JOBY - NYSE

Greetings and welcome to Joby Aviation's Fourth Quarter 2023 Conference Call and Webcast. At this time, all participants are in a listen-only mode. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Teresa Thuruthiyil.

Thank you. Hi, everyone, and welcome to Joby Aviation's Fourth Quarter and Fiscal Year 2023 Financial Results Conference Call. My name is Teresa Thuruthiyil and I'm Joby's Head of Investor Relations. On the call today, we have JoeBen Bevirt, Founder and Chief Executive Officer; Paul Sciarra, Executive Chairman; Didier Papadopoulos, President of Aircraft OEM; and Matt Field, Chief Financial Officer. After management's prepared remarks, we will open the call for questions. Please note that our discussion today will include statements regarding future events and financial performance as well as statements of belief, expectation, and intent. These forward-looking statements are based on management's current expectations and involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied. For a more detailed discussion of these risks and uncertainties, please refer to our filings with the SEC and the Safe Harbor disclaimer contained in today's shareholder letter. The forward-looking statements included in this call are made only as of the date of this call and the company does not assume any obligation to update or revise them. Also, during the call, we will refer to GAAP and non-GAAP financial measures. The reconciliation of non-GAAP to GAAP measures is included in our Q4 2023 shareholder letter, which you can find on our investor relations website along with the replay of this call. And with all of that said, I'll now turn the call over to JoeBen.

Thank you, Teresa, and thank you, everyone, for joining us today for our fourth quarter call. We entered 2023 knowing it would be a pivotal and exciting year for us, and it did not disappoint. Over the first three quarters, we launched production and delivered the first eVTOL aircraft to the US Air Force ahead of schedule. We started testing with a pilot on board and have now completed more than 100 inhabited flights. We expanded our partnership with SK Telecom. We deepened our partnership with Toyota and we announced a range of new partnerships for infrastructure development. We strengthened our already strong balance sheet. We expanded our contract with the DOD. We selected a site for manufacturing in Ohio and released our first ESG report. Perhaps most importantly, we made critical progress on certification, effectively completing the second stage in February of last year, and as we announced this morning, we have now become the first eVTOL company to complete the third stage. We delivered on all the goals we set ourselves for 2023 and ended the year continuing to lead our industry on the path to commercialization. These accomplishments are tangible proof of what makes Joby special and they kept us moving steadily towards our goal of launching commercial passenger operations in 2025. During the fourth quarter, the team maintained incredible momentum as we crossed into this calendar year. A real highlight for me was welcoming a team of senior leaders from the FAA to Marina in January. This visit gave us an opportunity to demonstrate first-hand the maturity of our designs and our production processes as we discussed our certification program with them in detail. This level of positive engagement and collaboration is encouraging and will help to ensure continued US leadership in this new sector. In November, we were honored to demonstrate this leadership by completing the first eVTOL flight in New York City. This was a seminal moment for our company, seeing a Joby aircraft lift off from a Manhattan heliport and complete a flight against the backdrop of the New York City skyline was quite literally a dream come true for me, and it moved the needle. In front of the local community, Mayor Adams, and key stakeholders, we were able to demonstrate the incredibly quiet acoustic footprint of our aircraft and the opportunity presented by our technology to improve city mobility. Seeing really is believing and I'm so proud of the team that was able to make this happen. It's just another example of the tangible real-life progress we're able to demonstrate at Joby day in and day out. Our flight was followed by a commitment from the city to electrify the site and bring air taxis to one of the most iconic heliports in the world. A few weeks before that flight, we were pleased to welcome Delta CEO, Ed Bastian, and representatives from the Economic Development Corporation of New York and the Port Authority of New York and New Jersey to a community event in Brooklyn, where we highlighted our shared ambition to deliver air taxi service in New York. We continue to work closely together to realize opportunities at Delta's hubs, at JFK, LaGuardia, and LAX. And over the last few weeks, we've announced key partnerships in the New York City region to support the installation of charging infrastructure. We've also announced partnerships with Clay Lacy to support the development of our LA Network with Nomura to support our Tokyo Network, and most recently with Skyports to build infrastructure in Dubai. Working with these partners, we plan to install our global electric aviation charging system or GEACS, the first charging system designed specifically for aviation, which supports the safe and efficient operation of all electric aircraft under development today. In November, we released the specification of GEACS to the industry to accelerate the commercialization of emissions-free aviation technology. But the most significant commercial development of the quarter came in December when we signed an agreement with the Government of Dubai to launch an air taxi service in the Emirate. Announced last week at the opening of the World Government Summit, this is a landmark agreement that delivers on all three ingredients required for the successful launch of an air taxi service in any market, a definitive path to operations, well-placed infrastructure supported by dedicated partners, and an aircraft with the capacity and range to deliver meaningful customer journeys. The agreement grants Joby exclusive rights to operate air taxis in the Emirate for six years and includes financial support for initial operations. The Government of Dubai wants this service to be the first in the world, and their actions certainly reflect that ambition, with support from the very highest levels of government and a regulatory pathway that builds on FAA processes that allows for operations ahead of achieving type certification in the US. This is a remarkable opportunity for any eVTOL operator, and we're proud to have demonstrated to the Government of Dubai that Joby is the best position to deliver this service. It's a definitive tangible partnership that provides another path to delivering on our goal of starting commercial passenger service in 2025. That commitment to delivering real progress and results is exactly what we will continue to do this year. In fact, we've already started. Last month, we received our Part 145 Repair Station Certificate from the FAA. This approval lays the foundation for us to carry out maintenance, repair, and overhaul services for our future fleet, which is a core part of our vertically integrated approach to commercial operations. And just this morning, we announced that we have become the first eVTOL company to complete stage three of the FAA certification process, an incredible milestone that Didier will speak more about in a moment. With the first three stages behind us, this year we expect to make steady progress on stage four as we expand our four-credit testing across more and more of the aircraft. In addition to continuing our leadership position on certification, we expect to achieve a number of milestones this year. We expect to reach a production run rate equivalent to one aircraft a month by the end of the year as we continue to ramp production in support of certification and commercialization. We plan to break ground on our expansion in Marina and begin component manufacturing in Dayton. We will commit at least two more aircraft to the Department of Defense as part of our existing contract. And finally building on the excitement we brought to New York City in November, we plan to extend our flight exhibition series to additional key markets. We believe these are the right milestones to ensure Joby's continued leadership in the sector. While we aren't blind to the challenges ahead of us, we believe that we are best positioned to succeed with the strongest balance sheet, the best team in the industry, and most important, a laser focus on delivery. Thank you for your continued support and over to Didier to discuss our progress in more detail.

