Shares in Tesla Inc. dropped by over 4% in late trading despite the electric car and solar panel maker beating analyst expectations in its latest quarterly results.

For its fiscal second quarter that ended June 30, Tesla reported adjusted earnings per share of 90 cents, up 20%, on revenue of $24.93 billion, up 47% year-over-year. Analysts had expected adjusted earnings per share of 80 cents and revenue of $24.22 billion.

Tesla’s gross profit rose 7% year-over-year, to $4.53 billion, while gross margins came in at 18.2%, down from 19.3% in the previous quarter. In Tesla’s automotive segment, the margin was 18.1%, down from 18.3%. The figures are notably below Tesla’s previous aim of having a margin of 20% and, given its other positive figures, could be a reason behind the company’s late price share slump.

The company’s overall operating margin was 9.6% on an operating income of $2.4 billion. Operating cash flow came in at $3.1 billion in the quarter and free cash flow was $1 billion.

Across its model lineup, Telsa produced 19,489 Model S and Xs in the quarter and delivered 19,225. Its most popular Model 3 and Y models saw production of 460,211 and deliveries of 446,915. The production numbers and deliveries were the highest ever recorded by the company.

Artificial intelligence also got a look-in in the quarterly report. Tesla highlighted its commitment to being at the forefront of AI development with a “new chapter” that started with the production of Dojo training computers. The computers are designed to meet Tesla’s neural net training needs and use in-house hardware. Tesla claims that the better the neural net training capacity, the greater the opportunity for its Autopilot team to iterate on new solutions.

“We are focusing on cost reduction, new product development that will enable future growth, investments in R&D, better vehicle financing options, continuous product improvement and generation of free cash flow,” Tesla said in its shareholder deck. “The challenges of these uncertain times are not over, but we believe we have the right ingredients for the long-term success of the business through a variety of high-potential projects.”

According to Reuters, Tesla reiterated that it expected to deliver about 1.8 million vehicles this year. The company had previously predicted in October that it would sell every car it manufactured in the foreseeable future, but in the second quarter produced 13,560 more vehicles than it delivered.

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