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Tesla Q3 Financial Results
- jumbopapa 7y agoI'm not great at reading financial results, but $TSLA is up ~17% after hours, so I'm assuming they did well.
- slg 7y agoJust a reminder that stocks move in relation to expectations and not relative to results. Bad results that are not as bad as expected results in the stock going up. Likewise good results that are not as good as expected results in the stock going down. So the takeaway from the after hours trading is not necessarily these results are good in a vacuum, it is that people were surprised that the results were as good (or perhaps not as bad) as they are.
- tempsy 7y agoYes these results were stellar and the movement reflect that
- jeffshek 7y agoAfter hours price : Tesla Stock is up 16.70% + Adjust earnings per share of $1.86 vs. expected losses of 42 cents per share (major reason)
- danhak 7y agoHighlights: $143M GAAP Net Income (vs $74M loss expected) Trial production started at Shanghai Gigafactory Model Y production moved forward to Summer 2020
- dmix 7y agoIs Model Y replacing Model X?
- danhak 7y agoNo, Model X will remain as the larger and more expensive SUV. Model Y will be smaller, less expensive and compete in the "luxury crossover" segment (Mercedes GLA, BMW X3 etc)
- dmix 7y agoAh, I see. The crossover market is huge in Asia so that should go well for them...
- Obi_Juan_Kenobi 7y agoIt's huge everywhere; a relatively smooth roll-out of the Y would be enormous for Tesla.
- slg 7y agoNo, but generally speaking the Model Y is to the Model X what the Model 3 is to the Model S.
- brianpan 7y agoTo be more specific: the X is build on the S platform; the Y is built on the 3 platform.
- soperj 7y agoNo, model Y is built on the same frame as model x. It'll be a suv. Sorry. meant model 3.
- davedx 7y agoOh crap. Got my Y reservation with the assumption it would be late and I’d have plenty of time to save!
- navigatesol 7y agoWhat's even the point of talking about timelines? Tesla's history of achieving them is horrible.
- erikpukinskis 7y agoNoisy information still contains information. Consistently biased information is even better... it contains exactly the same data as unbiased information.
- navigatesol 7y ago>Noisy information still contains information. I mostly mean: why are people saying "He bumped up the Model Y launch a couple months" when both deadlines were sort of irrelevant. They are years behind on others.
- erikpukinskis 7y agoModel 3 ramp was basically exactly as predicted, delta maybe 6 months. If you compare to the Model X ramp, which was delayed by what, 2+ years, they have gotten much better at predictable ramps.
- ultraism 7y agoAre we talking about official statements or random posts by Elon in Twitter?
- p1esk 7y agoI wish I bought some TSLA a few months ago when it was $180! :)
- cronix 7y agoI bet ARK is really pissed they sold 150,000 shares ($39M) yesterday. https://www.businessinsider.com/tesla-investor-ark-trims-stake-ahead-of-q3-earnings-report-2019-10 https://www.businessinsider.com/tesla-investor-ark-trims-sta...
- ProAm 7y agoMeh: "Shares of Tesla are down 23% since the beginning of the year."
- wesammikhail 7y agobut they are up 1130% since IPO. I personally dont understand why people use psychological lines such as month/quarter/year or 25/50/100 when none of that really matters. A business is a continuous process and should be looked at as such.
- kosievdmerwe 7y agoYes, but you could also have invested your money elsewhere and continued to see growth. Except for the complexity involving taxes and fees, if your money sits in Tesla shares for a long time and the stock stays flat, then you've lost money. Both in terms of opportunity cost and through inflation. And this is irrespective of when you bought them.
