Q32020

After a crazy busy day I finally had some time tonight to sit down & digest everything that was mentioned during today’s 2020 Q3 Tesla Earnings Call. I have summarized my rough notes into several categories and shared them below for your reference. Financials Best quarter in company history Record production & deliveries Record revenue Record net income (GAAP & non-GAAP) 5th sequential quarter of profitability Nearly double-digit operating margins Automotive gross margins including regulatory credits increased from 18.7% to 23.7% Some programs achieving greater than 25% gross margins Factory shutdowns did indeed have a negative effect on gross margins Small revenue of FSD released & recognized $10M Record cash balance which grew to $14.5B Record free cash flow of $1.4B Operating free cash flow of $2.4B Regulatory credits more than expected, tracking 2x as much as they were receiving this time last year Tesla’s success not possible without all of the hard-working employees and suppliers 70% of cars are produced locally, up from <50% last year Seeing financial benefits from improved vehicle reliability across the fleet Services and other margin improved thanks to more efficient used vehicle business along with streamlined service business Tesla treats each new product line as a startup internally Tesla is essentially made up of 12 individual startups Tesla is not dependent on typical enterprise software solutions as they write their own thanks to their internal applications team (Vertical integration across all aspects of the business) Tesla is trying to spend as much money as possible without wasting it to ensure continued growth Still aiming to aiming to achieve FY2020 guidance of 500,0090 vehicle deliveries As of now Tesla is aiming to produce somewhere between 800K - 1M vehicles in CY2020 however exact guidance will be provided at the next earnings call Battery Update ...