Joby Aviation, Inc. — 2022 Form 10-K
Reporting period: Fiscal year ended December 31, 2022. Filed February 28, 2023. Joby is developing electric vertical takeoff and landing aircraft and plans to manufacture and operate them as an air-transportation service. It had not begun commercial passenger operations.
Financial results and liquidity
| Metric | 2022 | 2021 | Change |
|---|---|---|---|
| Revenue | No commercial revenue reported | No commercial revenue reported | Not applicable |
| Research and development expense | $296.3 million | $197.6 million | +50% |
| Selling, general and administrative expense | $95.9 million | $61.5 million | +56% |
| Operating loss | $(392.2) million | $(259.1) million | Loss increased 51% |
| Net loss | $(258.0) million | $(180.3) million | Loss increased 43% |
| Net loss per share, basic and diluted | $(0.44) | $(0.61) | Lower loss per share, reflecting a higher weighted-average share count |
| Net cash used in operating activities | $(235.9) million | $(195.7) million | Cash use increased 21% |
Gross margin is not meaningful because the filing reports no commercial operations or revenue. Operating expenses rose as Joby expanded engineering, software development, certification, manufacturing preparation and headcount. Net loss also reflects $134.3 million of total other income, including a $98.0 million noncash gain from revaluing warrants and earnout-share liabilities; it is not an operating profit measure. Interest and other income was $16.9 million. Joby recorded $69.1 million of stock-based compensation.
At year-end, cash and cash equivalents were $146.1 million, short-term investments $910.7 million, and restricted cash $4.0 million. The company reported $1.057 billion in cash, cash equivalents and short-term investments, excluding restricted cash. Operating cash use was $235.9 million; investing activities used $630.8 million, mainly reflecting purchases of marketable securities and property and equipment. Financing activities provided $60.5 million, primarily from Delta. Total liabilities were $128.2 million, including $27.3 million of operating lease liabilities, $1.3 million of finance lease liabilities, and a $0.7 million tenant-improvement loan balance. The filing does not present a conventional debt total as a key metric. Management said available cash and investments should cover working capital and capital requirements for at least 12 months and, together with expected future operating cash, support the business through initial service operations in 2024; continued losses and future capital needs remain.
Business progress, changes and outlook
- Joby reported more than 1,000 prototype test flights, completion of pilot production lines in San Carlos and Marina, California, and the start of production-prototype manufacturing.
- After the FAA shifted eVTOL certification toward the “powered lift” classification, Joby signed an updated G-1 certification basis in July 2022, published in the Federal Register in November. The company said it had effectively completed two of five type-certification stages and reached 94% progress on Means of Compliance.
- Joby received a Part 135 air-carrier certificate in 2022, but still needs aircraft type and production certification and eVTOL-specific operating approvals. Management’s targets were initial Department of Defense operations in 2024 and commercial passenger service in 2025.
- Delta invested $60 million in October 2022 for common stock and received warrants that could enable up to $200 million in total investment. The warrants cover up to 12.8 million shares, subject to milestones and exercise terms. Joby also expanded its Uber collaboration to global markets. U.S. government contracts, expanded in 2022 to include the Marine Corps, had potential payments exceeding $75 million through 2025, subject to performance.
- Management’s illustrative, long-term unit-economics estimates included $3 per passenger mile at scale, approximately $2.2 million in annual net revenue and $1.0 million in earnings per aircraft, and a 1.3-year payback on a projected 10-year service life. These are projections, not established results or formal near-term guidance.
Risks, contingencies and unusual items
- Certification, production approval and eVTOL operating rules could take longer than expected. The FAA indicated that relevant special operating regulations might not be finalized until late 2024; delays or changes could push back the planned launch.
- Commercial viability depends on customer adoption, pricing, aircraft performance and safety, manufacturing scale, aircraft utilization, supplier availability, and access to suitable skyports and airport infrastructure. Weather, air-traffic constraints and local approvals may limit operations.
- A remotely piloted experimental prototype was involved in a February 2022 flight-test accident. Joby said it did not then expect a significant effect on operations or certification timing; the company and FAA/NTSB were investigating.
- Joby reported an accumulated deficit of $734.7 million and expects continued losses and negative operating cash flow. Further financing may be needed and could dilute shareholders or add restrictive debt terms.
- SummerBio, an equity-method investment, wound down operations in 2022. Joby recorded a $6.4 million impairment; reported 2022 equity-method income of $19.5 million was net of that impairment.
- Management and the auditor concluded that internal control over financial reporting was ineffective at year-end because of a material weakness: insufficient accounting resources with deep technical-accounting expertise. The auditor gave an adverse opinion on internal controls but an unqualified opinion on the financial statements.
- The filing reports no material legal proceedings at December 31, 2022. It also identifies potential dilution from warrants, equity awards and future financing; 622.6 million common shares were outstanding at year-end, and 628.6 million as of February 21, 2023.
Important facts for investors to verify
- Current FAA type-certification, production-certification and eVTOL operating-rule progress, and whether the 2024 and 2025 operating targets remain achievable.
- Actual cash burn, investment liquidity, planned manufacturing and infrastructure spending, and whether additional capital will be required before commercial service.
- Progress and costs in production-prototype testing, supplier qualification, manufacturing scale-up, and development of skyport access.
- Evidence supporting projected aircraft utilization, passenger demand, costs, pricing, revenue, earnings and payback assumptions.
- Potential dilution from Delta’s milestone-based warrants, other warrants, equity compensation and future financing.
- Remediation and sustained testing of the material weakness in financial reporting controls, and developments in the investigation of the 2022 prototype accident.