2015 Q2 Discussion thread for Delivery numbers, Earnings Report and Conference Call

[ludicrousspeed]

Guidance is by far the most important part of the entire Earnings Report event. Vehicle deliveries are the most important factor for the company right now because this is a growth investment and investors know Tesla will not turn a profit this quarter. Since everybody already knows what Tesla delivered in Q2 (11.5K Model S), everybody should be keeping their eyes on whether Model X is still on schedule and if 55K is still the goal for this year. I will also be interested in seeing how fast margins and R&D spending grow but don't think earnings, or losses in this case, are very important.

 

[aznt1217]

In addition to guidance. I've been keeping an eye on three KPI's for Tesla and tying them with company events. I use these to monitor company health and I'm pretty sure many on this forum do also.

Gross Margin
SG&A
R&D

I expect to see a steady climb in SG&A, a significant step up in R&D due to Tesla Energy, Gross Margin staying relatively flat.
I also expect a significant amount of cash burn this quarter. Shouldn't be a surprise with all the things going on (GF, Model X, acquisitions, etc.)

 

[FluxCap]

In addition to guidance. I've been keeping an eye on three KPI's for Tesla and tying them with company events. I use these to monitor company health and I'm pretty sure many on this forum do also.

Gross Margin
SG&A
R&D
View attachment 89433

I expect to see a steady climb in SG&A, a significant step up in R&D due to Tesla Energy, Gross Margin staying relatively flat.
I also expect a significant amount of cash burn this quarter. Shouldn't be a surprise with all the things going on (GF, Model X, acquisitions, etc.)

Great chart, thanks for sharing it!

 

[Hogfighter]

I'm surprised at how little chatter there has been regarding the stationary storage side. If they announce how many orders they have, it could be quite a positive catalyst.

 

[ludicrousspeed]

I'm surprised at how little chatter there has been regarding the stationary storage side. If they announce how many orders they have, it could be quite a positive catalyst.

The reason people are overlooking the stationary storage and probably will continue to do so, even if orders are sky high, is because they don't require any down payment. Skeptical analysts point to the fact that Tesla may not go through with a good portion of the $850M in orders in the first week. I persoanally disagree with those analysts because I think once Tesla begins to sell their storage products in higher volume in 2016 with the help of the gigafactory, the company will exceed general expectations. There is no reason to think that demand will be weak or that the products themselves aren't a major innovation, even without pre orders. Also many people point to Tesla's storage not being 100% ready for households yet, but Musk has already come out and said that around 85-90% of initial storage will go towards businesses, which could greatly benefit from the batteries, even in the short term.

 

[aznt1217]

The reason people are overlooking the stationary storage and probably will continue to do so, even if orders are sky high, is because they don't require any down payment. Skeptical analysts point to the fact that Tesla may not go through with a good portion of the $850M in orders in the first week. I persoanally disagree with those analysts because I think once Tesla begins to sell their storage products in higher volume in 2016 with the help of the gigafactory, the company will exceed general expectations. There is no reason to think that demand will be weak or that the products themselves aren't a major innovation, even without pre orders. Also many people point to Tesla's storage not being 100% ready for households yet, but Musk has already come out and said that around 85-90% of initial storage will go towards businesses, which could greatly benefit from the batteries, even in the short term.

Not even about that downpayment part. You are correct though the vast majority of initial orders will go to businesses via Powerpack-- because of the economics and scale that it benefits. Tesla would also probably prefer this so they can fine tune their software with something using significantly more energy.

- - - Updated - - -

Great chart, thanks for sharing it!

Thanks! I just wanted to post this up before people started freaking out about the headlines that will come out at the end of day tomorrow. Something along the lines of Tesla has record quarter but still loses money, etc.

These are the KPI's that matter for a company in the growth stage (assuming there is product focus). After product quality/experience/focus which is all well and good I look for the execution... for me these are the key measures that reflect how well execution is.

 

[Jonathan Hewitt]

I'm surprised at how little chatter there has been regarding the stationary storage side. If they announce how many orders they have, it could be quite a positive catalyst.

I think there is a chance for this to help if it's announcement of more contracts signed by businesses/utilities. Contracts are firm if written correctly and analysts can model those things. I don't think Powerwall can do anything else for now until it starts shipping at the earliest, IMO.

 

[tinm]

My guesses:

• not a lot of insight into stationary storage; they'll say it isn't rolled out yet, so no revenue. Maybe they'll provide projections but...
• capex will be higher than market (pretend) expectations, some analysts will react negatively; stock will reflect
• revs will be about what's expected
• like others have said, guidance for Q3, Q4 is all. I suspect they'll be exactly 55K no change.

