Tesla Q2 2023 Earnings SUMMARY [In 10 Minutes] $TSLA Stock

is a quick summary of what just happened

with a Tesla earnings Tesla earnings

came in with a margin of 18.2 percent

down from 19-1 we also got a bit of a

solar warning we were hoping at least

sign was hoping to see some kind of

boost in solar deployments as maybe a

leading indicator that uh and phase will

do quite well although Tesla doesn't

handle much regarding end phase given

that they use different types of

inverters so maybe the sales priority

for Tesla has been on vehicles rather

than on solar so it might be different

at end face but let's just say if solar

was booming at Tesla it'd probably be

booming it in Phase as well something to

keep in mind uh for the solar industry

and end phase it's still a bit in the

doldrums and Tesla's reiterating that to

us now another thing that we thought was

remarkable for Tesla and as everybody

did was free cash flow actually came in

a lot stronger than anticipated free

cash flow coming in at about billion

bucks with 2 billion coming in for

operating activities and no crazy

adjustments it's not like we had some

kind of weird one-time item in here that

really propped up these numbers in fact

when we looked at the income statement

we noticed that this was the lowest

number of regulatory credits that Tesla

has received with the highest number of

sales in the last five quarters at least

which means it's potentially the lowest

number of regulatory credits we've

gotten from Tesla or four Tesla in quite

a while so it's very impressive that

Tesla was able to beat adjusted EPS

expectations at 81 cents result at 91

cents and Tesla was able to beat EPS

expectations of 71 cents with a 78 Cent

Beat well a result of 78 78 cents not a

Beat by that but anyway that's

impressive given that the regulatory

credits weren't actually that sexy this

quarter what was sexy though uh was this

number right here a 17 18

annualized bump or sorry 17 quarter over

quarter bump in Services Revenue well

maybe this is because we're starting to

see some of that charging throughput

come in right that annualizes to a 68

growth rate for services revenue and

margins on Services Revenue are growing

remember we're not compounding because

the average rate of services growth is

much lower given that in Prior quarters

you're looking at eight 3.4 12 Services

growth we did see a bump in AI spent

here of 22 percent in the quarter that's

compared to a decline in AI spend

between the fourth and the first quarter

uh sorry I say AI spend I labeled it as

AI spend because I'm assuming it's AI

spend this is actually the research and

development line I'm calling it AI

because I wouldn't be surprised if

that's what gets talked about and the

earnings call we also show this picture

here and thought it was interesting that

they covered up the Cyber truck in

production here and they didn't cover up

the Cyber truck and product action in

this photo a little mysterious expecting

more Dojo production which is fantastic

expecting Services Revenue to climb also

excellent a list of companies here

announcing that expansion of the nacs

North American charging standard usage

which is great here's your solar warning

causing that postponement of solar

purchasing what interest rates of course

then uh what we also focused on heavily

was this uh this idea that we'd like to

get some color on when that cyber truck

is actually going to hit uh release are

we still going to get that this year so

we'll pay close attention to that in the

earnings call notice here what we found

is compared to the q1 report the next

gen platform item has been lined out as

separate from the Roadster item as in

development and we saw Giga Berlin have

its capacity bumped from 350 plus to

375.

