Indeed, meant to write 'push Q2 beyond $251m' - typo.
Yes, so in Q1 Tesla increased (short term) deferred revenue by about $132m:
Q1'2019 Q4'2018 QoQ change
Current assets:
Deferred revenue 762,810 630,292 +132,518
Resale value guarantees 480,225 502,840 -22,615
Total assets:
Deferred revenue 1,157,343 990,873 +166,470
Resale value guarantees 211,390 328,926 -117,536
And they characterized it thusly in the Q1'19 10-Q:
Deferred revenue activity related to the access to our Supercharger network, internet connectivity, Autopilot, full self-driving and over-the-air software updates on automotive sales with and without resale value guarantee amounted to $1.04 billion and $882.8 million as of March 31, 2019 and December 31, 2018, respectively.
Deferred revenue is equivalent to the total transaction price allocated to the performance obligations that are unsatisfied, or partially unsatisfied, as of the balance sheet date. Revenue recognized from the deferred revenue balance as of December 31, 2018 was $37.4 million for the three months ended March 31, 2019.
Of the total deferred revenue on automotive sales with and without resale value guarantees, we expect to recognize $462.3 million of revenue in the next 12 months. The remaining balance will be recognized over the various performance periods of the obligations, which is up to the eight-year life of the vehicle.
Key takeaways:
- Note how they only recognized $37.4m in Q1, but guided to have an average of deferred revenue recognition of 462/4 = ~$115m.
- Some of that will be due to revenue growth, but some of it might be due to bulk recognition of past FSD and EAP deferred revenue they have in their $1.15b deferred revenue piggy bank on the balance sheet.
- Most of this $1.15b is money already paid by customers, but not yet recognized as GAAP income. When they recognize it then these will I believe increase GAAP income with almost 100% margin: there's no matching "deferred cost of goods" concept I believe. So it's a powerful tool.
- There's also the expiring resale value guarantees.
In principle Tesla will have internal milestones, which if they are met revenue can be recognized. So for example if someone paid $5k for FSD two years ago and now gets Advanced Summon - they might declare that another 20% of that obligation was met.
There's a fair amount of discretionary leeway there I believe, the only true limit is when customers start asking for money back for not delivered milestones/features actually promised on the order page. (This is I suspect why the TSLAQ eco-terrorists are trying to stir up so much 'I want my money back' discontent among Tesla owners - but owners are not biting.)
Not advice though.
(Maybe
@Doggydogworld,
@schonelucht or
@neroden has a more accurate read on the financial details?)
