Good afternoon and thank you for holding. My name is Joe, and I will be your conference operator today. Welcome to Joby Aviation’s Fourth Quarter 2021 Conference Call. At this time, all participants are in a listen-only mode.

As a reminder, today's call is being recorded and a replay of the call will be available on the Investor Relations section of the Company's website. Please note that some of the Company's discussion today will include statements regarding future events and financial performance, and statements of beliefs, 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 more detailed discussion of these risks and uncertainties, please refer to the Company's 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.

This call will also include references to the Company's adjusted EBITDA, which is a non-GAAP financial measure, a reconciliation of this non-GAAP financial measure to the most directly comparable GAAP measure is included in today's shareholder letter, which is posted on the Company's website at ir.jobyavaiation.com.

On the call from management today are JoeBen Bevirt, Founder and Chief Executive Officer, Paul Sciarra, Executive Chairman and Didier Papadopoulos, Head of Programs and Systems and Matt Field, Chief Financial Officer. After the prepared remarks, we will open the call up to analysts for questions. I will now hand the call over to Mr. Bevirt..

Thank you, Operator. Good afternoon everyone and thank you for joining us for today’s call. I'm incredibly proud of what the team at Joby achieved in 2021. And I'm excited to have this opportunity to speak with you today and share our progress as we continue our journey towards bringing fast, affordable and sustainable air transportation to the world.

In our Q3 earnings, we highlighted three areas of focus that would guide our work and investment over the long-term, certifying our aircraft, scaling our manufacturing and preparing for commercial operations. This framework will continue to guide our work in 2022.

And I'm glad to report we've made great progress in each area since we last reported earnings. Of those three, certification really is the unlock. Without a certified aircraft, a certified means of production and certified operation there is no product.

And so I'm pleased Didier is here with us today to focus on that topic and share the amazing progress we've seen in this area. I'd like to hand it over to him to kick things off.

Didier?.

Thank you, JoeBen, and hi everyone. Certification is understandably a complex and multifaceted topic. And so I'd encourage you to go and watch the briefing event we ran on certification last year. It's available on our Investor Relations website. And it does a good job of contextualizing a lot of what I'll say today.

Since our last call, we've made progress in all areas of certification and have some real momentum behind us. The certifications we require can be divided in three categories, type certification for the aircraft, production certification, and operational certification for our future airline. I'm going to talk about all three in that order.

First, on the type certification front, which is a certification focused on the aircraft itself, we continue to make great progress on our means of compliance and our certification plans. Last year, we set ourselves a goal of having the majority of these in place by the second half of this year.

And with close to 70% of the means of compliance accepted, we are very much on schedule. Getting these means of compliance in place has been a seven year journey for Joby. So to see them getting signed off with some serious momentum is really exciting.

I'm also pleased to report that we were able to submit the first of the Area Specific Certification Plans, or ASCPs earlier this week, making an official transition from identifying the means of compliance to identifying the methods of compliance.

This is a really significant moment for us as a company, and we believe we're the first eVTOL company to reach this milestone. Over the coming months, we'll keep you up to speed with our progress across a series of ASCPs which together cover the entire aircraft.

We also successfully completed both our first System Review and our first compliance review with the FAA in the fourth quarter. During the system review, the FAA assesses our plans and processes for the development of complex, safety critical systems and equipment.

While the compliance review looks at our approach to development and verification of aerospace software and airborne electronic hardware, these both went very well. And we've since had formal sign off from the FAA, allowing us to move ahead with confidence.

We also successfully completed our first FAA manufacturing conformity inspection in the fourth quarter, which was followed earlier this year by our first conformity testing.

Although the focus of these tests was a simple carbon composite sample, the move to formal testing marks a significant milestone for Joby as we move into the implementation phase of our certification program for the first time.

In other words, this was the first time we have done real testing for credit with the regulator, rather than discussing what criteria would apply to testing or how the testing should be completed. Entering the stage of testing demonstrates the maturity of our production and quality systems after 10 years of hard work.

