Tesla Q2 Earnings Review

Tesla reported results yesterday after the market closed. This review will include a general financial analysis, a segment breakdown, management’s commentary, and outlook. At the end, I’ll share my take on the quarter and what I’m doing portfolio-wise.

In spite of a persistently tough environment for the automotive business, Tesla’s revenue hit a record high of 25.5 billion dollars, increasing 2.4% yearly and meaningfully compared to last quarter. The energy and services segments contributed significantly to this occurrence.

Tesla recorded gross profit of 4.57bn during the quarter, implying a margin of 17.9%, declining 30bps YoY and up 50bps QoQ. Operating income was 1.6bn, down yearly and with a margin of 6.3%, declining 330bps yearly but also up sequentially. Lastly, net income amounted to 1.47bn, down from 2.7bn last year. The net profit margin declined 510bps YoY to 5.8%.

Cash from operations increased materially YoY, to 3.61bn, and normalized compared to last quarter’s 242 million. On the other hand, Tesla had previously announced its commitment to several projects, all of which consume most cash flow. Capital expenditures amounted to 2.27bn, out of which 0.6 billion were destined to AI infrastructure.