2017 Q4 earnings estimates

[luvb2b]

now that delivery numbers are out figure i would put out a preliminary q4 estimate. comments welcome, i usually fine tune the model based on forum discussion. thanks.

…

ls veh % total

avg price s+x

avg price model 3

revenue

auto sales ex 3

auto sales mod 3

auto leasing

1 time autopilot

zev credits

total auto

energy storage

solarcity

grohmann

services/other

total revenue

cost of revenue

auto sales ex 3

auto sales mod 3

auto leasing

total auto

energy storage

solarcity

grohmann

services & other

total cost of rev

gross profit

auto gaap ex 3 gm

auto-zev ex 3 gm

model 3 gm

auto-zev incl 3 gm

storage gm

scty gm

grohmann gm

services gm

opex

tesla r&d

tesla sg&a

1time acq cost

solarcity r&d

solarcity sg&a

total opex

op income

interest inc

interest exp

scty interest

other income exp

1time scty gain

pretax income

income tax

net income

non-cont int.

net inc to common

basic shares

diluted shares

diluted gaap eps

gaap net income

- stock based comp

- one time scty

non-gaap net income

non-gaap diluted eps

[TD2] luv q4-17 [/TD2][TD2] Sep-17 [/TD2][TD2] Jun-17 [/TD2][TD2] Dec-16 [/TD2] [TD2] 0.21 [/TD2][TD2] 0.21 [/TD2][TD2] 0.19 [/TD2][TD2] 0.25 [/TD2] [TD2] 103.00 [/TD2][TD2] 100.86 [/TD2][TD2] 107.27 [/TD2][TD2] 103.28 [/TD2] [TD2] 50.00 [/TD2][TD2] 53.00 [/TD2][TD2] 0.00 [/TD2][TD2] 0.00 [/TD2] [TD2]2,304,398[/TD2][TD2]2,064,965[/TD2][TD2]1,913,852[/TD2][TD2]1,719,609[/TD2] [TD2]77,500[/TD2][TD2]11,766[/TD2][TD2]0[/TD2][TD2]0[/TD2] [TD2]263,387[/TD2][TD2]286,158[/TD2][TD2]272,764[/TD2][TD2]254,674[/TD2] [TD2]0[/TD2][TD2]0[/TD2][TD2]0[/TD2][TD2]0[/TD2] [TD2]0[/TD2][TD2]0[/TD2][TD2]100,000[/TD2][TD2]19,840[/TD2] [TD2] 2,645,285 [/TD2][TD2] 2,362,889 [/TD2][TD2] 2,286,616 [/TD2][TD2] 1,994,123 [/TD2] [TD2]65,000[/TD2][TD2]44,505[/TD2][TD2]15,680[/TD2][TD2]47,285[/TD2] [TD2]275,000[/TD2][TD2]273,000[/TD2][TD2]271,100[/TD2][TD2]84,100[/TD2] [TD2]5,100[/TD2][TD2]11,100[/TD2][TD2]10,200[/TD2][TD2]0[/TD2] [TD2]300,000[/TD2][TD2]293,181[/TD2][TD2]205,961[/TD2][TD2]159,123[/TD2] [TD2] 3,290,385 [/TD2][TD2] 2,984,675 [/TD2][TD2] 2,789,557 [/TD2][TD2] 2,284,631 [/TD2] [TD2]1,755,733[/TD2][TD2]1,662,297[/TD2][TD2]1,472,578[/TD2][TD2]1,372,604[/TD2] [TD2]146,150[/TD2][TD2]93,325[/TD2][TD2]0[/TD2][TD2]0[/TD2] [TD2]170,106[/TD2][TD2]175,224[/TD2][TD2]175,433[/TD2][TD2]171,818[/TD2] [TD2] 2,071,989 [/TD2][TD2] 1,930,846 [/TD2][TD2] 1,648,011 [/TD2][TD2] 1,544,422 [/TD2] [TD2]71,500[/TD2][TD2]59,188[/TD2][TD2]19,414[/TD2][TD2]60,779[/TD2] [TD2]192,500[/TD2][TD2]178,100[/TD2][TD2]184,348[/TD2][TD2]67,000[/TD2] [TD2]3,825[/TD2][TD2]10,100[/TD2][TD2]7,600[/TD2][TD2]0[/TD2] [TD2]345,000[/TD2][TD2]357,301[/TD2][TD2]263,569[/TD2][TD2]177,152[/TD2] [TD2] 