TSLA Q4 2019 Earnings

Call Details

• Call Title: Tesla, Inc. Q4 2019 Earnings Call
• Date: January 29, 2020 at 8:30 PM UTC
• Management Team:
  • Sherry Briand (Host)
  • Martin Viecha (VP of Investor Relations)
  • Elon Musk (CEO)
  • Zachary Kirkhorn (CFO)
  • Drew Baglino (SVP of Powertrain and Energy Engineering)

Call Summary

Financial Performance

• Deliveries reached over 112,000 vehicles in Q4 2019 in a single quarter.
• The company stated it can generate more than $20B in revenue with zero advertising spend.
• Tesla reported generating more than $1B of free cash flow in 2019 versus break even in 2018.
• The company achieved positive GAAP net income in both Q3 and Q4 2019.
• Stock-based compensation increased sequentially by $82M driven largely by the next tranche of the CEO grant.
• Shanghai-built Model 3 products were reported as slightly margin-dilutive in Q4 with a negative gross margin impact during launch.
• The company highlighted multi-quarter strong cash generation enabled by higher volumes and improved working capital management.

Guidance

• Model Y first deliveries were expected in limited quantities later in the quarter with ramp over subsequent quarters.
• Tesla expects higher gross margins on Model Y relative to Model 3 at run rate.
• The company signaled that run-rate production and delivery rates are expected for Shanghai-built Model 3 in 2020 with majority planned supply chain localization in-region.
• Q1 2020 was flagged as seasonally impacted and expected to be temporarily weighed down by two product ramps (Shanghai Model 3 and Fremont Model Y).
• Tesla expected a 1 to 1.5 week delay in the Shanghai Model 3 ramp due to a government-required factory shutdown tied to the coronavirus.
• Operating expenses were forecasted to increase in 2020 to support product pipeline and international footprint but were expected to grow slower than revenue.
• A battery-focused investor presentation ('Battery Day') was planned tentatively after the quarter, with a likely April timeframe mentioned.