Tesla held onto its Bitcoin investment during the second quarter, ending the period with $825 million worth of the cryptocurrency on its balance sheet even as the electric vehicle maker reported weaker-than-expected earnings.
The company posted adjusted earnings of 33 cents per share, missing Wall Street’s expectation of 51 cents, according to LSEG. Revenue, however, beat forecasts, coming in at $28.24 billion, above analysts’ estimate of $25.71 billion.
Tesla shares fell about 4 percent in after-hours trading following the results.
Bitcoin still strong for Tesla
The earnings report also confirmed that Tesla made no changes to its Bitcoin holdings during the quarter. The company first bought Bitcoin in 2021, investing $1.5 billion before later selling a large portion of its holdings. It has since maintained the remaining balance, making it one of the largest publicly traded corporate holders of the cryptocurrency.
The update comes during a difficult year for Tesla’s stock, which has fallen around 17 percent since the start of the year and about 11 percent this month as investors weigh slowing profit growth, pricing pressures and increasing competition in the EV market.
Despite the earnings miss, Tesla’s overall business continued to grow.
Quarterly revenue rose 26 percent from a year earlier, while net income slipped 5 percent to $1.11 billion, compared with $1.17 billion during the same period last year.
The automotive business remained Tesla’s biggest revenue driver, bringing in $20.52 billion, up 23 percent year over year. Its energy division, which includes solar products and battery storage systems, generated $3.14 billion in revenue, an increase of 13 percent.
Meanwhile, the company’s services business, which includes repairs, maintenance and other offerings, grew 50 percent to $4.58 billion, making it one of Tesla’s fastest-growing segments.
Even with stronger revenue, profitability came under pressure
Tesla’s gross margin fell to 16.8 percent, down from 17.2 percent a year ago and below analysts’ expectations of 19.4 percent. The decline reflected lower average selling prices for its vehicles as well as reduced revenue from regulatory credits.
During the quarter, Tesla also leaned further toward its more affordable lineup, selling lower-cost versions of its popular Model 3 and Model Y vehicles after phasing out its higher-priced Model S and Model X models.
While most investors focused on Tesla’s financial performance, the company’s unchanged Bitcoin position was another closely watched detail.
Tesla remains one of the few major public companies with a sizable Bitcoin treasury, alongside firms such as Strategy. Its decision to keep the cryptocurrency on its balance sheet suggests the company continues to view Bitcoin as a long-term treasury asset despite ongoing volatility in the crypto market.
For crypto investors, Tesla’s quarterly reports have become an important gauge of corporate sentiment toward Bitcoin. This quarter, the message was clear: despite softer earnings and a challenging environment for its core business, the company chose to stay the course with its crypto holdings.
