Rivian Automotive(RIVN) - 2025 Q2 - Quarterly Report

Part I. Financial Information This section presents Rivian's unaudited financial statements, including balance sheets, statements of operations, cash flows, and detailed notes for the reporting period Item 1. Financial Statements (unaudited) Rivian reported $2.54 billion in revenue and a reduced net loss of $1.66 billion for H1 2025, with total assets of $15.6 billion and liabilities of $9.5 billion, and significantly improved operating cash flow Condensed Consolidated Balance Sheets The balance sheet shows total assets of $15.597 billion and total liabilities of $9.518 billion as of June 30, 2025 Condensed Consolidated Balance Sheet Highlights (in millions) | Balance Sheet Item | Dec 31, 2024 (USD) | June 30, 2025 (USD) | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $5,294 | $4,812 | | Total current assets | $10,583 | $10,120 | | Property, plant, and equipment, net | $3,965 | $4,421 | | Total assets | $15,410 | $15,597 | | Liabilities & Equity | | | | Total current liabilities | $2,251 | $2,943 | | Long-term debt | $4,441 | $4,436 | | Total liabilities | $8,848 | $9,518 | | Total stockholders' equity | $6,562 | $6,079 | Condensed Consolidated Statements of Operations The statements of operations show total revenues of $2.543 billion and a net loss of $1.656 billion for H1 2025 Condensed Consolidated Statements of Operations Highlights (in millions, except per share data) | Metric | Q2 2024 (USD) | Q2 2025 (USD) | H1 2024 (USD) | H1 2025 (USD) | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $1,158 | $1,303 | $2,362 | $2,543 | | Automotive Revenues | $1,074 | $927 | $2,190 | $1,849 | | Software and services Revenues | $84 | $376 | $172 | $694 | | Gross profit | ($451) | ($206) | ($978) | $0 | | Loss from operations | ($1,375) | ($1,114) | ($2,859) | ($1,769) | | Net loss | ($1,457) | ($1,115) | ($2,903) | ($1,656) | | Net loss per share | ($1.46) | ($0.97) | ($2.93) | ($1.45) | Condensed Consolidated Statements of Cash Flows Cash flow statements indicate a significant reduction in net cash used in operating activities to $124 million for H1 2025 Condensed Consolidated Statements of Cash Flows Highlights (in millions) | Cash Flow Activity | Six Months Ended June 30, 2024 (USD) | Six Months Ended June 30, 2025 (USD) | | :--- | :--- | :--- | | Net cash used in operating activities | ($2,023) | ($124) | | Net cash used in investing activities | ($1,095) | ($1,114) | | Net cash provided by financing activities | $1,028 | $750 | | Net change in cash | ($2,094) | ($482) | Notes to Condensed Consolidated Financial Statements Notes detail the Volkswagen Group investment, revenue by source, outstanding debt, and segment gross profit - On June 30, 2025, Rivian received $1.0 billion from Volkswagen Group after achieving a financial milestone, exchanging $750 million for Class A common stock and recording the $250 million premium as deferred revenue[35] Revenue by Major Source (in millions) | Revenue Source | Q2 2024 (USD) | Q2 2025 (USD) | H1 2024 (USD) | H1 2025 (USD) | | :--- | :--- | :--- | :--- | :--- | | New electric vehicles | $1,057 | $924 | $2,172 | $1,688 | | Regulatory credits | $17 | $7 | $18 | $166 | | Software and services | $84 | $372 | $172 | $689 | | Total revenues | $1,158 | $1,303 | $2,362 | $2,543 | - Revenue from the Volkswagen Group joint venture for the combined performance obligation was $182 million for Q2 2025 and $349 million for H1 2025, with the majority of the transaction price expected to be recognized over approximately three years[70] Outstanding Debt (in millions) | Debt Instrument | Maturity | Dec 31, 2024 (USD) | June 30, 2025 (USD) | | :--- | :--- | :--- | :--- | | 2026 Notes | 2026 | $1,250 | $0 | | 2029 Green Convertible Notes | 2029 | $1,500 | $1,500 | | 2030 Green Convertible Notes | 2030 | $1,725 | $1,725 | | 2031 Green Secured Notes | 2031 | $0 | $1,250 | | Total long-term debt | | $4,475 | $4,475 | - In June 2025, the company issued $1.25 billion of 10% 2031 Green Secured Notes and used the proceeds to pay off the outstanding $1.25 billion 2026 Notes[81][88] Segment Gross Profit (in millions) | Segment | Q2 2024 (USD) | Q2 2025 (USD) | H1 2024 (USD) | H1 2025 (USD) | | :--- | :--- | :--- | :--- | :--- | | Automotive | ($441) | ($335) | ($938) | ($243) | | Software and Services | ($10) | $129 | ($40) | $243 | | Consolidated | ($451) | ($206) | ($978) | $0 | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses decreased automotive revenue, improved gross loss, significant growth in software and services, R2 platform focus, and strong liquidity of $8.5 billion Overview The overview details Rivian's segment structure, R2 production plans, and H1 2025 production and delivery volumes - Rivian's business is structured into two reportable segments: Automotive (consumer and commercial vehicles) and Software and Services (including the VW joint venture, remarketing, charging, and subscriptions)[132] - The company plans to start production of its new midsize SUV, the R2, in the first half of 2026, which is considered foundational to its long-term growth and profitability[137] Production and Delivery Volumes | Metric | H1 2025 | | :--- | :--- | | Vehicles Produced | 20,590 units | | Vehicles Delivered | 19,301 units | Results of Operations Results show a 16% decrease in automotive revenue, a 74% improvement in automotive gross loss, and a 303% increase in software and services revenue for H1 2025 - Automotive revenue for H1 2025 decreased by 16% YoY to $1.85 billion, primarily due to a 30% decrease in delivery volume, partially offset by increased average selling prices[159][161] - Automotive gross profit loss improved by 74% YoY for H1 2025, from a loss of $938 million to $243 million, driven by higher average selling prices, increased sales of regulatory credits, and reductions in material and overhead costs[162][165] - Software and Services revenue for H1 2025 increased by 303% YoY to $694 million, and gross profit turned positive to $243 million from a $40 million loss, primarily due to services provided by the Volkswagen joint venture[168][170] - The