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Rivian Automotive, Inc. / DE (RIVN)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 revenue was $1.30B, up sequentially and year over year, but gross margin fell to -16% as lower production drove fixed-cost under-absorption; EPS was -$0.97, a miss vs S&P Global consensus, while revenue slightly beat .
  • Management reduced 2025 regulatory credit outlook to ~$160M (from $300M) and raised adjusted EBITDA loss guidance to $(2.0)–$(2.25)B, maintaining deliveries at 40k–46k and CapEx at $1.8–$1.9B .
  • Software & Services continued to scale with $376M revenue and $129M gross profit; about half of S&S revenue was from the Volkswagen JV, strengthening non-vehicle profit drivers .
  • Strategic narrative centered on R2 cost structure (BoM ~50% of R1), fixed-cost absorption benefits in Normal, and autonomy “early fusion” AI roadmap; DOE loan (up to $6.6B) remains undrawn pending Georgia construction start .
  • Potential stock catalysts: EPS miss, guidance raise for EBITDA losses, regulatory credit headwind, and tariff impacts offset by JV monetization and R2 progress .

What Went Well and What Went Wrong

What Went Well

  • Software & Services scaled: $376M revenue, $129M gross profit, driven by JV services, remarketing, service, accessories, and charging; “About half” of S&S revenue came from the VW JV .
  • Balance sheet strengthen: $1.0B equity investment from Volkswagen at $19.42/share effective price; total liquidity $8.52B including revolver capacity .
  • R2 and autonomy execution: R2 DV builds underway; Normal expansion substantially complete; autonomy platform advancing with enhanced highway assist and an AI-centric “early fusion” approach; “I’m more bullish on this vehicle than any product we’ve developed” (RJ) .

What Went Wrong

  • EPS miss and margin compression: Q2 EPS -$0.97 vs consensus and gross margin -16% as production fell to 5,979 units, driving ~$137M incremental fixed costs in cost of revenues .
  • Guidance worsened: 2025 adjusted EBITDA loss raised to $(2.0)–$(2.25)B; regulatory credit outlook cut to ~$160M, leading to full-year gross profit “roughly breakeven” .
  • Tariff headwinds and supply chain: CFO reiterated “couple thousand dollars per unit” tariff impact and Q2 production was limited by supply chain complexities and trade policy shifts .

Financial Results

Headline Metrics vs prior periods

MetricQ2 2024Q1 2025Q2 2025
Total Revenue ($USD Billions)$1.16 $1.24 $1.30
Net Loss per Share (EPS, $USD)$(1.46) $(0.48) $(0.97)
Gross Margin (%)(39%) 17% (16%)
Adjusted EBITDA ($USD Millions)$(857) $(329) $(667)
Production (Units)9,612 14,611 5,979
Deliveries (Units)13,790 8,640 10,661

Actual vs S&P Global Consensus

MetricQ4 2024Q1 2025Q2 2025
Revenue Consensus ($USD Billions)$1.43*$1.02*$1.29*
Revenue Actual ($USD Billions)$1.73 $1.24 $1.30
EPS Consensus (Primary, $USD)$(0.63)*$(0.74)*$(0.64)*
EPS Actual (Primary, $USD)$(0.70) $(0.48) $(0.97)

Values with asterisk are retrieved from S&P Global.

Segment Breakdown (Q2 2025)

SegmentRevenue ($USD Millions)Gross Profit ($USD Millions)
Automotive$927 $(335)
Software & Services$376 $129
Total$1,303 $(206)

KPIs (Q2 2025)

KPIValue
Cash, Cash Equivalents & Short-term Investments$7,508M
Free Cash Flow$(398)M
Capital Expenditures$462M
Net Cash Provided by Operating Activities$64M

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Vehicles DeliveredFY 202546,000–51,000 (Q4’24) 40,000–46,000 (Q1’25 maintained in Q2) Lowered
Adjusted EBITDAFY 2025$(1,700)M–$(1,900)M (Q1’25) $(2,000)M–$(2,250)M (Q2’25) Lowered
Capital ExpendituresFY 2025$1,800M–$1,900M (Q1’25) $1,800M–$1,900M (Q2’25) Maintained
Regulatory Credits (Sales)FY 2025~$300M (prior outlook) ~$160M Lowered
Gross Profit (Consolidated)FY 2025Modest positive (Q1’25) Roughly breakeven (Q2’25) Lowered
Deliveries SeasonalityFY 2025N/APeak deliveries in Q3 2025 New detail

