Electric vertical takeoff and landing (eVTOL) aircraft manufacturer Joby Aviation is still losing millions in its pursuit of the country’s first eVTOL air taxi route, but its investments are beginning to pay off.
The Santa Cruz, California-based firm on Wednesday reported earnings for the second quarter of 2023, reflecting a net loss of $286 million. But the company’s recent milestones, as well as its strong liquidity position of $1.2 billion in cash and short-term investments, hold promise for its planned entry into service in 2025.
Joby’s net loss “reflected the loss on the revaluation of derivative liabilities of $181 million and operating expenses of $116 million, partly offset by interest and other income of $11 million,” the company said in a letter to shareholders. That’s $236 million more than in Q2 2022 and a $173 million increase quarter over quarter. The company’s net loss per share of 45 cents missed consensus analyst estimates by 30 cents.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) also fell $9.2 million year over year to $83 million, which Joby attributed to growing operating expenses. Those costs rose $16.3 million over the previous quarter to support employee expenses related to the certification and manufacture of its eVTOL.
However, Joby did report a whopping $1.2 billion in cash and short-term investments at the end of the quarter. That’s crucial because, like other air taxi manufacturers, it does not yet generate revenue. The company’s strong cash position was buoyed by a $180 million investment from Baillie Gifford in May and a $100 million cash infusion from SK Telecom in June.
So, while Joby’s net loss widened, it has plenty of cash on hand to support its certification and manufacturing activities. And in Q2, it made significant progress on both fronts.
Joby’s Q2 Highlights
Joby’s most crucial milestone in Q2 was the rollout of its first production aircraft from its assembly line in Marina, California. Manufactured to production specs for FAA type certification, the latest iteration of the Joby eVTOL has a payload of one pilot and four passengers, a carrying capacity of 1,000 pounds, and can fly up to 100 sm (87 nm) at 200 mph (174 knots). During flight, it produces just 45 dBA of noise, somewhere between the volume of rustling leaves and normal conversation.
Joby also recently released a few performance metrics for the aircraft. Its six electric motors combined generate 236 kilowatts of power at peak performance, twice that of the most powerful Tesla model available.
The aircraft is expected to become the first eVTOL to be delivered to a customer when it reaches Edwards Air Force Base in early 2024. There, it will be flown as part of Joby’s Air Force Agility Prime contract worth up to $131 million. Already, the company has begun training Air Force pilots to fly the eVTOL and installing charging infrastructure at the base.
On Joby’s Q2 earnings call, CEO JoeBen Bevirt confirmed that the air taxi completed its first flight last week, following the FAA’s blessing in June. Bevirt added that the company recently hosted 70 members of the Federal AAM Interagency Working Group—composed of representatives from 22 government departments and agencies—to witness an airborne test. California Governor Gavin Newsom also paid a visit.
Bevirt said Joby is still evaluating sites for its scaled manufacturing facility. But the company said its second production aircraft is already being built.
“We’re proud to have launched production in our home state of California,” Bevirt said in Joby’s Q2 letter to shareholders. “I’m incredibly grateful to the Joby team for their commitment to ensuring Joby remains a clear leader in this new sector and to Toyota for sharing their knowledge and experience with us over many years.”
While these early flights will help Joby validate its technology ahead of FAA testing, the company also made progress on the paperwork side of certification.
It has now submitted all of its certification plans—which specify the tests, analyses, and design reports it will perform to show its design conforms with the safety regulations outlined in its G-2 Means of Compliance—and seen two-thirds of them approved by the FAA. Certification plans are the third of five steps in type design approval. Now, Joby will use the bases accepted in stage three to move to the testing and analysis phase, in which it will write and execute test plans.
“The vast majority of our certification basis is now in place, which means the vast majority of our effort is now focused on the implementation stage of our certification which starts with stage four,” Didier Papadopoulos, head of aircraft OEM at Joby, said on the Q2 earnings call.
In addition, Joby established its new headquarters in Santa Cruz and stands to benefit from Innovate28, the FAA’s latest plan for the integration of advanced air mobility (AAM) aircraft. The blueprint lays out the agency’s efforts to get eVTOL operations in the sky within the next few years, with operations at scale expected a few years after that.
“This is a remarkably positive step, with the FAA effectively pulling forward the date it is planning to support scaled operations from the 2030s to 2028, in time for the LA Olympics,” Bevirt said on the earnings call.
All in all, while Joby’s financials were unspectacular, the company made significant strides toward entry into service. The hope is that those milestones will keep it on track to fly air taxi routes with Delta in 2025.
“Back on our fourth-quarter call, we outlined goals for the first half of 2023,” Bevirt said. “We said we would submit all of our certification plans to the FAA, and we did. We said we would roll out our first production prototype and fly it, and we have. Each of these goals is a huge milestone for Joby and reflects our relentless commitment to execution.”
Joby’s main competitor, Archer Aviation, will report its own Q2 earnings next Wednesday, while German rival Lilium released its Q2 shareholder letter in July.
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