Earnings Reports: Tesla, Netflix, and Snapchat

Tesla’s Fifth Consecutive Profitable Quarter

Earnings season is in full swing and investors are eagerly looking at reports to gain insights about how companies performed last quarter. There have been some positive and negative surprises so far, specifically with high-profile tech names.

For example, Tesla (TSLA) beat Wall Street expectations yesterday, reporting a net income of $331 million on revenue of $8.77 billion for the most recent quarter. This marked Tesla’s fifth profitable quarter in a row. Tesla also reported that it made $397 million selling regulatory tax credits to other car companies. These sales have been growing in recent years and they help boost Tesla’s profit margins.

Tesla delivered 139,300 vehicles during the period ending September 30—a new record for the company. The EV maker’s operating expenses climbed by 33% to hit $1.25 billion last quarter as Tesla constructed new factories in Austin, Texas and in Brandenburg, Germany. Last quarter was also notable for Tesla because it completed a five-for-one stock split, making it easier for people to make small-scale investments in the company.

Netflix’s Subscriber Boom May Be Over

Netflix (NFLX) missed net earnings expectations and subscriber number forecasts for last quarter. During the first half of the year, Netflix added almost 26 million subscribers as people around the world looked for ways to entertain themselves at home. However, the quarantine-induced boom may have ended, as Netflix only added 2.2 million new subscribers last quarter.

Though Netflix faces fierce competition from other streaming services like Disney+ (DIS) and Amazon (AMZN), the company is confident that it will reach its goal of having over 200 million subscribers worldwide this year. Though the pandemic has hampered movie and TV show production, Netflix has a backlog of content, which it hopes will give it an advantage over newer competing services heading into the end of the year.

Snapchat Adds Record Number of Advertisers

Snap Inc. (SNAP), the parent company of Snapchat, saw its revenue climb by 52% to $678.7 million last quarter, crushing analysts’ expectations. The platform attracted 11 million new users between the quarter ending in September and the previous quarter. Despite the rising popularity of TikTok and Facebook’s (FB) platforms over the summer, Snapchat had 249 million daily active users at the end of last quarter. This shows that as the pandemic continues, people are spending more time online across multiple platforms.

Snapchat also added a record number of advertisers to its platform last quarter. This was largely due to companies moving advertising dollars away from Facebook because they disagreed with the company’s handling of hate speech and misinformation on its platforms. Following the earnings report, Snap’s shares climbed over 20% in after-hours trading and ended yesterday higher by 28.3%.

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