- paulpauper 7y agoyou can mitigate this buy selling long dated put options on tesla, which hare very , very expensive and can yield a big return even if Tesla does nothing
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- zaroth 7y ago$143M GAAP / $342M Non-GAAP Net Income. $371M free cash flow. GAAP Gross Margin 18.9%. That is before G3 comes online which will, I believe, have an upward case for margins. That is the big news here today. And that is really great news for Tesla. Over $5.3B cash on hand. TSLA is in an amazing position going into Q4 and 2020. Highly confident of exceeding 360k deliveries for 2019. Just an amazing run up to the end of the quarter. For added inspiration, check out a flyover video of G3 with the loading docks starting to fill up: https://youtu.be/bI-My94Ig5k https://youtu.be/bI-My94Ig5k Full Disclosure: Long TSLA. No plans to sell in the next 9 years. I told my kids either the shares will pay for their college, or they may need some scholarships.
- rainyMammoth 7y agoyour full disclosure is really sad. You are buying into a cult with some life changing saving (kid's college) It might work though as long as there are enough investors believing in this irrational cult (the bigger idiot theory). You don't want to be the last one holding the bag. Edit2: Removing the downvote comment and adding why I think they are overvalued: They did a very good job capturing the early market given the void left by traditional auto makers. The next 5 years will be very tough though. They will be competing on the efficiency of the production chain. Toyota and Volkswagen are unbeatable at that game.
- deleted 7y ago[deleted]
- greenpizza13 7y agoToo mean.
- KukicAdnan 7y agoThis ain't it chief.
- kolbe 7y agoGive some support to your claim. If you don’t have the financial literacy to support it, then maybe reconsider hitting that “Reply” button next time.
- thinkingkong 7y agoThe Shanghai Gigafactory going from breaking ground to production ready in 10 months is staggering. Has anything like that been accomplished in NA in the last 10 years?
- dmix 7y agoThe Foxconn Wisconsin plant had the full support of the executive branch + billions in welfare from the local/state governments and even then they haven't started to working on it primarily due to the significant business risks and high costs of employing labour in America and general uncertainty around manufacturing anything state-side: https://en.wikipedia.org/wiki/Foxconn%27s_Wisconsin_plant https://en.wikipedia.org/wiki/Foxconn%27s_Wisconsin_plant Even the Chinese can't build anything in America.
- ur-whale 7y agoUS is slowly turning into Europe. And all the disadvantages without any of the perks.
- newnewpdro 7y agoThe Foxconn story is far more nuanced than that. There's been substantial uncertainty in Foxconn's genuine commitment to the project. It's been heavily reported on that Foxconn is notorious for failing to follow through on its promises. e.g. https://www.cnbc.com/2017/07/27/heres-whats-worrisome-about-foxconns-plan-to-build-a-plant-in-the-us-commentary.html https://www.cnbc.com/2017/07/27/heres-whats-worrisome-about-... There's been some great podcasts on the topic. Last I heard Foxconn kept changing their plans of what would actually be manufactured in WI. Initially it was high-tech state of the art stuff, last I heard their plans had shifted to manufacturing somewhat legacy flat panel display technology. I stopped following the story sometime last year though, at the time it sounded like Foxconn was really shafting WI. It benefits Foxconn to drag their feet in executing on what amounts to nothing more than a handshake deal. The more WI invests in that project the stronger Foxconn's position becomes.
- zdragnar 7y ago
- RivieraKid 7y agoThey recognized some FSD revenue.
- omgwtfbyobbq 7y agoWhere do you see that? I see this line about them expecting to do that going forward, but nothing about them recognizing revenue in Q3. >We also expect to gradually release nearly $500M of accumulated deferred revenue tied to Autopilot and Full Self Driving features.
- RivieraKid 7y ago> Margin was impacted [...] in part due to Smart Summon-related deferred revenue recognition
- steelframe 7y ago> Margin was impacted [...] in part due to Smart Summon-related deferred revenue recognition In case anybody has been watching the Tesla Smart Summon demolition derby videos on YouTube and is wondering what on earth Tesla was thinking when they pushed the feature out in its current state.
- DanCarvajal 7y agoThey were thinking they could book some deferred revenue to look more profitable than they really are.
- propercoil 7y agoExpected EPS: -$1.12 Reported EPS: $1.91 That's all we need to know. It's time for Tesla to move into more countries.
