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Near-future quarterly financial projections

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Preliminary Q3 2022 Earnings Estimate
These numbers will change once actual production and deliveries are reported.
Record highs galore. . . .deliveries, revenues, gross profit, operating profit, etc.
My non-GAAP EPS may be considered conservative at $1.36 but still much higher than Wall Street Consensus at $1.06.
The Operating Margin at 20.8% is impressive considering two new factories are still ramping.

1662830207869.png
 
Preliminary Q3 2022 Earnings Estimate
These numbers will change once actual production and deliveries are reported.
Record highs galore. . . .deliveries, revenues, gross profit, operating profit, etc.
My non-GAAP EPS may be considered conservative at $1.36 but still much higher than Wall Street Consensus at $1.06.
The Operating Margin at 20.8% is impressive considering two new factories are still ramping.

View attachment 851063
Thanks for this.

I'd like to see their Energy & Storage grow more than you're forecasting. Not that it'll have a huge net impact yet, but we've heard indications they're ramping now (the leaked presentation Rob did an episode on).
 
Preliminary Q3 2022 Earnings Estimate
These numbers will change once actual production and deliveries are reported.
Record highs galore. . . .deliveries, revenues, gross profit, operating profit, etc.
My non-GAAP EPS may be considered conservative at $1.36 but still much higher than Wall Street Consensus at $1.06.
The Operating Margin at 20.8% is impressive considering two new factories are still ramping.

View attachment 851063
I didn't at first notice that you mentioned consensus earnings of $1.06, so I went to Yahoo Finance to look there... and they don't show any Q3 consensus. The chart tops at $1.10, so it should have been there, and a couple of weeks ago they did show something much lower.
 
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Reactions: Mike Ambler
I didn't at first notice that you mentioned consensus earnings of $1.06, so I went to Yahoo Finance to look there... and they don't show any Q3 consensus. The chart tops at $1.10, so it should have been there, and a couple of weeks ago they did show something much lower.

Yes - I went to Yahoo first and noticed the numbers missing.
I eventually used Market Watch:

 
Thanks for this.

I'd like to see their Energy & Storage grow more than you're forecasting. Not that it'll have a huge net impact yet, but we've heard indications they're ramping now (the leaked presentation Rob did an episode on).
Energy is a tough segment to forecast. There is some evidence that Tesla can do much better than what I have forecasted.
Here is how I forecast the number. We saw huge growth in Solar in Q2 (106 MW) so I kept Q3 at 100MW thinking Q2 was not typical.
I grew storage by 20% in Q3 vs Q2.

1662852694598.png
 
Most of my numbers ended up very close to @The Accountant's this time. My GAAP EPS (diluted) estimate is $1.28 which translates to about $1.39 non-GAAP, which is 30% above the supposed Wall Street analyst consensus of $1.06/share. I still am focused more focused on Q4 and next year because almost all of my call options expire between Jan '23 and Jun '24.

This is a weird quarter with a lot of substantial uncertainties, especially on margins. How much did the 2022 price increases come into play and how much will still be in the backlog? What's the impact of relaxing cost pressure on logistics, chips and raw materials? How much of the extra spike in cost in Q2 over Q1 come from one-time expenses with shutting off Shanghai?

The difference in GAAP EPS estimates between @The Accountant's model and mine is mainly coming from automotive unit economics and Energy. My model forecasts a $400 bigger jump in automotive gross profit per car and another $320 per car on top of that for regulatory credits for about $0.7k total difference per car on average.

