Joby Aviation, Inc. — Q3 2022 Form 10-Q
Reporting period: Quarter and nine months ended September 30, 2022. Financial statements are unaudited. Joby is developing electric vertical takeoff and landing aircraft and plans to operate an integrated air transportation service; it is not yet reporting commercial service revenue.
Financial performance and liquidity
| Metric | Q3 2022 | Q3 2021 | Nine months 2022 | Nine months 2021 |
|---|---|---|---|---|
| Revenue | No revenue reported; the statements provide no revenue value. | |||
| Research and development expense | $73.9 million | $52.1 million | $220.1 million | $140.3 million |
| Selling, general and administrative expense | $23.3 million | $15.6 million | $70.7 million | $41.6 million |
| Operating loss | $(97.1) million | $(67.7) million | $(290.8) million | $(181.9) million |
| Net loss | $(79.2) million | $(78.9) million | $(191.1) million | $(185.4) million |
| Net loss per share | $(0.14) | $(0.20) | $(0.33) | $(0.91) |
| Net cash used in operating activities | Not presented for the quarter | $(182.8) million | $(147.0) million |
Gross margin is not meaningful because the company reported no revenue. At September 30, cash, cash equivalents and short-term investments totaled $1.075 billion; restricted cash was an additional $4.0 million. Total liabilities were $113.7 million, including $24.2 million of warrant liabilities and $58.5 million of earnout-share liabilities. The filing does not present a separate conventional debt balance; capital-lease payments totaled $1.1 million, including $0.4 million current and $0.7 million noncurrent principal.
Management said available cash and investments should fund working capital and capital requirements for at least 12 months and support the company through planned initial service operations in 2024, assuming expectations hold. Stockholders’ equity was $1.160 billion; accumulated deficit was $667.7 million. Stock-based compensation was $51.9 million for the first nine months.
Changes versus prior comparable periods
- Q3 operating expenses rose 43% year over year, driven mainly by staffing, engineering, software development, manufacturing-process development, certification, and prototype materials. Nine-month operating expenses rose 60%.
- Q3 net loss was broadly similar to the prior-year quarter, while nine-month net loss increased 3%, despite a $72.1 million nine-month gain from fair-value changes in warrants and earnout shares.
- Interest and other income increased as interest rates rose and Joby held substantial invested funds. Q3 and nine-month results also benefited from warrant and earnout-liability remeasurement gains; these are non-operating fair-value items, not service revenue.
- Cash, cash equivalents and restricted cash fell $758.5 million during the first nine months. The company also shifted funds into short-term investments: cash and short-term investments together declined from $1.299 billion at year-end 2021 to $1.075 billion at September 30, 2022.
Outlook, management commentary and risks
- Joby targets initial U.S. Department of Defense service operations in 2024 and commercial passenger service in 2025. It says the aircraft has completed more than 1,000 test flights and describes its FAA certification basis as signed at stage 4; these milestones do not constitute aircraft certification.
- The FAA changed its planned certification approach to the powered-lift classification; Joby re-signed an updated G-1 certification basis in July 2022. The FAA indicated relevant operational rules may not be finalized until late 2024. Rulemaking, certification, production approvals, or other authorizations could delay launches.
- Joby’s expanded government contracts have potential value of more than $75 million through 2025, but the government may modify, curtail, or terminate contracts, or decline options.
- Management expects continued losses and negative operating cash flow while the business is developed. Longer-term funding needs could require equity or debt financing, with potential dilution or restrictive terms. Key execution risks include certification, manufacturing scale and cost, hiring, supplier and infrastructure readiness, aircraft utilization, weather-related disruption, competition, and uncertain customer adoption.
- Hiring in software development and verification has progressed slower than initially expected. SummerBio, a related-party equity-method investment, decided to wind down; Joby recorded a $6.8 million impairment, while nine-month equity-method income was $19.0 million net of that impairment.
- On October 7, 2022, after quarter-end, Joby agreed to a Delta Air Lines collaboration and issued 11.0 million shares for $60 million. Delta also received warrants to purchase up to 12.8 million shares subject to collaboration milestones.
- Management disclosed a previously identified material weakness in internal controls related to insufficient technical accounting staffing. Remediation efforts are ongoing and require further validation and testing.
Most important facts for investors to verify
- Progress and timing of FAA certification, operational rules, and production and service approvals against the 2024 and 2025 targets.
- Cash burn, spending plans, and whether the stated liquidity runway remains adequate as manufacturing and commercialization investment increases.
- Evidence that aircraft can be produced at scale and operated with viable costs, utilization, safety, and customer demand.
- Terms, milestones, and potential dilution from the Delta warrants, alongside the impact of stock-based compensation and other potential share issuance.
- Whether internal-control remediation is completed and whether fair-value gains, SummerBio income, or other unusual items materially affect reported results.