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Tesla Motors, Inc. Earnings: Sales Growth Accelerates

By Daniel Sparks - Updated Oct 27, 2016 at 3:19PM

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Tesla updates investors on guidance, the Gigafactory, Model X, Model 3, and Energy Storage. Here are the key points.

After market close on Wednesday, Tesla (TSLA -0.68%) reported better-than-expected first-quarter results. Beyond providing investors an update on the key figures for the quarter, Tesla commented on its progress on other important projects in the company's pipeline, including Tesla Energy, Model X , Model 3, and the Gigafactory.

Model S. Currently, Model S sales make up virtually 100% of Tesla's revenue.

The results
Tesla's first-quarter non-GAAP revenue and EPS were $1.1 billion and a $0.36 loss, ahead of a consensus analyst estimate for $1.04 billion and a $0.50 loss, respectively.

The company's gross profit margin continues to be a strong point. Its automotive non-GAAP and GAAP gross profit margin, excluding zero-emission vehicle credits, or ZEVs, hit 26% and 25%, respectively. Last quarter, Tesla's non-GAAP and GAAP automotive gross profit margins were both 22%. The company's overall GAAP gross profit margin, which includes the benefits of incremental revenue from ZEVs, was 27.7%.

The electric-car maker had already announced quarterly deliveries of about 10,000, up 56% from the year-ago quarter and easily exceeding its guidance for 9,500 deliveries.

Accelerating growth
One of the key takeaways from the results was the level of sales growth Tesla is reporting. The company's revenue and delivery growth rates are actually accelerating.

Tesla's non-GAAP revenue in Q1 was up 55% from the year-ago quarter. This rate is up significantly from the 44% year-over-year growth achieved in Q4.

This accelerating growth is especially clear when examining the company's year-over-year growth rates in vehicle deliveries. The company's 56% year-over-year growth in Model S deliveries is the highest rate achieved since quarters in 2013, the first full year of Model S sales.

Data for chart based on quarterly SEC filings and press releases for quarters shown. Chart source: Author.

For the full year, Tesla maintained its guidance for an expectation for 55,000 vehicle deliveries, up 74% from vehicle deliveries in 2014. Some of these deliveries are expected to be Model X, which Tesla says will launch in late in Q3.

Model X prototype. Image source: Tesla Motors.

A few other important tidbits include:

  • Gigafactory cell and pack production is supposed to begin next year. Up until now, Tesla had only said cell production would begin next year.
  • Demand for Tesla's just-announced energy storage products is robust, or "off the hook," in Musk's words. There are about 38,000 orders for Powerwall and 2,500 for the larger Powerpack, Musk said during the Q1 earnings call.
  • Musk also said he expects Tesla Energy gross margins to be low initially and to be around 20% in the long run.
  • Tesla's guidance for 10,000 to 11,000 Model S deliveries in Q2 puts the company about in line with its plan laid out in Q4 to sell 40% of its expected 55,000 2015 deliveries during the first half of the year.
  • Tesla hopes to show off its Model 3 in March of next year and to begin first deliveries of the model in the second half of 2017.
  • Customers with pre-orders for Model X will finally be able to configure their vehicle specs by July, Musk predicted.

At the time of this writing, shares were up 2% in after hours trading.

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