Q2 ActualQ3 AccountantQ3 Gigapress
Automotive Sales$ 14.5$ 20.7$ 20.7
Regulatory Credits$ 0.34$ 0.300$ 0.420
Total Auto Revenues$ 14.5$ 21.0$ 21.1
Energy$ 0.87$ 0.99$ 1.30
Service & Other$ 1.47$ 1.65$ 1.62
Avg Rev/Veh excl Reg Credits (K)$ 56.0$ 55.4$ 55.2
Avg CoGS/Veh (K)$ 41.3$ 39.2$ 38.6
Avg Gross Profit/Veh excl Credits (K)$ 14.7$ 16.2$ 16.6
Auto Gross Margin27.9%30.3%32.0%
Auto Gross Margin excl. Credits26.2%29.3%30.1%
Research & Development (M)$ (667)$ (687)$ (700)
Sales, General & Administrative (M)$ (961)$ (940)$ (990)
Total Operating Expenses (B)$ (1.63)$ (1.63)$ (1.69)
GAAP Net Income (B)$ 2.26$ 4.38$ 4.52
Shares Outstanding, Diluted (B)3.4653.503.52
GAAP EPS, Diluted$ 0.65$ 1.25$ 1.28
Fremont136139.7140
Shanghai113206211
Austin510.312
Berlin51713
Total Global259373376

I modeled for the QoQ changes based on the following factors:

1. Price hikes from March and April starting to apply to more orders being fulfilled
Tesla Daily's table summarizes the price increases in 2021 and 2022 thus far. I believe we're mostly done with the 2021 price increases hitting the financials, because Q2's $56.0k average revenue per vehicle was up $5.3k from Q4 '21. That's a little more than the cost increases across Aug to Nov last year, but S&X contributed to that rise. From Q4 '21 to Q2 '22, S&X grew from 3.4% of mix to 5.8%. I estimate S&X to have average RPV about $58k higher than 3&Y, so this is roughly (5.8% - 3.4%) * $58k = $1.4k of the revenue rise. So, $5.3k - $1.4k = $3.9k must've been coming primarily from the price hikes coming into effect the rest of the way plus maybe a bit of extra revenue from FSD and insurance.

The big question now is the timing of the orders with post-March and April prices. Starting in Q3 this will impact the financials more and more. Q3 started in July, which is a week shy of 4 months after the prices began to rise 3 months after the final increase in April. After failure earlier this year in trying to use estimated delivery dates on Tesla's online ordering tool to predict price hike timing, now I'm just going to go with a simpler estimation method and assume most deliveries from Mar & Apr were delivered 6 to 9 months later, such that 25% of the price increase hits in Q3, 50% in Q4, and 25% in Q1. It looks like the average price hike was about $4k, so this translates to $1k increase in Q3, $2k in Q4, and $1k in Q1.

1662852225334.jpeg

2. Mix shifts
Shanghai is contributing more in Q3 than Q2. Model 3 will have had less share in Q3 and the S, X and Y will increase share.

I haven't yet built a calculator with estimates broken out by site and model, so this is approximate. On average, I think 3&Y probably are in the vicinity of $35k COGS and $50k rev/car, and S&X probably $65k COGs and $108k rev/car. Model Y costs about $6k more than Model 3, and Model S&X cost about $60k more than Model 3.
  • I have S&X share of mix declining 1% QoQ from 5.8% to 4.8%
    • $60k * 1% = $0.6k downward effect on revenue
    • $30k * 1% = $0.3k downward effect on cost
    • Net change is $0.3k reduction in average gross profit per car
  • I have Y share rising from a roughly estimated 57% share in Q2 to 60% in Q3
    • $6k * 3% = $0.18k upward effect on revenue
    • Costs about the same as Model 3
    • Net effect is $0.18k increase in average gross profit per car
  • Net effect from model shifts is about $0.1k reduction in average revenue per vehicle and $1.1k decrease in profit per vehicle
I guess Shanghai has about a $4k per vehicle gross profit advantage over Fremont, although I haven't looked into this in depth. Shanghai delivered 182174 in Q1, 112583 in Q2 and an estimated 211000 in Q3. If Shanghai has a ~$4k gross profit per car advantage vs Fremont and will increase from 117k out of 255 in Q2 to 211k out of 376k deliveries in Q3, then that's an increase of $4k * (211/376 - 117/255) = $0.4k profit per car.

Neglect Berlin and Austin because they're still a small portion.

