Thursday, December 7, 2023
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Shares of Rivian Automotive (RIVN 2.14%) were flat in Tuesday’s after-hours trading session following the premium electric vehicle (EV) maker’s release of its second-quarter 2023 results. On the positive side, the quarter’s revenue and adjusted earnings per share came in higher than Wall Street had expected. Moreover, management increased its 2023 production guidance to 52,000 total units, up from 50,000.

On the other hand, many investors are still probably concerned about Rivian’s cash-burn rate. It’s crucial for early-stage EV companies to quickly ramp up production to drive down their fixed cost per vehicle and lower the pace at which they burn through cash. As background, Rivian makes two all-electric vehicles for consumers: the R1T (a pickup truck) and R1S (an SUV). It also produces an electric delivery vehicle for Amazon, which owns a sizable chunk of Rivian stock. These vehicles are made at its factory in Illinois.

Below is an overview of Rivian’s second quarter and outlook, centred around eight key metrics.

1. Revenue of $1.12 billion

In the second quarter, Rivian’s revenue was $1.12 billion, which surpassed the Wall Street consensus estimate of $1 billion. This result was up 208% from the year-ago period and up 70% from the prior quarter. Revenue was primarily generated from vehicles delivered in the quarter. Sales of regulatory credits contributed $34 million to revenue.

2. Produced 13,992 vehicles, up 49% from the first quarter

In the second quarter, Rivian produced 13,992 vehicles, up 49% from the prior quarter. The company said in its shareholder letter that this “increase was supported by the continued ramp of our in-house Enduro motor line.” In the first half of 2023, the company produced 23,387 vehicles, which is close to the total it produced (24,337) during the full year of 2022.  Also during the second quarter, the company delivered 12,640 vehicles, 59% higher than in the first quarter.

3. Continued rollout of Amazon’s 100,000 delivery vans

Rivian continues to fulfil Amazon’s initial order of 100,000 custom-designed electric delivery vans (EDVs). We don’t know how many EDVs were produced and delivered in the quarter.

However, the company said that as of early July, there were EDVs in operation across more than 800 cities in the United States, and that it recently began delivery of these vehicles to Amazon in Europe.

4. Operating loss of $1.29 billion

Loss from operations was $1.29 billion, which is 25% narrower than the operating loss in the same period last year.

5. Adjusted net loss of $1.08 per share

The reported net loss was $1.20 billion, or $1.27 per share, a 33% improvement from the year-ago quarter.

Adjusted for one-time items, the net loss was $1.02 billion, or $1.08 per share, a 33% narrowing from the year-ago period. This result beat the loss of $1.41 that Wall Street had projected.

6. Cash used in operations was $1.36 billion

In the second quarter, Rivian used $1.36 billion in cash to run its operations. This result is higher than the $1.20 billion in cash it used in the year-ago period, but an improvement from the $1.52 billion in cash it used in the first quarter.

The year-over-year widening of the negative operating cash flow was primarily driven by the increased inventory of raw materials and finished goods stemming from its ramp-up in production.

Free cash flow was negative $1.62 billion. While this is wider than the negative $1.56 billion in the year-ago period, it’s narrower than the negative $1.80 billion in the first quarter.

7. $10.2 billion in cash, cash equivalents, and short-term investments at quarter-end

Rivian ended the quarter with $10.2 billion in cash, cash equivalents, and short-term (liquid) investments, and $2.72 billion in long-term debt on its balance sheet.

At the company’s current cash-burn rate of $1.62 billion per quarter, its cash balance would last about 6.3 quarters or just over one and a half years. For an early-stage EV maker, Rivian’s liquidity position is relatively decent, though investors will want to see the cash burn slow down soon.

8. Increased annual production guidance to 52,000 vehicles

Rivian raised its 2023 vehicle production forecast to 52,000 total units, up from 50,000. In 2022, it produced a total of 24,337 vehicles, so its 2023 production guidance represents an expected 114% annual increase.

The company also slightly improved its outlook for adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to negative $4.2 billion, from negative $4.3 billion.

In short, Rivian turned in a solid second-quarter report, and investors should be particularly pleased with the increase in the 2023 production outlook. They also should be happy with this standout stat: Gross profit per vehicle delivered improved by about $35,000 from the first quarter, driven by greater production, material cost reduction, and higher average revenue per vehicle.


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