Thanks, JoeBen. I'd like to add my own appreciation for the Joby team and everything they've achieved over the 12 twelve months. It's been a remarkable period and one that's been central to keeping us on track to launch commercial service in 2025. 2023 was an incredible year for Joby, and this year we are already off to a strong start with the news we shared this morning that we are now the first eVTOL company to complete the third stage of the FAA certification process. This is the result of years of hard work, and in 2023 alone we had nearly 3,000 pages of CERT documents accepted by the FAA. This is truly an incredible milestone and I want to take a moment to underscore what it means. Across every part of our aircraft program, we can confidently proceed into submitting test plans and conducting for-credit tests in stage four. That includes the path we'll take to certify all of the structural, mechanical, and electrical systems of our aircraft, and the program-wide approach to software, cybersecurity, noise and human factors. From the carbon fiber composites to the metallics, the flight electronics to the control systems, the batteries to the electric propulsion systems, and much more, we now have a well-defined path to certification. I've been part of many aviation certification programs and this is truly an incredible milestone for us. We continue to lead the industry towards certification because of so much hard work by the Joby team, our partners, and by the dedicated FAA staff who have worked closely with us for many years to reach this point. Now our focus is fully on stage four, where we continue to ramp up our FAA for-credit testing efforts. Last quarter, we completed 30 for-credit pathfinder tests. 24 of these tests covered four electronic components, each from a different functional area on the Joby aircraft. The other six were related to our materials and processes, the building blocks for our aircraft structure. Through these pathfinder tests, we're validating our approach to testing across each area of the aircraft, ensuring our testing methods are accurate and efficient before rolling them out more widely. Those 30 tests completed in Q4 put us in a great position to complete hundreds of for-credit tests across our structural materials and flight electronics over the course of this year. We're also beginning to move up the pyramid to larger structures and systems. With the acceptance this past quarter of our test plan for the tail static load tests, we're now building our first FAA conforming tail structure to begin FAA for-credit testing. We will continue to see this progress stack up each quarter as we put more and more points on the board with the FAA. What you won't see reflected in our progress chart is all of the work the team is doing, working directly with the FAA to progressively prepare us for success at the top levels of the aircraft pyramid, testing at the integrated system level and at the aircraft level. Last year, a lot of our interactions with the FAA was getting their hands on documentation such as CERT plans and system reviews. This year, it's progressively more about FAA hands on the actual aircraft systems. With all of our aircraft certification plans accepted, we're able to map out dozens of upcoming visits with the FAA, focused on dry-running our system level and aircraft level tests. This is the heart of the certification process. It's about Joby and the FAA working together at our simulators, in our integrated test lab, and at our many other test facilities to practice and perfect our testing approach in advance of for-credit testing so that when we're ready to do it for-credit, we already know we're going to get perfect marks. Our government partnerships also play a key role in these early tests. This week, our team at Edwards Air Force Base is working with the Air Force and the Navy to conduct High-Intensity Radiated Field, or HIRF testing on the entire aircraft. HIRF testing is a key part of any aircraft certification program. It verifies that onboard electronics equipments can withstand the levels of electromagnetic interference they are expected to encounter while in operation. We run HIRF tests routinely at our facility in San Carlos at the component level, but we will also be required to carry out HIRF testing on the full aircraft as part of certification and that's exactly what we are validating right now at Edwards. This test is an example of the incredible access to facilities and expertise that we gained through our partnership with the government, similar to the acoustics testing we conducted with NASA in 2021 and the wind tunnel testing we completed last year at the National Full-Scale Aerodynamics Complex. It's also a great illustration of how our work with the DOD can accelerate the certification process, helping us to prepare to do this test for FAA credit down the line. And this is exactly the type of testing that will support the landmark deal we announced last week with the government of Dubai to