Tesla has released its financial results and shareholder letter for the second quarter of 2020 after the market closed today.
We are updating this publication with all the details of the financial results, the shareholder letter and the conference call later tonight.
As we reported yesterday in our second-quarter earnings preview post, Wall Street expected revenue of around $ 5.146 billion for the quarter and a loss of $ 0.14 per share.
There was a lot of speculation about whether Tesla would make a profit or not, as this quarter’s profitability could mean eligibility for the S & P500 and CEO Elon Musk has been mocking “break even” at the end of the quarter to despite the impact of the pandemic.
Today, the automaker announced that it made $ 6 billion in revenue and reported a small profit of $ 0.50 per share (GAAP) in the second quarter of 2020, crushing expectations for revenue and profit.
Tesla delivered net GAAP income of $ 104M, non-GAAP net income of $ 451M (ex-SBC) in the second quarter, far more than expected by virtually all analysts.
In the shareholder letter, the automaker wrote about how it achieved profitability:
“Our operating profit improved in the second quarter despite difficult circumstances. Positive impacts included lower operating costs due to a temporary reduction in employee compensation expense, a sequential increase in regulatory credit revenue, and the recognition of deferred revenue of $ 48M related to a launch of the Full Self Driving feature. (FSD). These positive contributions were offset by significant costs related to factory closings, as well as a sequential increase in non-cash SBC spending primarily attributable to $ 101 million related to the 2018 CEO award milestones. “
In fairness, the sale of Tesla regulatory credits for electric vehicles is what made big profits by contributing $ 428 million.
Other impressive metrics include that Tesla improved its gross margin quarter-over-quarter and significantly increased its cash position:
Tesla shares (TSLA) rose as much as 7% in the aftermarket after the release of these results.
Here we will post our earnings follow-up posts and conference call to expand on the highlights (refresh page to see the latest posts):
Here is Tesla’s letter and second-quarter shareholder presentation in its entirety:
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