Tesla (NASDAQ:TSLA) posted its Q3 2023 earnings report after markets closed today. The results, which were discussed in the Q3 2023 Update Letter, were released after the closing bell on Wednesday, October 18, 2023.

Tesla’s earnings come on the heels of a Quarter that saw a decline in production and deliveries, thanks in part to the rollout of the upgraded Model 3 in Gigafactory Shanghai. In the third quarter, Tesla produced 430,488 vehicles and delivered 435,059. Tesla also maintained its target volume of 1.8 million vehicles this 2023. 

The following is a quick overview of Tesla’s Q3 2023 earnings results.

REVENUE

In the third quarter, Tesla posted revenues of $23.35 billion. In comparison, analysts expect Tesla to report a revenue of $23.9 billion in Q3 2023. Total revenue grew 9% YoY in Q3 despite the challenging quarter. As per the Q3 2023 Update Letter, Tesla’s third quarter revenues were affected by the company’s growth and increase in vehicle deliveries, as well as the reduced average selling price of its vehicles year-over-year. 

EARNINGS PER SHARE

Tesla’s non-GAAP earnings per share for the first quarter of 2023 was listed at $0.66. In comparison, analysts were expecting Tesla to post an earnings per share of $0.72. GAAP earnings per share was at $0.53, which is also below the expected $0.64 per share. 

PROFITABILITY 

Tesla posted a 7.6% operating margin in Q3. The company also posted a $1.8 billion GAAP operating income, $1.9 billion GAAP net income, and $2.3 billion non-GAAP net income in Q3 in the third quarter. The fact that Tesla remained profitable this Q3 seems to be a testament to the strength of the company’s business. 

Overall, operating income decreased year-over-year to $1.8 billion in the third quarter, resulting in a 7.6% operating margin.

CASH

Tesla’s quarter-end cash, cash equivalents, and investments increased sequentially by $3.0 billion to $26.1 billion in the third quarter. This was due to financing activities of $2.3 billion and free cash flow of $0.8 billion.

OTHER KEY UPDATES

• Tesla has more than doubled the size of its AI training compute to accommodate the company’s growing dataset and its Optimus humanoid robot program.
• First Tesla Cybertruck delivery event is set for November 30, 2023
• Gigafactory Texas’ Cybertruck capacity is at 125,000 units per year
• Gigafactory Shanghai’s annual output has been adjusted to over 950,000 vehicles
• FSD Beta’s cumulative miles has reached 525 million 
• Tesla Energy deployments hit a record high of 4.0 GWh in Q3 2023

Below is Tesla’s Q3 2023 Update Letter.

tsla-q3 by Simon Alvarez

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