- gok 7y agoInteresting that they missed on revenue but beat on profit. Fewer but more profitable vehicles than expected?
- propercoil 7y agoMore vehicles at a lesser price (Model 3).
- RivieraKid 7y agoFrom Twitter: Sequential revenue down $43MM. Sequential net income up $551MM. Makes sense.
- hef19898 7y agoPositive things are an improved cash flow and lower operational costs. Might be just in time for Tesla before the other car makers launch their models. It will be interesting to see how the race, building mass production capabilities vs. developing EV turns out. Also increased deliveries is a good thing. Guess I have to read the whole thing tomorrow in detail.
- hizanberg 7y agoNormally I invest in companies who I believe are undervalued and have solid fundamentals/profitability and are well positioned for future growth. TSLA is one of my few "emotional investments" of companies I've invested in because I want it to succeed. IMO its share price is highly speculatively priced, but I expect they'll eventually be able to maintain profitability to justify it as they're best positioned to benefit from an EV (+ renewable energy) future. I'm long TSLA and didn't expect them to achieve profitability before Shanghai Gigafactory (+ Model Y) is in full production, so this earnings release was a welcomed surprise. Happy to see them continue to grow and further invest in the future.
- synaesthesisx 7y agoI feel the same way - as someone who has been invested in $TSLA since it was $34 my risk is now effectively zero. I look forward to watching the company continue to succeed beyond imagination (although I have a serious disdain for FUD-spreading shorts).
- xkjkls 7y agoHow have the shorts succeed beyond your imagination. If you look at their EPS estimates over the last year for this quarter, they've gone from $2 a share to -$0.40, sure they beat the estimate of -$0.40, but with after hours gains the stock has gone from $380 -> $300 with them posting EPS of 30-40% lower.
- Richard_East 7y agoTo really take off in Europe, they need a smaller vehicle. Something the size of a BMW 1-series. Streets here are very narrow.
- zaroth 7y agoModel 3 is not tiny, but it’s IMO as small as you would ever want a car that travels highway speeds for safety reasons. I doubt Tesla will ever make a tiny 2-seater but I guess if the market is there they will follow it! BMW 1: 173” x 69” Model 3: 184” x 72.8”
- growlist 7y agoThe size of that (giga)factory. My god!
- adventured 7y agoAnd all those TSLA-short clown types on Twitter et al. and their endless posts showing the empty lot in China, mocking Tesla about how they'd never actually build a factory there. Reminds me of all the statements about how Tesla could never produce the Model 3 at scale. I have no position in TSLA, but I thoroughly enjoy watching those types of people get repeatedly humiliated by Tesla.
- nyczomg 7y agoSorry if this is slightly off topic, but it is amazing to me how differently various publications are spinning the same basic facts. Some headline samples: "Tesla shares soar after crushing third-quarter earnings" CNBC "Tesla's Quarterly Profit Drops 54%" WSJ "Tesla returns to profitability and tops Wall Street's third-quarter earnings" Business Insider "Tesla ekes out a profit as all eyes turn to its China Gigafactory" The Verge I get that financials are prone to much speculation, interpretation, etc. But it seems that the news is so agenda driven today that we're twisting facts to fit some narrative rather than the other way around. When the narratives being pushed at us by news organizations are so polarized around concrete numbers being reported at regular intervals in a heavily regulated manner, how can we hope to interpret more nuanced news appropriately? Sorry, rant over. This is exciting news for Tesla! Or maybe the beginning of the end.
- Franciscouzo 7y agoWhy the need to add "today", has news ever been any different in that regard?
- slg 7y agoPart of the problem is that the Internet has resulted in lots of these news outlets simply trying to be first on a story and then editing articles in real time. For example, that negative WSJ headline doesn't appear to exist anymore and now their article on the subject it titled "Tesla Holds Down Expenses, and Its Shares Surge" with the 54% number relegated to a subheading. Odds are that article will continue to be edited for days and will have a variety of different headlines in that time.