And this test was the first of 1000s of similar inspections and tests we can expect to complete as we demonstrate the airworthiness and safety of our aircraft, On the second area of certification, production, we completed the production manuals and process descriptions that we are required to put in place in order to start the official FAA audit of our quality system.

This is the first formal stage of achieving a production certificate. And it laid the groundwork for us to build our first production intent prototype, and then conforming aircraft. That's a pretty amazing task, and I'm proud of what our team has achieved. I'm also very grateful to the FAA for their support.

We expect the formal engagement process with the FAA’s manufacturing and inspection district offices in LA to kick off in 2022 and run for several quarters as we prepare to apply for production certification.

Finally, on the operational certification side, we continue to make good progress with our Part 135 Air Carrier Certificate, which is required to commence revenue generating passenger flights.

We recently announced that we have entered the fourth of five application stages, leaving us on track to receive the certification in the second half of this year as planned. I hope you all agree that taking all of this progress together, it's been an important quarter for Joby in terms of certification. And with that, I'll hand it back to JoeBen..

Thank you, Didier. I'm hugely grateful for the work our team has accomplished and I'm so excited by the momentum we're seeing on certification.

I should also say a particular thank you to Bonnie Simi, our Head of Air Operations and People along with the team that support her for the time they've invested in getting us to this point with our Part 135 application. We're incredibly lucky to be able to attract people like Didier and Bonnie to Joby.

And if you haven't read about Bonnie's remarkable experience, then I would encourage you to do so.

She's not only the former President of JetBlue Technology Ventures, but she also has decades of operational and strategic experience in the airline industry, having served in a raft of different roles from being a captain at United Airlines to the Head of Talent at JetBlue.

And with the Winter Olympics recently concluding, it's worth noting that she's also a three-time Winter Olympian. While we're saying thank you, we should also acknowledge the number of times that we've already mentioned the FAA today. They're so busy supporting this entire sector.

And so we're grateful for their ongoing support as we continue with our own journey towards introducing our service. Before I hand it over to Paul and Matt, I'd like to put some context around a couple of items. First, the economy. We're not immune to the market dynamics that we see around us right now.

Whether that's macroeconomic shifts, supply chain disruptions, or the impact of global conflicts. But we anticipated that things could get a little bumpy, and we prepared for that eventuality.

We have a great team of leaders with deep operational experience across a range of industries, including our CFO Matt, who spent 20 years at Ford, and really has seen it all. He knows how to guide a business like ours effectively through turbulent times. And we're grateful for the pragmatic approach he brings to managing our spending.

What I will say is that we've been fortunate to be able to build a remarkably strong balance sheet for Joby that allows us to plan with significantly longer time horizons than many others and this gives us the confidence that we can work through almost anything that the market throws at us.

Today, we're reporting that we ended 2021 with 1.3 billion in cash and short-term investments on our balance sheet, which is not only sector leading, but importantly, should be sufficient to support us through to commercialization. The second item I wanted to touch on is our flight test program.

As we previously reported, our first pre-production prototype was involved in an accident earlier this year. At the time, the aircraft was engaged in what is known as an envelope expansion campaign.

That's a normal part of flight testing that is designed to understand how the aircraft performs across its entire range of performance, what is known as a flight envelope. But to be frank, it's a bit of a luxury for us to be able to complete this sort of testing at this point in our development program.

Typically, a flight test envelope campaign would be performed once a final production aircraft is built. Being able to do it on a prototype helps us derisk our program and avoid changes later on, which would be both costly and time consuming.

From tip to tail, every new aircraft, including its systems and subsystems, is thoroughly tested through its full envelope of expected performance. That's one of the reasons that commercial aviation is as safe as it is.

That expected performance envelope is something that we define during the design process using software tools, simulation and bench testing. The flight test campaign is designed to prove it out in real life and help us understand how the aircraft performs across the envelope we have defined.

At this point, it's worth noting that the performance we're evaluating during these tests is the very maximum we believe the aircraft is capable of and is considerably higher than the performance we have defined for day-to-day operations.

