Tesla’s Q4 2023 Earnings Review: Missed Estimates, Optimistic Outlook, and the Rise of Optimus

Key Highlights

• Tesla’s Q4 2023 revenue: $25.17 billion (Est. $25.87 billion)
• Adjusted EPS: 71 cents (Est. 73 cents)
• Basic EPS: $2.49
• Free Cash Flow: $2.06 billion (Est. $1.45 billion)
• Gross Margin: 17.6% (Est. 18.1%)
• 2024 Volume Growth outlook: “Notably lower” than 2023.

Tesla’s Q4 2023 earnings fell short of analyst estimates, causing a nearly 6% drop in the stock during extended trading.

Earnings per share (EPS) came in at 71 cents (adjusted), below the expected 74 cents. Revenue amounted to $25.17 billion, missing the estimated $25.6 billion. Total revenue increased by 3% from the previous year, reaching $24.3 billion. Operating margin for the quarter was 8.2%, down from 16% a year ago.

Auto revenue showed meager growth due to reduced average selling prices after global price cuts. Net income more than doubled to $7.9 billion, largely due to a $5.9 billion one-time noncash tax benefit.

Tesla warns of potentially lower vehicle volume growth in 2024. Elon Musk expressed his desire to own 25% of Tesla, addressing concerns about potential shareholder influence. Musk discussed the possibility of a dual-class share structure.

Tesla introduced Optimus, described by Musk as the most sophisticated humanoid robot globally. Musk claimed Optimus could surpass the value of everything else combined for Tesla. Tesla aims to ship some Optimus units next year, but specific details about capabilities and cost were not provided.

Cybertrucks are now available for purchase, with Tesla expecting a longer ramp-up due to manufacturing complexity. Tesla reported automotive revenue of $82.42 billion for the full year, a 15% increase from 2022. The energy division’s revenue rose 54% to $6.04 billion. Operating income decreased to $2.1 billion in the quarter, attributed to reduced vehicle prices and increased R&D expenses.

Tesla released a new version of its premium driver assistance software, known as Full Self Driving Beta. As of the end of 2023, Tesla had 54,892 Supercharger connectors worldwide at 5,952 stations.

Tesla shares dropped around 16% year-to-date as of Wednesday’s close after more than doubling in 2023.

Tesla share down 9% in Pre-market.

Tesla Faces Downgrade from Brokerages Following Disappointing Q4 Earnings Report