Tesla Inc (NASDAQ: TSLA), the Texas-based EV maker reported Adj EPS (non-GAAP) of US $2.54 per share, and record revenue of US $17.719 billion for Q4 2021, exceeding Wall Street's average estimate. After Tesla trading officially closed on January 26, 2022, the company released its Shareholder Letter before its Q4 2021 Earnings Call. Tesla management will hold a live question and answer webcast that day at 4:30 p.m. Central Time (5:30 p.m. Eastern Time) to discuss the Company’s financial and business results and outlook.

HIGHLIGHTS

Cash

• Operating cash flow less capex (free cash flow) of $2.8B in Q4
• In total, $1.5B increase in our cash and cash equivalents in Q4 to $17.6B

Profitability

• $2.6B GAAP operating income; 14.7% operating margin in Q4
• $2.3B GAAP net income; $2.9B non-GAAP net income (ex-SBC1) in Q4
• 30.6% GAAP Automotive gross margin (29.2% ex-credits) in Q4

Operations

• Record vehicle deliveries of 0.94 million in 2021
• Annualized vehicle production run-rate of over 1.22 million in Q4-2021

FINANCIAL SUMMARY

Revenue
Total revenue grew 65% YoY in Q4 to $17.7B. YoY, revenue was impacted by the following items:
+ growth in vehicle deliveries
+ growth in other parts of the business

Profitability
Our operating income improved to $2.6B in Q4 compared to the same period last year, resulting in a 14.7%
operating margin. This profit level was reached while incurring SBC expense attributable to the 2018 CEO award
of $245M in Q4, driven by the final two operational milestones becoming probable. YoY, operating income was
primarily impacted by the following items:
+ further per vehicle cost (COGS) reduction
+ growth in vehicle deliveries
+ improved profitability of automotive leasing and Service & Other business
- increase in SG&A driven mainly by $340M payroll tax on 2012 CEO award option exercise
- rising raw material, commodity, logistics and expedite costs
- increased warranty and recall cost related to a specific batch of vehicles

Cash
Quarter-end cash and cash equivalents increased sequentially by $1.5B to $17.6B in Q4, driven mainly by free cash
flow of $2.8B, partially offset by net debt and finance lease repayments of $1.5B. Our total debt excluding vehicle
and energy product financing has fallen to just $1.4B at the end of 2021.

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