2,684,814 [/TD2][TD2] 2,535,535 [/TD2][TD2] 2,122,942 [/TD2][TD2] 1,849,353 [/TD2] [TD2] 605,571 [/TD2][TD2] 449,140 [/TD2][TD2] 666,615 [/TD2][TD2] 435,278 [/TD2] [TD2]25.0%[/TD2][TD2]21.8%[/TD2][TD2]27.9%[/TD2][TD2]22.6%[/TD2] [TD2]25.0%[/TD2][TD2]21.8%[/TD2][TD2]24.6%[/TD2][TD2]21.8%[/TD2] [TD2]-88.6%[/TD2][TD2]-693.2%[/TD2][TD2]0.0%[/TD2][TD2]0.0%[/TD2] [TD2]21.7%[/TD2][TD2]18.3%[/TD2][TD2]24.6%[/TD2][TD2]21.8%[/TD2] [TD2]-10.0%[/TD2][TD2]-33.0%[/TD2][TD2]-23.8%[/TD2][TD2]-28.5%[/TD2] [TD2]30.0%[/TD2][TD2]34.8%[/TD2][TD2]32.0%[/TD2][TD2]20.3%[/TD2] [TD2]25.0%[/TD2][TD2]9.0%[/TD2][TD2]25.5%[/TD2][TD2]0.0%[/TD2] [TD2]-15.0%[/TD2][TD2]-21.9%[/TD2][TD2]-28.0%[/TD2][TD2]-11.3%[/TD2] [TD2]301,622[/TD2][TD2]301,622[/TD2][TD2]324,774[/TD2][TD2]234,960[/TD2] [TD2]512,998[/TD2][TD2]512,998[/TD2][TD2]407,757[/TD2][TD2]365,909[/TD2] [TD2]0[/TD2][TD2]0[/TD2][TD2]0[/TD2][TD2]15,807[/TD2] [TD2]30,000[/TD2][TD2]30,000[/TD2][TD2]45,000[/TD2][TD2]11,000[/TD2] [TD2]140,000[/TD2][TD2]140,000[/TD2][TD2]130,000[/TD2][TD2]74,300[/TD2] [TD2] 984,620 [/TD2][TD2] 984,620 [/TD2][TD2] 907,531 [/TD2][TD2] 701,976 [/TD2] [TD2] -379,049 [/TD2][TD2] -535,480 [/TD2][TD2] -240,916 [/TD2][TD2] -266,698 [/TD2] [TD2]6,000[/TD2][TD2]5,531[/TD2][TD2]4,785[/TD2][TD2]2,179[/TD2] [TD2]-65,000[/TD2][TD2]-68,409[/TD2][TD2]-54,441[/TD2][TD2]-43,104[/TD2] [TD2]-54,000[/TD2][TD2]-48,700[/TD2][TD2]-54,000[/TD2][TD2]-22,000[/TD2] [TD2]-12,000[/TD2][TD2]-24,390[/TD2][TD2]-41,208[/TD2][TD2]32,524[/TD2] [TD2]0[/TD2][TD2]0[/TD2][TD2]0[/TD2][TD2]88,700[/TD2] [TD2] -504,049 [/TD2][TD2] -671,448 [/TD2][TD2] -385,780 [/TD2][TD2] -208,399 [/TD2] [TD2]20,000[/TD2][TD2]-285[/TD2][TD2]15,647[/TD2][TD2]11,070[/TD2] [TD2] -524,049 [/TD2][TD2] -671,163 [/TD2][TD2] -401,427 [/TD2][TD2] -219,469 [/TD2] [TD2]-50,000[/TD2][TD2]-51,787[/TD2][TD2]-65,030[/TD2][TD2]-98,132[/TD2] [TD2] -474,049 [/TD2][TD2] -619,376 [/TD2][TD2] -336,397 [/TD2][TD2] -121,337 [/TD2] [TD2]167,500[/TD2][TD2]167,294[/TD2][TD2]165,212[/TD2][TD2]155,024[/TD2] [TD2]167,500[/TD2][TD2]167,294[/TD2][TD2]165,212[/TD2][TD2]155,024[/TD2] [TD2] -2.83 [/TD2][TD2] -3.70 [/TD2][TD2] -2.04 [/TD2][TD2] -0.78 [/TD2] [TD2]-474,049[/TD2][TD2]-619,376[/TD2][TD2]-336,397[/TD2][TD2]-121,337[/TD2] [TD2]120,000[/TD2][TD2]112,653[/TD2][TD2]116,042[/TD2][TD2]87,713[/TD2] [TD2]0[/TD2][TD2]18,225[/TD2][TD2]0[/TD2][TD2]-72,920[/TD2] [TD2]-354,049[/TD2][TD2]-488,498[/TD2][TD2]-220,355[/TD2][TD2]-106,544[/TD2] [TD2] -2.11 [/TD2][TD2] -2.92 [/TD2][TD2] -1.33 [/TD2][TD2] -0.69 [/TD2]

 

[GoTslaGo]

Dumb question:

Based on the letter:

15200 S delivered
13120 X delivered

28320 S&X delivered. At 100 ASP (being lazy I am) = 2.832 billion.

Your total revenue for S&X & lease = 2567785000; approx 25.6k S&X.

