10-QPeriod: Q2 FY2019

Tesla, Inc. Quarterly Report for Q2 Ended Jun 30, 2019

Filed July 29, 2019For Securities:TSLA

Summary

Tesla's Q2 2019 (ending June 30) filing shows a significant increase in total revenues, driven primarily by a 66% surge in automotive sales, largely due to higher Model 3 deliveries. This growth was partially offset by a reduction in average selling prices and an increased sales return reserve related to prior vehicle buyback options. While the automotive segment's gross margin saw a slight decrease year-over-year due to pricing adjustments on Model S and X, overall operational efficiency improvements are noted in R&D and SG&A expenses as a percentage of revenue. The company's financial position strengthened with a substantial increase in cash and cash equivalents, bolstered by proceeds from common stock and convertible debt issuances. Capital expenditures remained significant, focused on expanding production capacity for Model 3 and preparing for Model Y and Gigafactory Shanghai. Despite the net loss reported, Tesla demonstrated progress in its operational scale and efficiency, with a positive swing in operating cash flow compared to the prior year's period.

Financial Statements
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Key Highlights

  • 1Total revenues increased by 47% to $10.89 billion for the six months ended June 30, 2019, compared to $7.41 billion in the prior year period.
  • 2Automotive sales revenue grew by 53% to $8.68 billion for the six months ended June 30, 2019, driven by a significant increase in Model 3 deliveries.
  • 3The company reported a net loss of $1.06 billion for the six months ended June 30, 2019, an improvement from the $1.53 billion net loss in the same period of 2018.
  • 4Cash and cash equivalents increased to $4.95 billion as of June 30, 2019, from $3.69 billion as of December 31, 2018.
  • 5Capital expenditures for the six months ended June 30, 2019, were $573.1 million, primarily for Model 3 production and solar energy systems.
  • 6Tesla completed the acquisition of Maxwell Technologies, Inc. in May 2019 for $207.2 million.
  • 7Restructuring and other charges increased significantly to $160.8 million for the six months ended June 30, 2019, largely due to IPR&D impairment and facility closures.

Frequently Asked Questions

Tesla's total revenues for the three months ended June 30, 2019, were $6.35 billion, a significant increase of 59% compared to $4.00 billion in the same period of 2018. This growth was primarily driven by automotive sales, which increased by 66%.

Tesla reported a net loss of $389.3 million for the three months ended June 30, 2019, compared to a net loss of $742.7 million in the prior year's quarter. While still a net loss, this represents an improvement. The automotive segment's gross margin decreased slightly due to pricing adjustments, but operational efficiencies in R&D and SG&A were noted.

As of June 30, 2019, Tesla had $4.95 billion in cash and cash equivalents, an increase from $3.69 billion at the end of 2018. This increase was supported by proceeds from equity and debt offerings. Capital expenditures remained substantial, focused on expanding production capacity for existing and upcoming models (Model 3, Model Y) and international operations like Gigafactory Shanghai.

Yes, Tesla completed the acquisition of Maxwell Technologies, Inc. in May 2019 for $207.2 million, adding complementary technology. The company also incurred significant restructuring and other charges totaling $160.8 million for the six months ended June 30, 2019, largely related to IPR&D impairment and facility closures, which are expected to yield cost savings.