10-QPeriod: Q1 FY2020

Tesla, Inc. Quarterly Report for Q1 Ended Mar 31, 2020

Filed April 30, 2020For Securities:TSLA

Summary

Tesla's first quarter 2020 report shows resilience and growth despite the emerging COVID-19 pandemic. The company achieved a record for vehicle production and deliveries in Q1 2020, resulting in positive income from operations and net income for the first time in a seasonally weak quarter. This performance was driven by strong automotive sales, up 39% year-over-year, with significant contributions from Model 3 and the newly launched Model Y. The company also saw improvements in gross margins, particularly within the automotive segment, reaching 26% compared to 20% in the prior year. While the energy generation and storage segment experienced a revenue decrease, overall revenues grew by 32% to $5.98 billion. Tesla's financial position remains robust with $8.08 billion in cash and cash equivalents as of March 31, 2020. The company is actively managing its capital expenditures, projecting $2.5 billion to $3.5 billion annually for the next three years, and is well-positioned to fund ongoing operations and expansion plans, including further development of Gigafactories in Shanghai and Berlin. The report also highlights early successes with Model Y production ramp and demand for its energy storage products, though it acknowledges the significant uncertainties and potential impacts from the ongoing COVID-19 pandemic on future operations and demand.

Financial Highlights

51 data points
Beta

Revenue

$5.99B

20.6% Gross Margin

Net Income

$16.00M

0.3% Net Margin

EPS (Diluted)

$0.01

Total Assets

$37.25B

Cash & Equivalents

$8.08B

Free Cash Flow

-$895.00M

Financial Statements
Beta
Revenue$5.99B
Cost of Revenue$4.75B
Gross Profit$1.23B
R&D Expenses$324.00M
SG&A Expenses$627.00M
Operating Expenses$951.00M
Operating Income$283.00M
Interest Expense$169.00M
Net Income$16.00M
EPS (Basic)$0.01
EPS (Diluted)$0.01
Shares Outstanding (Basic)2.75B
Shares Outstanding (Diluted)2.98B

Key Highlights

  • 1Record vehicle production (102,672) and deliveries (88,496) in Q1 2020.
  • 2Achieved positive income from operations ($283 million) and net income ($68 million) for the first time in a seasonally weak Q1.
  • 3Total revenues increased by 32% year-over-year to $5.98 billion, driven by a 39% increase in automotive sales.
  • 4Gross margin improved significantly to 21% from 12% in Q1 2019, with automotive gross margin at 26%.
  • 5Cash and cash equivalents stood at $8.08 billion as of March 31, 2020, indicating a strong liquidity position.
  • 6Commenced production and deliveries of the Model Y, ahead of schedule.
  • 7The company proactively disclosed the impact of COVID-19, including temporary suspensions of operations at its U.S. facilities.

Frequently Asked Questions

In Q1 2020, Tesla reported record vehicle production and deliveries, leading to positive income from operations of $283 million and net income of $68 million. Total revenues grew by 32% to $5.98 billion, primarily driven by a 39% increase in automotive sales. Gross margin improved significantly to 21%.

The company experienced disruptions due to government-imposed suspensions at its Shanghai, New York, and Nevada facilities. Social distancing measures also impacted deliveries and sales. Tesla implemented temporary cost reduction measures, including furloughs and salary reductions for some employees.

As of March 31, 2020, Tesla maintained a strong liquidity position with $8.08 billion in cash and cash equivalents. The company expects its cash flow from operations to be sufficient for future capital expenditures and debt obligations.

Revenue growth was primarily driven by a significant increase in automotive sales, up 39% year-over-year. This was fueled by higher volumes of Model 3 and Model Y deliveries, as well as increased sales of regulatory credits. The launch of Model Y production and deliveries ahead of schedule was a key contributor.

Yes, Tesla highlighted the ongoing and unpredictable impact of the COVID-19 pandemic on its operations, supply chain, and demand. Other risks include potential production ramp delays, supply chain disruptions, competition, regulatory changes, and risks associated with its financing programs and international operations.