Is the difference derived from accounting for vehicles in transit from the previous quarter?

 

[tlo]

What is the cash flow based on your estimates?

 

[luvb2b]

not dumb, when i first did this i had same head-scratcher.

i found i need to take as direct revenue the percent of non-leased vehicles at their asp, so 28320 * 0.79 * 103 - ~ 2.3b

the leased vehicle revenue is realized over time, and there's a fairly complex mix of resale value guarantees and other stuff that go into it. the salient feature is that you're seeing only a fraction of the revenue of the leased vehicles reported in any quarter. this is the reason for the discrepancy with your estimate.

vehicles in-transit are inventory and not part of revenue.

Dumb question:

Based on the letter:

15200 S delivered
13120 X delivered

28320 S&X delivered. At 100 ASP (being lazy I am) = 2.832 billion.

Your total revenue for S&X & lease = 2567785000; approx 25.6k S&X.

Is the difference derived from accounting for vehicles in transit from the previous quarter?

 

[luvb2b]

which cash flow? i have to spend more time to answer that well, but it is quite possible cash flow from ops is positive due to inventory drawdown and reservations of roadsters and semis. cash flow from investing is widely negative. cash flow from financing should be positive i think. i'll try to work out some more details around this over coming days and post here.

What is the cash flow based on your estimates?

 

[schonelucht]

I will post my numbers tomorrow but I have smaller loss. With regards to cash-flow 7730 cars that bring in 80k each and some $400M in extra customer deposits, I too have them being cash positive for the quarter even after $1B of capex

 

[GoTslaGo]

not dumb, when i first did this i had same head-scratcher.

i found i need to take as direct revenue the percent of non-leased vehicles at their asp, so 28320 * 0.79 * 103 - ~ 2.3b

the leased vehicle revenue is realized over time, and there's a fairly complex mix of resale value guarantees and other stuff that go into it. the salient feature is that you're seeing only a fraction of the revenue of the leased vehicles reported in any quarter. this is the reason for the discrepancy with your estimate.

vehicles in-transit are inventory and not part of revenue.

Thanks! That makes more sense!

 

[tlo]

which cash flow? i have to spend more time to answer that well, but it is quite possible cash flow from ops is positive due to inventory drawdown and reservations of roadsters and semis. cash flow from investing is widely negative. cash flow from financing should be positive i think. i'll try to work out some more details around this over coming days and post here.

I think an important one is net decrease in cash and cash equivalents. If say cash from ops and cash from financing are breakeven and net cash from investing activities stays constant from last Q, that's -1.3b. Cash and cash equivalents at end of Q would then be $2.2b. I guess a lot depends on how much in reservations they received for the roadster and semi.

 

[generalenthu]

The assumptions look reasonable except for sg&a. Why would think it will not go up. Unless they've guided it to be flat.

 

[schonelucht]

@luvb2b quick question first : why do you have leasing revenue lower this quarter than Q2 and Q3? And why is interest expense also lower than Q3?

For the rest of my discussion, I am assuming no ZEV credits. After fixing an embarrasing mistake in my model (messed up x1000 and x1000000 multiplier) I have losses at $325M. The main difference is the amount of leased cars. I have it lower because of two reasons 1) higher share of sales in market that do not offer Tesla leasing (to be honest, I don't know if Norway is Tesla or 3rd party leasing) 2) higher proportion of inventory sales which I somehow convinced myself are more likely bought on a tradein or loan. A lower percentage of leases obviously translates in a higher automotive revenue stream which I have at nearly $3B. I also think you underestimate energy storage. This quarter the South Australian project drops and that alone represents easily $40M of revenue (but cost of goods too of course).

On the operational expense side, I have R&D slightly going up to account for more Grohman work shifting from external parties to internal development. Also maybe some emergency R&D costs for the battery assembly lines. For SG&A I have a modest increase. The effort to put out Model 3 starts to have its impact with new delivery structures, the current CFO isn't as focused on cash as the previous one and the rollout of superchargers continues (partially paid through SG&A as a marketing expense)

Finally I also don't have any tax provisions. They didn't do so (materially) last quarter. I suppose because enough capex spending offset liabilities (Gigafactory&Buffalo spending which grant tax breaks?). If that is true, they'll likely have the same thing this quarter.

 

[schonelucht]

If say cash from ops and cash from financing are breakeven and net cash from investing activities stays constant from last Q, that's -1.3b.

Cash from ops is pretty much a given to be positive. They sold 7730 cars out of inventory. That alone monetized inventory to somewhere around half a billion. And then there is the likely growth in customer deposits from the Semi&Roadster reveal. Together with improved losses on higher sales versus flat operational expenses is in my eyes enough to turn that -1.3B in something much closer to 0.

