TSLA Q1 2020 Earnings

Call Details

• Call Title: Tesla, Inc. Q1 2020 Earnings Call
• Date: April 29, 2020 10:30 PM UTC
• Management Team:
  • Martin Viecha (VP of Investor Relations)
  • Elon Musk (Chief Executive Officer)
  • Zachary Kirkhorn (Chief Financial Officer)

Call Summary

Financial Performance

• The company reported its first-ever positive GAAP net income in a seasonally weak Q1 2020.
• Automotive gross margin excluding regulatory credits was reported at 20% for Q1 2020.
• Cash and cash equivalents at quarter end were $8.1B as reported on the call.
• Vehicle inventory increased by 14,000 units at the end of Q1 2020, creating a near-term headwind to free cash flow.
• Deferred revenue related to Full Self-Driving (FSD) options is a little over $600M as of the quarter end.
• Regulatory credit sales increased in Q1 versus Q4, and most of the Q1 credit revenue did not convert to cash and is reflected in accounts receivable.
• Energy deployments were limited by COVID-19 shutdown activities, and solar roof Version 3 launch inefficiencies negatively impacted Q1 energy profitability.
• Free cash flow in Q1 was reduced by elevated end-of-quarter inventory from abrupt production and delivery suspensions.

Guidance

• Battery Day timing was described as likely in the third week of May but no firm date was provided.
• Full Self-Driving (FSD) will be offered as a subscription, planned for 'towards the end of this year', while continuing to sell FSD as a one-time option.
• The company expects to continue Model Y capacity expansion at full speed in Giga Shanghai and Giga Berlin and in Fremont when permitted.
• Company reiterated a long-term ambition around high vehicle growth, with 50% compound annual growth still characterized as the likely number and below-40% described as unlikely absent massive force majeure.
• No formal short-term numeric earnings or delivery guidance was provided for Q2 on the call.
• Zachary Kirkhorn stated the company modeled many scenarios into 2021 and remained comfortable with liquidity to proceed with long-term investments.
• Regulatory approval timelines for fully driverless operation were explicitly identified as outside the company's control and therefore uncertain.