Rivian (RIVN) will give investors a crucial first quarter update on its financials as the pure-play adventure EV maker attempts to turn the tide from losses to profit this year.
In the first quarter Rivian revealed its upcoming R2 mid-size EV and strong Q1 sales, but also announced job cuts and a pause in the development of its Georgia plant. The company also received a financial boon from the state of Illinois: an $827 million incentive package to expand its facility in the city of Normal.
Conserving cash while still developing its new vehicles (and retooling its existing Normal plant) is of paramount concern for investors as 2024 progresses.
For the quarter, Rivian is expected to report revenue of $1.175 billion, a massive 78% jump from a year ago. The revenue bump will not translate into profit yet, with the company expected to report an adjusted loss of $1.15 per share, with an adjusted net income loss of $1.129 billion. Operating profit is expected to come in slightly worse, with a $1.299 billion loss, along with EBITDA of negative $856.6 million.
Last month the company did, however, report first quarter R1T and R1S production of 13,980 and deliveries of 13,588, topping expectations of around 12,400 units. The company also reaffirmed production guidance of 57,000 vehicles in 2024.
Investors will also be looking for any updates on Rivian’s full-year profitability metrics. Rivian previously said it sees an adjusted EBITDA loss of $2.70 billion for 2024, with capital expenditure outlays hitting $1.75 billion.
Part of bringing down those costs came in the form of a 10% salaried staff reduction, with the company citing economic uncertainty. During its Q4 earnings report, Rivian reiterated its forecast to reach “modest gross profit” by the end of 2024. CFO Claire McDonough noted that the company was “very close” to achieving a positive contribution margin at the end of 2023.
In terms of its cash cushion, Rivian said it had $7.86 billion in cash and cash equivalents at the end of Q4, down from the $9.1 billion it had at the end of Q3.
R2 and future vehicles
In March at an event in Laguna Beach, Calif., Rivian unveiled its smaller, less expensive electric R2 SUV, which is expected to arrive in 2026. In a surprise announcement, the company also revealed smaller R3 crossovers, which gave the stock a boost, though shares are still down a whopping 55% year to date.
Rivian also said it will produce the R2 at its existing US factory instead of its upcoming Georgia factory, saving the company more than $2 billion. Rivian said its Georgia factory development is suspended at the moment, though Georgia Governor Brian Kemp said Rivian CEO RJ Scaringe reaffirmed the company wasn’t abandoning the project.
Scaringe said once the R2 was ready for a larger rollout, the upcoming Georgia facility would handle the rollout. The company also said it would be launching its R2 in Europe, which would be a huge market for the company as it’s not currently selling its larger R1 vehicles on the continent.
Wall Street is still skeptical of the Rivian profitability story, even with the wider appeal of the R2.
“In our view, the path to R2 profitability would also be harder to believe if the company cannot deliver gross margin positive on R1,” Deutsche Bank’s Emmanuel Rosner wrote following the R2’s reveal.
“Furthermore, with R2 priced starting $45k and directly competing with Tesla’s Model Y (priced at $44k for the lowest trim), we wonder how Rivian will be able to achieve positive margin with much more content, and more limited scale vs. Tesla who has world-class sourcing conditions,” he said.
Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.
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