Joby Aviation, Inc. — Q1 2023 Form 10-Q
Reporting period: Three months ended March 31, 2023; balance-sheet figures are as of March 31, 2023, unless otherwise noted. Amounts below are in U.S. dollars.
Business context and financial performance
Joby is developing electric vertical takeoff and landing aircraft and plans to operate an air transportation service rather than primarily sell aircraft. The company remains pre-commercial and reported no revenue in the statements presented.
| Metric | Q1 2023 | Q1 2022 |
|---|---|---|
| Research and development expense | $75.5 million | $72.1 million |
| Selling, general and administrative expense | $24.2 million | $22.3 million |
| Total operating expenses / operating loss | $99.7 million | $94.3 million |
| Interest and other income, net | $8.4 million | $0.8 million |
| Income from equity-method investment | None | $14.5 million |
| Warrant and earnout fair-value change | $22.0 million loss | $16.8 million gain |
| Net loss | $113.4 million | $62.3 million |
| Net loss per share, basic and diluted | $0.19 | $0.11 |
| Net cash used in operating activities | $78.6 million | $61.4 million |
No gross margin or operating margin can be calculated from the filing’s presented results because revenue was not reported.
Liquidity, debt and balance sheet
- Cash, cash equivalents and short-term investments totaled $977.8 million, versus $1,056.8 million at December 31, 2022. This excludes restricted cash; cash, cash equivalents and restricted cash totaled $52.8 million.
- Total assets were $1.219 billion; total liabilities were $149.2 million; stockholders’ equity was $1.069 billion. Accumulated deficit was $848.0 million.
- The filing reports operating lease liabilities of $26.2 million in total. It does not identify material conventional borrowings in the presented balance sheet.
- Investing cash outflow was $19.1 million, mainly reflecting purchases of marketable securities and property and equipment, partly offset by securities maturities and sales. Financing cash inflow was $0.4 million.
- Management said available cash and investments were expected to meet working-capital and capital needs for at least the next 12 months, and expected funding to support initial service operations in 2024. It also noted potential need for additional equity or debt financing.
Material changes versus the prior comparable period
- Net loss increased $51.1 million, or 82%. Operating expenses rose 6%, while operating loss increased to $99.7 million.
- Other income shifted to a $13.6 million net loss from $32.0 million of net income. The main drivers were the $38.9 million adverse year-over-year swing in warrant and earnout remeasurement and the absence of $14.5 million of SummerBio equity-method income, after that business wound down. Higher interest income partly offset these effects.
- Operating cash use increased $17.1 million, or 28%. Investing cash use fell substantially from the prior-year period, which included much larger net purchases of marketable securities.
- Shares issued and outstanding increased to 629.5 million from 622.6 million at year-end 2022. The May 3, 2023 share count was 631.0 million before the subsequent offering described below.
Outlook, risks and unusual items
- Joby targets initial U.S. Department of Defense service operations in 2024 and commercial passenger operations in 2025. It reported more than 1,000 successful test flights and a signed, stage 4 FAA G-1 certification basis.
- The FAA indicated that eVTOL operating regulations (SFARs) were not expected to be finalized until late 2024. Certification, regulatory changes or delays, manufacturing scale-up, hiring, supply chains, costs and development of customer demand could delay launch or affect economics.
- Government contracts expanded in July 2022 and April 2023 and had potential value exceeding $131 million through 2026; the filing cautions that the government may modify, curtail or terminate contracts or not exercise options.
- Quarterly results include volatile, non-cash fair-value remeasurement of warrants and earnout shares. These liabilities totaled $94.9 million at quarter-end; no earnout shares had vested.
- Subsequent to quarter-end, Joby agreed to sell 43,985,681 shares at $4.10 per share in a registered offering, with net proceeds of approximately $180.2 million. The offering was expected to close on or about May 5, 2023.
- Management concluded disclosure controls and procedures were not effective because a previously reported material weakness remained, relating to insufficient accounting resources with deep technical accounting expertise. Remediation and effectiveness testing were ongoing.
- The company reported no material legal proceedings as of March 31, 2023. Management noted ordinary-course claims and general indemnification exposure; no related liability was recorded for those possible indemnification obligations.
Most important facts for investors to verify
- Progress and timing for FAA aircraft certification and eVTOL operating rules, and whether the 2024 and 2025 service targets remain achievable.
- Actual cash burn, planned manufacturing and infrastructure spending, and the assumptions behind management’s liquidity and runway statements.
- Offering closing, net proceeds, resulting share count and dilution, including any further financing needs.
- Development of DoD contract revenue and commercial customer demand, alongside the economics and costs of operating aircraft at scale.
- Progress in remediating the material weakness and the effect of warrant and earnout fair-value changes on reported results.