Tesla TSLA Q2 Adj. EPS $1.45 Beats $0.96 Estimate, Sales $11.96B Beat $11.21B Estimate

Photo: Christophe Ena

Tesla Inc. (NASDAQ: TSLA), the California EV maker, reported Adj EPS (non-GAAP) of US $1.45 per share, and record total revenues of US $11.96 billion for Q2 2021. After Tesla trading officially closed on July 26, 2021, the company released its Shareholder Letter before its Q2 2021 Earnings Call, which will be hosted today at 2:30 p.m. Pacific Time (5:30 p.m. Eastern Time).

Highlights

Cash
Operating cash flow less capex (free cash flow) of $619M in Q2
Net debt and finance lease repayments of $1.6B in Q2
In total, $912M decrease in Tesla's cash and cash equivalents in Q2 to $16.2B

Profitability
$1.3B GAAP operating income; 11.0% operating margin in Q2
$1.1B GAAP net income; $1.6B non-GAAP net income (ex-SBC1) in Q2
28.4% GAAP Automotive gross margin (25.8% ex-credits) in Q2

Operations
Record vehicle production and deliveries in Q2
Successful launch of FSD subscription in July
Started delivering the new Model S to customers

Revenue
Total revenue grew 98% YoY in Q2. This was primarily achieved through substantial growth in vehicle deliveries, as well as growth in other parts of the business. At the same time, vehicle ASP1 declined by 2% YoY as Model S and Model X deliveries were reduced in Q2 due to the product updates and as lower ASP China-made vehicles became a larger percentage of Tesla's mix.

Profitability
The company's operating income improved in Q2 compared to the same period last year to $1.3B, resulting in an 11.0% operating margin. This profit level was reached while incurring SBC expense attributable to the 2018 CEO award of $176M in Q2, driven by a new operational milestone becoming probable.

Operating income increased YoY mainly due to volume growth and cost reduction. Positive impacts were partially offset by growth in operating expenses including increased SBC, Model S/X ramp (negative margin in Q2), additional supply chain costs, lower regulatory credit revenue, Bitcoin-related impairment of $23M and other items.

Cash
Quarter-end cash and cash equivalents decreased to $16.2B in Q2, driven mainly by net debt and finance lease repayments of $1.6B, partially offset by free cash flow of $619M.

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