Tesla, Inc.

Previous wording

As a result of rapidly evolving trade policy, uncertainty in the automotive and energy markets continues to increase, posing risks to our global supply chain and cost structure which could have a meaningfully adverse impact on demand for our products and our profitability. The current tariff regime will have a relatively larger impact on our energy generation and storage business compared to our automotive business. While we prepare for near-term challenges to our business under current policies, we are focused on long-term growth opportunities as we continue to make prudent investments.

Current wording

As a result of rapidly evolving trade and fiscal policy, uncertainty in the automotive and energy markets continues to increase, posing risks to our global supply chain and cost structure which could have a meaningfully adverse impact on demand for our products and our profitability. The current tariff regime will have a relatively larger impact on our energy generation and storage business compared to our automotive business. While we prepare for near-term challenges to our business under current policies, we are focused on long-term growth opportunities as we continue to make prudent investments.

Previous wording

In 2025, we produced approximately 363,000 consumer vehicles and delivered approximately 337,000 consumer vehicles through the first quarter. We are focused on profitable growth, including by leveraging existing factories and production lines to introduce new and more affordable products, further improving and deploying our FSD (Supervised) capabilities, including future autonomous capabilities through our purpose-built Robotaxi product, Cybercab, reducing costs, increasing vehicle production, utilized capacity and delivery capabilities, improving and developing our vehicles and battery technologies, vertically integrating and localizing our supply chain, and expanding our global infrastructure, including our service and charging infrastructure.

Current wording

In 2025, we produced approximately 773,000 consumer vehicles and delivered approximately 721,000 consumer vehicles through the second quarter. We are focused on profitable growth, including by leveraging existing factories and production lines to introduce new and more affordable products and services, further improving and deploying our FSD (Supervised) capabilities, including future autonomous capabilities through our purpose-built Robotaxi product, Cybercab, reducing costs, increasing vehicle production, utilized capacity and delivery capabilities, improving and developing our vehicles, battery and AI compute technologies, vertically integrating and localizing our supply chain, and expanding our global infrastructure, including our service and charging infrastructure. In June 2025, we launched our Robotaxi service in Austin, capitalizing on our AI investments and scalable mobility infrastructure to advance a service-driven business model.

Previous wording

In 2025, we deployed 10.4 GWh of energy storage products through the first quarter. We are focused on ramping the production and increasing the market penetration of our energy storage products.

Current wording

In 2025, we deployed 20.0 GWh of energy storage products through the second quarter. We are focused on ramping the production, increasing the market penetration of our energy storage products, developing our battery technologies and vertically integrating, localizing and expanding our supply chain.

Previous wording

During the three months ended March 31, 2025, we recognized total revenues of $19.34 billion, representing a decrease of $1.97 billion compared to the same period in the prior year. During the three months ended March 31, 2025, our net income attributable to common stockholders was $409 million, representing a decrease of $981 million compared to the same period in the prior year. We continue to ramp production and build and optimize our manufacturing capacity, expand our operations while focusing on further cost reductions and operational efficiencies to enable increased deliveries and deployments of our products, and invest in research and development to accelerate our AI, software, and fleet-based profits for further revenue growth.

Current wording

During the three and six months ended June 30, 2025, we recognized total revenues of $22.50 billion and $41.83 billion, respectively, representing decreases of $3.00 billion and $4.97 billion, respectively, compared to the same periods in the prior year. During the three and six months ended June 30, 2025, our net income attributable to common stockholders was $1.17 billion and $1.58 billion, respectively, representing decreases of $228 million and $1.21 billion, respectively, compared to the same periods in the prior year. We continue to ramp production and build and optimize our manufacturing capacity, expand our operations while focusing on further cost reductions and operational efficiencies to enable increased deliveries and deployments of our products, and invest in research and development to accelerate our AI, software, and fleet-based profits for further revenue growth.