- user5994461 7y agoBet there are always multiple headlines and they're A/B tested for the most views.
- jaimex2 7y agoCry wolf enough times and you just start getting ignored though. I can't say I ever click on any Business Insider or the Verge articles anymore regardless of title.
- m0zg 7y agoI wish them all the success in the world in the face of increased competition. They basically started the "no compromise electric car" market, in the face of an army of naysayers, and the last few years have been extremely rough on both the company and Musk personally. IMO they pretty much deserve to win. Disclosure: I hold no TSLA, and don't own any of their cars. I just like dogged persistence in the face of impossible odds.
- Diederich 7y ago> I just like dogged persistence in the face of impossible odds. Amen.
- csours 7y agoI'd like to know what Tesla's debt load is, minus any debt related to vehicle leasing. Basically I wonder how much they owe in long term loans and bonds. I think it's on page 24, but I don't know how to read it. Ycharts says 13B - https://ycharts.com/companies/TSLA/total_long_term_debt https://ycharts.com/companies/TSLA/total_long_term_debt
- missedthecue 7y agohttps://ir.tesla.com/static-files/65db1b3c-3edd-44b0-86ec-715a7ddb9338 https://ir.tesla.com/static-files/65db1b3c-3edd-44b0-86ec-71... As of the end of June, 2019, they had $12.159 Billion in long term debt, not including vehicle leasing. You can view the debt individually with interest rates and maturity date on page 23 of my attached document
- csours 7y agoOk from there they have about 1 billion in debt related to leased vehicles and a little over 1 billion in debt related to customer's solar installation financing.
- throwaway66920 7y agoThis is great news. There’s few companies in the world I want to do well specifically. Tesla’s gotta be at the top of the list.
- zelly 7y agoMade so much money today. Thank you Elon, thank you Tesla owners. Remember kids if you don't own anything, you will be a slave forever.
- ricardobeat 7y agoHow so? The stock hasn't even recovered to 2018 levels.
- 0x5345414e 7y agoOptions probably
- zelly 7y agoI have been buying regularly (dollar cost averaging) mostly under 200 earlier this year.
- LeftHandPath 7y agoI remember doing a due-diligence on Tesla during the Oil Crisis of 2015. The stock was at 195 or so, the company hadn't released anything other than high-end sedans, and the cars were still sold in stores. If you went to their website, you saw that they were planning to have a $35,000 vehicle for sale by 2018, with rapid charging stations set up across the country (forming a corridor for coast-to-coast travel), where Tesla owners would be able to charge for free. And furthermore, the leadership - Musk - had shown his worth when he put his last dimes into PayPal just a few years earlier. I said it was a good company to go long on for a three year timeline. (They didn't listen, I was only 17 and had never invested in my life). It might be time to give them another examination.
- rainyMammoth 7y agoAnd it's good they didn't invest on your advice to go long on TSLA. If you invested into The diversified SP500 instead with the same timeline (2015 to today) it would give you a slightly similar or even better return than TSLA that went from 195 to 295 ( and that is IF the current price holds until tomorrow which will most probably not). Never forget opportunity cost while investing!
- paulpauper 7y agobut the person who buys telsa instead of an index fund is likely anticipating increase volatility and has higher risk tolerance
- gimmeThaBeet 7y agoThey can anticipate higher volatility, but that doesn't mean they're being compensated for it. Yeah we have the benefit of hindsight, but that's what we're talking about. If you're just evaluating past performance starting from any point in 2015, Tesla generated average returns, was pretty uncorrelated (which is great), and was way more volatile than the S&P. That's not thrilling.
- gimmeThaBeet 7y agoAs in, as far as I can tell, maybe like 1 month in 2015 to now would get you superior returns to the S&P, with like, 3x the volatility. Unless you bought Tesla before like, 2013, the returns(especially risk-adjusted) in general are not great. That definitely grinds my gears a bit when it comes to Tesla. The cars are fantastic, but the equity isn't quite the product. You can dismiss the haters, but that volatility is pretty intrinsic to Tesla. They're doing a lot of great things, but that alone does not a great investment make, and I think that doesn't get discussed very honestly. One thing it does have going for it, very low correlation.
