GM Q3 2026 Earnings Analysis

And I'm Jordan. Today we're digging into General Motors' third quarter 2026 results, and there's a lot to unpack—record revenue, a massive new buyback, and a truck changeover that's about to shake things up.

Good to have that out of the way. Let's get into the numbers.

Those EPS numbers really jump out when you consider share buybacks are doing a lot of heavy lifting there. GM's diluted share count is down 9% year-over-year, and since 2023 they've cut shares outstanding by 37%. That's a massive reduction.

Twenty billion is more than 25% of GM's current market cap. That's the board basically saying, "we think this stock is cheap, and we're going to keep buying it hand over fist." CFO Paul Jacobson even said they'll keep doing this "as long as the valuation remains depressed."

Right, and that's despite some real headwinds. Copper's at record highs, steel's at four-year highs, and GM said commodity, logistics, and DRAM memory costs added about $2 billion of pressure for the full year—more than they expected back in July.

And that changeover isn't free. They're expecting about 35,000 fewer units in Q4 because of the downtime. But management's spinning it as short-term pain for long-term gain—better pricing and mix once the new trucks hit showrooms.

That software and services story is quietly becoming a real growth engine. OnStar and Super Cruise revenue was up 15% year-over-year this quarter, deferred revenue is up 40%, and they're approaching $7.5 billion in deferred revenue for the year. That's a high-margin business layered on top of the hardware.

That free cash flow improvement is coming from a few places—lower capex than expected, some tariff refund timing benefits, and just strong operational execution. Worth noting, they've also made good progress working through those EV restructuring cash charges—$7.4 billion incurred since mid-2025, with most of it already paid. That bodes well for 2027 free cash flow since those payments roll off.

Right, Paul Jacobson was pretty candid that if current commodity prices just get annualized, that's an additional $1-1.5 billion headwind next year, bringing the total commodity drag to roughly $2 billion. He said they need to see some moderation from these recent price spikes to hit their growth targets.

There was also a nice tidbit on GM Defense—new contracts with the Pentagon for the Infantry Squad Vehicle, a Patriot missile component deal with Lockheed Martin, and armored Suburban deals. GM Defense is targeting 30% annual top-line growth with double-digit margins. It's a small business relative to the whole company, but it's growing fast and diversifies the revenue base.

So what does this all mean for investors? GM is executing well operationally—margins are healthy, cash flow is strong, and the buyback signals real confidence from the board. But there's a real cost headwind building into 2027 that isn't fully resolved yet. The truck changeover execution and whether commodity prices moderate are the two things to watch closely over the next couple of quarters.

Before we wrap up, our required reminder: Everything discussed is AI-generated analysis for educational purposes. Past performance doesn't guarantee future results. Please do your own due diligence.

Lots to watch. Thanks for tuning in to Beta Finch.