 

[vigge50]

The conference call will be at 02:30 PM PT but how long before that do the letter use to come up one the site? Is it an half an hour or one hour before the call?

 

[anticitizen13.7]

The conference call will be at 02:30 PM PT but how long before that do the letter use to come up one the site? Is it an half an hour or one hour before the call?

Tesla usually posts the shareholder letter a few minutes after market close (4PM Eastern U.S.).

 

[timf]

Tesla usually posts the shareholder letter a few minutes after market close (4PM Eastern U.S.).

Sometimes it isn't posted until after 5PM Eastern. In any case, it's always sometime between the market closing and the call beginning.

 

[bonnie]

My guesses:

• not a lot of insight into stationary storage; they'll say it isn't rolled out yet, so no revenue. Maybe they'll provide projections but...

I think they'll very likely announce a few installations and that the program has begun rolling out.

 

[mikes_fsd]

I think they'll very likely announce a few installations and that the program has begun rolling out.

Bonnie, which Powerwall did you get? How's it working out so far?

 

[ludicrousspeed]

I think the street is expecting guidance of 13K vehicles for Q3, still 55k vehicles for 2015, and first model X deliveries by late September. In my opinion, the stock price has a much higher downside reaction potential than upside in the after hours following ER if Tesla guides below or above those numbers. I think releasing the Model X design studio in the next week or so and announcing the roll out of stationary storage may surprise investors. Of course, I'm not expecting anything today that will have any long-term impact on Tesla. What's everybody's general expectations for ER and the CC?

 

[ggr]

I think the street is expecting guidance of 13K vehicles for Q3, still 55k vehicles for 2015, and first model X deliveries by late September. In my opinion, the stock price has a much higher downside reaction potential than upside in the after hours following ER if Tesla guides below or above those numbers. I think releasing the Model X design studio in the next week or so and announcing the roll out of stationary storage may surprise investors. Of course, I'm not expecting anything today that will have any long-term impact on Tesla. What's everybody's general expectations for ER and the CC?

Personally, I'm expecting gangbusters results. There's something about the quiet confidence they've been projecting recently, and I did a factory tour about 6 weeks ago and had my socks blown off. I'm solidly long. We'll see.

 

[FluxCap]

Agree with most here, but I'll sum up my thoughts thusly:

In the immediate-term, I think from this letter and call, we will have the battle of positives and negatives for the attention of the market. Which items dominate share price movements near-term is anyone's guess.

As Bonnie said, I can foresee solid revenue projections from Tesla Energy's first customers making analysts drool, positive comments about margins on new Model S versions, maintaining guidance, and a Model X detail or two that gets people excited.

I can also see possible Model X release delays, possible deliveries misses, analyst concerns about demand stemming from the unexpected Model S incentive program announcment, and concerns/questions about ongoing cashflow projections, especially given Deepak's imminent departure.

I just have no clue here, but I'm not positioned aggressively going into this one, this time.

 

[Trev Page]

I can't help thinking the recent referral program is timed for a push to keep the new production line saturated given the increased capacity of 2000 units a week. Doing that could easily meet the remainder of guidance for the year.

 

[andrewket]

I'm curious about power wall sales as well. I submitted my request the day of the announcement and still haven't received an email or phone call. Stating they received "x orders" is misleading if tesla is counting people like me.

 

[bonnie]

Bonnie, which Powerwall did you get? How's it working out so far?

Hah. If I had one (or three) here, I wouldn't have posted and ruined a surprise. Purely my belief based on 'nothing I have'.

 

[Foghat]

I can't help thinking the recent referral program is timed for a push to keep the new production line saturated given the increased capacity of 2000 units a week. Doing that could easily meet the remainder of guidance for the year.

My belief is the referral program is about cost savings on salespeople, not really about any concern with demand. Let's face it, 80% of owners are better salespeople then what are at tesla stores right now. Most of sales are generated by referrals already. Why not pay less for prosumer then paying a heck of a lot more for expanding the sales teams globally? $1000 per sale is a no brainier.

In in other news, has anyone seen the supposed leaked photo of the Model 3 mock up? To me, it looks like a model s-esk Austin Martin which would be really striking design. Man, they are going to sell like hot cakes on purely looks alone, if true. Wonder if Elon might give a little surprise tidbit on the model 3 front today... Many "leaks" are planted to drum up interest into a lead up to an announcement...