- pcurve 7y ago20% jump after market. I'm really confused. Is this short covering? I've read through the financial statement. They're fine, but I'm scratching my head over why it warrants 20% jump? Anyone have a good explanation?
- hizanberg 7y agoAs always, it's because they performed much better than Wall St expected, who expected another operating loss. TSLA is particularly volatile because they run the risk (and many analysts believe) that they will run out of cash before they can achieve profitability, so their share price have carried a lot of risk that have hampered its price from its $400's highs. This surprising profit effectively significantly weakens the risk giving investors more confidence they'll continue to be around for the long term to dominate the EV market.
- jaimex2 7y agoThe trading bots work in mysterious ways.
- Obi_Juan_Kenobi 7y agoTesla, with this report, is looking much more like a mature company that is attractive to traditional investors. They have a 'headwind' in that they're selling less expensive cars, leasing more, and continuing large expansions in manufacturing (gig 3) and service. Nevertheless, they've reigned in costs and are putting up disciplined profits just the same. Their results are aggressive, but calculated. It's a far different situation from the 'bet the company' roll-out of the Model 3. They weathered the storm, and are doing what they can to provide confidence to investors. The last earning report was their first indication of being 'through the woods'. This more-or-less confirms the trend, so you can start looking ahead. Tesla has several very interesting projects going forward, and now it looks like they have the core business they need to sustain that. It's very easy to read this as an inflection point. The last inflection was the Model 3 announcement. Things were looking optimistic, and share prices reflected that. But the Model 3 launch was anything but smooth, and there was a reasonable argument to be made that Tesla would fall, not merely stumble. My guess; reasonable numbers from China will drive a new ATH.
- mrnobody_67 7y agoTesla delivered 1,800 more cars in Q3 versus Q2, and somehow delivered $551MM more net income.
- navigatesol 7y agoWith a lower margin mix of models.
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- aazaa 7y agoTesla as a long term investment going forward largely depends on whether you view the electric car as a disruptive innovation (breaks established car companies' business models) or sustaining innovation (does not break established car companies' business models). Established players tend to have the upper hand for sustaining innovation. Sustaining innovation can start at the top of a market and work down. Disruptive innovation favors the upstart. However, disruptive innovation starts at the bottom of a market and moves up. The more I see what Tesla and other car companies are doing with EVs, the more it seems that the electric car is actually a sustaining innovation.
- kentlyons 7y agoTesla is probably a new market disruption. If so electric is a bit of a red herring. There is some evidence of this with the trade in data. The analogy is apple taking out Nokia Motorola and Blackberry with a phone that wasn't good by the standards of the day since it was playing a different game.
- xkjkls 7y agoWhy? Effectively assembling vehicles at margin seems to be the major key to the auto industry EV or ICE. The existing competitors still have greater skill at that.
- kmlx 7y agoi view Tesla as a low volume car manufacturer. so low volume that right now they're simply not that interesting. and i don't see them reaching millions of cars per quarter. like VW, Hyundai or GM. hopefully they'll prove me wrong, and come out with a $15k car next year or something. in the meantime i'm holding my hopes up for the upcoming crop of ev's with sub-tesla prices from all the usual suspects.
- nickik 7y agoThe competition also can not simply produce millions of EVs. The economic problems are very real. In fact one of the reason they are not pushing it as much as they could, is because EV don't make profit for them.
- michannne 7y agoA ton of people retired early today. Good for them, I lost 40 bucks so fortunately I'm not quite in the position to be angry.