Previous wording

We ended the first quarter of 2025 with $37.00 billion in cash and cash equivalents and investments, representing an increase of $433 million from the end of 2024. Our cash flows provided by operating activities were $2.16 billion during the three months ended March 31, 2025, compared to $242 million during the same period ended March 31, 2024, representing an increase of $1.91 billion. Capital expenditures amounted to $1.49 billion during the three months ended March 31, 2025, compared to $2.78 billion during the same period ended March 31, 2024, representing a decrease of $1.29 billion. Overall growth has allowed our business to generally fund itself, and we will continue to make critical high-value investments while maintaining a strong balance sheet.

Current wording

We ended the second quarter of 2025 with $36.78 billion in cash and cash equivalents and investments, representing an increase of $219 million from the end of 2024. Our cash flows provided by operating activities were $4.70 billion during the six months ended June 30, 2025, compared to $3.85 billion during the same period ended June 30, 2024, representing an increase of $842 million. Capital expenditures amounted to $3.89 billion during the six months ended June 30, 2025, compared to $5.05 billion during the same period ended June 30, 2024, representing a decrease of $1.16 billion. Overall growth has allowed our business to generally fund itself, and we will continue to make critical high-value investments while maintaining a strong balance sheet.

Previous wording

We are focused on growing our manufacturing capacity, which includes capacity for manufacturing newer vehicle models such as our Cybertruck, Tesla Semi and future vehicles utilizing aspects of our next generation platform, and ramping the production at our Gigafactories to their installed production capacities as well as increasing production rate and efficiency at our current factories. In the first quarter of 2025, we accomplished an industry first - simultaneously changing over production lines across all factories for our New Model Y. While there were several weeks of lost production in the quarter from this changeover, we successfully ramped our production lines across four factories while managing supply chains across three continents without any major disruptions, demonstrating the advancement of our operational and supply chain management capabilities. As we continue to ramp production of the New Model Y, we are also preparing our factories for the launch of new models later this year. The next phase of production growth will be initiated by advances in autonomy and the introduction of new products, including those built on our next generation vehicle platform, as well as our ability to add to our available sources of battery cell supply by manufacturing our own cells that we are developing to have high-volume output, lower capital and production costs and longer range. Our goals are to improve vehicle performance, decrease production costs and increase affordability and customer awareness.

Current wording

We are focused on growing and optimizing our manufacturing capacity, which includes capacity for manufacturing newer vehicle models and future vehicles utilizing aspects of our next generation platform, while maximizing production rate and efficiency at our Gigafactories. Our factories are also preparing for the release of new models later this year. The next phase of production growth will be initiated by advances in autonomy and the introduction of new products, including those built on our next generation vehicle platform, as well as our ability to manufacture our own cells that we are developing to have high-volume output, lower capital and production costs and longer range. Our goals are to improve vehicle performance, decrease production costs and increase affordability and customer awareness.

Previous wording

These plans are subject to uncertainties inherent in establishing and ramping manufacturing operations, which may be exacerbated by new product and manufacturing technologies we introduce, the number of concurrent international projects, any industry-wide component constraints, labor shortages and any future impact from events outside of our control. For example, changes to trade policy with respect to tariffs, export controls and other restrictions may impact our global supply chain cost structure and availability, affecting not only vehicle production, but also facility expansions. Moreover, we have set ambitious technological targets with our plans for battery cells as well as for iterative manufacturing and design improvements for our vehicles with each new factory expansion.

Current wording

These plans are subject to uncertainties inherent in establishing and ramping manufacturing operations, which may be exacerbated by new product and manufacturing technologies we introduce, the number of concurrent international projects, any industry-wide component constraints, labor shortages and any future impact from events outside of our control. For example, changes to fiscal and trade policy with respect to tariffs, export controls and other restrictions may impact our global supply chain cost structure and availability, affecting not only vehicle production, but also facility expansions. Moreover, we have set ambitious technological targets with our plans for battery cells as well as for iterative manufacturing and design improvements for our vehicles.