 

[mrdoubleb]

Paging @luvb2b and @schonelucht , but anyone can answer, of course.

If they have indeed gotten rid of the 3rd shift on Model S & X, wouldn't that increase gross profit on those cars? I know it's hard to estimate as I don't imagine the 3rd shift built exactly 1/3 of the cars, but they only suffered a penalty of 13% less vehicles produced. They've specifically said that due to increased automation they can now remove the 3rd shift with minimal impact on production (they estimated 10%, I think we got 13).

 

[schonelucht]

It's super hard to estimate indeed. First of all, third shift was not only active on all stations so it's certainly not 1/3 of the employees that got shifted over. Is it 10%? 20%? Who knows. But yes, throwing labour at bottleneck places is inefficient and not doing so should increase gross margin. On the other hand there are a number of costs that acrue on time basis instead of production unit basis. For those, having less produced units per time slice decreases gross margin. There is nearly 0% visibility for us retail investors to make any reasonable estimation here. But since they haven't specifically given updated gross margin guidance at the same time they said they'd do this I suspect it's going to be a wash.

 

[neroden]

I'm not going to try to predict this. There's so many one-time things going on that I don't think it's worthwhile, personally. Interesting to see y'all's predictions, though. More interesting would be predictions for Q1 or Q2.

 

[schonelucht]

How many Model 3 buyers will trade-in a car? And more to the point, how many will trade in an S or X? Because Tesla tends to keep those on the books instead of offloading them to wholesalers. If it takes a while before they get monetized again through the used-car sales program. Just 1000 trade-ins can easily already be $40M. This effect may be considerable in Q1 and especially Q2.

 

[Reciprocity]

Are we sure 100% of the AP 2.0 rev was recognized? Someone raised an interesting point in the general thread that the rain sensing feature was realeased Dec. 31st. Though people didn't report it update until the 1st when they woke.

Is rain sensing even AP 2.0. I believe it is because it's only available to those who purchased AP 2.0 and finally brings it into parity with AP 1. Probably a small amount, but even 5% x 100,000 cars x 70% take rate = $17.5M. maybe?

 

[RiverCard]

Cash from ops is pretty much a given to be positive. They sold 7730 cars out of inventory. That alone monetized inventory to somewhere around half a billion.

"In Q4, Tesla delivered 29,870 vehicles... Q4 production totaled 24,565 vehicles" = 5,305 plus

" about 4,820 S & X in transit at 9/30/17" minus "2,520 S & X in transit at 12/31/17" = 2,300"

So 5,305 plus 2,300 = 7,605-- Close?

~7,700 x $80k (ie Inventory is lower of COGS or FMV)= $616 million--Close?

What happens in Q1?

 

[Out4aDuck]

"In Q4, Tesla delivered 29,870 vehicles... Q4 production totaled 24,565 vehicles" = 5,305 plus

" about 4,820 S & X in transit at 9/30/17" minus "2,520 S & X in transit at 12/31/17" = 2,300"

So 5,305 plus 2,300 = 7,605-- Close?

~7,700 x $80k (ie Inventory is lower of COGS or FMV)= $616 million--Close?

What happens in Q1?

Looking just at S&X, there were 28320 delivered and 22140 produced. A difference of 6180. The number of S&X in transit decreased by 2300. Therefore, S&X inventory was reduced by 3880. It was also reduced by 2174 in Q3.

 

[schonelucht]

"In Q4, Tesla delivered 29,870 vehicles... Q4 production totaled 24,565 vehicles" = 5,305 plus

" about 4,820 S & X in transit at 9/30/17" minus "2,520 S & X in transit at 12/31/17" = 2,300"

My reasoning was that due to the 'negative' cash-flow on Model 3 ramp (payment terms with suppliers allow 2 months, but payment from customers is at delivery) we can consider the model 3's also to be fully contributing to cash generation this quarter. I should have been more clear. That leaves my second error where I used Model 3's produced instead of Model 3's delivered. Sorry for the mistakes. Together with the cost of trade-ins, the impact of this because significant. Maybe we will see a noticeable cash drain. Not $1.3B by far though.

 

[ValueAnalyst]

My reasoning was that due to the 'negative' cash-flow on Model 3 ramp (payment terms with suppliers allow 2 months, but payment from customers is at delivery) we can consider the model 3's also to be fully contributing to cash generation this quarter. I should have been more clear. That leaves my second error where I used Model 3's produced instead of Model 3's delivered. Sorry for the mistakes. Together with the cost of trade-ins, the impact of this because significant. Maybe we will see a noticeable cash drain. Not $1.3B by far though.

I think you mean negative cash cycle, but that's a cash flow discussion, whereas I think this thread is about income statement.