Business · Companies · 2 hrs ago
Meta and Tesla beat revenue forecasts but face spending concerns
Meta and Tesla both reported third-quarter results that topped market forecasts for revenue.
Meta’s sales rose 26% from a year earlier, helped by stronger advertising, while Tesla’s total revenue was nearly unchanged.
Meta’s rapid AI investment is putting pressure on cash: it spent $34.9 billion on equipment in the quarter and reported negative free cash flow of $2.1 billion.
The company also plans to issue non-voting shares from January 2027, one for each existing share, for uses including fundraising and employee pay; the added shares could reduce value per share.
Tesla’s core vehicle business weakened, with automotive revenue down 3% and energy revenue down 16%.
Tesla said battery supply was limiting sales and that its passenger-car order backlog was the largest in four years, though average selling prices fell again.
Both companies now need to show their investments can pay off: Meta has raised its fourth-quarter revenue outlook, while Tesla’s robotics and robotaxi plans are still presented as future prospects.
Meta and Tesla reported third-quarter revenue above market forecasts, but investors focused on their spending and business challenges.
Meta revenue rose 26% year over year to $64.61 billion, while costs tied to a youth mental health lawsuit helped cut operating profit by 37%.
Meta reported $34.91 billion in capital expenditure and negative free cash flow of $2.12 billion for the quarter.
Tesla revenue was $28.05 billion, but automotive revenue fell 3% and energy revenue fell 16%.
The article said Meta faces questions about funding AI investment, while Tesla’s robots and robotaxis have yet to show when they will generate revenue.
- Who
- Meta and Tesla.
- What
- Both reported third-quarter revenue above market forecasts, while spending and business concerns drew attention.
- When
- The results were announced after the New York market closed on October 21, local time.
- Where
- The announcements followed trading on the New York stock market.
- Why
- Investors focused on Meta’s funding needs for AI investment and on when Tesla’s robots and robotaxis might become profitable.
This story does not have two clearly opposing sides.
Meta and Tesla announced their third-quarter results after the New York market closed.
South Korean markets opened lower amid profit-taking and mixed signals from the United States.
Meta’s new non-voting C shares are scheduled to take effect.
- Meta third-quarter revenue
- $64.61 billion, up 26% year over year
- Meta third-quarter capital expenditure
- $34.91 billion
- Meta third-quarter free cash flow
- Negative $2.12 billion
- Tesla third-quarter revenue
- $28.05 billion
- Tesla automotive revenue
- $20.56 billion, down 3% year over year
What people are saying
Meta is growing well, but it means money is short