launch the world's first air taxi network in a premier global city. The regulatory framework we have agreed to with the Dubai General Civil Aviation Authority builds upon FAA standards, using much of the same test data that we're submitting to the FAA for review, but with a more expedient path to market. We'll accomplish this by using testing and analysis that we were already planning on completing as part of the FAA certification process, alongside a high level of regulator oversight and an ongoing review process to ensure safety for early operations. In other words, it builds on existing work to get us to market sooner and allows us to learn along the way. It's a win-win situation that doesn't add significant additional certification burden to our team. As well as progress on certification, we've been hard at work preparing for future operations, from our exhibition flights in New York City to completing a series of precision landing tests with the FAA. This test campaign was a sight to behold. The team flew 31 times in just two days, with three different pilots on board to demonstrate the precise handling qualities of our aircraft. This showcase of our aircraft performance was critical in demonstrating to the FAA that we have the same infrastructure requirements as similarly sized helicopters. This confirms what we already knew, that we will be able to use existing infrastructure, such as the downtown Manhattan heliport and our partner HHI's heliport just across the Hudson River in Kearny, New Jersey. Additionally, the data we shared with the FAA through this testing will help inform the design guidance they are finalizing for future vertiports, one of the many areas where Joby is not just leading, but defining the industry. Another area where we're defining the industry is understanding how to integrate an air taxi service into the airspace around major cities and airports. Just before the end of the year, we announced the completion of a series of airspace simulations with NASA, focusing on the complex airspace near Dallas-Fort Worth. With real pilots and air traffic controllers playing their role, the Joby-NASA team simulated scenarios with dozens of Joby aircraft aloft at the same time alongside existing airport traffic. During the simulation, air traffic controllers were able to integrate up to 120 eVTOL operations per hour, arrivals and departures, from DFW Airport's central terminal area. This seminal exercise demonstrated that we're able to operate air taxi services in some of the busiest airspace using the tools available to traffic controllers today. This is a remarkable proof point as we prepare for operations in markets around the world. And this future begins on our manufacturing lines. I personally get so much energy from spending time in Marina and San Carlos, where you can really see production ramping up every week. Last year, we built hundreds of flight electronics units and thousands of composite parts. We now have one aircraft in final assembly and two more aircraft being assembled right behind it. The team is cranking out parts for numerous aircraft to follow and to support company and for-credit testing. By the end of the year, we will be building at a run rate equivalent to an aircraft a month. And as we expand in Marina and bring online facilities in Dayton, Ohio, our production rate will continue to accelerate to support commercial service. We now have four FAA conforming assembly lines and plan to conform more over the course of 2024, laying the groundwork for expansion of our for-credit testing and receiving our production certificate soon after our type certification. Finally, I want to take a moment to emphasize the importance of the GEACS charging interface our team has developed. This technology has been more than a decade in the making. The Joby team has built and flown multiple generations of eVTOL aircraft, logging over 30,000 miles that include vertical takeoffs and landings. We've learned just how important it is to have the right charging and thermal conditioning systems in place to support rapid operations and maximize battery life. We took on the hard challenge of designing and building the first-ever charging system that actively cools the vehicle's batteries, resulting in a dramatically more performant aircraft and higher tempo operations than achievable with an off-the-shelf EV charger. In November, we shared the specifications of the GEACS with the industry to move all of us closer to a world where quiet, clean aircraft are commonplace, and we're actively working with a number of electric aircraft developers to ensure the chargers we plan to install with our partners around the globe will work for everyone. We have a lot of hard work ahead of us, on certification, on manufacturing, and on preparing for commercial operation, but we have the best team and the right strategic approach, and we will continue to deliver as we always have. On that note, I'll hand it off to Matt to discuss our financial results.