Previous wording

Our cost reduction efforts, cost innovation strategies, and additional localized procurement and manufacturing are key to our vehicles’ affordability and have allowed us to competitively price our vehicles. We will also continue to generate demand by improving our vehicles’ performance and functionality, including through product offerings and features utilizing artificial intelligence such as Autopilot, FSD (Supervised), and other software, and delivering new vehicles and vehicle options, such as our launch of the updated Model 3 in 2024, and the New Model Y in the first quarter of 2025. In addition, we have been increasing awareness, and expanding our vehicle financing programs, including attractive leasing terms for our customers.

Current wording

Our cost reduction efforts, cost innovation strategies, and additional localized procurement and manufacturing are key to our vehicles’ affordability and have allowed us to competitively price our vehicles. We will also continue to generate demand by improving our vehicles’ performance and functionality, including through product offerings and features utilizing artificial intelligence such as Autopilot, FSD (Supervised), and other software, and delivering new vehicles and vehicle options. In addition, we believe the launch of our Robotaxi service in June 2025 will unlock significant business growth to advance a service-driven business model. We will continue to improve safety and profitability while scaling the network. In addition, we have been increasing awareness, and expanding our vehicle financing programs, including attractive leasing terms for our customers.

Previous wording

However, we operate in a cyclical industry that is sensitive to shifting consumer trends, political and regulatory uncertainty, including with respect to trade and the environment, all of which can be compounded by inflationary pressures, rising energy prices, interest rate fluctuations and the liquidity of enterprise customers. For example, as inflationary pressures increased across the markets in which we operate, central banks in developed countries raised interest rates rapidly and substantially, which impacted the affordability of vehicle lease and finance arrangements. Further, sales of vehicles in the automotive industry also tend to be cyclical in many markets, which may expose us to increased volatility as we expand and adjust our operations. Moreover, as additional competitors enter the marketplace and help bring the world closer to sustainable transportation, we will have to adjust and continue to execute well to maintain our momentum. Additionally, our suppliers’ liquidity and allocation plans may be affected by current challenges in the North American automotive industry, which could reduce our access to components or result in unfavorable changes to cost. These macroeconomic and industry trends have had, and will likely continue to have, an impact on the pricing of, and order rate for our vehicles, and in turn our operating margin.

Current wording

However, we operate in a cyclical industry that is sensitive to shifting consumer trends, political and regulatory uncertainty, including with respect to trade and the environment, all of which can be compounded by inflationary pressures, rising energy prices, interest rate fluctuations and the liquidity of enterprise customers. For example, as inflationary pressures increased across the markets in which we operate, central banks in developed countries raised interest rates rapidly and substantially, which impacted the affordability of vehicle lease and finance arrangements. Further, sales of vehicles in the automotive industry also tend to be cyclical in many markets, which may expose us to increased volatility as we expand and adjust our operations. Moreover, as additional competitors enter the marketplace and help bring the world closer to sustainable transportation, we will have to adjust and continue to execute well to maintain our momentum. Additionally, our suppliers’ liquidity and allocation plans may be affected by current challenges in the automotive industry, which could reduce our access to components or result in unfavorable changes to cost. These macroeconomic and industry trends have had, and will likely continue to have, an impact on the pricing of, and order rate for our vehicles, and in turn our operating margin.

Previous wording

Changes in government and economic policies, incentives or tariffs may also impact our production, cost structure and the competitive landscape. While the final scope and application of recently announced changes in trade policy remain uncertain at this time, higher tariffs on imports and subsequent retaliatory tariffs could adversely impact consumer spending and demand for durable goods and related services. We will continue to adjust accordingly to such developments, and we believe our ongoing cost reduction efforts, including through production innovation, process improvements and logistics optimization, and focus on operating leverage, vertical integration and supply chain localization will continue to benefit us in relation to our competitors. Our new products, which will include more affordable options, and our advances in autonomy, position us for future growth.

Current wording

Changes in government and economic policies, incentives or tariffs may also impact our production, cost structure and the competitive landscape. While the final scope and application of recently announced changes in trade policy remain uncertain at this time, higher tariffs on imports and subsequent retaliatory tariffs could adversely impact consumer spending and demand for durable goods and related services. Furthermore, certain provisions of the recently signed OBBBA, including the removal of tax credits for electric vehicles, may also impact consumer demand for electric vehicles in general once effective. We will continue to adjust accordingly to such developments, and we believe our ongoing cost reduction efforts, including through production innovation, process improvements and logistics optimization, and focus on operating leverage, vertical integration and supply chain localization will continue to benefit us in relation to our competitors. Our new products, which will include more affordable options, and our advances in autonomy, position us for future growth.

