10-QPeriod: Q3 FY2013

Tesla, Inc. Quarterly Report for Q3 Ended Sep 30, 2013

Filed November 8, 2013For Securities:TSLA

Summary

Tesla, Inc. (TSLA) reported its third quarter 2013 financial results, showcasing a significant year-over-year increase in revenue, driven primarily by the ramp-up in Model S deliveries and the expansion into European markets. Despite revenue growth, the company continued to incur operating losses, though these losses narrowed compared to the previous year's period. A key development was the successful completion of a public offering of common stock and convertible senior notes, substantially bolstering the company's cash position. This capital raise, along with strong operational cash generation, provided Tesla with ample liquidity to fund its ongoing operations, research and development, and expansion plans, including the Supercharger network and preparations for the Model X.

Financial Highlights

46 data points
Beta

Revenue

$431.35M

23.8% Gross Margin

Net Income

-$38.50M

-8.9% Net Margin

EPS (Diluted)

$-0.02

Total Assets

$2.17B

Cash & Equivalents

$795.12M

Free Cash Flow

$25.49M

Financial Statements
Beta
Revenue$431.35M
Cost of Revenue$328.48M
Gross Profit$102.87M
R&D Expenses$56.35M
SG&A Expenses$77.07M
Operating Expenses$133.42M
Operating Income-$30.55M
Interest Expense$6.49M
Net Income-$38.50M
EPS (Basic)$-0.02
Shares Outstanding (Basic)1.83B

Key Highlights

  • 1Total revenues increased significantly year-over-year to $431.3 million for Q3 2013, up from $50.1 million in Q3 2012, driven by Model S deliveries.
  • 2The company ended the quarter with a strong cash position of $795.1 million in cash and cash equivalents, an increase from the prior year.
  • 3Tesla successfully raised capital through a public offering of common stock and convertible senior notes, totaling approximately $355.5 million and $648.0 million in net proceeds, respectively.
  • 4Gross profit turned positive in Q3 2013 at $102.9 million, a substantial improvement from a gross loss of $8.8 million in Q3 2012.
  • 5Operating expenses increased significantly, with SG&A expenses rising to $77.1 million from $37.8 million year-over-year, reflecting global expansion efforts.
  • 6The company repaid its entire outstanding loan facility with the Department of Energy for approximately $451.8 million in May 2013.
  • 7Model S deliveries expanded to Europe in August 2013, contributing to the revenue growth.

Frequently Asked Questions

The primary driver of Tesla's revenue growth in the third quarter of 2013 was the ramp-up in Model S deliveries, significantly boosted by the commencement of deliveries in Europe in August 2013 and increased sales of regulatory credits.

Tesla ended the third quarter of 2013 with a strong cash and cash equivalents balance of $795.1 million, an increase from the prior year. The company expects its current liquidity sources, along with projected cash flow from operations, to adequately fund its ongoing operations and expansion plans.

In May 2013, Tesla completed a public offering of common stock, raising approximately $355.5 million net of costs, and issued $660.0 million in aggregate principal amount of convertible senior notes, from which it received net proceeds of approximately $648.0 million. These actions significantly strengthened the company's balance sheet.

Tesla is accounting for transactions under the 'Resale Value Guarantee' program as operating leases. This means revenue is deferred and recognized over the contractual term of the guarantee program, rather than being recognized fully at the time of sale. This program had an adverse impact on reported revenues and operating results in Q3 2013, although it does not affect cash flows.