3. Lower logistics costs
Wild guess that this cost $100M more in Q3 than Q2, because shipping costs have been falling globally. If anyone knows a good way to estimate this better, I'd like to hear it.

$100M / 373k vehicles = $0.27k saved per vehicle

4. Regulatory credit sales revert to mean
Since Q1 2020, which was when the EU tightened greenhouse gas emissions requirements if I remember correctly, regulatory credit sales have averaged $407M per quarter. There doesn't appear to be any trend (see chart below) so I went with the average plus a $13M bonus to take it to $420M for good karma. This is a $120M delta between our models, which translates to about a $0.03/share.

1662848155133.png

5. No inefficiency of unplanned start-stops at Shanghai
Wild guess that this cost $100M in Q2 over Q1. If anyone knows a good way to estimate this better, I'd like to hear it.

$100M / 373k vehicles = $0.27k saved per vehicle

Tesla guided for explosive growth of the Energy business, saying "it will grow like kelp on steroids" and it's really a question of whether it will double, triple or quadruple in 2022. There are signs of this happening in Q3 finally.
 
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I found a mistake but I don’t think the error flowed through to the final EPS calculation. I’ll need to revisit this tomorrow. It does seem to have affected average revenue per vehicle and that should actually be steady QoQ at $56k.
  • I have S&X share of mix declining 1% QoQ from 5.8% to 4.8%
    • $60k * 1% = $0.6k downward effect on revenue
    • $30k * 1% = $0.3k downward effect on cost
    • Net change is $0.3k reduction in average gross profit per car
  • I have Y share rising from a roughly estimated 57% share in Q2 to 60% in Q3
    • $6k * 3% = $0.18k upward effect on revenue
    • Costs about the same as Model 3
    • Net effect is $0.18k increase in average gross profit per car
  • Net effect from model shifts is about $0.1k $0.4k reduction in average revenue per vehicle and $1.1k $0.1k decrease in profit per vehicle
 
Here are my Q3 forecasts, and the current Q4 one for a bonus:
1662905919277.png

Note my model has yet to include a 3:1 share split modifier
1662905987262.png

Putting in the 3:1 share split EPS (GAAP) = $3.83/3 = $1.28

To be honest I don't think the things that get marked as being non-GAAP (i.e. non-recurring) often are in fact non-recurring. I think in practice they keep on recurring. So I don't actually calculate a non-GAAP number. TheAccountant tells me that the only difference for Tesla between GAAP and non-GAAP is the Stock Based Comp (SBC) item. He goes on to tell me my equivalent non-GAAP number would be about $1.39 adding back the SBC. But personally I think the non-recurring stuff (for TSLA) is really GAAP-ish and should be counted by any investor in forming a view so I personally don't develop a non-GAAP number.

If one goes on to plug the below share prices in at end Q3 and end Q4 then you can see how the ratios would look. Note this excludes the 3:1 split, not that that makes a difference, just make a mental adjustment yourselves.

1662906277999.png


And here was the vehicle production I assumed to generate the above, and I also assume production = sales in the forecast quarters, i.e. no stock changes. My Berlin and Austin numbers are likely a bit iffy.
1662906392237.png
For the Energy Division = S&S here is what I assume - this was my original forecast which Tesla has been falling woefully behind. It remains to be seen whether they can climb back onto my forecast, or whether they will continue to disappoint
1662906519142.png
 
Key differences between @petit_bateau's Q3 estimates and mine and @The Accountant 's.

  • Deliveries substantially higher at 386k, mostly coming from 227k expectation for Shanghai
    • Per CPCA data Tesla sold 105k from Giga Shanghai in July and August, so this is an estimate for a monster 112k September. Could happen. Tesla had like 10k cars of inventory at the end of August. This depends on how much inventory they finish with and just how good the line upgrades are.