Previous wording

As our production increases, we must work constantly to similarly increase vehicle delivery capability so that it does not become a bottleneck on our total deliveries. We are also committed to reducing the percentage of vehicles delivered in the third month of each quarter, which will help to reduce the cost per vehicle. As we expand our manufacturing operations globally, we will also have to continue to increase and staff our delivery, servicing and charging infrastructure accordingly, maintain our vehicle reliability and optimize our Supercharger locations to ensure cost effectiveness and customer satisfaction. In particular, as other automotive manufacturers have announced their adoption of the North American Charging Standard (“NACS”) and agreements with us to utilize our Superchargers, we must correspondingly expand our network in order to ensure adequate availability to meet customer demands. We also remain focused on continued enhancements of the capability and efficiency of our servicing operations.

Current wording

As our production increases, we must work constantly to similarly increase vehicle delivery capability so that it does not become a bottleneck on our total deliveries. We are also committed to reducing the percentage of vehicles delivered in the third month of each quarter, which will help to reduce the cost per vehicle. As we expand our manufacturing operations globally, we will also have to continue to increase and staff our delivery, servicing and charging infrastructure accordingly, maintain our vehicle reliability and optimize our Supercharger locations to ensure cost effectiveness and customer satisfaction. In particular, as other automotive manufacturers have announced their adoption of the North American Charging Standard (“NACS”) and agreements with us to utilize our Superchargers, we must correspondingly expand our network in order to ensure adequate availability to meet customer demands. We also remain focused on continued enhancements of the capability and efficiency of our servicing operations. In tandem with the launch of our Robotaxi business, we are focused on developing and optimizing dedicated infrastructure, including in relation to vehicle cleaning and maintenance, charging, security, teleoperations and fleet management, to ensure service quality as we continue to scale.

Previous wording

The long-term success of this business is dependent upon incremental volume growth. We continue to increase the production and capabilities of our energy storage products to meet high levels of demand, including the introduction of Powerwall 3 in 2024, and the ramps of our Megafactories in Shanghai and Lathrop, California. For Megapack, energy storage deployments can vary meaningfully quarter to quarter depending on the timing of specific project milestones and logistics. As these product lines grow, we will have to maintain adequate battery cell supply for our energy storage products. At the same time, changes in government and economic incentives or tariffs may also impact our sales, cost structure and the competitive landscape. For instance, the recently announced import tariffs by the US government could significantly increase battery cell expenses, negatively impacting consumer demand. Despite these challenges, as AI infrastructure drives rapid load growth, we see opportunities for our energy storage products to stabilize the grid, shift energy when it is needed most and provide additional power capacity.

Current wording

The long-term success of this business is dependent upon incremental volume growth. We continue to increase the production and capabilities of our energy storage products to meet high levels of demand, including the ramps of our Megafactories in Shanghai and Lathrop, California, and the construction of a new Megafactory near Houston, Texas. For Megapack, energy storage deployments can vary meaningfully quarter to quarter depending on the timing of specific project milestones and logistics. As these product lines grow, we will have to maintain adequate battery cell supply for our energy storage products. At the same time, changes in government and economic incentives or tariffs may also impact our sales, cost structure and the competitive landscape. For instance, the recently announced import tariffs by the US government and the provisions of the OBBBA could significantly increase battery cell expenses and impact costs for our consumers, negatively impacting consumer demand. Despite these challenges, as AI infrastructure drives rapid load growth, we see opportunities for our energy storage products to stabilize the grid, shift energy when it is needed most and provide additional power capacity.