Thanks, Didier, and good afternoon, everyone. We ended 2023 with cash and short term investments totalling slightly over $1 billion. With the strongest balance sheet in the industry, we are able to support our leading position in certification and manufacturing while at the same time capitalizing on the opportunities that JoeBen and Didier highlighted, expanding our capacity, broadening our base of operations with the Department of Defense and investing in the early stages of commercialization. Looking back at the fourth quarter of 2023, we incurred a net loss of $115 million, reflecting a loss from operations of about $128 million, offset by interest and other income of $13 million. Our net loss compares to a net income in the third quarter, with the difference explained by the non-recurrence of the favorable revaluation of our warrants and earnout shares. Our operating expenses were largely flat over the quarter, reflecting higher spending on staffing and certification activities, offset by a lower accrual for stock-based compensation compared with the prior quarter. In the fourth quarter, we recognized our first revenue as a company, totaling $1 million. This revenue represents consideration received for providing early government-directed flight operations conducted in Marina, California, with our prototype aircraft. The associated costs are called out in our operating expenses under flight services, which represent the direct cost associated with supporting these flights. We've defined this revenue and cost as providing flight services to differentiate it from our long-term air taxi service model, which we expect will look very different. For example, since we are utilizing a prototype aircraft for these operations, we are not including the aircraft cost in our figures, nor do we have other expected costs like landing fees that would eventually be part of a more traditional revenue and cost of goods sold approach. Adjusted EBITDA, a non-GAAP metric that we reconcile to our net income in our shareholder letter was a loss of $96 million in the fourth quarter. This was about $3 million higher than the prior quarter, reflecting increased staffing and cost to support certification as mentioned earlier. Our adjusted EBITDA loss was just under $19 million higher than in the same period last year, reflecting the growth in our organization and expenses to support manufacturing and certification. Our global staffing, with more than 1,700 employees, continues to grow at a measured pace as we bring on resources in a deliberate and pragmatic way to support our initiatives at just the right time, with most of our staff supporting our company's certification and manufacturing efforts. In the fourth quarter of 2023, our cash used in operations and spending on property, plant, and equipment totaled $91 million. For the full year, this totaled $344 million, which was below our anticipated spending range, reflecting timing of payments and disciplined choices around our spending in the fourth quarter. As mentioned at the outset, we ended the year with $1 billion in cash and short term marketable securities. As we look to the year ahead, we are excited by the significant opportunities that JoeBen and Didier highlighted, as we continue to garner support for bringing quiet emissions-free flight to market and to execute on certification and manufacturing milestones. Turning to our outlook for 2024. First, on the top line, while we are not providing detailed revenue guidance for next year, it is important to understand the breadth of our flight programs in 2024. Our revenue this year will be driven by on-base government-directed flights that are part of the contract that we signed with the Department of Defense in April of last year. We will also fly aircraft on-base and in Marina as part of our internal certification and testing programs. We do expect to receive payments from the US government for some portion of these flights as we have in the past, which we account for as contra R&D expense along with other R&D-related deliverables. With one Joby aircraft currently at Edwards and a second expected to be delivered this year, our government-directed flights will show up as revenue similarly to what we recorded in Q4. However, the agreed payments for our earliest directed flight operations, which we completed last year, were higher than what we will record for on-base operations, which reflects the progressive maturity of the aircraft and our operations. Consequently, our fourth quarter 2023 revenue should not be presumed to be annualized into this year. Additionally, our on-base flight hours are expected to be lumpy as we find the right cadence with the Department of Defense with our first on-base operations. For example, our aircraft at Edwards has been undergoing testing in the first quarter, as Didier described earlier, so we do not expect meaningful revenue in this quarter. In total for the year, the overall impact to our cash from our first on-base operations is expected to be negligible, which is consistent with our plan. As we have explained in the past, the more timely benefits we expect to gain from this early engagement include operational learnings, which will pay dividends into the future as we build both our government and commercial service businesses and the opportunity to showcase our aircraft's features and capabilities to a broad array of potential future government customers. From a spending perspective, we expect growth in our certification, manufacturing, and go-to-market activities to result in the use of cash, cash equivalents, and short term investments of approximately $440 million to $470 million. This increase compared with 2023 includes continued staffing growth and the production of additional aircraft and parts as Didier discussed earlier. We also plan to expand our manufacturing facility in Marina, California, breaking ground on a building that more than doubles our footprint in Marina to support flight training, aircraft storage, and expanded manufacturing processes. This is expected to provide sufficient space to more than double our annual production capacity at this site, giving us the option to scale up to 25 planes per year to support early market operations while we bring up our Ohio facility. I'd like to thank the State of California who approved a $9.8 million CalCompetes grant in November and thank our local community partners who supported our application. This grant will offset a substantial portion of the building cost. As we discussed last quarter, we are planning to add manufacturing capacity in Dayton, Ohio, the birthplace of aviation. We have agreed to the location for our initial manufacturing operations and are days away from closing on the facility purchase. After interior improvements and the installation of machining equipment, this facility will start building parts to support production and aircraft assembly in California. We are grateful to our state and local partners in Dayton, Ohio for their support with incentives totaling up to $325 million, a portion of these incentives will offset much of our planned investments at this first site starting this year. With these investments, you can expect our capital expenditure to increase significantly relative to the $31 million we spent in 2023 as we build out our facilities to support aircraft production. This strategy of supporting initial production and certification from our San Carlos and Marina facilities and a stepwise systematic scaling in Dayton, reflects our rational measured approach to manufacturing and spending. It gives us optimal flexibility to incorporate learnings from the production floor while we proceed through the certification process. It also demonstrates the maturity of the organization to prevent overcommitting investments and resources while we certify, build and commercialize this new form of transportation. In summary, 2023 was a year of notable achievements from progressing certification, the rollout of our first production aircraft, first flights with a pilot on board, first urban exhibition flight in New York City, the delivery of our first aircraft to a customer, and our first revenue, and 2024 is off to a fast start, as you've heard both on the certification front with the completion of stage three of our certification process and the signing of a definitive agreement to launch exclusive air taxi services in Dubai. We are excited by the year ahead and the opportunities we see as we continue to lead our industry towards commercialization of this revolutionary technology. This concludes our prepared remarks. Operator, would you please instruct participants on how to ask questions?

