by the third quarter of 2028.

Gwynne Shotwell reported that aviation production rates have quadrupled since the beginning of the year, with a goal to double that rate again before the end of the year to meet aircraft demand.

The company entered into an agreement to acquire 800 megahertz low-band spectrum, which management stated will pave the way for Starlink Mobile to become a major mobile carrier in the United States.

INDUSTRY GLOSSARY

• Starlink V3: The third-generation satellite in the Starlink constellation, delivering significantly higher bandwidth capacity per launch compared to previous versions.
• Colossus II: The company's massive supercomputing cluster located in Memphis, utilized for training and inference of super intelligence models.
• Terafab: The planned high-volume semiconductor fabrication facility designed to produce super intelligence chips.
• Grok Bot: An agentic super intelligence assistant designed for both consumer use and enterprise workflows.
• GB300: High-performance graphics processing units used in the buildout of super intelligence compute infrastructure.
• Starfall: A space capsule designed to provide routine, low-cost access to microgravity environments for scientific and medical research.
• Starmind: A next-generation satellite constellation focused on high-bandwidth super intelligence connectivity.
• Nameplate Compute: The total theoretical power capacity of a data center or supercomputing cluster, measured in gigawatts.

Full Conference Call Transcript....

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Both stocks are down this morning, half an hour in to the regular trading day TSLA is at $382.465 down $4.005 (1.04%) and SPCX is at $152.34, down $6.97 (4.38%)