Rivian shares rebound on rising profits, rising production expectations, and the end of Amazon Van exclusivity

Rivian shares rebound on rising profits, rising production expectations, and the end of Amazon Van exclusivity

shares Rivian Cars (Raven 1.40%) It rose 4.4% in after-hours trading on Tuesday, after the electric vehicle (EV) maker released its third-quarter 2023 report.

The positive investor reaction was attributable to several factors: revenue and earnings for the quarter exceeded Wall Street expectations, management raised its 2023 production target and improved EBITDA loss guidance, and the company’s termination of its exclusivity agreement with Amazon To purchase its commercial vehicles.

As background, Rivian makes two all-electric consumer vehicles: the R1T (pickup) and the R1S (SUV). It also produces an electric delivery vehicle, which until Tuesday’s announcement was only available to Amazon, which has a large stake in Rivian.

Here’s an overview of Rivian’s third quarter and outlook, centered around eight key metrics.

1. Revenue increased by 149% year over year

In the third quarter, Rivian’s revenue was $1.34 billion, which beat Wall Street estimates of $1.31 billion. This result was up 149% from the same period last year and up 19% from the previous quarter. Revenue was generated primarily from vehicles delivered in the quarter.

2. 16,304 vehicles were produced, an increase of 17% over the second quarter

In the third quarter, Rivian produced a total of 16,304 vehicles, an increase of 17% over the previous quarter. As in Q2, the majority of R1 production during the quarter was R1S.

Also during the third quarter, the company delivered 15,564 vehicles, 23% more than in the second quarter.

3. The continued rollout of 100,000 Amazon delivery trucks

Rivian continues to fulfill Amazon’s initial order of 100,000 custom-designed electric delivery vans (EDVs). The company does not disclose its production and delivery numbers for these vehicles. However, it noted that Amazon now has more than 10,000 EDV vehicles in its fleet.

4. Operating loss reduced by 19%

Loss from operations was $1.44 billion, 19% lower than the operating loss in the same period last year.

5. Adjusted loss per share decreased by 24%.

The reported net loss was $1.37 billion, or $1.44 per share, a 23% improvement from the same quarter last year.

After adjusting for one-time items, net loss was $1.13 billion, or $1.19 per share, representing a 24% decrease from the same period last year. This result exceeded the adjusted loss of $1.33 per share that Wall Street had expected.

6. Reduced cash used in operations by 36%.

In the third quarter, Rivian used $877 million in cash to manage its operations. This result represents a 36% improvement over cash used in the same period last year, as well as a 36% improvement over the second quarter.

Free cash flow was negative $1.07 billion. This is lower than the negative figure of $1.67 billion in the same period last year, and also narrower than the negative figure of $1.62 billion in the second quarter.

7. $9.13 billion in cash, cash equivalents and short-term investments at the end of the quarter

Rivian ended the quarter with $9.13 billion in cash, cash equivalents, short-term (liquid) investments, and $2.72 billion of long-term debt on its balance sheet.

At the company’s current cash burn rate of $1.07 billion per quarter, its cash balance would last about 8.5 quarters, or just over two years. For an early-stage electric vehicle maker, Rivian’s liquidity position is relatively strong.

8. Increase annual production guidance to 54,000 vehicles

Rivian raised its 2023 vehicle production forecast to 54,000 total units, up from 52,000 units. In 2022, it produced a total of 24,337 vehicles, so 2023 production guidance represents an expected annual increase of 122%.

The company also improved its 2023 forecast for adjusted EBITDA to negative $4.0 billion, from negative $4.2 billion.

In summary, Rivian delivered a strong third-quarter report. Investors should be particularly pleased with the increase in 2023 production forecasts, the improvement in EBITDA loss forecasts, and the end of the commercial truck exclusivity agreement with Amazon.

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Beth McKenna has no position in any of the stocks mentioned. The Motley Fool has positions on and recommends Amazon. The Motley Fool has a disclosure policy.

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