Tesla's $1.1bn Q2 profit: $1.0bn of it is a mark-up on its SpaceX stake
Q2 10-Q: operating income $398m (1.4% of revenue), regulatory-credit revenue down 67%. The item that held net income in place is not on the face of the income statement but in Notes 2 and 13
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Tesla Form 10-Q for Q2 2026 (filed 2026-07-23): statement of operations, Note 2 'Fair Value of Financial Instruments', Note 3 'Acquisition', Note 13 'Related Party Transactions', MD&A 'Other Income, Net'
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Tesla's (TSLA) second-quarter 2026 revenue rose 26% to $28.2bn, but operating income fell to $398m, less than half of a year earlier. Net income, however, was almost unchanged at $1,114m. Note 2 of the 10-Q filed July 23 identifies the item that filled the gap.
What happened
Tesla (TSLA) is the most widely held U.S. stock among Korean retail investors. Its 10-Q for the second quarter of 2026, filed July 23, shows revenue of $28,236m, up 26% from a year earlier. Operating income, however, was $398m, less than half the $923m of a year earlier — an operating margin of 1.4%.
Net income moved differently. Net income attributable to common stockholders was $1,114m, close to the $1,172m of a year earlier. Operating income fell by $525m, yet net income barely moved, because of $590m of "Other income, net" and $422m of interest income. The footnote to Note 2 says what is inside other income: "For the three months ended June 30, 2026, we recorded a $1.00 billion net gain on our SpaceX equity investment." The cash flow statement puts the unrealized gain at $1,005m.
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Note 2, the fair-value table and its footnote (1): 'For the three months ended June 30, 2026, we recorded a $1.00 billion net gain on our SpaceX equity investment.' It sits inside Other income, net ($590m) on the statement of operations; the MD&A attributes the change to the SpaceX gain, bitcoin adjustments and currency moves.
Why did operating income fall?
The 10-Q statement of operations shows each line's change. Which items mattered and by how much is set out in the subscriber section of this article.
Is the gain cash?
No. Nothing was sold, so no cash came in. Tesla discloses that regulatory sale restrictions lift in September 2026; until then the stake is only re-marked each quarter.
Where can I verify these numbers?
On SEC EDGAR: Tesla's Q2 2026 Form 10-Q (accession 0001628280-26-049270), statement of operations, Notes 2, 3 and 13, and the MD&A section 'Other Income, Net'.
Revision history
— Reworked the free preview — lead and subhead now stop at the event and the key figure; interpretive paragraphs, the analogy and watch-next lines and interpretive FAQ answers moved to the subscriber section. No figures or sources changed.
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Tesla Form 10-Q for Q2 2026 (filed 2026-07-23): statement of operations, Note 2 'Fair Value of Financial Instruments', Note 3 'Acquisition', Note 13 'Related Party Transactions', MD&A 'Other Income, Net' · SEC EDGAR · This article is not investment advice. Disclaimer
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