JOBY - NYSE

Greetings, and welcome to the Joby Aviation Second Quarter Fiscal Year 2025 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce Teresa Thuruthiyil, Head of Investor Relations. Please go ahead.

Thank you. Good afternoon and evening, everyone. Thank you for joining us for Joby Aviation's Second Quarter 2025 Financial Results Conference Call. I'm Teresa Thuruthiyil, Joby's Head of Investor Relations. We will begin the discussion with remarks from JoeBen Bevirt, Founder and Chief Executive Officer; and Rodrigo Brumana, Chief Financial Officer. Paul Sciarra, our Executive Chairman, will be joining us later for Q&A. 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'll refer both to GAAP and non-GAAP financial measures. A reconciliation of non-GAAP to GAAP measures is included in our Q2 2025 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. The last quarter was one of our best yet. We're delivering at an exceptional level on all fronts, on certification, on manufacturing and on commercialization. And we have so much to talk about that I'm going to get straight into it. The progress we've reported this quarter is unparalleled, supported by an incredible team, years of planning and a wealth of flight testing. To put our flight testing into context, in July alone, we completed 76 separate flights with 4 different aircraft in 3 different locations around the world. These included both piloted and remotely piloted flights with vertical takeoffs, full transitions and vertical landings. And the amount of flight testing matters because it's the core of our certification effort. It's the way you drive maturity into an aircraft program, whether for commercial or defense use, and it's the way you wring out technical issues to mitigate extensive changes later in the certification process. Our team is delivering day in and day out, and they know that if you're in the business of flying aircraft, you have to actually fly aircraft. In Stage 4 of certification, we're now 70% complete on the Joby side and more than 50% complete on the FAA side, up 10 points from last quarter and we're gearing up for Stage 5. During this stage, Joby and FAA pilots will fly our aircraft to validate all of our certification work ahead of receiving a type certification. And I'm pleased to say, as we announced this morning, the first of 5 aircraft for TIA flight testing is headed to final assembly, and we remain on track to start flying our TIA aircraft with Joby pilots this year and to begin TIA certification flights with FAA pilots early next year. For context, this is a milestone you don't reach at the flip of a switch. There are very few, if any certification processes that are as involved as the steps required to reach type inspection authorization. It's multivariable, time-intensive and relies on not just your own execution, but also that of the FAA. We've been at this for more than a decade. Developing, iterating and collaborating on paper and in practice. We've taken a concept and turned it into a conforming design with approved test plans and the ability to manufacture under a quality management system, all in alignment with the FAA. We're now putting the keystone in the arch. Alongside our certification progress, the global regulatory momentum is undeniable. Here in the U.S., the White House, DOT and FAA are setting the pace for next-generation aviation. For eVTOL, the executive order on drone dominance directs the FAA and DOT to establish programs for state and local governments to partner with companies like ours on early operations. Globally, Australia, New

