Some are surprised, others saw it coming. Tesla has a lot of doubters at the moment, and the only way to silence them was to show that the company can be profitable, at least temporarily. Back in September, Elon Musk said that this goal was within reach, and urged employees to maximize deliveries and minimize costs to make it happen.
In its third quarter letter to shareholders, Tesla announced its first quarterly profit in three years: $21.88 million on revenue of $2.30 billion, or 71 cents a share, a surprise for Wall Street analysts, who were predicting another fat loss. The company also had $176 million of free cash flow.
Making the figues even sweeter is the fact that they conform to generally accepted accounting principles (GAAP). Tesla seems to be abandoning its practice of reporting the more lenient “non-GAAP” figures.
Tesla shipped a record 24,821 cars in the quarter, and says it plans to deliver about 80,000 cars for the full year. Model 3 remains on track for deliveries in the second half of 2017.
“We were able to have our best quarter ever and achieve full GAAP profitability,” said Musk on a conference call with analysts. “It’s definitely one of the best moments ever in Tesla.”
“This was a great three months for the company,” agreed Joe Dennison of Zevenbergen Capital Investments. “Despite daily headlines and skepticism, Tesla continues to widen its technology lead and make steady progress towards its goals of mass production.”
The surprise profit, and the stock boost that’s sure to ensue, would make it easier for Tesla to raise more cash for the production ramp-up. However, Musk told the analysts that the latest plan “does not require any capital raise for the Model 3 at all.”