Summary
Tesla's Q2 2018 10-Q filing reveals a significant increase in automotive sales, driven by higher Model 3 production volumes and the adoption of new revenue recognition standards. Despite revenue growth, the company reported a substantial net loss for the quarter, primarily due to increased operating expenses, including restructuring costs and higher cost of revenues, particularly related to Model 3 production ramp-up. The company's cash position remains robust, but operational cash flow continues to be negative, with substantial investments in capital expenditures for production capacity expansion, especially for Model 3 and Gigafactory 1. Key financial highlights include a substantial increase in inventory, reflecting production ramp-up, and a notable decrease in operating lease vehicles due to the adoption of ASC 606. The company's debt levels remain high, though management believes current liquidity and projected operating cash flows will be sufficient for at least the next 12 months. Investors should monitor production efficiency improvements for Model 3, gross margin trends, and the impact of ongoing capital expenditures on cash flow.
Financial Highlights
51 data points| Revenue | $4.00B |
| Cost of Revenue | $3.38B |
| Gross Profit | $619.00M |
| R&D Expenses | $386.13M |
| SG&A Expenses | $750.76M |
| Operating Expenses | $1.24B |
| Operating Income | -$621.39M |
| Interest Expense | $163.58M |
| Net Income | -$717.54M |
| EPS (Basic) | $-0.28 |
| EPS (Diluted) | $-0.28 |
| Shares Outstanding (Basic) | 2.55B |
| Shares Outstanding (Diluted) | 2.55B |
Key Highlights
- 1Automotive sales revenue surged by 55% year-over-year to $3.12 billion, primarily driven by higher Model 3 deliveries and the adoption of the new revenue recognition standard (ASC 606).
- 2Total revenues increased by 43% to $4.00 billion, reflecting strong performance in the automotive segment and a 31% increase in the energy generation and storage segment.
- 3Despite revenue growth, Tesla reported a net loss of $717.5 million attributable to common stockholders for the quarter, compared to a net loss of $336.4 million in the prior year period.
- 4Gross margin for the total automotive segment decreased significantly from 28% in Q2 2017 to 21% in Q2 2018, impacted by higher costs associated with the Model 3 production ramp, including manufacturing under-utilization.
- 5Operating expenses rose by 40% year-over-year, largely due to increased SG&A expenses and a one-time restructuring charge of $103.4 million recognized in the quarter.
- 6Net cash used in operating activities was $528.0 million for the six months ended June 30, 2018, an increase from $270.0 million in the prior year period, indicating continued cash burn from operations.
- 7Total assets decreased slightly to $27.91 billion from $28.66 billion at the end of 2017, primarily due to a reduction in operating lease vehicles, while inventory increased significantly by $1.06 billion to $3.32 billion.