Rivian Automotive Inc - Class A
Q3 2024 Earnings
Market Reaction
S&P 500 over the same 30 days: +1.55%.
Did RIVN Beat Earnings? Q3 2024 Results
Rivian delivered a bruising third quarter, missing on both top and bottom lines as a production disruption rippled through its financials. The electric vehicle maker posted a loss of $1.08 per share against a consensus estimate of $0.92, a 17.39% miss, while revenue of $874.00 million fell 11.68% short of the $989.58 million analysts expected and represented a steep 34.6% decline from the year-ago period. The culprit was a shortage of a shared component within the Enduro motor system, which curtailed output to just 13,157 vehicles and forced Rivian to revise its full-year production target to 47,000 to 49,000 units, pressuring fixed-cost absorption and prompting a guidance revision for adjusted EBITDA to a loss of $2.83 billion to $2.88 billion. Still, management pointed to meaningful progress, including narrowing gross profit losses and a path to modest positive gross profit in Q4 2024, supported by premium variant mix shifts and a targeted 20% material cost reduction for R1 Dual-Motor vehicles, while the anticipated close of the Volkswagen joint venture in Q4 is expected to shore up the company's longer-term runway toward R2 production in 2026.
- Production disruption due to Enduro motor component shortage negatively impacted deliveries and revenue
- Revenue decline partially driven by timing of higher EDV deliveries in Q3 2023 and challenging consumer environment
- Gross profit losses improved year-over-year due to lower delivery volume, partially offset by cost of revenue efficiency initiatives
- LCNRV write-downs and firm purchase commitment losses decreased to $140 million from $452 million year-over-year
- Operating expenses at lowest level in three years; stock-based compensation expense declined significantly
- Second generation R1 material cost improvements from design changes, supplier negotiations, and lower raw material costs
“This quarter we have made progress against our key objectives and have seen meaningful progress on our Gen 2 R1 cost structure due to the new technologies incorporated into the vehicle and manufacturing process. We are excited about the future and our midsize SUV, R2, which we believe will be a fundamental driver of Rivian's growth. We're also looking forward to closing our proposed joint venture with Volkswagen Group which is expected in the fourth quarter.”
Rivian CEO, on the earnings call
Forward Guidance & Outlook
Rivian reaffirmed its 2024 delivery outlook of 50,500 to 52,000 vehicles and capital expenditures of $1,200 million. Production guidance was reaffirmed at 47,000 to 49,000 vehicles following a prior revision due to an Enduro motor component shortage. Annual adjusted EBITDA guidance was revised to a loss of $2.825 billion to $2.875 billion. The company expects to achieve modest positive gross profit in Q4 2024, driven by improved revenue per unit, variable cost reductions (including a targeted 20% material cost reduction for R1 Dual-Motor vehicles), and fixed cost efficiencies. R2 launch is targeted for the first half of 2026 in Normal, Illinois, with R2 material costs anticipated to be 45% lower than a comparable Gen 2 R1 vehicle. The Volkswagen Group joint venture was expected to close in Q4 2024, with investments expected to fund operations through R2 ramp and enable a path to positive free cash flow.
RIVN YoY Financials
RIVN Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.