Tesla Q1 Earnings Review

Tesla reported results on Tuesday 23^rd after the market closed. The company has been struggling for the past couple of quarters. Decelerating growth, declining margins, and uncertainty about the near term. In this article, I’ll go over Tesla’s quarterly performance, management’s commentary and my take on the quarter. I’ll further comment on Tesla’s weight in the portfolio I manage and what I’m planning to do moving forward.

The company reported revenues of 21.3 billion dollars, declining 9% on a yearly basis, and representing the first decrease in the past four years. Revenue’s 4yr CAGR stands at 37%. The automotive industry is rather cyclical. For these are somewhat expensive items, financing rates impact demand.

Tesla did 3.69bn in gross profit, down sequentially and yearly. The gross profit margin declined 190bps YoY and 20bps QoQ. Operating income was 1.17bn during the quarter, the absolute lowest since 2020, implying a margin of 5.5%. Lastly, Tesla generated 1.12bn in net income, with a margin of 5.3%, contracting 550bps YoY and 390bps QoQ.