Joby Aviation, Inc. — Q2 2022 Form 10-Q
Reporting period: Quarter and six months ended June 30, 2022. Joby is developing electric vertical takeoff and landing aircraft and plans to manufacture, own and operate them as an air transportation service. It had not yet launched commercial service and reported no revenue.
Financial results and liquidity
| Metric | Q2 2022 | Q2 2021 | Six months 2022 | Six months 2021 |
|---|---|---|---|---|
| Research and development expense | $74.2 million | $54.0 million | $146.3 million | $88.2 million |
| Selling, general and administrative expense | $25.2 million | $14.3 million | $47.4 million | $26.0 million |
| Operating loss | $(99.4) million | $(68.4) million | $(193.7) million | $(114.2) million |
| Net loss | $(49.6) million | $(65.0) million | $(111.9) million | $(106.5) million |
| Operating cash used | Not separately provided | Not separately provided | $(114.5) million | $(77.5) million |
- Q2 net loss per share was $(0.09), versus $(0.58) a year earlier; six-month loss per share was $(0.19), versus $(0.96). Share counts differ substantially year over year following the 2021 merger and recapitalization.
- Q2 and six-month total other income included fair-value gains on warrants and earnout shares of $42.7 million and $59.5 million, respectively. These noncash gains helped reduce reported net loss and do not reflect operating profitability.
- At June 30, cash, cash equivalents and short-term investments totaled $1.151 billion; restricted cash was another $4.0 million. Total assets were $1.356 billion, total liabilities $127.7 million, and stockholders’ equity $1.229 billion. Accumulated deficit was $588.5 million.
- Investing cash outflow was $526.8 million in H1, largely reflecting purchases of marketable securities, partly offset by maturities and sales. Cash, cash equivalents and restricted cash declined by $641.3 million; this movement should not be read as operating burn alone.
- No revenue or gross margin was reported. The filing reports operating expenses rather than a revenue-based margin measure. No material conventional debt balance is identified; capital-lease principal payments totaled $1.249 million, with $0.583 million current and $0.666 million noncurrent.
Material changes versus prior comparable periods
- Q2 operating expenses rose 45% year over year; R&D increased 37% and SG&A increased 76%. For H1, operating expenses rose 70%, with R&D up 66% and SG&A up 83%, reflecting increased staffing, aircraft engineering and testing, manufacturing development, certification, insurance and professional services.
- Despite higher operating losses, Q2 net loss narrowed by $15.4 million, mainly because of fair-value gains on warrants and earnout shares. H1 net loss widened by $5.4 million despite higher other income, including fair-value gains and SummerBio equity-method income.
- SummerBio decided to wind down and close its testing business. Joby recorded a $6.8 million impairment of its investment; H1 equity-method income was $19.0 million net of that impairment.
- Cash and cash equivalents declined from $955.6 million at year-end 2021 to $311.1 million, while short-term investments rose from $343.2 million to $840.4 million, reflecting investment of available funds.
Outlook, risks and unusual items
- Management said available cash and investments should meet working-capital and capital needs for at least the next 12 months and expected funding to support the company through initial service operations. Joby expects continuing losses and negative operating cash flows until sustainable commercial operations; future financing may be needed, with potential dilution or restrictive debt terms.
- Joby targets commercial service beginning in 2024. It cited more than 1,000 successful test flights and a signed, stage 4 FAA certification basis. After the FAA signaled a shift toward “powered lift” certification, Joby re-signed an updated basis in July 2022; certification, production approval and operating authorization remain essential and timing is uncertain.
- The company’s U.S. Air Force and other government contracts were expanded in July 2022 and have potential value exceeding $75 million through 2025. Government customers may modify, terminate or not renew contracts.
- Key business risks include market adoption, competition, aircraft certification and manufacturing execution, supply-chain disruptions, safety and utilization constraints, infrastructure needs, and the cost and availability of financing. Management said aircraft payback and unit economics depend on production scale, cost, utilization and customer willingness to pay.
- There were no material legal proceedings reported. The filing reiterates a previously identified material weakness in internal control over financial reporting, relating to insufficient full-time personnel with deep technical accounting expertise. Remediation efforts were ongoing and had not yet been validated over sustained reporting cycles.
Investor verification priorities
- Track FAA certification progress and whether the updated powered-lift certification basis affects the 2024 service target.
- Monitor cash burn, investment balances and funding runway against planned manufacturing, infrastructure and commercialization spending.
- Separate operating performance from noncash warrant and earnout fair-value changes and SummerBio-related income or impairment.
- Verify progress toward aircraft production, unit-cost targets, utilization assumptions, government contract execution and commercial demand.
- Follow remediation and testing of the disclosed internal-control material weakness, and assess potential dilution from equity awards and future financing.