- Robotbeat 7y agoOne of the biggest pieces of news from the earnings call is that they're planning on supplying batteries/powertrains to other carmakers. That's a great idea for several reasons: 1) Of all parts of the car (ignoring autonomy-related stuff), Tesla is best at the battery and powertrain. They have a sizable efficiency advantage compared to almost anyone else. By supplying this key part, they should be able to maximize the value of this advantage. Other carmakers are probably better at super high luxury interiors or low cost interiors (although Tesla has interesting ideas and a nice aesthetic--which is subjective and thus could limit their demand, which this move avoids). 2) It indirectly gives them access to more EV credits. Tesla's credits are all but expired in the US. They will be all gone after Q4. So they'd be at a huge disadvantage to a company like VW who owns a bunch of "manufacturers" which each have access to their own set of EV credits but could use a common powertrain platform. By providing powertrains to other car companies, they can indirectly pull kind of the same trick. 3) It means they can make them compatible with the Supercharger network, thus spreading the cost of developing and expanding that network over more companies and giving them an economy of scale. At a large enough scale and serving other carmakers, they could actually make some money this way. 4) It allows them to focus on automating this aspect of electric car manufacturing. Their sizable R&D budget for powertrain can now access tens of millions of vehicles per year instead of just a few hundred thousand vehicles. It also maximizes the benefit of streamlining cell production and bringing it in-house (although I think it's possible Tesla may keep the higher performance cells for their own vehicles and use Panasonic or LG Chem cells for 3rd party vehicles, like they've done with Powerwall and are doing with Shanghai Model 3). Fully automating production of the powertrain/battery would become far more plausible at two orders of magnitude greater scale. 5) Allows them to make the biggest impact on climate emissions as fast as possible. Scaling up carmaking is hard. Focusing on the battery and powertrain is something they're already good at and can significantly help reduce global emissions. 6) Allows them to decarbonize their service vehicles and other logistics vehicles (perhaps even mining equipment), making a better argument about how their embodied emissions are actually very low (and falling). 7) It also helps other carmakers which helps Tesla curry social and political support (instead of the "Tesla vs the World" status they currently seem to have). They provided powertrains/batteries to other companies in the past, like the Smart car or Toyota's electric Rav4. Back when it looked like Tesla might be in financial trouble, I considered this strategy as a significant backstop in case things went south. But deploying it now is probably an even better idea, now that they've scaled up to the point that they've used up all their EV credits.
- spectrum1234 7y ago"Margin was impacted in part due to fundamental improvements in our operating efficiency, including higher fixed cost absorption, reductions in manufacturing and material costs and continued improvements in vehicle quality and in part due to Smart Summon-related deferred revenue recognition, FX and other non-recurring items." How did Tesla cut fixed and variable costs so much? I want more details than this. This is extremely impressive! And what is an example "higher fixed cost absorption" in this context? Seems like most of the fixed costs here would be the already established factory and other fixed costs would be minimal. Its also surprising there was such a big opportunity for variable cost savings over a short time period of 1 quarter. Presumably this is from less manufacturing waste, higher quality output, and slightly higher production rates. Tesla is certainly a rare company that can find ways to increase margin this much, but its extremely impressive to see this happen over 1 quarter instead of 1-2 years as I was expecting.
- wmhorne 7y agoWhy can't Tesla divorce their interest in producing electric vehicles from their agenda in producing autonomous ones? It seems there is so much call for the former and so little for the latter. I wonder why they've felt the need to fuse the two. I, for one, wish there was an option for a cheaper Tesla without all the self-driving capabilities, much of which is useless now and will, I expect, become obsolete before any actual self-driving is commonplace.
- electriclove 7y agoYou can get the ~$35k Model 3 which does not come with AutoPilot. It is an amazing value.
- djrogers 7y agoNot sure where you're shopping, but on tesla.com I can order any Tesla without Autopilot for $6k less than one with it.
- sidcool 7y agoVery very impressive. If I had money I would by Tesla shares.
- kmlx 7y agoi'm waiting 'till Musk goes on another interview and the stock tanks.
- Amygaz 7y agoWhat actually amazes me the most is the very slick slide layout for an earning reports. I'd read more of those if they were like that.