NCG
Jul 24, 2024
Overview
Tesla’s Q2 FY24 income statement reveals a robust performance across several key areas despite facing industry-wide challenges. The automotive giant reported a revenue of $25.5 billion, reflecting a modest 2% year-over-year (YoY) increase. This growth was primarily driven by strong vehicle sales, energy generation, and storage services.
Revenue Breakdown
Automotive Sales and Services:
• Auto Sales: $18.5 billion (9% YoY increase)
• Total Auto Revenue: $19.9 billion (7% YoY increase)
• Regulatory Credits: $0.9 billion (+216% YoY)
• Leasing: $0.5 billion (19% YoY decrease)
• Energy Generation and Storage: $3.0 billion (+100% YoY)
• Services: $2.6 billion (+21% YoY)
Automotive sales continue to be Tesla’s primary revenue stream, contributing significantly to the overall revenue. Regulatory credits saw a massive spike, indicating successful navigation of environmental regulations. Energy generation and storage services doubled their revenue, showcasing Tesla’s diversification and growth in sustainable energy solutions.
Profitability
Gross Profit and Operating Profit:
• Gross Profit: $4.6 billion (18% margin)
• Operating Profit: $1.6 billion (6% margin, +3pp YoY)
Tesla maintained a stable gross profit margin of 18%, with operating profit showing a 3 percentage point improvement YoY. This indicates effective cost management and operational efficiency.
Net Profit and Other Income:
• Net Profit: $1.5 billion (6% margin, +5pp YoY)
• Other Income: $0.3 billion
Tesla’s net profit margin improved significantly, reflecting strong overall financial health and effective business strategies.
Expenses
Cost of Revenue and Operating Expenses:
• Cost of Revenue: $20.9 billion
• Operating Expenses: $3.0 billion
• SG&A: $1.3 billion (5% of revenue)
• R&D: $1.1 billion (4% of revenue)
• Restructuring: $0.6 billion (2% of revenue)
While the cost of revenue remains high, operating expenses have been well-managed. The investment in research and development underscores Tesla’s commitment to innovation, while restructuring costs suggest ongoing adjustments to optimize operations.
Key Insights
• Diverse Revenue Streams: Tesla’s growth in energy generation and storage highlights successful diversification beyond automotive sales.
• Regulatory Credits: The significant increase in regulatory credits showcases Tesla’s strategic advantage in adhering to and capitalizing on environmental regulations.
• Operational Efficiency: Improvements in operating profit and net profit margins reflect efficient cost management and operational strategies.
Conclusion
Tesla’s Q2 FY24 performance underscores its resilience and strategic growth in a competitive industry. The company’s focus on diversification, operational efficiency, and innovation positions it well for future growth.
Disclaimer
This analysis reflects the opinions of the firm and is not intended as investment advice. We focus solely on proprietary trading and do not manage assets or provide investment advice. Investors should conduct their own research and consider their financial situation before making investment decisions.