Tesla (TSLA) releases Q3 2021 results: delivers on high expectations

Tesla (TSLA) has released its financial results and shareholders letter for the third quarter of 2021 after market close today.

We are updating this post with all the details from the financial results, shareholders’ letter, and the conference call later tonight. Refresh for the latest information.

Tesla Q3 2021 earnings expectations

Yesterday, we posted our Tesla earnings preview with Wall Street expectations.

The Wall Street consensus for this quarter is $14.005 billion in revenue and earnings of $1.59 per share.

Those expectations are super high because of Tesla’s giant increase in deliveries during the quarter.

Tesla Q3 2021 earnings results

The automaker has now released its Q3 2021 results and it shows Tesla has mostly met those expectations.

Tesla reports revenue of $13.757 billion, which is a little below expectations, and earnings of $1.86 per share (non-GAAP), over expectations.

The profits and operating margins were significant for Tesla this quarter:

“The third quarter of 2021 was a record quarter in many respects. We achieved our best-ever net income, operating profit and gross profit. Additionally, we reached an operating margin of 14.6%, exceeding our medium-term guidance of “operating margin in low-teens”.

Notably, Tesla’s automotive gross margin improved to 30% this quarter.

That’s despite the company claiming significant cost pressure from the supply chain. Though Tesla also increased prices throughout the quarter.

Despite the improved margins and higher revenue, Tesla’s cash on hand went down during the quarter, but that’s mostly due to debt repayment.

Tesla noted in its shareholders’ letter:

“Quarter-end cash and cash equivalents decreased to $16.1B in Q3, driven mainly by net debt and finance lease repayments of $1.5B, partially offset by free cash flow of $1.3B. Our total debt excluding vehicle and energy product financing has fallen to just $2.1B at the end of Q3.”

The rest of the shareholders’ letter is fairly low on new information as Tesla mostly recaps already known information from the quarter.

Hopefully, we get more information during the conference call.

We will be posting our follow-up posts here about the earnings and conference call to expand on the most important points (refresh the page to see the most recent posts):

Here’s Tesla’s Q3 2021 shareholder letter and presentation in full:

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Tesla’s Q3 2021 conference call:

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