To put that into context, during FAA flight testing, we are required to demonstrate speeds that are substantially above the never exceed speed of the aircraft, a speed that is already above the nominal operating speed. In other words, far beyond what the aircraft would ever do during day-to-day operations.

During an envelope expansion campaign, we steadily increased the demands on the aircraft understand if, when and how failures occur, so that we can mitigate them. In that respect, it's very similar to the component level bench testing we do every day that involves endurance or performance tests that exceed what we expect to see in normal use.

Acknowledging that these flights pose a higher risk, we purposely conducted them in uninhabited areas. And thanks to technology we've developed in-house, we're able to perform them without anybody on board. While we continue to work with the NTSB and the FAA to understand the precise cause of the accident, the learning process has already begun.

As we review gigabytes of high-definition data and film from the flight, which we receive up to 1000 times a second. The data from this envelope expansion campaign and more than 1000 other test flights has informed the design of our first production intent aircraft and plays an important part in derisking our future.

We can also be proud that our very first pre-production prototype aircraft was able to complete all of its primary mission from flying a maximum demonstrated range of 154 miles in July 2021 and demonstrating our low noise profile during NASA testing in September 2021 to flying at speeds over 200 miles an hour and an altitude of more than 11,000 feet earlier this year.

At this stage, we do not expect this accident to have a meaningful impact on our business operations, or certification timing, and I'm happy to confirm that our second production aircraft has already returned to flight testing. Finally, for me, I wanted to share that we've begun manufacturing our first production intent aircraft.

This aircraft will be the first to roll off our pilot manufacturing line in Marina, California, and we expect to see it in the skies later this year.

It will benefit from the investment that we've made in advanced production technologies such as automated by replacement machines and additive processes, which were made as part of the build out of 125,000 square feet of manufacturing space in 2021.

We continue to benefit from our decision to vertically integrate engineering and manufacturing and just one example of that, in 2021, we were able to deliver more than 20,000 machine parts in-house, allowing us to stay nimble and avoid many of the challenges seen in the global supply chain.

To bring all of that together, I'm really excited about where we are right now. We've demonstrated the full performance of our aircraft. We've got momentum on all fronts of our certification work. We have a strong balance sheet, and our manufacturing facilities are really coming to life.

With that, I'll turn it over to Paul to update you on the third of our focus areas preparing for commercialization. Thank you so much.

Paul?.

Thanks, JB. On the commercial side of the business, we recently made a number of announcements that are also reflective of our vertically integrated approach.

Earlier this year, we announced partnerships with both ANA Holdings and SK Telecom that will see us join forces with Japan's largest airline, and South Korea's leading telecommunications company to explore launching aerial ride sharing services in Japan and South Korea.

Both of these companies are remarkably successful in their own right and committed to delivering the highest levels of customer service, it's an honor to be working with them. These two partnerships also demonstrate our differentiated approach to delivering our service in markets outside of the U.S.

We believe that Joby has to remain incredibly close to our customer, whether that's in our core U.S. markets, where we plan to deliver our service directly to customers themselves, or in select international markets, where we'll work in partnership with local companies like ANA, or SK to deliver our service.

We don't want to just sell aircraft, we want to sell a very particular service, one that gives customers back time in their busy lives.

We believe that passengers will travel with us because the experience is enjoyable and frictionless because the aircraft is at the right place at the right time because the right route is available, because the sky port is in just the right place.

In other words, because all of these pieces are carefully coordinated, to save customers time every time they use it. Now if we just stand back, sell our aircraft, and let the market try and pull all these pieces together in the right order. It will get messy fast.

We need coordination, especially in the early years of the market, to make sure that the benefits are truly demonstrated to customers. This is a lot like Tesla, who built out the charging network themselves to make sure their future vehicle owners would also be able to appreciate the full potential of their technology.

And back then, they were only introducing a new type of car. We're introducing something even more novel, not just a new type of vehicle, but an entirely new form of transportation that will need to be well understood and effectively introduced in order to be successful. Now this doesn't mean we have to do everything ourselves.

