What up Hyperchange, Tesla earnings are hot off the press, happy earnings day if you celebrate. Things are going crazy. Tesla’s reported some great numbers, the stock is ripping about 8% as I’m recording this right now. The hot off the press is the Q3 shareholder letter. We’re going to dive into this, I’m going to give you my take on the financials of Tesla Earnings.
1. Tesla’s Q3 Financial Highlights
So here’s Mainstreet data.com, visualizing the financials. I want to dive into a couple of things to show you why this was such an excellent quarter for Tesla. 25.2 billion in revenue, 8% year-over-year growth, was a great resumption of growth, but the biggest reason the stock is mooning: operating income of 2.78 billion, up huge from 1.6 billion last quarter. Also, a massive increase from 1.8 billion in Q3 of last year. So, long story short, Tesla reported about half a billion or a billion more in profits than people like me were expecting. Tesla Earnings
2. Strong Gross Profit Growth
Gross profit-wise, you can see, underlying the hood, the business is getting very significantly more profitable with margins. Year-over-year gross profit growth was just 1% in Q2, but in Q3 re-accelerated to 20%. So I think that’s a huge other reason why the stock is doing well right now. It plays a great role in Tesla Earnings.
3. Energy and Services Business Performance
Also, it was a standout quarter from the energy and services business. Here is the revenue by segment; you can see another big quarter for energy and services as they become a bigger chunk of that Tesla revenue pie. But if we go down to gross profit, they’re an even bigger chunk. So you can see energy and services representing an all-time high for gross profit. I mean, if we look at the profit in the energy business, it’s been a monster—700 million in gross profit quarterly now, with still a ton of growth ahead with Shanghai just getting started. Services businesses also ramping up and profitability. This was due to the supercharger being used, partially, so as the supercharger network expands, this can grow as well. Tesla Earnings
4. Free Cash Flow and Capital Expenditures
But I mean, long story short, you’ve had Tesla add about $2 billion in free cash flow, 2.7 billion in free cash flow after a record 3.51 billion of capital expenditures. Record of 6.25 billion in operating cash flow, it was a monster quarter. Tesla Earnings
5. Key Insight: Cheaper Model Launch
Now, I want to go through the shareholder deck to show you a couple of things that I was looking for. I’m going to get to the most exciting thing that I thought was the most important, which was their guidance on the cheaper model in the first half of 2025. Sorry, I’m scrolling through these charts like crazy here, but this is the most important line in the whole shareholder letter, in my opinion: Plans for new vehicles, including more affordable models, remain on track for the start of production for the first half of 2025. The new cheaper Tesla models are coming soon; they’re still on track. That is amazing news. That is the thing I was looking for.
6. Cybertruck’s Profitability and Ramp-Up
We’ve also got some other interesting tidbits here. This Cybertruck had its first profitable quarter in terms of gross margin. That is a huge sign for the vehicles, as they start to ramp that up for that to be contributing to profits is huge. The production capacity of the Cybertruck is now over 125,000 units a year. The semi-TRU is getting just off the ground. Great news as Tesla China does well. Cybertruck plays a major role in Tesla Earnings.
7. Energy and Services Growth
Energy, here they’re talking about how energy generation and storage and service gross profit continues to boom. That was like that chart we just saw, but this is the needle mover here. Tesla’s other businesses are now contributing almost a billion in a quarter in incremental gross profit, and that is going to continue to grow and offset any weakness in the consumer auto business until we can get to these products right here: the wireless charging for the Cyber cab.
8. Quarter-End Recap and Key Highlights
I mean, this is just insane to end the quarter like this. I’ll leave you with some of these cool images from the 10/10 event. WOW—7 million cars produced. But anyway, just wanted to give you a quick wrap-up.
9. Tesla’s Record Profit and Cash Flow
Oh, sorry, there we go. Okay, anyway, just wanted to give you a quick analysis of the Tesla Q3 earnings. Long story short, the company was able to produce 2.7 billion in profit, and also had 2.7 billion in free cash flow, so they had 62 billion in profit they came in for the company. They spent 3.5 billion cash on future projects, which leaves a free cash flow of $2.7 billion. That’s why the cash on the balance sheet went up to 33 billion, an all-time high. This is the quick analysis of Tesla Earnings.
10. Key Takeaways for Tesla Investors
What do you need to know about Tesla? Cybertruck is ramping, semi-TRU is ramping, the 3-and-Y business is stable, and the company is profitable and growing as it is now before we introduced more affordable models before the Cyber cab came before Optimus came out. Energy is on the cusp of ramping into a breakout year in 2025, and so are superchargers. That’s going to accelerate that 1 billion in incremental gross profit that we’re already seeing.
11. Overcoming Investor Concerns
So I personally, as someone fearful of Elon Musk’s politics going to influence demand for Teslas. Is this going to make Tesla go unprofitable? Are they going to have to cut prices so much that’s going to hurt their margins? No, everything went in the right direction. If you look at the margins, they had a huge jump in margins across the board for the company. 10.8% operating margins, up from 6.3% last quarter, up from 7.6% in Q3 2023. So the highest operating margin or profitability as a company in five quarters. Same with the gross gap—gross margin was the highest ever.
12. Conclusion: Tesla’s Strong Performance
So, I don’t know. Tesla’s business is doing great. This was much better than I expected, and I think that’s why the stock’s booming. I will be on the conference call tonight, going to be listening to that and digesting it, and then trying to post another update if we get any tidbits. But also, the Cybertruck going profitable in ramping and the more affordable model is on track for coming out in the first half of 2025, which is months away.
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Detailed video about Tesla Earnings.