Thanks, JoeBen, and hello, everyone. I'm thrilled to be joining Joby at such a pivotal time. What brought me here is simple. This is a company building a reality that does not exist today. Joby will make air travel an everyday reality. But that's not an easy task. The team is solving hard problems with rigor from certification to manufacturing to global deployment. What stood out to me is the rare alignment of vision, execution and capital. We have a strong balance sheet, long-term partners and a team that understands how to turn bold ideas into tangible outcomes. In every conversation I had before joining whether with engineers, test pilots or operating leaders, I saw the same thing: quiet excellence and relentless focus. In my first few weeks on the job, I witnessed the team coming together to deliver the historic Dubai flights with precision, intensity and pride. It showed me what this company is made of. As a newcomer, I can say with high conviction, this is the real deal. As CFO, my focus is very clear. Number one, ensure we scale methodically; number two, stay discipline with capital; and number three, translate our technical and regulatory progress into long-term value. Now shifting to our Q2 financial results. We ended the second quarter of 2025 with cash and short-term investments totaling $991 million. We closed the first $250 million tranche from Toyota and received an additional $41 million through our ATM facility. Our Q2 2025 use of cash totaled $112 million, $10 million lower than last quarter, primarily due to having one less payroll run in the quarter, partially offset by growth in operating expenses. This spending also included about $12 million on property and equipment. We remain on track with our full year 2025 guidance of $500 million to $540 million in use of cash, excluding any potential impact from our proposed acquisition of Blade's passenger business. On a GAAP basis, we reported a Q2 net loss of $325 million, which includes $168 million operating loss and a $157 million nonoperating loss, both impacted by noncash items. The net loss was $242 million higher than the prior quarter, primarily due to an increase in our share price, reflecting an unfavorable noncash revaluation of warrants, earn out shares and the Toyota first tranche investment we received. Total operating expenses for the quarter were $168 million, up about $5 million from the prior quarter. The increase was driven by higher staffing and program spend to support key milestones, including progress on the final assembly of our first TIA aircraft. Adjusted EBITDA, a non-GAAP metric that we reconcile to our net income in our shareholder letter was a loss of $132 million in the second quarter. This was about $4 million higher than the prior quarter, reflecting the increased spending I mentioned before. Compared to the same period last year, our adjusted EBITDA loss was $24 million higher, reflecting growth in our organization to support the design, manufacture and the certification progress of our aircraft and early investments related to commercialization. As JoeBen said before, 2025 has been and will continue to be a pivotal year for Joby and for this new industry. You should expect us to keep flying in diverse conditions and locations forging new partnerships and laying the groundwork for support across regulations, infrastructure and operations. You should see the closing of our Blade acquisition and the integration of their operating know-how as a key advantage in preparing for commercial service. You should see us continue maturing our low-rate manufacturing efforts into scaled production capabilities and leveraging our best-in-class partner, Toyota, to do this together. You should also stay tuned as we develop hybrid aircraft for U.S. defense combining Joby's VTOL and autonomy capabilities with L3Harris' expertise. Joby remains the only company to deliver eVTOLs to a U.S. Air Force base and fly full transition piloted and unpiloted missions of full-scale eVTOL aircraft today. I want to be realistic about the amount of work we have in front of us. It is not going to be easy. We are building a reality that does not exist today. Our path will be challenging, but we embrace it and are executing with tangible results as we shape our future lines of revenue. Now with our 3 paths to generating revenue in mind, let's recap. Number one, as an air taxi operator, direct-to-consumer business, we made an exciting acquisition that is expected to accelerate our time line. We have a strong backing from local and global regulators, and we continue to demonstrate our commitment to bring flying to everyday life. Number two, for partner service, our relationship with ANA in Japan provides an opportunity to collaborate on air taxi ecosystem in the key markets. And number three, under the banner of aircraft sales, we look forward to sharing more about our distribution relationship with Abdul Latif Jameel for electric aircraft and with L3Harris for autonomous and hybrid aircraft. We look forward to continue sharing our progress with you. At this time, operator, please open the call for questions.

[Operator Instructions] And the first question comes from the line of Austin Moeller with Canaccord Genuity.

So just my first question here. Now that you've bought Blade, are you preparing to -- or are you planning to provide S4 eVTOLS to the local charter operators that own those helicopters and have a similar model to Blade? Or are you still planning to operate and own the aircraft yourselves?

Thanks a lot, Austin, this is JoeBen. We're going to remain flexible on that. Here in the U.S., we do have a preference for retaining the long-term free cash flow and the long-term revenues from the passenger service. But we do see Blade's asset-light model as being a valuable one. I think as you look at our partnership with ANA, where our operation in Japan will be co-owned. That also gives us the opportunity to pull forward revenue. And then, of course, with our distribution partnership with Abdul Latif Jameel in Saudi Arabia, where we could be potentially selling aircraft and again, that would be another way to pull forward revenue. So we do see a balance, and we see the model that Blade has as giving us flexibility and thank you for highlighting that opportunity.

Okay. And just a follow-up on the TIA aircraft that you're constructing. Are you able to discuss what the specs of that are, like the maximum takeoff weight or if you stretch the fuselage at all? And the 6 aircraft that you're building for TIA testing, they're all expected to have different percentages of conforming parts to perform specific tests, correct?

Yes. So a couple of clarifications there. One, the aircraft is nearly identical to the aircraft that we've been flying before. But I really want to pound the table on how exciting this moment is. This is the culmination of more than a decade of hard work from the Joby team and close collaboration with the FAA. In order to build this aircraft, we had FAA DARs in -- on the factory floor with us regularly doing inspections. And they're inspecting the build of the aircraft against our quality systems. They're -- and again, this has to be -- this is the final -- this is the finish line, right? We are -- the aircraft that we're building is -- before we can even start building it, we had to have a design that met all of the certification standards that we'd agreed to through Phase 1, 2, 3 and 4 of the certification program. So all the progress that we've been reporting to you each quarter against Stage 1, against Stage 2, against 3 and 4, that has all built to this moment. All of the work that we've done maturing our manufacturing systems and processes that has built to this moment. And so as I said in my prepared remarks, this is us putting the keystone in the arch. This is preparing for this really magical moment when this aircraft takes to the air and then with Joby pilots, and then we do 4 credit flight flights for certification credit with the FAA pilots on board. And so we're so proud and I really want to emphasize what a big deal this is for the whole Joby team. And yes, really just so grateful and it's a huge day for us today.