That's why we partner with great companies like Uber, or ANA or SK. But we do believe we need to play a very active role in the customer experience. It's about putting Joby's best foot forward, and ensuring the market develops in the way our customers wanted to.

And if we can do that here in the U.S., as well as in markets like South Korea, where 42 million people live in urban areas, or Japan, where 92% of the population does, we'll be well on our way to unlocking the scale and full potential of our service. I'll now hand it over to Matt to discuss the financials..

Thank you, Paul, and thank you for joining us. In the fourth quarter we reported a positive net income of $5 million, an improvement of 38.9 million compared with the fourth quarter of 2020 and 83.9 million better than last quarter.

Our net income in the fourth quarter reflected spending on our operations of 77.2 million more than offset by reported gains unrelated to our ongoing core operations. This should not be expected to repeat in the future.

These gains included other income of 71.7 million and a one-time tax benefit of 10.5 million arising from accounting adjustments on the Uber elevate transaction within the measurement period.

The positive other income in the fourth quarter largely reflected the change in the fair market value of our warrants and earnout shares with 61.3 million and income from equity method investments 10.2 million.

Within our operating expenses research and development costs totaled 57.3 million reflecting aircraft development and certification activities, including early manufacturing operations, Selling, general and administrative expenses were 19.9 million for the quarter.

As I highlighted last quarter, we will reference adjusted EBITDA for our ongoing reporting of operating performance. This is a non-GAAP measure that excludes one-time costs stock-based compensation accruals and other costs unrelated to our ongoing core operations. For the fourth quarter stock-based compensation totaled 7.5 million.

Also excluded from adjusted EBITDA is income from equity method investments and the impact on net income arising from the revaluation of our derivative liabilities, namely, our warrants and earn up shares, which, as a reminder, does not impact our cash flow.

All of this was laid out in our shareholder letter in the section titled non-GAAP financial measures. Adjusted EBITDA for the fourth quarter was negative 65.2 million, an increase of 29.8 million over the same quarter in 2020.

The higher expenses compared with the same period a year ago and compared with the prior quarter from early reflect growth in personnel supporting development and certification activities, early manufacturing operations, initial investments in commercialization, as well as administrative costs to support us becoming a public company.

As of the end of February Joby had 1124 employees up from 715 a year ago, over 80% are directly involved in the design, manufacture and certification of our aircraft.

Net increase in cash for 2021 totaled 878 million, reflecting the successful completion of our merger with RTP and cash received from Uber's investment, partly offset by net cash used in operating activities, purchases of property and equipment and acquisitions, which combined, totaled 234.9 million.

For the fourth quarter cash flow is negative 60.9 million. This spending primarily reflected net cash used in operating activities, purchases of property equipment and acquisitions, which combined total 62.3 million. As we look ahead to 2022, we will continue to maintain a pragmatic to managing our operations and spending.

We will remain disciplined about the speed at which we grow our operations with our near-term focus firmly on certification and the early manufacturing of our aircraft, with a time of hiring and spending to match our needs. In 2021, we invested in building out much of our pilot manufacturing capacity for powertrain, electronics and composites.

For 2022, overall spending on property and equipment is expected to be moderately higher than 2021 as we complete our pilot manufacturing facilities, build out our testing operations and began initial spending on early commercial operations with the purchase of our first simulator in partnership with CAE as we recently announced.

We are continuing to validate the capabilities of our pilot manufacturing facility to confirm production throughput as we build our first production intent aircraft this year, and multiple test articles for certification and other business requirements.

This approach provides a lower risk route confirming that our manufacturing processes and procedures support production certification prior to spending money on our higher volume phase one production line.

For full year 2022, we expect net cash used in operating activities and spending on property and equipment to range from 340 million to 360 million as we grow our team complete our pilot manufacturing operations and testing facilities and make progress towards certification and commercialization.

As JoeBen mentioned at the outset, we ended 2021 with 1.3 billion in cash and short-term investments. This provides an incredibly strong financial foundation to bring our revolutionary technology to market. We look forward to sharing further progress with you in the months ahead.

