Joby Aviation, Inc. — Q2 2023 Form 10-Q
Business context and reporting period. Unaudited results cover the quarter and six months ended June 30, 2023. Joby is developing electric vertical takeoff and landing aircraft and plans to operate an air transportation service rather than primarily sell aircraft. It reported no revenue in the presented statements and remains in the development and certification stage.
Financial results and liquidity
| Metric | Q2 2023 | Q2 2022 | Six months 2023 | Six months 2022 |
|---|---|---|---|---|
| Research and development | $88.8 million | $74.2 million | $164.4 million | $146.3 million |
| Selling, general and administrative | $27.1 million | $25.2 million | $51.3 million | $47.4 million |
| Operating loss | $116.0 million | $99.4 million | $215.7 million | $193.7 million |
| Net loss | $286.1 million | $49.6 million | $399.5 million | $111.9 million |
| Net loss per share | $0.45 | $0.09 | $0.64 | $0.19 |
| Operating cash used | Not separately stated | Not separately stated | $150.3 million | $114.5 million |
At June 30, cash and cash equivalents were $382.7 million and short-term investments were $812.1 million, totaling $1.195 billion; cash, cash equivalents and restricted cash totaled $383.4 million. Management said these resources should cover working capital and capital requirements for at least the next 12 months and support the company through initial service operations in 2024. Stockholders’ equity was $1.085 billion and accumulated deficit was $1.134 billion. The filing shows no borrowings or material cash requirements from current contractual obligations; reported liabilities include lease obligations and warrant and earnout liabilities. Profit margins are not meaningful because no revenue was reported.
Material changes and unusual items
- Operating expenses increased 17% in Q2 and 11% for the first six months, mainly from hiring, aircraft engineering and software work, certification, and prototype materials. Government grants partly offset research and development costs.
- Net loss widened substantially, primarily because fair-value remeasurement of warrants and earnout shares produced a $180.7 million Q2 loss and a $202.8 million loss for the first six months. These are valuation changes, not equivalent operating cash outflows; the comparable 2022 periods recorded gains.
- Interest and other income increased to $10.7 million in Q2 and $19.1 million for the first six months, reflecting interest earned on invested funds. The 2022 equity-method income from SummerBio did not recur after that business wound down.
- Operating cash use rose to $150.3 million for the six months. Investing activities provided $98.8 million, principally from marketable-securities maturities and sales. Financing provided $284.9 million, including $180.2 million net proceeds from a registered offering and $99.9 million from a share issuance to SK Telecom.
- Shares outstanding increased from 622.6 million at year-end 2022 to 692.6 million at June 30, 2023. Potential dilution also includes warrants, equity awards and other share-based compensation.
Outlook, commentary and risks
Management targets initial Department of Defense service in 2024 and commercial passenger operations in 2025. It cited more than 1,000 successful test flights and a signed FAA stage 4 G-1 certification basis. The company has a Part 135 operating certificate for on-demand service using conventional aircraft; eVTOL operations still require further regulatory approvals and aircraft certification. The FAA’s relevant powered-lift operating rules were not expected to be finalized until late 2024, and delays could affect launch timing.
Joby expects research and development and selling, general and administrative expenses to rise as it develops, certifies and manufactures aircraft and prepares operations. Risks include certification and production delays, uncertain manufacturing costs and scale economics, capital needs and possible dilution, unproven customer demand and competition, infrastructure and utilization constraints, and the possibility that government contracts may be changed or terminated. The company said it may need additional equity or debt financing if cash generation or circumstances differ from expectations.
Disclosure controls were not effective at quarter-end due to a previously reported material weakness involving insufficient accounting resources with deep technical accounting expertise. Remediation was ongoing and required further validation and testing. The filing reported no material legal proceedings and no subsequent events requiring adjustment or disclosure.
Important facts for investors to verify
- Progress and timing for FAA aircraft certification, powered-lift operating rules, production approvals and commercial launch.
- Cash burn, investment liquidity and management’s runway assumptions, particularly as manufacturing and infrastructure spending increase.
- Customer demand, pricing, aircraft utilization and the cost and feasibility of scaled production.
- Changes in warrant and earnout fair values, which materially affect reported net income or loss but are subject to valuation assumptions.
- Potential share dilution from future financing, warrants, earnout arrangements and equity awards.
- Whether the material weakness is remediated and disclosure controls become effective.