Summary
Tesla, Inc. (TSLA) reported strong revenue growth for the third quarter of 2016, driven by a significant increase in vehicle deliveries for both Model S and the newly introduced Model X. Total revenues surged by 145% year-over-year to $2.3 billion. The company also saw an improvement in gross margin, reaching 27.7%, up from 24.7% in the prior year period, attributed to factors like increased regulatory credit sales and manufacturing efficiencies. Despite revenue growth and improved margins, Tesla's net loss widened for the quarter, although this was largely driven by increased operating expenses related to research and development (R&D) for the upcoming Model 3 and expanded selling, general, and administrative (SG&A) costs associated with global expansion. The company's balance sheet shows a substantial increase in cash and cash equivalents, bolstered by a significant equity raise. Management remains focused on aggressive expansion plans, including the ambitious target of producing 500,000 vehicles by 2018, and continued investment in the Gigafactory and the development of Model 3.
Financial Highlights
49 data points| Revenue | $2.30B |
| Cost of Revenue | $1.66B |
| Gross Profit | $636.74M |
| R&D Expenses | $214.30M |
| SG&A Expenses | $336.81M |
| Operating Expenses | $551.11M |
| Operating Income | $85.62M |
| Interest Expense | $46.71M |
| Net Income | $21.88M |
| EPS (Basic) | $0.01 |
| EPS (Diluted) | $0.01 |
| Shares Outstanding (Basic) | 2.23B |
| Shares Outstanding (Diluted) | 2.35B |
Key Highlights
- 1Total revenues increased by 145% year-over-year to $2.30 billion, primarily driven by a 132% increase in vehicle deliveries.
- 2Gross margin improved to 27.7% from 24.7% in the prior year period, attributed to regulatory credits, manufacturing efficiencies, and updated warranty estimates.
- 3Operating expenses increased significantly, with R&D up 20% and SG&A up 42% year-over-year, reflecting investments in Model 3 and global expansion.
- 4Net loss for the quarter was $21.9 million compared to a net loss of $229.9 million in the prior year, with the increase driven by higher operating expenses.
- 5Cash and cash equivalents significantly increased to $3.1 billion, reflecting proceeds from a May 2016 public offering and other financing activities.
- 6The company reiterated its target of producing 500,000 vehicles annually by 2018, indicating continued aggressive growth plans.
- 7Customer deposits saw a substantial increase to $690.4 million, primarily due to Model 3 reservations.