This concludes our prepared remarks and we will now move into the question-and-answer session.

Operator, would you please instruct participants on how to ask questions?.

Yes, thank you. [Operator Instructions] Our first question comes from Christine Liwag with Morgan Stanley. Please proceed..

Maybe going back to the flight-testing accident in February, third-party data kind of shows that the aircraft is flying at over 250 miles per hour at over 10,000 feet. So it's kind of sounds like, it's at the edge of the flight envelope and certainly, a little above the expected normal operating range of the aircraft.

Like what does this mean for the flight test going forward.

And what do you need to learn from the second test aircraft to progress with certification and entering the service by 2024?.

Thanks for the question, Christine. It sounds like there is two pieces of it. One on sort of lessons learned and the second around what sort of flight test means kind of looking going forward. So why don't I take each of each of those pieces in turn.

We cannot add a lot of detail to what JB said at the outset, regarding the conditions around this particular event, until the work with the NTSB, and the FAA is finalized.

But we can confirm as JB discussed at the outset, that we were at the end of the flight test expansion campaign, and at test points that were well above what we expect to see a normal operation for the aircraft. So I think we've got to leave it at that.

With respect to what flight test means go forward we obviously announced today that we had our second aircraft now back up into flight test. And there are a number of points that we still want to make sure that we work through with that aircraft, including work on the ground for taxi, and then a few other test points in the air.

But fundamentally, the reason for continuing the flight test work is to really build on the momentum that we had, you can think about flight test as kind of a muscle that we want to make sure that we build and maintain over time.

So ensuring that we continue to do that work over the next quarters to really prepare ourselves for the final certification test effort is really one of the key goals of that vehicle..

Great.

And then, in terms of your flight testing program, how many more test aircraft do you plan to build?.

So we have a number of aircraft that we're planning both this year and next. We've not necessarily finalized the number of vehicles that we're going to put into the flight test program.

Some of those may be used for other operations say that sort of DoD, but it is important there on the manufacturing side, to kind of build and maintain momentum, that manufacturing muscle is kind of like the test muscle one that we want to continue to exercise so that we're really well prepared for scaling production when we need to..

Great. And then, with your partnerships with South Korea and Japan, I mean, it sounds like you're partnering with South Korea, kind of the Uber version there.

Can you speak to what these partnerships are, where they fit in your strategy? And then also, when you think about, as a first mover advantage, how meaningful are these partnerships to your success?.

So thanks a lot for the question on SK and ANA, what I can say is that we've spent a lot of time with each of those groups. And we feel really good about them as the right partner for Joby as we think about exploring service in both South Korea and Japan sort of respectively.

In each case, they bring important assets that are complementary to what Joby provides. In the case of ANA, obviously, an extended operating history in Japan have close relationships with regulators.

And, of course, an incredible sort of focus on customer service, each of which we think is going to be important as we think about rolling out service in that kind of market.

SK on the other hand, has the second largest ride sharing network in South Korea, as well as an important mapping asset that is critical as we think about sort of rolling up the service.

So our approach in each of those, and I think this is an approach that you'll see us take in other places too, is to find the right local partner that has the right sort of complements to what Joby provides so that we can maximize the likelihood of success whether that market is in Japan, South Korea, or somewhere else..

Our next question is from David Zazula with Barclays. Please proceed..

Hey, thanks for taking my question. This is I think, I speak for a lot of investors who will say they really appreciate you giving a little bit of color into the G2 process that overall has been a little opaque.

Maybe for Didier, the 70% number that you quote, can you maybe give us any kind of examples of tests that you think you've kind of nailed down and agreed to with the FAA.

And the ones that are up, or any description you can -- what's upcoming and ongoing as far as that process?.

Thank you, David for the question. What I can tell you is that 70% is of the means of compliance is well on track for us achieving the majority of agreement or acceptance with the FAA, on what we are going to do to show compliance against the rules that we talked about through the G1.