Previous wording

Our capital expenditures are typically difficult to project beyond the short-term given the number and breadth of our core projects at any given time, and may further be impacted by uncertainties in future global market conditions and shifting global trade policy. We are simultaneously developing and ramping new products, building or ramping manufacturing facilities on three continents, piloting the development and manufacture of new battery cell technologies, expanding our Supercharger network and investing in autonomy and other artificial intelligence enabled training and products, and the pace of our capital spend may vary depending on overall priority among projects, the pace at which we meet milestones, production adjustments to and among our various products, increased capital efficiencies and the addition of new projects. While we prepare for near-term challenges to our business under current policies, we are focused on long-term growth opportunities as we continue to make critical, high-value investments while maintaining a strong balance sheet. Owing and subject to the foregoing as well as the pipeline of announced projects under development, all other continuing infrastructure growth and varying levels of inflation, we currently expect our capital expenditures to exceed $10.00 billion in 2025. Changes in trade policy may necessitate adjustments to our project timelines, potentially impacting our capital expenditure expectations.

Current wording

Our capital expenditures are typically difficult to project beyond the short-term given the number and breadth of our core projects at any given time, and may further be impacted by uncertainties in future global market conditions and shifting global trade and fiscal policy. We are simultaneously developing and ramping new products, building or ramping manufacturing facilities on three continents, piloting the development and manufacture of new battery cell technologies, expanding our Supercharger network and investing in autonomy and other artificial intelligence enabled training and products, and the pace of our capital spend may vary depending on overall priority among projects, the pace at which we meet milestones, production adjustments to and among our various products, increased capital efficiencies and the addition of new projects. While we prepare for near-term challenges to our business under current policies, we are focused on long-term growth opportunities as we continue to make critical, high-value investments while maintaining a strong balance sheet. Owing and subject to the foregoing as well as the pipeline of announced projects under development, all other continuing infrastructure growth and varying levels of inflation, we currently expect our capital expenditures to exceed $9.00 billion in 2025. Changes in fiscal and trade policy may necessitate adjustments to our project timelines, potentially impacting our cash flow and capital expenditure expectations.

Previous wording

Automotive sales revenue decreased $3.54 billion, or 21%, in the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, due to a decrease of approximately 51,000 combined Model 3 and Model Y cash deliveries in part from bringing down all of our vehicle factories simultaneously for the changeover to New Model Y. Additionally, we had a lower average selling price per unit driven by sales mix, higher customer incentives such as attractive financing options, and a negative impact from the strengthening of the United States dollar when compared to foreign currencies year over year, as well as a decrease of 5,000 deliveries of other models.

Current wording

Automotive sales revenue decreased $6.28 billion, or 18%, in the six months ended June 30, 2025 as compared to the six months ended June 30, 2024, due to a decrease of approximately 95,000 combined Model 3 and Model Y cash deliveries in part from bringing down all of our vehicle factories simultaneously for the changeover to New Model Y and a decrease of approximately 16,000 deliveries of other models. Additionally, we had a lower average selling price per unit driven by sales mix and higher customer incentives such as attractive financing options.

Previous wording

Services and other revenue increased $350 million, or 15%, in the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. The increase was primarily due to increases in paid Supercharging revenue, insurance services revenue, non-warranty maintenance services and collision revenue, used vehicle revenue and part sales revenue.

Current wording

Services and other revenue increased $438 million, or 17%, in the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. Services and other revenue increased $788 million, or 16%, in the six months ended June 30, 2025 as compared to the six months ended June 30, 2024. The increases were primarily due to increases in paid Supercharging revenue, non-warranty maintenance services and collision revenue, insurance services revenue, used vehicle revenue and part sales revenue.

Previous wording

Energy generation and storage revenue increased $1.10 billion, or 67%, in the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. The increase was primarily due to increases in Megapack and Powerwall deployments compared to the prior year, partially offset by a decrease in average selling price of Megapack.

Current wording

Energy generation and storage revenue increased $870 million, or 19%, in the six months ended June 30, 2025 as compared to the six months ended June 30, 2024. The increase was primarily due to increases in Megapack and Powerwall deployments compared to the prior year, partially offset by a decrease in average selling price of Megapack.