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] One moment please while we poll for questions. Our first question comes from the line of Andres Sheppard with Cantor Fitzgerald. Please proceed with your question.

Hey, everyone. Good afternoon and congratulations on another quarter and all of the developments. I guess, first question was, I'm hoping maybe you can expand a little bit further on the announcement to launch the air taxi in the UAE and particularly the exclusivity behind it. Does this essentially prevent some of your peers to enter this market at all, whether it's via right sharing or a direct sales model? Just trying to better understand that. Thank you.

Thank you, Andres. This is JoeBen. And thank you for the question. It is -- was incredibly exciting to be in Dubai and to get to sign the definitive agreement for our air taxi service there. This is a seminal agreement, it's something we've been working with the Roads and Transport Authority of Dubai for many years now and getting this across the line in a definitive way and including the six-year exclusivity that you mentioned is a huge moment for the industry and a huge accomplishment for Joby and for the RTA. And with regard to the exclusivity, again, we have a six-year exclusivity to operate the -- an air taxi service in the Emirate. So we're very excited about this. We're excited to be working on this with the RTA, with our partner on infrastructure, and Skyports, and to really showcase the -- bringing together the three critical pieces that Dubai and the UAE have done, which is the regulatory, the infrastructure, and the right aircraft to deliver meaningful value to customers. So again, really, really pleased with this and grateful for all of our partners and the support here.

Thanks, JoeBen. That's very helpful. And maybe just as a quick follow-up. So congratulations on completing the third stage of the FAA-type certification process. Obviously, very exciting. Just wondering, can you give us maybe some color, what does the timeline for the fourth step looks like, particularly as you're now going to doing the for FAA credit testing? Just trying to get a sense of what that timeline looks like. What are some of the different milestones that we can look for just to identify how that is progressing? Thank you.

Hey, Andres. This is Didier. Good to hear from you. It's a good question. I feel like this is a good time to talk a bit about what FAA conformity and FAA for credit testing really is. The FAA really sets the standards and defines exactly what that is at the component level, at the system level, and at the aircraft level, which is really how you have to progress towards your certification and stage four organization. I'm really excited about what the team has been able to deliver last year, right, with 30 tests completed at the component level, having gone through exactly the process as outlined by the FAA, it sets us very well this year to expand across all of the base of the pyramid and execute more of those on hundreds of other tests. And then progressing from there into the system, just as we just discussed, we will be starting with the tail system here, really excited about that, and then moving into the airplane. Maybe a quick pause on that also, there are three essential elements that define what it takes one to get an FAA conformity and to be able to also get credit for the testing from the FAA. One, you have to have the design matured and released to the FAA because this is what they're going to use as the basis for you showing compliance. And I feel we've demonstrated that really well last year, particularly with those component level tests, and are working towards that this year -- the beginning of this year with the tail test. Two, you have to demonstrate the ability to build or manufacture to these designs on conforming lines. And we've done just that last year with four conforming lines now completed and are working expediently on adding additional conforming lines that feed into the airplane. So another check and a big win for the team on that one. And three, possibly most importantly, to do a for-credit test and for-credit conformity on any area in the aircraft, you have to have gone through stages one, stages two, stages three, and then four for that specific test plan. If you have not done that, there's no point in having that discussion with the FAA. And with the team now at the point where we close on all of stage three and are working and submitting test plans on stage four is exactly where we want to be. I'm really excited about -- really this year is what you're going to see, all the progress and focus on that stage.

