Tesla's profit fell 43% this quarter — but record Canadian deliveries helped save the story

The numbers

Tesla reported third-quarter revenue of $28.05 billion on Wednesday, roughly flat from $28.10 billion a year earlier, according to the company's Q3 update. But profitability took a hit: GAAP net income fell 43% to $787 million, and GAAP earnings per share came in at $0.22, down from $0.39 a year ago.

The non-GAAP picture looked better. Adjusted earnings were $0.48 a share, ahead of analyst estimates of around $0.44 to $0.45, according to CNBC reporting cited by The Circuitry.

Where the money went

Operating income fell 56% to $718 million — a 2.6% operating margin — as operating expenses climbed 39% to $4.78 billion, driven by superintelligence and other R&D projects, stock-based compensation and administrative costs, according to reporting on the results.

There was good news inside the cost squeeze: total gross margin improved to 19.6%, up from 18.0% a year earlier and 16.8% in the second quarter. Operating cash flow was $6.3 billion and free cash flow reached $1.53 billion after $4.73 billion in capital expenditures. Tesla ended the quarter with $45.4 billion in cash and investments.

The Canadian angle

Buried in the release was a number that matters here: Tesla said it delivered a record number of vehicles in Canada in the quarter, alongside records in Australia, Japan and Taiwan. The company delivered 486,532 vehicles globally — down 2% from a year earlier — produced 464,391, and marked its 10-millionth vehicle overall.

Canadian buyers have a stake in what comes next, too. More than 75% of new North American deliveries now include Full Self-Driving (Supervised), according to Tesla, with active FSD subscriptions up 67% year over year to 1.74 million. And Tesla says its energy business took a tariff-related hit — energy revenue fell 16%, partly due to tariff-related customer refunds, according to Drive Tesla Canada's reporting.

What comes after the call

The company will face questions on its Wednesday evening earnings call about whether the margin rebound is sustainable — and about the bigger story from Tuesday, when Elon Musk confirmed Tesla and SpaceX have each formed special committees to study a possible merger.