  • Average revenue per vehicle -$0.1k QoQ change to $57.3k

  • Average cost per vehicle -$0.6k change QoQ, going to $40.7k

  • Energy ramp estimate is more aggressive (note: for mine I didn't research much and just slapped 50% QoQ growth onto the revenue and cost numbers we had in Q2)

All three of our models give almost the same end result for non-GAAP EPS at around $1.37 which is 30% above Wall Street published estimates. $1.37 is $5.50 annualized, which happens to be the average Street forecast for FY 2023 earnings, so I would have to imagine that analysts will need to revise their 2023 estimates and price targets. There's so much uncertainty this quarter, I wouldn't be surprised to see the beat be anywhere between 20 and 40%.

Who knows how TSLA would react to yet another 30% beat, but roughly if the price also rises 30% to keep the forward P/E ratio around 70-80, then we'd be at ~$400.

Not investment or financial advice.
 
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Key differences between @petit_bateau's Q3 estimates and mine and @The Accountant 's.

  • Deliveries substantially higher at 386k, mostly coming from 227k expectation for Shanghai
    • Per CPCA data Tesla sold 105k from Giga Shanghai in July and August, so this is an estimate for a monster 112k September. Could happen. Tesla had like 10k cars of inventory at the end of August. This depends on how much inventory they finish with and just how good the line upgrades are.

  • Average revenue per vehicle -$0.1k QoQ change to $57.3k

  • Average cost per vehicle -$0.6k change QoQ, going to $40.7k

  • Energy ramp estimate is more aggressive (note: for mine I didn't research much and just slapped 50% QoQ growth onto the revenue and cost numbers we had in Q2)

All three of our models give almost the same end result for non-GAAP EPS at around $1.37 which is 30% above Wall Street published estimates. $1.37 is $5.50 annualized, which happens to be the average Street forecast for FY 2023 earnings, so I would have to imagine that analysts will need to revise their 2023 estimates and price targets. There's so much uncertainty this quarter, I wouldn't be surprised to see the beat be anywhere between 20 and 40%.

Who knows how TSLA would react to yet another 30% beat, but roughly if the price also rises 30% to keep the forward P/E ratio around 70-80, then we'd be at ~$400.

Not investment or financial advice.
It's reassuring that three clever fellows (or fellowettes as the case may be) land at such a tight grouping via independent modelling. Appreciate you all taking the time to post your results.
 
I found a mistake but I don’t think the error flowed through to the final EPS calculation. I’ll need to revisit this tomorrow. It does seem to have affected average revenue per vehicle and that should actually be steady QoQ at $56k.
Fixed. New GAAP EPS estimate is $1.32. Not sure what that would be non-GAAP.

I'm still going to roughly go with Shanghai having $4k more profit per car than the average. Assume $10k cheaper and $6k less revenue.

Since I'm looking at Shanghai gaining 10% mix share QoQ, here's the corrected version of the calculation I did yesterday:

$41.3 (Q2 cost actual)
- .3 (Model S declining mix share)
- 10*10% (Shanghai increasing mix share)
- .27*2 ($100M savings each on logistics and supply costs)
= $39.5k expected global average CoGS per car in Q3.​
$56.0k (Q2 rev actual)
+ 1 (Leading edge of price increase wave from Mar & Apr)
- 0.6. (Model S declining mix share)
+ 0.18 (Model Y increasing mix share)
-6*10% (Shanghai increasing mix share)
= $56.0k expected global average Rev/car in Q3.​

This fix only slightly affects my original estimate of gross profit per car. My GAAP EPS number actually went slightly up though, to $1.32, mainly because I also adjusted my expectation for income tax provision by $100M ($0.03/share), taking it down to 11.5% of pre-tax income. There might also have been a couple cents per share worth of rounding differences. I'm not trying to get this quarter precisely right. This quarter I expect a nice beat, but the real party starts when the Mar+Apr price jumps come into full effect in Q4 and Q1 just as the new factories drag down cost once in volume production.