Previous wording

Cost of automotive sales revenue decreased $2.44 billion, or 18%, in the three months ended March 31, 2025 as compared to the three months ended March 31, 2024 due to the decreases in deliveries year over year as discussed above. Additionally, there was a decrease in the average cost per unit of our vehicles primarily from lower raw material costs and a positive impact from the strengthening of United States dollar when compared to foreign currencies year over year, partially offset by sales mix.

Current wording

Cost of automotive sales revenue decreased $2.40 billion, or 15%, in the three months ended June 30, 2025 as compared to the three months ended June 30, 2024 due to the decreases in deliveries year over year as discussed above and lower average cost per unit due to sales mix and lower material costs, partially offset by lower fixed cost absorption and an increase in tariffs compared to the prior period.

Previous wording

Cost of services and other revenue increased $330 million, or 15%, in the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. The increase in cost of services and other revenue is generally in line with the changes in services and other revenue as described above.

Current wording

Cost of services and other revenue increased $439 million, or 18%, in the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. Cost of services and other revenue increased $769 million, or 17%, in the six months ended June 30, 2025 as compared to the six months ended June 30, 2024. The increases in cost of services and other revenue are generally in line with the changes in services and other revenue as described above.

Previous wording

Gross margin for total automotive decreased from 18.5% to 16.2% in the three months ended March 31, 2025 as compared to the three months ended March 31, 2024 primarily due to lower average selling price per unit, partially offset by lower average cost per unit and an increase in regulatory credits revenue, as discussed above.

Current wording

Gross margin for total automotive decreased from 18.5% to 16.8% in the six months ended June 30, 2025 as compared to the six months ended June 30, 2024 primarily due to lower average selling price per unit and a decrease in regulatory credits revenue as described above.

Previous wording

Gross margin for total automotive & services and other segment decreased from 16.7% to 14.3% in the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. The change in gross margin is primarily due to the automotive gross margin factors discussed above.

Current wording

Gross margin for total automotive & services and other segment decreased from 17.1% to 15.4% in the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. Gross margin for total automotive & services and other segment decreased from 16.9% to 14.9% in the six months ended June 30, 2025 as compared to the six months ended June 30, 2024. The changes in gross margin are primarily due to the automotive gross margin factors discussed above.

Previous wording

Cost of energy generation and storage revenue increased $713 million, or 58%, in the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. The increase in cost of revenues was primarily due to increases in Megapack and Powerwall deployments compared to the prior year. Additionally, average cost per unit for Megapack and Powerwall both decreased primarily from lower raw material costs.

Current wording

Cost of energy generation and storage revenue decreased $331 million, or 15%, in the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, primarily due to a decrease in average cost per unit for Megapack and Powerwall from lower raw material costs, partially offset by an increase in Powerwall deployments compared to the prior year.

Previous wording

Research and development (“R&D”) expenses increased $258 million, or 22%, in the three months ended March 31, 2025 as compared to the three months ended March 31, 2024 primarily due to an increase in AI programs and related costs. R&D expenses as a percentage of revenue increased from 5% to 7% in the three months ended March 31, 2025 as compared to the three months ended March 31, 2024 primarily due to higher R&D expenses and lower total revenues in the current period.

Current wording

R&D expenses as a percentage of revenue increased from 4% to 7% in the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. R&D expenses as a percentage of revenue increased from 5% to 7% in the six months ended June 30, 2025 as compared to the six months ended June 30, 2024. These increases were due to higher R&D expenses and lower total revenues in the current period.

Previous wording

Interest income increased $50 million, or 14%, in the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. The increase was primarily due to higher interest earned on our cash and cash equivalents and short-term investments compared to the prior period due to an increase in our average portfolio balance, partially offset by a lower average interest rate.

Current wording

Interest income increased $44 million, or 13%, in the three months ended June 30, 2025 and increased $94 million, or 13%, in the six months ended June 30, 2025 as compared to the three and six months ended June 30, 2024, respectively. The increases were primarily due to higher interest earned on our cash and cash equivalents and short-term investments compared to the prior period due to increases in our average portfolio balance, partially offset by lower average interest rates.