company plans a three-week shutdown of its Normal Factory in late Q3 2025 to prepare for R2 production, which is expected to negatively impact near-term production and costs[167] Liquidity and Capital Resources Liquidity and capital resources highlight $8.519 billion in total liquidity, Volkswagen Group investments, and a potential DOE loan facility Total Liquidity (in millions) | Component | Dec 31, 2024 (USD) | June 30, 2025 (USD) | | :--- | :--- | :--- | | Cash and cash equivalents | $5,294 | $4,812 | | Short-term investments | $2,406 | $2,696 | | Availability under ABL Facility | $1,363 | $1,011 | | Total liquidity | $9,063 | $8,519 | - Rivian received a $1.0 billion equity investment from Volkswagen Group on June 30, 2025, and expects up to an additional $2.5 billion in future investments and loans from VW, subject to milestones[187] - The company has a loan arrangement with the U.S. Department of Energy (DOE) for a multi-draw term loan facility of up to approximately $6.0 billion to support the development of its Stanton Springs North Facility, subject to conditions[189] - Management believes that the existing balance of cash, cash equivalents, short-term investments, and available credit will be sufficient to meet operating, working capital, and capital expenditure needs for at least the next 12 months[192] Item 3. Quantitative and Qualitative Disclosures about Market Risk The company reports no material changes in market risk exposure, having repaid floating-rate debt in June 2025 to reduce interest rate risk - In June 2025, the company paid off its outstanding floating-rate debt, reducing its exposure to interest rate risk[199] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2025[201] Part II. Other Information This section covers legal proceedings, various risk factors, and other pertinent information Item 1. Legal Proceedings Rivian is actively defending against multiple stockholder class action and derivative lawsuits related to its IPO and alleged securities violations - The company is defending against multiple stockholder lawsuits, including class actions and derivative suits, alleging violations of securities laws and breaches of fiduciary duties[206] Item 1A. Risk Factors The company faces extensive risks including ongoing losses, financing needs, intense competition, R2 launch dependence, supply chain issues, and reliance on key partners Risks Related to Our Business Business risks include a history of losses, future financing needs, and significant reliance on Amazon and the Volkswagen Group joint venture - Rivian is a growth-stage company with a history of losses, including a net loss of $1.656 billion for the first six months of 2025, and expects to incur significant expenses and losses for the foreseeable future[208] - The company will require additional financing to support its business, which may not be available on acceptable terms, if at all, and the ability to draw on its DOE loan is subject to meeting certain milestones[211] - A significant portion of automotive revenues has been from Amazon, and any reduction in orders or termination of the relationship would materially and adversely affect the business[258][260] - The business is subject to risks associated with the joint venture with Volkswagen Group, including reliance on it for a significant portion of software and services revenue and for future software development[224] Risks Related to Information Technology, Data Security, Privacy, and Intellectual Property Risks involve cybersecurity threats, compliance with evolving data privacy laws, and regulatory scrutiny of AI technologies - The company faces numerous cybersecurity risks, including ransomware and phishing attacks, which could lead to data breaches, compromise vehicle safety, and result in significant liability and reputational harm[346][348] - Compliance with complex and evolving federal, state, and foreign data privacy laws (e.g., CCPA, GDPR) is critical, and failure to comply could result in significant fines and legal action[351][352] - The use of AI technologies is subject to increasing regulatory scrutiny, such as the EU AI Act, which could require significant resources to ensure compliance and may expose the company to new liabilities[362][366] Risks Related to Other Legal, Regulatory, and Tax Matters Legal and regulatory risks include trade tariffs, potential loss of government incentives, and compliance with environmental, health, and safety regulations - The business is adversely affected by trade tariffs and other barriers, which increase the cost of imported components and may disrupt the supply chain[381] - The unavailability, reduction, or elimination of government incentives, such as the 30D and 45W tax credits removed by the OBBBA, could diminish the competitiveness of EVs and harm the business[308][309] - The company is subject to substantial and evolving environmental, health, and safety regulations, and compliance could impose significant costs and cause delays in manufacturing operations[396] Risks Related to the Ownership of Our Class A Common Stock Risks for stockholders include stock price volatility and concentrated voting control by executive officers, directors, and principal stockholders - The market price of the company's Class A common stock has been and may continue to be volatile due to a variety of factors, including operating performance, analyst ratings, and overall market conditions[412] - Executive officers, directors, and principal stockholders collectively hold approximately 31.7% of the voting power, allowing them to significantly influence corporate matters[415] - The company has a dual-class stock structure where Class B common stock, held by an affiliate of the Founder and CEO, has ten votes per share, concentrating voting control[416] Item 5. Other Information CEO Robert J. Scaringe amended his Rule 10b5-1 trading plan on June 11, 2025, for the sale of up to 894,195 Class A common shares - On June 11, 2025, CEO Robert J. Scaringe amended his Rule 10b5-1 trading arrangement to cover the sale of up to 894,195 shares of Class A common stock[453]