Tesla has released their Q2 2021 earnings report, posting a GAAP profit with the exclusion of regulatory credit sales for the first time in company history.

Tesla Q2-21 GAAP net income excluding regulatory credits: $788 million.

Although this is Tesla’s 8th straight profitable quarter, each previous quarter would have slipped to a GAAP loss with the exclusion of regulatory credit sales (without considering additional tax adjustments). Tesla's first profitable quarter came in Q1 2013, but that quarter's $11M GAAP net income relied on $68M in regulatory credit sales.

While regulatory credit sales result in significant additional cash for the company, reliance on credit sales for profitability has been a common criticism of Tesla throughout its history.

Live Tesla earnings analysis: here

Q2 Earnings Highlights:

· $12.0 billion in total revenue. Up 98% YoY 

· $1.02 EPS (GAAP) and $1.45 EPS (non-GAAP)

·  11.0% operating margin 

· $1.1 billion net income (GAAP)

· $354 million in regulatory credit revenue

Tesla's report states: 

"In the second quarter of 2021, we broke new and notable records. We produced and delivered over 200,000 vehicles, achieved an operating margin of 11.0% and exceeded $1B of GAAP net income for the first time in our history."  

The record quarter is in tandem with Tesla's record deliveries of 201,304 vehicles. Tesla also produced 206,421 vehicles during the second quarter, a 14% increase quarter-over-quarter and a 151% increase year-over-year. Also contributing to the profitable quarter was less stock-based compensation– down $140 million quarter-over-quarter. 

Energy

Despite the major backlog of Powerwalls, Tesla deployed 85 MW of solar panels/roofs and 1,274 MWh of energy storage in the second quarter. This is also the first quarter following Tesla's comments on their new format requiring Powerwalls with the purchase of any solar product. 

On energy, Tesla commented:

"Energy storage deployments more than tripled YoY in Q2, driven mainly by recognition of several Megapack projects. Energy storage deployments can vary meaningfully quarter to quarter depending on the timing of specific project milestones. Powerwall remained exceptionally popular as deployments nearly doubled YoY ." 

What did you think about Tesla's Q2 Earnings Report? Let us know on Twitter, @teslapodcast.

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Disclosure: Rob Maurer and Brennan Ertl are long TSLA stock and derivatives