The next question comes from the line of Kristine Liwag with Morgan Stanley.

You've had a very, very jampacked quarter. So congrats on all these milestones. I mean, with the acquisition of the Blade network, can you talk about how you're thinking about your first initial commercial service in the U.S.? How did that change now that you own Blade? And where would you see your first initial cities where you're serving in the U.S. after this acquisition?

Thank you so much, Kristine. So we do see incredible demand and incredible opportunities in markets across the country and around the world. But this acquisition of Blade really supercharges our operations in New York with an incredible existing operations team with amazing vertiport infrastructure, with exclusive lounges, with a loyal customer base. And we're just absolutely thrilled with the way that we believe this will allow us to really ramp our operations in New York much faster than we had previously planned on.

Being based in New York, very excited to see that come to fruition. And following up on the certification regarding, I guess, airspace usage. So have you sorted with the municipalities in New York about the ability to use the Joby aircraft and these vertiports? Is that all sorted? Are you just waiting for the aircraft certification now? Or are there additional approvals you need before you enter into service there?

So we do expect any additional work on the airspace side beyond what the Blade operations currently entail. We work very closely with air traffic controllers in multiple markets across the country, and we've been doing really groundbreaking planning into -- for new vertiports. I'd also love to highlight the incredible work that the FAA is doing. And that Secretary Sean Duffy has spoken about on enhancing and modernizing our air traffic control framework. So we think that's really fantastic and exciting. I want to remind folks that once we get type certification, we also need to take and put our Joby aircraft onto a Part 135 operating certificate before we begin passenger service. We do have the opportunity to do air tours prior to the aircraft going on the 135, but that is an additional step in -- on top of the type certification.

Great. That's wonderful. And just following up lastly on the type certification. You said you're 75% of the way through for Stage 4. Can you talk about the remaining 25%? What is there left to do? And what would the Stage 5 process look like?

Yes. Just one correction. On the Joby side, we're 70% complete. And so the remaining 30% will come in over the next year or so as we progress the final pieces there. But the -- I want to be really clear that we do not need to be at 100% on Stage 4 prior to beginning the TIA work. So some of those Stage 4 pieces are not required for the TIA flight test. So we do -- we're at a very, very strong place, both on the Joby side and on the FAA side to deliver on our goals of beginning the TIA flight test with FAA pilots on board early next year. So the momentum is just absolutely phenomenal, and we're so grateful to the FAA for the incredible lean in that they've shown for many quarters in a row here, just really going above and beyond.

Congratulations again on your progress.

[Operator Instructions] And the next question comes from the line of Bill Peterson with JPMorgan.

Really a lot of terrific progress in the last quarter. I'd like to start off with the first question on Blade and maybe expanded from some of the prior questions. So I guess, what is the specific plans for expanding the passenger business currently in New York and Southern Europe? Do you see any additional opportunities for passenger to expand in other parts in the world or other cities in the U.S.? And again, this is assuming with helicopters first? And what does the team plan to do with the Blades jet and other business that seems like on face value, maybe has a little bit less synergies?

Thanks a lot, Bill. This is Paul. So we do actually see opportunities to continue to expand Blade's existing business even ahead of certification of our aircraft. But look, that wasn't the reason for the acquisition. The reason for the acquisition is that the big limitation of that business has been -- essentially the sort of vehicles that they were using. We think we've got an opportunity to both expand the route map, lower cost or sort of increase margin and in turn, fly higher temporal operations given the lower noise profile of our vehicle. So those, I think, are really the pieces that are going to be important to kind of more rapidly taking full advantage of the important groundwork that Rob and the team at Blade have laid.

Okay. And then for my second question, given the call around the DoD's budget request for $9.4 billion for autonomous and hybrid aircraft, what do you think this can translate in terms of opportunity for Joby? I guess, could this help fund R&D work or specific contracts or something else we should be looking at?