Previous wording

Other (expense) income, net, changed unfavorably by $562 million in the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. The unfavorable change was primarily due a $125 million mark-to-market loss in the current period compared to a $335 million mark-to-market gain on our bitcoin digital assets in the prior period. Additionally, there were unfavorable fluctuations in foreign currency exchange rates on our intercompany balances. As our intercompany balances are significant in nature and we do not typically hedge foreign currency risk, we can experience significant fluctuations in foreign currency exchange rate gains and losses from period to period.

Current wording

Other income (expense), net, changed favorably by $400 million in the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. Other income (expense), net, changed unfavorably by $162 million in the six months ended June 30, 2025 as compared to the six months ended June 30, 2024. The changes are due to mark-to-market on our bitcoin digital assets and fluctuations in foreign currency exchange rates on our intercompany balances. As our intercompany balances are significant in nature and we do not typically hedge foreign currency risk, we can experience significant fluctuations in foreign currency exchange rate gains and losses from period to period.

Previous wording

Our provision for income taxes decreased by $314 million in the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily due to the change in our pre-tax income year over year. Our effective tax rate increased from 26% to 29% in the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily due to the changes in the mix of our jurisdictional earnings.

Current wording

Our provision for income taxes decreased by $12 million in the three months ended June 30, 2025 and decreased by $326 million in the six months ended June 30, 2025 as compared to the three and six months ended June 30, 2024, respectively, primarily due to the change in our pre-tax income year over year. Our effective tax rate increased from 21% to 23% in the three months ended June 30, 2025 and increased from 23% to 25% in the six months ended June 30, 2025 as compared to the three and six months ended June 30, 2024, respectively, primarily due to the changes in the mix of our jurisdictional earnings.

Previous wording

In addition, because a large portion of our future expenditures will be to fund our growth, we expect that if needed we will be able to adjust our capital and operating expenditures by operating segment. For example, if our near-term manufacturing operations decrease in scale or ramp more slowly than expected, including due to global economic or business conditions, we may choose to correspondingly slow the pace of our capital expenditures. Finally, we continually evaluate our cash needs and may decide it is best to raise additional capital or seek alternative financing sources to fund the rapid growth of our business, including through drawdowns on existing or new debt facilities or financing funds. Conversely, we may also from time to time determine that it is in our best interests to voluntarily repay certain indebtedness early.

Current wording

In addition, because a large portion of our future expenditures will be to fund our growth, we expect that if needed we will be able to adjust our capital and operating expenditures by operating segment. For example, if our near-term manufacturing operations decrease in scale or ramp more slowly than expected, including due to global economic, tax, trade or business conditions, we may choose to correspondingly slow the pace of our capital expenditures. Finally, we continually evaluate our cash needs and may decide it is best to raise additional capital or seek alternative financing sources to fund the rapid growth of our business, including through drawdowns on existing or new debt facilities or financing funds. Conversely, we may also from time to time determine that it is in our best interests to voluntarily repay certain indebtedness early.

Previous wording

As discussed in and subject to the considerations referenced in Part I, Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations—Management Opportunities, Challenges and Uncertainties and 2025 Outlook—Cash Flow and Capital Expenditure Trends in this Quarterly Report on Form 10-Q, we currently expect our capital expenditures to support our projects globally to exceed $10.00 billion in 2025. Changes in trade policy may necessitate adjustments to our project timelines, potentially impacting our capital expenditure expectations.

Current wording

As discussed in and subject to the considerations referenced in Part I, Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations—Management Opportunities, Challenges and Uncertainties and 2025 Outlook—Cash Flow and Capital Expenditure Trends in this Quarterly Report on Form 10-Q, we currently expect our capital expenditures to support our projects globally to exceed $9.00 billion in 2025. Changes in trade policy may necessitate adjustments to our project timelines, potentially impacting our capital expenditure expectations.

