RIVN Q4 2021 Earnings

Call Details

• Call Title: Rivian Automotive, Inc. Q4 2021 Earnings Call
• Date: March 10, 2022 at 10:00 PM UTC
• Management Team:
  • Tim Bannon (Vice President of Investor Relations)
  • RJ Scaringe (Founder, Chairman, and Chief Executive Officer)
  • Jiten Behl (Chief Growth Officer)
  • Claire McDonough (Chief Financial Officer)

Call Summary

Financial Performance

• Rivian produced 1,003 vehicles and delivered 909 vehicles in Q4 2021, which generated $54M of revenue.
• The company reported a negative GAAP gross profit of $383M in Q4 2021 driven by high fixed costs, inflation, and supply-chain-driven BOM and logistics increases.
• Rivian recorded a LCNRV inventory write-down that negatively impacted Q4 gross profit and that write-down is expected to affect near-term quarters.
• Research and development expense was $726M in Q4 2021 compared with $255M in Q4 2020, reflecting investments in current and future vehicle programs and cross-platform technologies.
• SG&A expense was $682M in Q4 2021 compared with $98M in Q4 2020, which included $277M of stock-based compensation recorded in the quarter.
• The company recorded a primarily non-cash other expense of $663M related to donated shares and cash to Forever by Rivian Inc. in conjunction with the IPO.
• Capital expenditures for Q4 2021 were $455M and the company ended the year with $18.4B of cash on hand, inclusive of restricted cash.
• The shareholder letter and call discussed both GAAP and non-GAAP measures and indicated reconciliations are in the shareholder letter.

Guidance

• Rivian plans to produce 25,000 vehicles across the R1 and RCV platforms in 2022 due to visible supply-chain constraints.
• Absent supply constraints, the company believes the Normal, IL facility equipment and processes could produce approximately 50,000 vehicles in 2022.
• The company estimated adjusted EBITDA for 2022 to be negative $4.75B, primarily due to continued forward investment.
• Capital expenditures for 2022 are expected to be $2.6B, driven by Normal factory expansion and investments in tooling, battery technology, service network, and digital capabilities.
• Rivian stated its long-term targets remain unchanged with a 25% gross margin target, EBITDA margin in the high teens, and a 10% free cash flow margin target.
• The company expects EDV production to ramp considerably during Q2 2022, with EDV builds currently being used to refine digital integration with Amazon.
• Rivian cautioned that supply-chain constraints are the primary limiting factor on total output for 2022 and are the most sensitive variable for near-term margins.