Thanks a lot, Bill. This is Paul again. So 2 pieces to your question. Look, along the way, there's always opportunities for R&D funding to essentially offset some of the work that's necessary to deliver on the vehicles that we're talking about. That's been a strategy that we've used very effectively over the course of our engagements with DoD, over the last 6 or 7 years. But most importantly, and I think what you should see in the announcement with L3 is that we're sort of taking the next step in terms of missionizing this aircraft for the right use cases kind of against key contracts, whether existing or future that are matched against the capability gaps for different branches. And we're really pleased to be working with L3 on that front, because of the depth of their engagement with many of these customers, they have a very strong understanding of kind of where those gaps are. And over the course of both the flight demonstrations in the fall and even more importantly, the demonstrations with customers early next year, that's going to I think be the opportunity to sort of open up the commercialization effort in a very significant way with the DoD.

The next question comes from the line of Chris Pierce with Needham & Company.

You guys recently updated us on the Marina facility. I was wondering when -- and sorry if I missed this, but when might we hear more about the Ohio facility and more scaled production. I understand you don't want to produce these things at scale until you know you're further down the road with certification. So this is a sort of a backdoor way to ask about certification timing. But I guess when might we hear about Ohio manufacturing cadence margins on the OEM side of the business? Just kind of details around that would be helpful for modeling.

Yes. Thank you, Chris. So as I mentioned, previously, the -- we're really trying to think about this in a multi-site horizontal scaled approach. First, with Marina, we are thrilled with the time line that we were able to build and begin to populate our manufacturing -- our larger manufacturing facility there, doubling our -- more than doubling our manufacturing footprint in Marina. And also really pleased with the work that the team is doing to mature and accelerate the build rate of both the components and the aircraft. Just today, got a report that we had manufactured 18,000 components in July alone. So it shows that we're -- Joby manufacturing globally is just hitting its stride and becoming more and more efficient and more and more productive. With regard to your question about Ohio, we're thrilled with the acquisition of our first building there and the build out of that. We're thrilled to be building our team in Ohio, doing training, and can't wait for parts to start coming out of that facility. And also extremely excited about opportunities to continue to expand our Ohio footprint and the incredible support we've received from both Dayton and the State of Ohio and JobsOhio. They've been absolutely spectacular partners for us.

Okay. Appreciate the detail. On Slide 8, when you talked about Dubai, you're talking about this 1 vertiport in the first quarter of '26. Does that get back to Part 135 in touring, where it might be a kind of something you can do with passengers in the first quarter of '26, but then you need further build-out in like hotels or things like that? Or is there already infrastructure to land these things with passengers? Like I just want to get a sense of what needs to go beyond what's in the letter to kind of start higher tempo passenger flight in Dubai?

It's a great question. I think one of the amazing things about our -- the flights that we did over there is that some of our key partners and potential partners were able to come and see flights. And including many folks on the real estate and real estate development side, and the amount of interest and the excitement from real estate developers, both in Dubai and around the world has never been greater. The ability to have a quiet electric aircraft, land at your development and deliver folks, for example, from the airport to the Palm in a matter of minutes rather than nearly an hour, that's a game changer. And so we do see really significant momentum in opening up additional takeoff and landing locations. Additionally, as I believe you're aware, our partner for building the vertiports in Dubai is Skyports, and they're making fantastic progress alongside RTA, the Roads and Transport Authority in planning and building out the network of vertiports in Dubai. And so we -- as you mentioned, the first vertiport that broke ground at DXP, the airport there is making great progress, and we're really excited to bring additional nodes online in the Dubai network and thrilled with the momentum we're seeing in Dubai overall.

Okay. And then just lastly on Blade. Is it fair to say that Blade didn't have any exclusive properties but you gained a potential first- mover advantage? Or am I -- is there more to it than that?

So Blade, one has a number of exclusive launches. Two, the real estate available at many of these vertiports is quite limited. And so it's valuable to have a place for passengers to wait out of the sun, out of the rain while they're getting ready to board their flight. So we do feel like the -- although many of these sites are public access, having a lounge and a facility at those locations is extraordinarily valuable. Two, the Blade also has a large network of takeoff and landing locations in Europe and as well as the greater New York area. And we think that, that network of takeoff and leading locations is an incredibly valuable and underappreciated asset, and we're -- we couldn't be more thrilled to be able to count that as a Joby asset now.