Previous wording

As of March 31, 2025, we and our subsidiaries had outstanding $7.27 billion in aggregate principal amount of indebtedness, of which $2.17 billion is current. For details regarding our indebtedness, refer to Note 7, Debt, to the consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Current wording

As of June 30, 2025, we and our subsidiaries had outstanding $6.98 billion in aggregate principal amount of indebtedness, of which $1.97 billion is current. For details regarding our indebtedness, refer to Note 7, Debt, to the consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Previous wording

As of March 31, 2025, we had $16.35 billion and $20.64 billion of cash and cash equivalents and short-term investments, respectively. Balances held in foreign currencies had a U.S. dollar equivalent of $2.81 billion and consisted primarily of Chinese yuan and euros. We had $5.00 billion of unused committed credit amounts as of March 31, 2025. For details regarding our indebtedness, refer to Note 7, Debt, to the consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Current wording

As of June 30, 2025, we had $15.59 billion and $21.20 billion of cash and cash equivalents and short-term investments, respectively. Balances held in foreign currencies had a U.S. dollar equivalent of $2.70 billion and consisted primarily of Chinese yuan and euros. We had $5.00 billion of unused committed credit amounts as of June 30, 2025. For details regarding our indebtedness, refer to Note 7, Debt, to the consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Previous wording

Net cash provided by operating activities increased by $1.91 billion to $2.16 billion during the three months ended March 31, 2025 from $242 million during the three months ended March 31, 2024. This increase was primarily due to favorable changes in net operating assets and liabilities of $2.11 billion, partially offset by a decrease in net income excluding non-cash expenses, gains and losses of $193 million.

Current wording

Net cash provided by operating activities increased by $842 million to $4.70 billion during the six months ended June 30, 2025 from $3.85 billion during the six months ended June 30, 2024. This increase was primarily due to favorable changes in net operating assets and liabilities of $1.30 billion, partially offset by a decrease in net income excluding non-cash expenses, gains and losses of $454 million.

Previous wording

Net cash flows from investing activities and their variability across each period related primarily to capital expenditures, which were $1.49 billion and $2.78 billion for the three months ended March 31, 2025 and 2024, respectively, mainly for AI-related capital expenditures, global factory expansion, machinery and equipment as we expand and enhance our product roadmap. We also purchased $159 million and $2.31 billion of short-term investments, net of proceeds from maturities and sales, for the three months ended March 31, 2025 and 2024, respectively.

Current wording

Net cash flows from investing activities and their variability across each period related primarily to capital expenditures, which were $3.89 billion and $5.05 billion for the six months ended June 30, 2025 and 2024, respectively, mainly for AI-related capital expenditures, global factory expansion, machinery and equipment as we expand and enhance our product roadmap. We also purchased $709 million and $3.26 billion of short-term investments, net of proceeds from maturities and sales, for the six months ended June 30, 2025 and 2024, respectively.

Previous wording

Net cash flows from financing activities changed by $528 million to $332 million net cash outflows during the three months ended March 31, 2025 from $196 million net cash inflows during the three months ended March 31, 2024. The decrease was primarily due to a $710 million increase in repayments of debt and a $151 million decrease in proceeds from issuances of debt. See Note 7, Debt, to the consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further details regarding our debt obligations. Additionally, the decrease was partially offset by a $101 million decrease in payments for buy-outs of noncontrolling interests in subsidiaries and $101 million of proceeds received from directors in shareholder settlement net of payment for related legal fees during the three months ended March 31, 2025.

Current wording

Net cash flows from financing activities changed by $3.29 billion to $554 million net cash outflows during the six months ended June 30, 2025 from $2.74 billion net cash inflows during the six months ended June 30, 2024. The decrease was primarily due to a $2.91 billion increase in repayments of debt and a $845 million decrease in proceeds from issuances of debt. See Note 7, Debt, to the consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further details regarding our debt obligations. Additionally, the decrease was partially offset by a $139 million decrease in principal payments on finance leases, a $124 million decrease in payments for buy-outs of noncontrolling interests in subsidiaries and $101 million of proceeds received from directors in shareholder settlement net of payment for related legal fees during the six months ended June 30, 2025.