Tesla (TSLA) published its letter to financial results and shareholders for the second quarter of 2020 following today’s market closure.
We are refreshing this post with all the information from the financial report, shareholders letter and later tonight’s conference call.
As stated yesterday in our Q2 earnings preview post, Wall Street expected revenue for the quarter to be around $5.146 billion, and a loss of $0.14 per share.
There was a lot of talk on whether or not Tesla would make a profit as this quarter ‘s efficiency could mean qualifying for the S&P500 and CEO Elon Musk was teasing “breaking even” late in the quarter given the pandemic effect.
The automaker revealed today that it generated $6 billion in sales, and posted a modest profit of $0.50 per share (GAAP) in Q2 2020 – smashing sales and earnings forecasts.
Tesla generated $104 M of GAAP net income, $451 M of non-GAAP net income (ex-SBC) in Q2 – much more than practically any analyst predicted.
The carmaker wrote about how it accomplished profitability in the shareholders letter:
“Our operating profit improved in Q2 despite challenging circumstances. Positive impacts included lower operating costs due to a temporary reduction in employee compensation expense, a sequential increase in regulatory credit revenue and deferred revenue recognition of $48M related to a Full Self Driving (FSD) feature release. These positive contributions were offset by significant costs related to factory shutdowns, as well as a sequential increase in non-cash SBC expense primarily attributable to $101M related to 2018 CEO award milestones.”
To be fair, Tesla’s selling of electric vehicle regulatory credits is what allowed the huge profits by contributing $428 million.
Many impressive metrics involve Tesla raising its quarter-over-quarter gross margin, and substantially rising its cash position:
After the announcement of these results, Tesla’s stock (TSLA) rose as much as 7 percent in aftermarket trading.
We will update our Earnings and Conference Call follow-up posts here to build on the most crucial details.
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