Tesla ( $TSLA ) Earnings Breakdown

Tesla ( $TSLA ) Earnings Breakdown

Highlights:
-Earnings reported 0.45 vs estimated 0.49 (-8.54%)
-Revenue reported 21.30b vs estimated 22.22b (-4.14%)
-Vehicle Production & Deliveries: Produced over 433,000 vehicles and delivered approximately 387,000 vehicles.
-Energy Storage: Deployed 4,053 MWh of energy storage products, the highest quarterly deployment yet.
-Challenges: Faced challenges from the Red Sea conflict, arson attack at Gigafactory Berlin, and production ramp of the updated Model 3.
-Financial Performance: Achieved $1.2 billion GAAP operating income and $1.1 billion GAAP net income in Q1.
-Investments: Invested $2.8 billion in capital expenditures, focusing on AI infrastructure, production capacity, and service networks.
-Future Growth: Focused on profitable growth, expanding awareness, increasing vehicle financing programs, and reducing operational costs.
-Product Strategy: Updated future vehicle lineup to accelerate the launch of new models ahead of the previously communicated schedule.

Good Parts:
-Profitability: Generated $1.5 billion non-GAAP net income in Q1, indicating strong profitability.
-Operations: Achieved record energy storage deployment and increased AI training compute by more than 130%.
-Financial Stability: Maintained a strong balance sheet with $26.9 billion in cash, cash equivalents, and investments.
-Future Outlook: Positioned to manage liquidity, maintain a strong balance sheet, and accelerate product innovation.

Bad Parts:
-Decrease in Revenue: Total revenue declined by 9% YoY in Q1 to $21.3 billion, impacted by reduced vehicle average selling price, decline in vehicle deliveries, and negative FX impact.
-Operating Income Decline: Operating income decreased by 56% YoY to $1.2 billion in Q1, primarily due to reduced vehicle ASP, increase in operating expenses, and production disruptions.
-Cash Flow: Experienced negative free cash flow of $2.5 billion in Q1, driven by inventory increase and AI infrastructure capex.

Income Statement Grade: C
 
-Strong profitability despite challenges.
Record energy storage deployment and AI training compute increase.
-Maintained a strong balance sheet with significant cash reserves.
-Decline in revenue and operating income.
-Negative free cash flow due to increased capex and inventory.

Balance Sheet Grade: B
 
-Adequate liquidity with $26.9 billion in cash, cash equivalents, and investments.
-Stable current assets and liabilities.
-Increased inventory.
-Rising debt levels.

Cash Flow Statement Grade: D
 
-Positive net cash from operating activities.
Investments in future growth initiatives.
-Negative free cash flow due to high capex and inventory increase.
-Decrease in cash and cash equivalents.

Overall Summary:
Tesla faced several challenges in Q1, including production disruptions and declining revenue and operating income. Despite these challenges, the company maintained strong profitability and invested heavily in future growth initiatives. However, negative free cash flow and a decline in cash reserves indicate potential liquidity concerns that need to be addressed. Overall, Tesla's financial performance reflects resilience amid adversity, but efforts are needed to improve cash flow and stabilize revenue and operating income.