Rivian gained positive momentum in the second-quarter and beat Wall Street expectations as the company ramped up EV sales, narrowed losses, reduced costs and shored up its supply chain.
The company struck a confident tone in its second-quarter earnings, which was released after markets closed Tuesday, even raising its production guidance for the year from 50,000 to 52,000 vehicles. The company said it expects its adjusted earnings guidance for the year to improve to a loss of $4.2 billion, which while still a massive number is better than it expected.
Rivian reported revenue of $1.12 billion in the second quarter, a more than threefold increase from the same period last year. That revenue jump was largely driven by the delivery (or sale) of 12,640 vehicles. About $34 million of that revenue came from the sale of zero-emission regulatory credits, according to the company’s regulatory filing.
Rivian is still very much operating at a loss, although even that showed improvement. Rivian reported a net loss of $1.19 billion compared to a $1.7 billion loss in Q2 2022. On an adjusted basis, Rivian reported a loss of $881 million, or $1.08 per share.
Analysts polled by Yahoo finance expected revenue of $1 billion and an adjusted earning per share loss of $1.36.
“Our second quarter results reflect our continued focus on cost efficiency as we accelerate the drive towards profitability,” founder and CEO RJ Scaringe said in a statement. “On a quarter-over-quarter basis, delivered vehicles grew around 60% while gross profit per vehicle improved by about $35,000. We have achieved meaningful reductions in both R1 and EDV vehicle unit cost across the key components, including material costs, overhead and logistics. It was a strong quarter, and we remain focused on ramping production, driving cost efficiencies, developing future technologies, and enhancing the customer experience.”
The takeaway here is a company that seems to have resolved some of its biggest money-sucking problems, including less-than-ideal contracts with some suppliers. Rivian said in its letter to shareholders that it negotiated supplier price reductions, including the elimination of short-term premiums.
Rivian also lowered costs through layoffs in 2022 and 2023 that reduced payroll and other expenses.
For instance, Rivian spent $444 million on research and development in the second quarter, about 18% less than the same period last year. The company said the decrease was primarily due to a $94 million reduction in payroll and related expenses, including stock-based compensation.
Capital expenditures also dropped to $255 million compared to $359 million in the same year-ago period. Rivian said cap expenditures were higher last year because it spent more on equipment and construction in the early stages of its production.
Rivian said it ended the second quarter with $10.2 billion in cash, cash equivalents, and short-term investments.