Thanks, Didier. That's very comprehensive. I appreciate it. And congratulations again on the quarter. I'll pass it on. Thank you.

Thank you. Our next question comes from the line of Kristine Liwag with Morgan Stanley. Please proceed with your question.

Hey, good afternoon, JoeBen, Didier, Matt, and Teresa, and congratulations also on completing the third of the five stages of the FAA-type certification process and being the first developer of eVTOL to accomplish this. So maybe one follow-up question from the question already asked on the stage four and stage five certification as we look forward. Didier, is there anything that would surprise you on the stage four and stage five? And the reason for that is, look, Gulfstream right now is in its third year of the stage four and five certification for the G700, especially with the change in the requirement where they need a line-by-line validation of the software for the fly-by-wire that's been an obstacle. Is there any read across here for you? And how confident are you guys in a 2025 entry into service?

Yeah. Thanks, Kristine. Appreciate the question here. Look, I feel really good about where we are right now, particularly because you talked about years, this has been multiple years in the making, getting to the point where stage three is complete. We have been in lockstep with the FAA for a good amount of time where we're talking about all the details of the design of the CERT plan and the implementation, and I think that gives me a lot of confidence in us moving into stage four, being in a very good position. You talked about fly-by-wire by way of example, one of the most critical and important area of CERT plans is exactly our flight controls in the fly-by-wire and we have spent quite a bit of time with the FAA on that. Relating to software, I really want to remind and reiterate, software is not -- software verification particularly is not new to Joby. Our Avionyx acquisition team that's in Costa Rica has been doing this for many, many, many years, and they have demonstrated over the past few years that they can deliver on all expectations, both for Joby and external customers. And so I feel like we're well-positioned to walk through the software line. And, oh, by the way, our software CERT plan has also been accepted. So we hit it both on the software side as well as on the functional side.

Great. And then also look at the past like few years you guys have done a lot of partnerships with different countries, including your most recent exclusive deal, but then you've also got partnerships in South Korea and Japan, can you guys talk about a little bit more, why does this seem to be more attention on eVTOL across the different countries? And as you see these exclusive partnerships with one country, could you see more of these rollout, especially as you get closer to certification?

Thanks, Kristine. So thank you for highlighting the incredible interest that we have from many international markets. I think we're continuing to see significant inbound here, but we're going to be very thoughtful and measured in the number of additional markets that we take on and really focus as much as we can on the incredible opportunities that we have already committed to. And we are very, very grateful to our partners, as you mentioned, in Japan, in Korea, in the UAE, and then, of course, our incredible partnerships here in the US. We may choose a select number of additional international markets, but again, we're going to really focus on the execution.

Great. And if I could squeeze one last question. Matt, the $440 million to $470 million free cash flow usage for 2024, at the end of that, what would be the capacity on your low volume manufacturing plant in Marina after that spend? And if you wanted to expand capacity beyond what you have in place like how much could that incrementally cost?

Yeah. Hi, Kristine. So the way we think about the Marina, as Didier mentioned, the end of this year will be running at a rate of one aircraft per month, so that would be 12 aircraft obviously in terms of capacity. We're working on ramping that up over time as our expansion comes on stream. That expansion would be online somewhere in 2025 most likely, based off kind of our present calculations, and that gives us the option to ramp up to 2025. So we feel that's a good starting point as we lay the groundwork for our international and domestic operations for go-to-market and then obviously working on further expansions from there.

Great. Thank you very much, guys.

Thank you.

Thank you. Our next question comes from the line of Savi Syth with Raymond James. Please proceed with your question.

Hey, good afternoon, everyone. If I might just ask another certification question here. We haven't heard much on the G1 side in terms of when do you think the FAA might accept that? And just a clarification on based on Didier's comments, so are there items in the stage three certification plans that are still placeholders or dependent on issue papers that are not yet finalized?

