Summary
Tesla's second quarter 2017 10-Q filing reveals a company in a significant growth and investment phase, marked by substantial revenue increases across its automotive and energy segments. Total revenues more than doubled year-over-year, driven by strong performance in automotive sales, with a notable contribution from the ramp-up of Model X production and early Model S sales, alongside increased automotive leasing. The energy generation and storage segment also saw explosive growth, largely due to the inclusion of SolarCity's operations. However, this growth was accompanied by a significant increase in operating expenses, particularly in research and development and selling, general, and administrative costs, leading to a continued net loss. The company is heavily investing in future production capacity, with substantial capital expenditures focused on the Model 3 ramp-up and Gigafactory 1 construction. Tesla secured substantial financing through debt issuances, including new convertible senior notes, to support these investments. Despite the ongoing losses and heavy investment, Tesla maintained a solid cash position and access to credit facilities, signaling sufficient liquidity for at least the next twelve months. Investors should monitor the execution of the Model 3 production ramp, the integration of SolarCity, and ongoing capital expenditure effectiveness.
Financial Highlights
52 data points| Revenue | $2.79B |
| Cost of Revenue | $2.12B |
| Gross Profit | $666.62M |
| R&D Expenses | $369.77M |
| SG&A Expenses | $537.76M |
| Operating Expenses | $907.53M |
| Operating Income | -$240.92M |
| Interest Expense | $108.44M |
| Net Income | -$336.40M |
| EPS (Basic) | $-0.14 |
| EPS (Diluted) | $-0.14 |
| Shares Outstanding (Basic) | 2.48B |
| Shares Outstanding (Diluted) | 2.48B |
Key Highlights
- 1Total revenues surged by 127% year-over-year to $5.49 billion for the first six months of 2017, with automotive revenues up 107% and energy generation and storage revenues up an exceptional 1777%.
- 2The company reported a net loss of $798.6 million for the first six months of 2017, an increase from $575.5 million in the prior year, reflecting increased operating expenses and investments.
- 3Capital expenditures significantly increased to $2.14 billion in the first six months of 2017, primarily driven by investments in Model 3 production equipment and Gigafactory 1 construction.
- 4Tesla raised substantial capital through debt financing, including a $977.5 million issuance of 2.375% convertible senior notes due 2022, and also received $400.2 million from a public offering of common stock.
- 5Gross margin for the automotive segment improved to 27.7% for the first six months of 2017 from 23.5% in the prior year, driven by manufacturing efficiencies and increased average selling prices.
- 6The integration of SolarCity is significantly impacting the Energy Generation and Storage segment, contributing $479.7 million in revenue for the first six months of 2017, though this segment's gross margin was 29.0%, up from 1.5% in the prior year.
- 7The company commenced Model 3 production in July 2017 and targets reaching 5,000 vehicles per week by the end of 2017, with ongoing significant investments in scaling production capacity.