EV maker reports Q2 revenue and earnings beat, while gross margins miss expectations

Tesla (TSLA) stock is higher after the bell as the electric-vehicle maker reported a revenue and earnings beat, but margins that came in below expectations.

For the quarter, Tesla reported Q2 revenue of $24.9 billion, topping street estimates of $24.51 billion, with adjusted EPS coming in at $0.91, compared to estimates of $0.81. That revenue figure represents a slight gain from Q1, but an over 45% gain from a year ago.

On the profitability end, Tesla reported adjusted net income of $3.1 billion, compared to estimates of $2.87 billion, and more than the $2.9 billion from Q1.

Tesla’s closely watched Q2 gross margin came in 18.2%, below analyst expectations of 18.8%. In Q1, Tesla’s gross margin was 19.3%, which itself was down from Q4’s 24%. Tesla’s operating margin fell below 10% to 9.6%, which is nearly 5% (493 bp) below what it was a year ago.

“Our operating margin remained healthy at approximately 10%, even with price reductions in Q1 and early Q2. This reflects our ongoing cost reduction efforts, the continued production ramp success in Berlin and Texas and the strong performance of our Energy and Services & Other businesses,” the company said in a statement.

Tesla also reported that it was working on Cybertruck equipment installation at its gigafactory in Austin, with initial production slated to begin “later this year” along with initial customer deliveries.

Over the last three months, Tesla stock has jumped a whopping 58%, adding over $100 in share price for investors riding the boom. Charging deals with legacy automakers, a massive run-up in AI related stocks that roped Tesla in, and strong production and delivery numbers for Q2 pulled Tesla stock higher, and led to analyst after analyst pulling their price targets higher. This weekend’s news that Giga Austin built its first production Cybertruck gave the stock a boost on Monday.

Earlier this month Tesla reported Q2 global production of 479,700 units, with deliveries of 466,140. The delivery figure easily topped Wall Street consensus estimates of 448,599 units, as well as the prior quarter’s total of 422,875. Both production and delivery totals for the second quarter were all-time records for Tesla.

Concerns about demand in Q1 seem to have been addressed by Tesla’s strong delivery numbers for Q2. Aside from growing volume and product updates on vehicles like the Cybertruck and upcoming gen-3 platform, in the near term analysts are laser-focused on gross margin.