Joby Aviation, Inc. — Q1 2022 Form 10-Q
Reporting period: Three months ended March 31, 2022. Joby is developing electric vertical-takeoff-and-landing aircraft and plans to manufacture and operate them as an aerial ridesharing service. It reported no revenue for the quarter; meaningful operating margins are therefore not available.
Financial performance and liquidity
| Metric | Q1 2022 | Q1 2021 / prior date |
|---|---|---|
| Revenue | None reported | None reported |
| Research and development expense | $72.1 million | $34.2 million |
| Selling, general and administrative expense | $22.3 million | $11.6 million |
| Operating loss | $94.3 million | $45.8 million |
| Net loss | $62.3 million | $41.5 million |
| Operating cash used | $61.4 million | $29.7 million |
| Cash, cash equivalents and short-term investments | $1,220.8 million | $1,298.8 million at Dec. 31, 2021 |
| Total assets / total liabilities | $1,423.3 million / $158.9 million | $1,488.4 million / $171.6 million at Dec. 31, 2021 |
Net loss per share was $0.11, compared with $0.37 in Q1 2021; weighted-average shares rose to 579.1 million from 111.0 million. Other income included a $16.8 million gain from changes in fair value of warrants and earnout shares and $14.5 million of equity-method income from SummerBio. These items materially offset the operating loss and are not operating revenue.
Investing cash outflow was $476.1 million, largely reflecting purchases of marketable securities; property and equipment purchases were $10.8 million. Financing cash flow was $0.1 million. The company held $417.1 million in cash and equivalents and $803.7 million in short-term investments at quarter-end. Capital lease payments totaled $1.4 million, including $0.6 million current and $0.8 million noncurrent; the filing reports no material cash requirements from current contractual obligations.
Changes and notable items
- Operating expenses more than doubled year over year: R&D rose 111% and SG&A rose 91%, principally from hiring, aircraft engineering and testing, manufacturing-process development, certification work, materials, insurance and professional services.
- Net loss increased by $20.8 million, while other income rose substantially from SummerBio earnings and fair-value movements. The fair-value gain included a $19.4 million earnout-liability gain, partly offset by losses on warrant liabilities.
- Unrealized losses on available-for-sale securities were $2.6 million. Stock-based compensation expense was $19.4 million.
- In March, Joby acquired an aerospace composite manufacturing business for approximately $1.5 million in cash and $0.1 million of restricted stock units.
Outlook, risks and controls
- Management targets initial commercial passenger service in 2024. It cited more than 1,000 successful test flights and a signed FAA stage 4 G-1 certification basis. In May 2022, the FAA indicated it was reconsidering whether eVTOL aircraft should be certified under a powered-lift classification; it did not expect this change to affect current timelines.
- Joby reported more than $40 million in potential U.S. government contract payments through 2024, subject to full performance. Government contracts may be modified, curtailed or terminated.
- Management expects cash on hand to meet working-capital and capital needs for at least 12 months and expects available funds to support the company through initial commercialization. It anticipates continued operating losses and negative operating cash flow, and may require future equity or debt financing.
- Key risks include certification and commercialization delays, uncertain demand for a developing UAM market, manufacturing scale and aircraft economics, competition, weather and utilization constraints, supply-chain disruption, and the need for infrastructure and additional funding.
- The company disclosed a previously identified material weakness in internal control over financial reporting related to insufficient technical accounting staffing. Remediation efforts were underway but required further validation and testing. No material legal proceedings were reported.
Most important facts for investors to verify
- Progress and timing of FAA aircraft, production and operating certifications, including any effect of the proposed powered-lift classification.
- Cash consumption, investment portfolio liquidity and whether the stated funding runway remains sufficient as development and commercialization spending grows.
- Progress toward the 2024 launch target, manufacturing scale-up, production costs and expected service economics.
- Whether U.S. government contract payments are earned and whether additional contracts are secured.
- Remediation of the internal-control material weakness and the durability of non-operating SummerBio income and fair-value gains.