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’24, Q1’25)Current Period (Q2’25)Trend
AI/AutonomyRoadmap with JV and tech platform highlighted in Q4’24; OTA progress in Q1’25 Early-fusion AI, Rivian Large Driving Model, enhanced highway assist; autonomy & AI day planned for December Accelerating execution
Supply ChainOngoing improvements but still a risk (Q4’24) Q2 production limited by supply chain complexities and trade policy shifts Near-term headwind
Tariffs/MacroExternal policy risks flagged (Q4’24) “Couple thousand dollars per unit” tariff impact expected in H2’25 Worsening cost headwind
Regulatory CreditsRecord credits helped Q4 revenue 2025 credits cut to ~$160M (from $300M); no revenue expected for remainder of 2025 from certain programs Material negative
R2 Product/CostsBoM ~half of R1; Normal expansion on track (Q1’25) DV builds underway; Normal expansion substantially complete; shared fixed-cost absorption at Normal; confident on positive R2 gross margin Positive trajectory
Capacity/Georgia DOE LoanDOE loan closed, up to $6.6B (Q4’24) DOE loan undrawn; construction-driven draw; Normal to ~215k capacity; Georgia buildings go vertical early 2026 Phased build-out

Management Commentary

  • “Changes to EV tax credits, regulatory credits, trade regulation and tariffs are expected to have an impact on the results and the cash flow of our business.” (CEO RJ) .
  • “Automotive gross profit losses were $335M… Software and Services reported another strong quarter with $376M of revenue and $129M of gross profit… about half… from the Software and Electrical Hardware JV with Volkswagen Group.” (CFO Claire) .
  • “We expect total 2025 regulatory credit sales to be approximately $160M as compared to our prior outlook of $300M… we expect our gross profit for the full year 2025 to be roughly breakeven.” (CFO Claire) .
  • “We’ve previously said the bill of material cost on R2 is about half that of R1… that’s actually contractually negotiated with suppliers.” (CEO RJ) .
  • “We plan to shut down our Normal facility for approximately three weeks starting in September to prepare for the planned launch of R2… we anticipate the third quarter to be our peak delivery quarter of the year.” (CFO Claire) .

Q&A Highlights

  • DOE Loan draw: Undrawn; structured as construction/project finance; intention to draw as Georgia build commences .
  • Autonomy stack strategy: Early sensor fusion, AI-centric model, robust data flywheel; path to map-free operation and eventual hands-off/eyes-off in defined areas by 2026 .
  • R2 economics and BoM: BoM ~50% of R1, shared low-voltage electronics sourcing with VW JV to further reduce costs; positive R2 gross margin targeted, faster path than R1 given shared fixed-cost absorption .
  • Regulatory/tariff impacts: Tariff headwind “couple thousand dollars per unit” consistent with prior; primary guidance change driven by regulatory credits reduction; EBITDA target for 2027 still pursued .
  • Capacity and Georgia timeline: Normal to ~215k after September downtime; Georgia construction vertical in early 2026; R2 capacity at Normal ~155k with further variants envisioned in Georgia .

Estimates Context

  • Q2 2025 results vs S&P Global consensus: Revenue beat ($1.30B actual vs $1.29B*), EPS miss (-$0.97 actual vs -$0.64*). Prior quarters showed revenue beats with EPS better than consensus in Q4’24 and Q1’25. Values retrieved from S&P Global.
  • The magnitude of the EPS miss and increased adjusted EBITDA loss guidance suggest downward revisions to near-term street EPS/EBITDA, while revenue resilience and S&S momentum could temper top-line cuts .
MetricQ4 2024Q1 2025Q2 2025
Revenue Consensus ($USD Billions)$1.43*$1.02*$1.29*
Revenue Actual ($USD Billions)$1.73 $1.24 $1.30
EPS Consensus (Primary, $USD)$(0.63)*$(0.74)*$(0.64)*
EPS Actual (Primary, $USD)$(0.70) $(0.48) $(0.97)

Values with asterisk are retrieved from S&P Global.

Key Takeaways for Investors

  • Near-term headwinds: EPS miss, margin pressure from lower production and fixed-cost absorption, and regulatory credit reduction drive a weaker profitability outlook for 2025 .
  • Top-line resilience: Revenue grew YoY and QoQ; S&S contribution is material and profitable, diversifying earnings away from vehicle margins .
  • R2 cost and scale are pivotal: Contracted BoM reductions (~50%) and Normal fixed-cost sharing imply faster profitability ramp for R2 vs R1; watch DV/validation milestones and Normal capacity upgrade in September .
  • Autonomy roadmap as strategic lever: AI-centric platform and expanding feature set could underpin S&S monetization and future licensing, complementing the VW JV .
  • Liquidity runway: $7.51B cash and investments at Q2, with prospective VW JV milestones and DOE financing supporting Georgia build; monitor timing and conditions for draws .
  • Trading implications: Expect estimate revisions (EPS/EBITDA down) and elevated sensitivity to policy/tariff headlines; catalysts include autonomy/AI day, R2 commissioning, and Q3 deliveries peak .
  • Medium-term thesis: Execution on R2 launch, S&S growth, and JV monetization could offset regulatory/tariff drag and support the 2027 EBITDA-positive ambition if volume ramps and cost roadmaps are achieved .