10-QPeriod: Q3 FY2019

Tesla, Inc. Quarterly Report for Q3 Ended Sep 30, 2019

Filed October 29, 2019For Securities:TSLA

Summary

Tesla, Inc. (TSLA) filed its Form 10-Q for the quarterly period ending September 29, 2019. The report details a mixed financial performance, with total revenues decreasing year-over-year for the quarter but increasing for the nine-month period. Automotive sales revenue saw a year-over-year decline in the third quarter, impacted by pricing adjustments and a higher proportion of Model 3 leases, though Model 3 deliveries increased for the nine-month period. The energy generation and storage segment revenue experienced a slight increase for the quarter but a decrease for the nine-month period. Despite revenue pressures in automotive sales, the company reported improved gross margins in energy generation and storage and a decrease in operating expenses as a percentage of revenue, indicating efforts towards cost efficiency. Financially, Tesla generated positive net cash from operating activities for the nine months ended September 30, 2019, an improvement from the prior year. The company also made significant progress on its Gigafactory Shanghai project and continued investing in capital expenditures for global manufacturing expansion. A notable event was the acquisition of Maxwell Technologies, Inc., which contributed to an increase in goodwill. The company also disclosed an ongoing SEC investigation related to Elon Musk's 2018 'going private' tweet and settlement terms, alongside various other legal proceedings.

Financial Highlights

53 data points
Beta

Revenue

$6.30B

18.9% Gross Margin

Net Income

$143.00M

2.3% Net Margin

EPS (Diluted)

$0.05

Total Assets

$32.80B

Cash & Equivalents

$5.34B

Free Cash Flow

$371.00M

Financial Statements
Beta
Revenue$6.30B
Cost of Revenue$5.11B
Gross Profit$1.19B
R&D Expenses$334.00M
SG&A Expenses$596.00M
Operating Expenses$930.00M
Operating Income$261.00M
Interest Expense$185.00M
Net Income$143.00M
EPS (Basic)$0.05
EPS (Diluted)$0.05
Shares Outstanding (Basic)2.69B
Shares Outstanding (Diluted)2.77B

Key Highlights

  • 1Total revenues for the nine months ended September 30, 2019, increased by 21% to $17.2 billion, compared to $14.2 billion in the prior year. However, quarterly revenues decreased by 8% to $6.3 billion compared to $6.8 billion in the same period of 2018.
  • 2Automotive sales revenue decreased by 13% to $5.1 billion in Q3 2019 compared to $5.9 billion in Q3 2018, attributed to lower Model S and X deliveries and lower average selling prices due to prior price adjustments.
  • 3The company generated positive net cash from operating activities of $980 million for the nine months ended September 30, 2019, up from $863 million in the same period of 2018.
  • 4Gross margin for the total automotive segment decreased from 26% in Q3 2018 to 23% in Q3 2019, primarily due to lower average selling prices for Model S and X.
  • 5Research and development expenses decreased by 5% to $334 million in Q3 2019, and by 10% to $998 million for the nine-month period, reflecting cost efficiency initiatives.
  • 6Selling, general, and administrative expenses decreased by 18% to $596 million in Q3 2019 and by 10% to $1.9 billion for the nine-month period, also driven by cost efficiencies and headcount reductions.
  • 7Tesla acquired Maxwell Technologies, Inc. for $207 million in May 2019, adding $79 million in goodwill and $105 million in intangible assets.

Frequently Asked Questions

In the third quarter of 2019, Tesla's total revenues were $6.3 billion, a decrease of 8% compared to $6.8 billion in the same period of 2018. The company reported a net income attributable to common stockholders of $143 million, or $0.78 per diluted share, compared to $311 million, or $1.75 per diluted share, in Q3 2018. While automotive sales revenue declined, other segments like Services and Other saw significant growth.

Automotive sales revenue decreased by 13% in Q3 2019 year-over-year, primarily due to a decrease in Model S and Model X deliveries and lower average selling prices resulting from earlier pricing adjustments. The growing proportion of Model 3 leases also contributed to the lower average selling price despite an increase in Model 3 deliveries for the nine-month period. Gross margin in the automotive segment also declined.

Tesla generated positive net cash from operating activities, totaling $980 million for the nine months ended September 30, 2019, an improvement from $863 million in the same period of 2018. The company ended the quarter with $5.3 billion in cash and cash equivalents, indicating a healthy liquidity position. Investing activities showed significant capital expenditures, particularly for Gigafactory Shanghai and Model 3 production.

Yes, Tesla completed the acquisition of Maxwell Technologies, Inc. for $207 million in May 2019, integrating its energy storage and power delivery technology. This acquisition added $79 million in goodwill and $105 million in intangible assets to the balance sheet. The company also continued to advance its Gigafactory Shanghai project, with trial production of Model 3 underway.