4680 ramping though we've heard that for

quite a long time

that has not changed for a while gross

margin obviously falling from about 19.3

percent to 18.2 percent a lot of

expectation that this could be the

trough which will be very uh uh very

very important to Tesla let's just put

it that way and not only is this a very

important and impressive uh for for

Tesla if this ends up being the trough

but I think it's not anywhere near as

bad as feared a lot of bears were

looking at 14 to 16 uh gross margin and

uh we got 18.2 yes it's lower and it's

certainly much lower than last year but

boy oh boy with interest rates where

they are and the the price Cuts we saw

in Q2 nowhere near as bad as feared but

what blows my mind is that somehow we

were still able to go from uh 19.3 to

18.2

but free cash flow was able to pop that

was impressive to me if we jump over to

the q1 report we actually have that same

sheet right here you can see this is Q2

this is q1 right there in case you want

a free for a freeze frame uh one of the

things that you see in Q2 is you did

lower that operating margin as well the

9.6 the operating margin we saw over

here was 11.4 but you could also see

that in the columns before but most

importantly that free cash flow there at

the bottom relatively low if we go to

the cash flow statement just to try to

get a little bit more of an insight into

this what are the contributors to that

free cash flow we could really just do

that over on this side there we go do

that on the latest report and pop into

that free cash flow statement here one

of the contributors maybe was that you

had less of a drop uh in uh your changes

in operating assets and liabilities net

of bizcom's uh we I mean look at this

sort of decline that we've had over here

right from 2.1 to 1.5 as a subtractor to

cash operating cash and then only a 1.1

subtractor of cash here so we could go

into the actual quarterly report once

it's filed and get a little bit more

color on some of these details but that

really helped us prop up cash flow now

even if you didn't understand any of

what I just said in the last 30 seconds

we could totally ignore that and we

still wouldn't have been negative in

free cash flow so congratulations to

Tesla they really pulled off

preventing my personal biggest fear

tooling of the Cyber truck progressing

uh so far still expecting two three for

an initial delivery event but we're told

they're still in testing and tooling for

the Cyber truck when we look at the

actual balance sheet we find that they

increase their debt from about 5.9

billion to about 6.9 billion dollars of

debt so about a one billion dollar

increase I have to say some part of me

thinks this is just Elon trolling

but you do have 23 billion dollars of

cash versus 22.9 billion dollars in

bills so anybody who's walking around

bragging about the 23 billion dollars of

cash or Tesla really gotta land on the

bills they got but it's okay you know I

get it and you get inventories as well

yeah yeah we debate this all day long uh

so uh thank you by the way Michael for

the shout out Michael here uh says

superb instant and real-time analysis it

finally got me to subscribe and you have

been well worth it before this a serious

thank you that's really nice of you to

say really appreciate that so the

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like I get better at it every single

time I do it uh and so I I really enjoy

providing that value while also getting

better at doing it all the time now what

do we think about as a takeaway for

Tesla here look personally I think this

is fantastic my worst fears have been

allayed my worst fear was negative free

cash flow and money raise the fact that

we got I'm gonna call this a relatively

benign report beat on EPS Miss on margin

but who care is that margin is still not

in Bear territory

just swiping the sweat off the forehead

next big takeaway that's solar industry

might have a little bit more time to do

some quantity building there

I don't know when solar is going to take

off again but I will put it this way I

think it is it is my opinion not

personalized advice for you but is my

opinion that that could be one of the

best Industries to really be building

your allocation

as you start trimming from some of your

big Winners because I think they'll be

the next winners whether that's when

rates come down or whatever who cares

good news though and why that relates to

Tesla is because Tesla's in the Solar

industry as well they do their own

batteries they do their own inverters

after they fired solar Edge uh and um

they've got an easy way to sell panels

in conjunction with selling cars uh with

these hot summers we're also anecdotally

hearing from solar reps that we talked

to that solar Sails are actually

increasing but that's just not showing

up yet at the Tesla numbers so it makes

me wonder is Tesla perhaps prioritizing

vehicle sales over solo who knows but we

do know that the earnings call will be

in about 40 50 minutes it's usually like

an hour and a half long and then of

course we'll have some insights on the

Tesla earnings call later but I will be

streaming the earnings call later as for

now thank you so much for being here

everyone I think this is great news uh

this is a really uh you know again short

of like a bag of cash coming down from

Jesus handed to Tesla

this is pretty good uh so this is the

best we could have asked for so I'm

happy thank you so much for watching

here and getting your news here we'll

see you in the next one goodbye everyone

and good luck now I want you to know

this when it comes to AI

time is what's going to make you money

and if you can prove that value to an

employer you'll always be able to be

employed so this is another way of

making sure that you don't get replaced

but

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