Good question. And we love certification questions by the way. So we've been in constant touch with the FAA relating to the G1. Our understanding is the G1 release is coming up soon. But what's really important is that the FAA has -- we're really grateful for that has been keeping us up to date on all the expected changes in the G1, and so we've been in constant touch and are aware of the content in there. And what we can say from there is that we expect zero design changes to our aircraft based on the G1 changes coming. We feel really, really confident about that based on what we've been able to see, that's really important. The potential area where there may be some applications are really associated with the documentation rework and the compliance aspect of that, but none of these is expected to impact us, particularly this year as we're focusing again on stage four. So we're focused on stage four. We know there are no design changes and then we're ready to go when the G1 shows up.

Got it. And then just, you also had some really helpful information on kind of the number of for-credit testing that's being done, could you put that in context of how many tests? I think, Didier, you mentioned hundreds of tests this year. Just trying to put that 30 into context of kind of what needs to get done.

Yeah, we haven't really shared the exact numbers of tests. I think the more important part of this, the relevance of the tests that we talked about is, they were pathfinders for additional tests, those additional tests that are coming. So it's really about we've built the knowledge base, right? We know what the process of conforming parts. We know what the process of submitting test plans and getting those test plans accepted are and we know how to execute on these. The rest as it relates to component is really about now accelerating. So we can move through this faster than we did last year.

Understood. Thank you.

Thank you, Savi.

Thank you. Our next question comes from the line of Austin Moeller with Canaccord Genuity. Please proceed with your question.

Hi. Good afternoon. Just my first question here. How do you currently feel in partnership with Toyota about the scalability and the manufacturability of the pouch sales as you ramp up production?

Thanks, Austin. We feel very good about what we've been able to accomplish both from a -- most importantly from a safety standpoint, but also from a cycle life standpoint on and performance standpoint on our battery modules. We've done extensive testing over many years and just incredibly pleased with the performance across all of these dimensions.

Great. And just a follow-up, you mentioned you don't expect any major design changes on the current iteration of the aircraft, and I understand in the last quarter you've done 30 plus for-credit component level test, but do you expect that the current iteration of the aircraft has a sufficient weight to really make sure that it can be certified under that powered lift certification?

Yeah. So the G1 and the associated CERT basis as we have seen it with the FAA continues to be something we feel very confident about. Like I said, we've seen all the expected changes coming, at least the ones that the FAA has shared with us, which we understand are comprehensive and we don't see any impact on our design as it relates to the eVTOL configuration and power lift requirements.

Excellent. Thanks for the insights.

Thank you. Our next question comes from the line of Bill Peterson with JPMorgan. Please proceed with your question.

Hi. Good afternoon and nice job in the quarterly execution. Like to try to get a little bit more granular on the commercial operations. I guess, 2025 is pretty wide window, are you thinking closer to the start of the year or the end of the year? And I guess what would make it closer to the start versus the end, i.e., what's in your control, what's not? What's dependent on the FAA or others? And I guess, with that in mind, you said earlier I think, that would maybe lead you to start in Dubai ahead of the US, is that what it could look like?

Yeah. Thank you. So we are very pleased as we talked about with the partnership in Dubai, and again, that's across the three critical dimensions. First, the regulatory, second, the infrastructure, and third, having the right aircraft. Specifically on your question, in terms of the timing, that a lot of that comes down to the regulatory piece. And the approach that we're taking is leveraging all the incredible work that we've done with the FAA and working closely with the GCA to ensure that all of the work there happens in an expedient way, and so again, we're grateful for the partnership with the GCA and they're working very closely with our team and will continue to over the months to come. With respect to specific timing within 2025, we're not providing that at this time.

Okay. And I just kind of want to follow-up on the earlier question around run rate. So you exit this year at 12. In 2025, after the expansion, you'll be somewhere between 12 and 25, maybe exiting next year with the ability to make 25 aircraft. I guess, how should we think about the run rate? And maybe when is Dayton ready to ramp? Just trying to get a sense for, as we try to build our models out a few years, what the -- I guess, what you could achieve commercially over the next, call it, two to three, four years?

Hey, Bill. So, as you think about Dayton, I'll really refer you back to how we talked about it last quarter. Right now, we're really focused on getting our lines certified, up and running, getting the manufacturing processes dialed in because scaling an inefficient process would be the worst thing a company could do. And so we're really focused on that 12 and 25, but getting ready, as you said, for a measured approach to Ohio, starting small, as you've seen us talk about before, doing this in a very methodical way, starting small in this case with a small manufacturing operation, which gives us that kernel of employees building out the culture that allows us to scale and then followed by a methodical ramp up to eventually 500 aircraft over time. But it will be over time and a more gradual approach to scaling just because that's the right way to scale a manufacturing plant and it's the most prudent way to do it.

