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What Happened to Tesla’s Revenue Growth Rate in 4Q17?

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Feb. 9 2018, Published 1:16 p.m. ET

Tesla’s 4Q17 revenues

In 4Q17, Tesla (TSLA) reported GAAP (generally accepted accounting principles) revenues of $3.3 billion, which represents an increase of 43.9% YoY (year-over-year) from its $2.3 billion in revenues during the same quarter of 2016. The 4Q17 YoY growth rate was also far better than the 29.9% YoY growth it reported in 3Q17.

Still, TSLA managed to meet the analysts’ 4Q17 revenues estimates. The company’s 4Q17 revenues were also ~10.2% higher than its GAAP revenues of $3 billion in 3Q17.

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Tesla began reporting its earnings primarily in GAAP financial figures since 3Q16. The difference between GAAP and non-GAAP revenues is due to differential accounting treatments to lease. On a GAAP basis, lease revenues are recognized throughout the life of the lease, unlike in the case of non-GAAP.

Automotive revenue growth

In 4Q17, Tesla delivered nearly 30,000 car units to customers, representing a YoY increase of about 34.7% from the just over 22,000 vehicle units delivered in the fourth quarter of 2016. The company delivered around 28,000 units of its Model S and Model X, while 1,542 units of its Model 3 were delivered last quarter. These total car deliveries reflected a 14.7% rise on a QoQ (quarter-over-quarter) basis.

With these higher QoQ and YoY car deliveries, TSLA has managed to generate revenues of $2.7 billion from its Automotive segment—about 36% higher on a YoY basis and up 14% QoQ.

Despite its recent improvements, Tesla’s annual car production is still just a fraction of the annual vehicle production of mainstream automakers (XLY) including Ford Motor (F), General Motors (GM), and Toyota Motor (TM).

Revenues from other segments

Tesla’s energy generation and storage segment revenues also increased to $298 million in 4Q17, up from $131 million in 4Q16. This reflected a rise of about 127% YoY. However, on a QoQ basis, the company’s revenues from its Energy segment fell ~6%.

Continue to the next part for a key look at Tesla’s 4Q17 gross margin.

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