Release Date: August 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Joby Aviation Inc (JOBY, Financial) achieved significant progress in certification, reaching 37% completion on the Joby side of Stage four.
- The company successfully flew its second production prototype aircraft and rolled out its third, with the fourth in final assembly.
- Joby Aviation Inc (JOBY) applied for certification in Australia and signed a memorandum of understanding with Maconomy, a subsidiary of Saudi Aramco, for the direct purchase of aircraft.
- The company received FAA authorization to use its Elevate OS operating system, designed to enable high-tempo on-demand air taxi operations.
- Joby Aviation Inc (JOBY) demonstrated a 561-mile hydrogen and electric flight, showcasing the potential for regional emission-free travel.
Negative Points
- Joby Aviation Inc (JOBY) reported a net loss of $123 million for Q2 2024, reflecting a loss from operations of about $144 million.
- The company's cash use totaled $99 million for the quarter, contributing to concerns about its cash burn rate.
- There are uncertainties and risks associated with the certification process, which could impact the timeline for commercial operations.
- The company faces challenges in scaling production to meet its goal of one aircraft per month by the end of the year.
- Joby Aviation Inc (JOBY) needs to manage the complexities of international expansion and regulatory approvals in multiple countries.
Q & A Highlights
Q: Can you share your vision regarding commercialization, especially with the recent application in Australia and other international markets?
A: We are targeting a commercial launch in Dubai next year, with infrastructure groundbreaking later this year and first flights in the first half of next year. We also see tremendous international opportunities in Japan, Korea, the UK, and Australia, leveraging bilateral relationships with the FAA. Additionally, we are excited about our partnerships with Uber and Delta in the US, particularly in New York and LA. (JoeBen Bevirt, CEO)
Q: What lessons have been learned from the rollout of the third prototype aircraft that will help with future production ramp-up?
A: We have seen significant cost reductions and quality improvements. Our partnership with Toyota has been beneficial, and we are incorporating lessons from each successive plane. We are optimizing workflows, building some automation, and seeing double-digit yield improvements. This helps us support a mature quality management system, which is crucial for obtaining a production certificate. (Matthew Field, CFO and Didier Papadopoulos, President of Aircraft OEM)
Q: Can you elaborate on the mid to long-term vision for the hydrogen aircraft?
A: Our hydrogen-electric program has the potential to dramatically improve sustainability and performance. The recent demonstration was to get regulators to lean in and work with us on certification processes. The spend on this program has been small, but the potential impact is significant, allowing us to address large and adjacent markets. (JoeBen Bevirt, CEO)
Q: What are the current R&D costs and how do you see them evolving in 2025 and beyond?
A: R&D costs are categorized into three buckets: the engineering factory, manufacturing costs, and government contracts. The engineering factory costs will taper off as we get closer to certification, while manufacturing costs will grow to support production and commercialization. Government contract costs will ebb and flow based on opportunities. (Matthew Field, CFO)
Q: What is your latest thinking on validating FAA type certification with EASA, given their higher safety standards?
A: We continue to work closely with both the FAA and EASA to align on certification paths. We have seen steps towards more alignment on key points and will continue to expand our certification efforts with other international regulators. (Didier Papadopoulos, President of Aircraft OEM)
Q: What type of flying have you done with the production conforming aircraft, and where are you in the flight test process?
A: We have been flying full-scale aircraft since 2017 and have continued to fly our preproduction prototype. Most of our focus now is on making progress in Stage 4 of certification, building certified software and hardware, and converting development test assets into conforming test assets. We expect to have four aircraft in active flight test next quarter. (Didier Papadopoulos, President of Aircraft OEM)
Q: Why continue to build production conforming aircraft versus switching to certification conforming aircraft?
A: Building these aircraft helps us mature our quality management system and supports our path towards production certification. Each aircraft has a dual purpose: for engineering verification, DoD applications, or international demonstrations. This strategy helps us scale cost-effectively and quickly. (Didier Papadopoulos, President of Aircraft OEM and Matthew Field, CFO)
Q: What are the risks of expanding into new areas like hydrogen and autonomy, and how are you mitigating them?
A: We remain extremely focused on the certification of our battery-electric aircraft. The incremental technologies like hydrogen and autonomy build on this platform and expand our opportunities. We are optimistic about our progression as we expand into next-generation aviation technologies. (JoeBen Bevirt, CEO)
Q: Can you define what you mean by core versus non-core markets?
A: All the markets we are targeting, including Dubai, the US, Japan, Korea, the UK, and Australia, are considered core markets. We are actively working on potential services in these areas and leveraging bilateral arrangements to expand our reach. (Paul Sciarra, Executive Chairman)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