We recently submitted this week, our first cert plan for the cabin safety. And that's going to allow us to make progress towards testing for all those cabin elements such as seat safety, for example, flight deck aspects associated with control of the various equipment’s within the flight deck and so on.

So as we continue to make progress there, you'll see other things roll in, associated with things like power plants, flight controls, and so on throughout the mid of this year..

Great. Thanks very much. Yes, that's very helpful. There was a competitor, that there was a report out on recently that had their battery in the spotlight.

I think there's probably fewer questions around your battery, you've definitely demonstrated a lot of flight testing around but I can you speak to your confidence in the battery you have as far as being able to ultimately serve the design range at kind of your design payload and what you've learned from flight testing so far?.

Yes, thank you, David. The battery is as you rightly noticed one of the areas that we're most proud of and we've done a lot of diligence on. There's a number of different facets of the battery that are really, really important to the operating economics of our service.

And so we've done work on the safety, the battery, and then on the performance of the battery to deliver range, and then on the lifetime of the battery, in order to make our footprint on the planet as light as possible. And also the economics of operating our services compelling as possible.

So on that first piece, the safety, we've done a lot of really rigorous work on the engineering side, as well as being closely aligned with the FAA on the needs of compliance that we're going to test our battery packs against.

The second piece is the performance as you may have seen, we demonstrated 154-mile range with our prototype aircraft this last year. And we're very pleased to have been able to demonstrate that and then the last piece is that we've in the lab shown more than 10,000, representative 25-mile flight tests on a battery pack.

And we again, that's really valuable as we look to generate really compelling price points and operating economics for our customers..

Our next question is from Andres Sheppard with Cantor Fitzgerald. Please proceed..

Hey, guys, good afternoon and congrats on the quarter. A lot of great updates this quarter. So again, congratulations on that. I'm wondering if you can provide maybe additional color on how many test flights you're expecting to conduct this year with the second production prototype.

I'm just curious can how this is expected to ramp up throughout the rest of the year. Thank you..

Thank you, Andres. This is Didier. Like Paul mentioned earlier we are very excited to start -- resume again with a second aircraft with our flight testing.

We have learned a lot and for the most part completed the flight envelope that was dedicated to the first aircraft, this next aircraft is intended to focus on a separate area of the envelope focus in on ground taxing, hovering, takeoff and landing conversions, and so on. So we will spend quite a bit of this year focusing around those areas.

Not necessarily speak to the number of flights, but we will do what we need to do to make sure that we have all the envelope covered. That leading into, as JoeBen said earlier, starting to fly then, shortly after our production intent aircraft, which we'll pick up from there as well..

Got it fair enough. And that was very helpful, thank you. Maybe one quick follow up with the partnerships in South Korea and Japan.

I'm wondering any thoughts there around maybe having some direct sales of the aircraft just given the different legislations there? Or is the goal still very much to operate 100% of these aircraft?.

Thanks for the question, Andres. Our approach is really unchanged, as we think about rolling out service both here in the U.S. and potentially abroad. In each case, we want to make sure that we have the right partners in place.

And we want to make sure that we continue to deliver the right level of customer service or what I was talking about in terms of coordination of the various pieces of it. Now there may be slightly different character to that coordination in different international geographies, as you said, based on different national regulations in those places.

But it's still going to be an approach that looks a lot like what we're thinking about rolling out here in the U.S..

Got it. Okay. And thanks again for taking my question. And congrats again on the quarter. I'll pass it off. Thanks..

Joe, are there more questions left out for this earnings call?.

No. There are no more questions at this time. And I’d like to hand the call back to Mr. Bevirt..

Thank you so much. And thank you all for taking the time to join us today. We're so grateful for your support. What I hope you take away from today is the incredible progress our team has been making particularly on certification. We have real momentum, and I'm so excited about what stands ahead for us in 2022.

We look forward to speaking to you again soon. And hope you all have a fantastic evening. Thank you so much..

This concludes today's conference. Thank you very much for your participation. You may now disconnect..