Yeah, it makes sense. And -- I may have missed it, but as we think about your use of cash this year, can you give us a little bit more granularity on CapEx versus OpEx? You said substantially up, but I guess what does that mean? How much government incentives can offset? And I guess how much of the OpEx growth is, I guess, slated for the go-to-market? The first commercial aircraft, additional software engineers, app development, hiring, just basically hiring to support the commercialization efforts, trying to get a sense versus certification and manufacturing spend.

Yeah. So, as we think about this year, we spent about $30 million in CapEx. I would expect that to roughly double next year, and that's really driven by both building out the facility here in California, which will take -- will cross '24, '25, but also building out the equipment, building out the facility in Ohio. And so that's a big lumpy step function in our CapEx. The rest of it largely is OpEx and that's going to be growing, primarily manufacturing and certification folks, because that is the bulk of our organization. We'll start early operations. We'll be sending people down to Dubai to start there. And so we'll have some growth there, but the bulk of our operational growth will be around certification and manufacturing of our aircraft and buying parts like those things are all in there, right?

Just to be clear, you said next year $60 million, but you mean this year 2024?

Apologies. I signed my checks with the right year, but I still have to think about it twice.

Okay. Thank you.

Thank you.

Thank you. [Operator Instructions] Our next question comes from the line of Edison Yu with Deutsche Bank. Please proceed with your question.

Hey, thanks for taking our questions. Want to follow up on the design topic from earlier? I believe in the latest NTSB report, you guys are talking about 4,200 maximum takeoff weight. Obviously, the production vehicle is 5,300 per your disclosure. Can you give us a sense what drove that increase? And also on the latest aircraft in production, are we at the 5,300 already?

Thanks, Austin. Yeah, so we're -- the 5,300 is the weight of the aircraft that we're taking through certification, and we're very pleased with the performance that we're achieving across all the different systems on the aircraft and expect to, as Didier talked about, the designs to stick where they are.

In terms of what was the drivers? What were the drivers of the increase in weight? Anything you can share us on that?

No. It's again -- the 4,200 pound vehicle was an aircraft that we designed in 2017 and 2018 and began flying in early 2019. It has showed the incredible performance across all the different dimensions. Again, we have the most performant aircraft in the market with or in development, with a 100-mile range, 200 miles an hour top speed, and a really incredible acoustic signature, which we think is something that's really underappreciated and something that we've focused on since the beginning and which I don't think others have been able to achieve or prioritize in the right way, and we think this is critical to delivering operations to the markets where our customers want to go.

Thank you. Our last question for today comes from Savi Syth with Raymond James. Please proceed with your question.

Hey, thanks for the follow-up. I was just kind of curious, you have announced several infrastructure partnerships including this kind of Dubai operation, and you also working closely with Delta, could you talk a little bit about how you're thinking about your initial commercialization plan? How all of this kind of fit within that kind of launch plan?

Yeah. Thank you, Savi. On the infrastructure part, this is an incredibly important piece of the business and an area where we're very grateful for our partnership with Delta and the investments they've made into the airports at LaGuardia, JFK, and LAX, and to be able to build best-in-class infrastructure, closely coupled to those terminals and to deliver seamless customer experiences as they get off of Delta flights and onto Joby flights. And then also delivering incredible customer experiences with our partner, Skyports in Dubai, and then as we build out infrastructure opportunities in markets around the world, this is an incredible opportunity to again to deliver the customer experience that we're looking for. And as we go forward infrastructure is going to be a more and more significant part of the conversation.

I appreciate that the infrastructure is the kind of the long pole in the tent, but so -- are you going to kind of wait to see how things progress to figure out where you launch operations first? Is that my understanding or I'm just trying to figure out how this all kind of comes together because you also have kind of charging in various airports not tied to the Delta operation?

Yeah, I think as you saw, we rolled out a bunch of different partnerships in airports in different markets in the US and so rolling out that infrastructure and the engagement there and the momentum we're seeing there is just absolutely fantastic.

Thank you. I would now like to turn the conference back over to Joby Aviation's CEO, JoeBen Bevirt for closing comments.

Yeah, thank you so much. I think one of the things I hope you took away from the call today was that this is more tangible than it's ever been before and our team is incredibly well-positioned to capitalize on this amazing market. I think you also heard that our team is consistently knocking it out of the park on certification, on manufacturing, and on the commercialization. And it's just -- I have to say that I feel incredibly privileged to have the opportunity to work with the amazing partners we have around the world and with the just spectacular team here at Joby Aviation that I'd like to express my sincere gratitude for delivering quarter-after-quarter. Thank you all so much for joining us today and I hope you have a fantastic afternoon or evening.