Q2 ActualQ3 AccountantQ3 Gigapress
Automotive Sales$ 14.5$ 20.7$ 21.0
Regulatory Credits$ 0.34$ 0.300$ 0.420
Total Auto Revenues$ 14.5$ 21.0$ 21.4
Energy$ 0.87$ 0.99$ 1.30
Service & Other$ 1.47$ 1.65$ 1.62
Avg Rev/Veh excl Reg Credits (K)$ 56.0$ 55.4$ 56.0
Avg CoGS/Veh (K)$ 41.3$ 39.2$ 39.5
Avg Gross Profit/Veh excl Credits (K)$ 14.7$ 16.2$ 16.5
Auto Gross Margin27.9%30.3%31.5%
Auto Gross Margin excl. Credits26.2%29.3%29.5%
Research & Development (M)$ (667)$ (687)$ (700)
Sales, General & Administrative (M)$ (961)$ (940)$ (990)
Total Operating Expenses (B)$ (1.63)$ (1.63)$ (1.69)
GAAP Net Income (B)$ 2.26$ 4.38$ 4.63
Shares Outstanding, Diluted (B)3.4653.503.52
GAAP EPS, Diluted$ 0.65$ 1.25$ 1.32
Fremont136139.7140
Shanghai113206211
Austin510.312
Berlin51713
Total Global259373376
 
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Thanks for this.

I'd like to see their Energy & Storage grow more than you're forecasting. Not that it'll have a huge net impact yet, but we've heard indications they're ramping now (the leaked presentation Rob did an episode on).
Just an fyi. I was catching up on this thread this morning and then caught this tonight. Interesting discussion of energy/battery growth this quarter.

 
I find it useful to get an average of the quarter EPS projections. Here is what I've tabulated so far:

SourceQ3 Estimate (GAAP - Diluted)
The Accountant (TMC)$1.25
Gigapress (TMC)$1.32
petit_bateau (TMC)$1.28
Tesla Economist (YT)$1.64
James Stephenson (YT)$1.25
Wall Street Consensus$1.06

I tend to leave the Wall Street consensus out of my average since it is usually quite wrong. Without that the average is $1.35. I think Lee's (Tesla Economist) is overly optimistic - but we'll know for sure in a few weeks.

Thank you to all those that take the time to build their models and to share them with the community. Truly appreciated!
 
I find it useful to get an average of the quarter EPS projections. Here is what I've tabulated so far:

SourceQ3 Estimate (GAAP - Diluted)
The Accountant (TMC)$1.25
Gigapress (TMC)$1.32
petit_bateau (TMC)$1.28
Tesla Economist (YT)$1.64
James Stephenson (YT)$1.25
Wall Street Consensus$1.06

I tend to leave the Wall Street consensus out of my average since it is usually quite wrong. Without that the average is $1.35. I think Lee's (Tesla Economist) is overly optimistic - but we'll know for sure in a few weeks.

Thank you to all those that take the time to build their models and to share them with the community. Truly appreciated!
Matt Smith (Good Soil) is at $1.58. He ends up with 34.7% automotive gross margin excl. credits after a fairly detailed analysis.
 
I find it useful to get an average of the quarter EPS projections. Here is what I've tabulated so far:

SourceQ3 Estimate (GAAP - Diluted)
The Accountant (TMC)$1.25
Gigapress (TMC)$1.32
petit_bateau (TMC)$1.28
Tesla Economist (YT)$1.64
James Stephenson (YT)$1.25
Wall Street Consensus$1.06

I tend to leave the Wall Street consensus out of my average since it is usually quite wrong. Without that the average is $1.35. I think Lee's (Tesla Economist) is overly optimistic - but we'll know for sure in a few weeks.

Thank you to all those that take the time to build their models and to share them with the community. Truly appreciated!

The wall street consensus of $1.06 is Non-GAAP EPS. Since you are presenting GAAP in your table, the GAAP EPS for Wall Street would be about $0.95.
Just to get an idea on how far off wall street is from the "amateur" forecasters.

Also - about a year ago, Tesla Economist looked overly optimistic and he actually game the closest to the final reported number.
The Tesla Economist has the simplest model and sometimes it's the simple model that gets it right. Would love to see him nail it again.