TSLA Q1 2019 Earnings

Call Details

• Call Title: Tesla, Inc. Q1 2019 Earnings Call
• Date: April 24, 2019 at 9:30 PM UTC
• Management Team:
  • Elon Musk (Chief Executive Officer)
  • Zachary Kirkhorn (Chief Financial Officer)
  • Martin Viecha (VP of Investor Relations)
  • Jonathan Chang (General Counsel)
  • Jerome Guillen (President of Automotive)
  • J.B. Straubel (Chief Technology Officer)
  • Cherie (Call Coordinator)

Call Summary

Financial Performance

• Tesla exited Q1 with $2.2B in cash and cash equivalents on hand.
• Cash declined by $1.5B versus 2018 ending balance, driven primarily by a $920M convertible note payoff and working capital impacts from international Model 3 expansion.
• A $920M convertible note was paid on March 1st with $188M of that payment flowing through operating cash flows.
• Q1 included $188M of one-time adjustments flowing through net income, comprised of $120M related to S and X pricing/reserve actions and $67M related to restructuring and other charges.
• Automotive revenue was negatively impacted by $501M attributed to the S and X reserve increase.
• Model 3 automotive gross margin declined slightly to approximately 20% in Q1.

Guidance

• Company reiterated Q2 delivery target range of 90,000 to 100,000 vehicles as referenced in Q&A discussion.
• Tesla expects quarter-ending cash to increase going forward and does not expect to repeat Q1 working capital effects in Q2.
• Zachary Kirkhorn stated a target of 25% non-GAAP automotive gross margin by the end of the year.
• Tesla expects to be through supplier interruptions by Q2 and does not anticipate significant supplier constraints into Q2.
• Tesla is tracking April deliveries to be the largest single month of deliveries in company history.
• Gigafactory Shanghai is expected to reach volume production by the end of the year with a projection of more than 1,000 cars/week and potentially 2,000 cars/week shortly thereafter.