[Operator Instructions] And the next question comes from the line of Savi Syth with Raymond James.

Is definitely an action-packed quarter here. If I can go back to the aircraft, can I clarify kind of if you're out of policy completely, and this is just kind of the execution side. So like the MOC cert plans are approved without placeholders? Or is this kind of being built at risk a little bit?

I would say that we are very much in the final -- yes, I would say that we're substantially out of policy, if not completely out of policy. The real focus right now with the FAA is on finalizing all of our TIA flight test plans. And really, really thrilled with the lean in from the FAA on that front. Of course, there's still the 50% of Stage 4 that the FAA has to approve. But again, the progress and they're just putting points on the board day after day. So we're yes, we feel extraordinarily good about where we are with the FAA and as well as where we are in terms of the design and manufacture of this aircraft. We think this is a huge, huge milestone that we announced today and just thrilled with the execution of the testing team. I don't know that I emphasize that enough. We didn't just finish building this airframe. We finish testing this airframe. So it's like -- it's going into final assembly, and it's got lots of green checkmarks.

That's great. And then maybe along those lines, can I -- as we kind of look forward to the start of testing. I know kind of each aircraft, I think you said you'll build 5 will be designed to test something different. I wonder if you can kind of talk a little bit about like maybe what the first aircraft will be designed to test and what we can kind of look forward to.

Yes. So there are multiple TIA tests that we're working on getting -- the test plans that we're working on getting approval with the FAA and each one of those -- each of the test plans has a specific 1 of those 5 aircraft that it's going to get -- that we plan to test it against. There is some flexibility, but we we're targeting it. And the other thing I should emphasize is that we've started building parts for all 5 of those aircraft. So some of them are -- this one, for example, has now completed the testing. We have multiple others where the airframes are undergoing -- going through the airframe assembly process. And we're building components and systems for many of them. So we're in full swing, and I couldn't be more proud of the work that our incredible manufacturing team is doing across the sites in San Carlos, Marina, and soon Ohio. So absolutely thrilled and grateful to everybody on the Joby manufacturing team.

I appreciate that, JoeBen. If I might ask a quick follow-up on previous kind of question on the defense side. Have you kind of identified any specific programs of record? And I'm just kind of curious how meaningful that can be? I know you quoted a big DoD number, but was curious how much realistic kind of opportunity that could be pursued here.

Thanks, Savi. This is Paul. So I mean scoping up. This is a big moment, I think, for rethink in terms of what the future of military aviation looks like. Recent conflicts have certainly shown that the sort of paradigm of large expensive crewed helicopters for a wide variety of missions may not be the right one on a go-forward basis. So we think we've got an opportunity in conjunction with L3 to essentially build something that is cheaper, quieter, autonomous and essentially flexible for a wide range of use cases. So we called out a few, I think, in the announcement, including contested Logistics, counter-UAS or counter drone and in turn, electronic warfare. And fortunately, we are partnered with someone that has incredible payloads across each of those sort of functions. To answer your question, there are core existing programs that we are going after, but some of this is also about shaping programs in light of that big rethink that I mentioned at the front end. And what I think is very important in this sort of moment is being able to translate very quickly from demonstration into deployment. And that's where I think this dual-use approach, essentially leveraging the same technologies and the same manufacturing lines that we're using for the commercial side really pays dividends, both to us as a company and in turn, to our customers in defense.

The next question comes from the line of Amit Dayal with H.C. Wainwright.

Congrats on all the progress this quarter. With respect to the certification time line, do you have a sense of whether it's like next 2 or 3 quarters? Or is it a little bit longer before you are completely set up to get into operations?

Yes. Thank you for the question, Amit. Just to be clear, what we're guiding to is that we're on schedule to begin flying the TIA aircraft with Joby pilots by later this year and to begin flying with FAA pilots on board by early next year. And so that's the -- those are the flights that the FAA pilots fly to confirm that we are compliant and that's what gives us points on the board for Stage 5. And once those are complete, then we're in the final stretch of Stage 5 and type certification.

Understood. And then is the Blade deal closed for you guys? I just wanted to see when we can potentially see contribution from the Blade operations in your financials? Is it 4Q, maybe we can see that?

Yes, Amit, Rodrigo here. Look, we just signed and it will take a few weeks to close. So more guidance when we get there. But right now, we are just like in the process of announcing it. And then, as you know, very typical, we'll take a few weeks to close.