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Rivian revenue beats estimates in Q2

Automotive reporter Pras Subramanian examines Rivian's latest earnings report and the manufacturer's EV production figures.

Video Transcript

[AUDIO LOGO]

RACHELLE AKUFFO: Breaking news now, electric vehicle maker Rivian reporting second-quarter earnings just moments ago. Shares trading about 4 and 1/2% to the downside in after hours. Yahoo! Finance's Pras Subramanian has the details for us. Pras, what are the big takeaways?

PRAS SUBRAMANIAN: Hey, Rachelle. Yeah, so good news and bad news here. Let's start with the good news first, Rivian reporting $364 million in revenue for Q2. That's beating estimates of $335.7. Their adjusted EPS loss for the quarter came in at $162. This is a slight miss from the $161 that was estimated. They did maintain their production forecast for 25,000 vehicles and said they produced 8,000 trucks since the start of production late last year.

Now, the bad news is they increased their full year 2022 adjusted EBITDA loss to $5.45 billion. That originally was $4.75 billion for the year, so they increase that loss by a little less than $1 billion. They also say they still see supply constraints to remain a limiting factor in output, so they are still being challenged there with production.

So we're going to keep an eye out more on what's happening with the production ramp of the R1T and the R1S SUV. We want to hear more about these component shortages and how bad margins are. And also, we want to hear about this plan they have where they're converting pre-orders, reservations to actual purchases in order to get vehicles in the hands of buyers and have them be able to take advantage of that full tax credit before the new inflation reduction that goes into effect.

So I'll keep digging through this, Rachelle, but right now, shares down about 4.3% in after-hours trading.

RACHELLE AKUFFO: All right. Well, thank you for that update. Pras Subramanian reporting there. So Brian, as we're seeing there, shares still falling in after-hours trading, and that's despite coming out ahead on the top and bottom line.

But obviously, it comes down to production. This is a company that was very slow when it came to getting the production rolling out, even though it beat Tesla to the punch in getting its first pickup-- its pickup truck to the US. So it'll be interesting to see if they can actually pick up that momentum once we see what happens with their production.

BRIAN CHEUNG: Yeah. Well, I mean, interesting to see that the earnings report says that as of June 30-- so a little bit lagged here, that's the quarter that they're reporting-- their net R1 preorder backlog, about 98,000 for consumers in the US and Canada.

And you wonder whether or not that backlog is going to get bigger because of what Pras just mentioned, which is the fact that reservation holders can now sign binding purchase agreements to get one of these trucks in order to get that $7,500 federal tax credit that has just been recently passed.

So I think that that's going to very much put more pressure on Rivian to meet those production numbers, even though, of course, it's going to be a good thing on the top line to get more reservations into the books. But for the record, this is not just something that the EV makers are experiencing.

All the other automakers, when you look at Honda or BMW or Land Rover, for example, also having issues of replenishing their new car lots for dealers. So again, that's going to remain a big story because of the chip shortage, and you do kind of wonder how that's going to impact the quarters to come.

RACHELLE AKUFFO: Indeed, and we'll be following up with Rivian with Dan Ives later on in the show, so you don't want to miss it.