Tesla Release Q2 2020 Results Shows Profit And Crushing Expectations

by StartupWorld Staff         

On 22nd July, after the market close, the US-based electric vehicle firm Tesla has released its second quarter of 2020 financial results and shareholders’ letters. 

After the release of Q2 earnings previews, a leading publishing firm was expecting revenue of nearly $5.146 billion for the second quarter and a per-share loss of $0.14.

There was several more speculation about Tesla whether the firm will or not bring a profit since profitability in the present quarter of 2020, it could mean eligibility to the S&P500 and CEO Elon Musk has been pulling up some ‘breaking even’ late in the quarter in spite of the impact of the pandemic outbreak.

With the second-quarter revenue announcement, the automaker also announced that it secured $6 billion in revenue, and it also reported a small profit of $0.50 per share (GAAP) in the second quarter of 2020 – putting down all the expectations for earnings and revenue.

Tesla Release Q2 2020 Results Shows Profit And Crushing Expectations

The automaker has delivered $104 million generally accepted accounting principles (GAAP) as a net income, $451 million non-GAAP net income (ex-SBC) in the second quarter of 2020, which is way higher than predicted virtually by every analyst.

In the shareholder’s letter, Tesla wrote all the details on how it achieved profitability. The letter reads, Tesla has improved its operating profit in the second quarter of 2020, even in the challenging circumstances. The positive impacts in the business in this duration was the savings of the operating cost due to the impacts of the pandemic lead to the temporary cutting down in headcount compensation expense, a consecutive hike in regulatory credit revenue and deferred revenue recognition of $48 million linked to a Full Self Driving (FSD) feature release. All these positive incidents and money savings have contributed largely to balance the massive costs related to factory shutdowns and also a successive increase in non-cash SBC expense primarily applicable to $101 million related to 2018 CEO award milestones.

To be unbiased, the automaker’s sale of regulatory credits for electric vehicles is the only thing that enabled the large profits by contributing $428 million.

Other impressive points include in these regulatory credits are that Tesla has improved its gross margin every quarter, and it remarkably showed a hike in its cash position.

Also, read Tesla’s biggest investor Ballie Gifford, the UK-based asset management firm’s investment in flying taxies. (Mobility Startup Lilium)


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