Shares of Tesla Inc (TSLA) slipped 3% after hours on Wednesday after the company reported that its second-quarter adjusted earnings slipped by about 18% year-over-year despite growth in vehicle deliveries as it focuses on developing products in parallel segments, such as robotics.

The company reported quarterly revenue of $28.2 billion, marking a year-on-year growth of about 26%, and above an analyst estimate of $27.6 billion. Adjusted earnings per share for the quarter, however, came in at $0.33, below an estimated $0.55 and lower than the $0.40 reported in Q2 2025.

TSLA Pivot Costs

The company further reported negative free cash flow of $1.1 billion for the first time in more than two years, implying it spent more than it generated as it focuses on its pivot from an EV maker into robotics and artificial intelligence.

The strong revenue numbers largely reflect a strong delivery performance for the quarter. Earlier this month, Tesla reported record Q2 vehicle deliveries of 480,126 units — well above Wall Street’s ~406,000 consensus and representing ~25% year-over-year growth and a sharp rebound from Q1. Energy storage deployments also hit a record 13.5 GWh, underscoring continued momentum in the higher-margin energy business.

However, capital expenditures rose 142% in the quarter to nearly $5.8 billion, weighing down earnings. The company ended the quarter with a stronger balance sheet and reported nearly $43.5 billion in cash, cash equivalents, and short-term investments as of the end of the quarter.

Product Updates

Tesla said that its Tesla Semi truck and Megapack 3 energy storage product remain on schedule for production starting in 2026.

First-generation production lines for its humanoid robot Optimus are also being installed in anticipation of production starting “soon”, the company said. The company plans to build Optimus in both California and Texas, starting with the production lines at its Fremont factory that replaced the one for its now-retired Model S and X vehicles.

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