Q2 2024 Joby Aviation Inc Earnings Call

August 7, 2024

Greetings, and welcome to Joby Aviation's second quarter 2024 conference call and webcast. At this time, all participants are in a listen-only mode.

Operator: and Webcast. At this time, all participants are in a listen-only mode. If anyone should require operator assistance during the conference, please press star and zero on your cell phone keypad.

Operator: and Webcast. At this time, all participants are in a listen-only mode. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Teresa Thuruthiyil, Joby's Head of Investment Relations.

Operator: At this time, all participants are in a listen-only mode. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Teresa Thuruthiyil, Joby's Head of Investment Relations.

Teresa Thuruthiyil: If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Teresa Thuruthiyil, Joby's Head of Investment Relations.

Teresa Thuruthiyil: As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Theresa Thuruthiyil, JoeB's head of in reservations.

Teresa Thuruthiyil: Thank you.

Teresa Thuruthiyil: Thank you. Good afternoon and evening, everyone. Welcome to the Joby Aviation conference call to discuss the company's financial results for the second quarter of 2024. We announced our results earlier today. Both our Q2 2024 shareholder letter and a webcast of this call are available online on the investor relations page of our website at ir.jobeaviation.com. Our discussion today will include statements regarding future events and financial performance, as well as statements of belief, expectation, and intent.

JoeBen Bevirt: Good afternoon and evening, everyone. Welcome to the JoeB Aviation conference call to discuss the company's financial results for the second quarter of 2024. We announced our results earlier today; both our Q2 2024 shareholder letter and a webcast of this call are available online at the investor relations page of our website at ir.jobaviation.com. Our discussion today will include statements regarding future events and financial performance, as well as statements of belief, expectation, and intent. These forward-looking statements are based on management's current expectations and involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied.

Speaker Change: Thank you. Good afternoon and evening, everyone. Welcome to the Joby Aviation conference call to discuss the company's financial results for the second quarter of 2024.

Speaker Change: We announced our results earlier today. Both our Q2 2024 shareholder letter and a webcast of this call are available online at the Investor Relations page of our website at ir.jobeaviation.com.

Teresa Thuruthiyil: These forward-looking statements are based on management's current expectations and involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied. For a more detailed discussion of these risks and uncertainties, please refer to our filings with the SEC and the Safe Harbor disclaimer contained in today's shareholder letter. The forward-looking statements included in this call are made only as of the date of this call, and the company does not assume any obligation to update or revise them.

Our discussion today will include statements regarding future events and financial performance, as well as statements of belief, expectation, and intent.

Speaker Change: These forward-looking statements are based on management's current expectations and involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied.

JoeBen Bevirt: For a more detailed discussion of these risks and uncertainties, please refer to our filings with the SEC and the Safe Harbor disclaimer contained in today's shareholder letter. The forward-looking statements included in this call are made only as of the date of this call, and the Company does not assume any obligation to update or revise them. Please note that today's call will include results reported on a non-GAAP basis. Our Q2 2024 shareholder letter provides a reconciliation between gap and non-gap measures.

Speaker Change: For a more detailed discussion of these risks and uncertainties, please refer to our filings with the SEC and the Safe Harbor disclaimer contained in today's shareholder letter.

Speaker Change: The forward-looking statements included in this call are made only as of the date of this call, and the company does not assume any obligation to update or revise them.

Teresa Thuruthiyil: Please note that today's call will include results reported on a non-GAAP basis. Our Q2 2024 shareholder letter provides a reconciliation between GAAP and non-GAAP measures. On the call today, we have JoeBen Bevirt, Founder and Chief Executive Officer; Didier Papadopoulos, President of Aircraft OEM; Matt Field, Chief Financial Officer; and joining us for Q&A, we also have Paul Sciarra, Executive Chairman. After management's prepared remarks, we will open the call for questions. And with all of that said, I'll turn the call over to JoeBen.

Speaker Change: Please note that today's call will include results reported on a non-GAAP basis. Our Q2 2024 shareholder letter provides a reconciliation between GAAP and non-GAAP measures.

JoeBen Bevirt: On the call today, we have Joe Ben Bevert, founder and chief executive officer; DDA Papadopoulos, president of aircraft OEM; Matt Field, chief financial officer; and joining us for Q&A, we also have Paul Chiara, executive chairman. After management's prepared remarks, we will open the call for questions.

JoeBen Bevirt: On the call today, we have JoeBen Bevirt, Founder and Chief Executive Officer, Didier Papadopoulos, President of Aircraft OEM,

Speaker Change: Matt Field, Chief Financial Officer, and joining us for Q&A, we also have Paul Sciarra, Executive Chairman.

Speaker Change: After management's prepared remarks, we will open the call for questions.

JoeBen Bevirt: And with all of that said, I'll turn the call over to Joe Ben. Thanks, Teresa, and thank you everyone for joining us today. I'm pleased to report that we've had another great corner, making important progress across all three of our core focus areas. Certification, manufacturing, and commercialization. While investing in JoeB's long-term success, DDA is going to speak to the detail of this in a few moments, but I'd like to call out some of the headlines. On certification, we saw a significant momentum during the quarter, and we're now at 37% complete on the JoeB side of stage 4.

JoeBen Bevirt: Thanks, Teresa, and thank you, everyone, for joining us today. I'm pleased to report that we've had another great quarter, making important progress across all three of our core focus areas, Certification, Manufacturing, and Commercialization, while investing in Joby's long-term success. Didier is going to speak to the details of this in a few moments, but I'd like to call out some of the headlines.

JoeBen Bevirt: Thanks, Teresa, and thank you, everyone, for joining us today. I'm pleased to report that we've had another great quarter, making important progress across all three of our core focus areas. Certification, Manufacturing, and Commercialization, while investing in Joby's long-term success. Didier is going to speak to the details of this in a few moments, but I'd like to call out some of the headlines. On certification, we saw significant momentum during the quarter, and we're now at 37% complete on the JOBY side of Stage 4.

Speaker Change: And with all of that said, I'll turn the call over to JoeBen.

JoeBen Bevirt: Thanks Teresa and thank you everyone for joining us today. I'm pleased to report that we've had another great quarter, making important progress across all three of our core focus areas.

JoeBen Bevirt: Certification, Manufacturing, and Commercialization.

Speaker Change: while investing in Joby's long-term success.

Speaker Change: Didier is going to speak to the detail of this in a few moments, but I'd like to call out some of the headlines.

JoeBen Bevirt: On certification, we saw significant momentum during the quarter, and we're now at 37% complete on the CHOBE side of Stage 4. On manufacturing, our second production prototype aircraft began flying during the quarter, our third rolled off the pilot assembly line, our fourth is in final assembly, and the fuselage and tail for our fifth are already connected and undergoing proof load testing.

Didier: On certification, we saw significant momentum during the quarter, and we're now at 37% complete on the Joby side of Stage 4.

JoeBen Bevirt: On manufacturing, our second production prototype aircraft began flying during the quarter. Our third rolled off the pilot assembly line. Our fourth is in final assembly, and the fuselage and tail for our fifth are already connected and undergoing proofload testing. That means we will soon be flying four aircraft as part of our test program. On commercialization, we applied for certification in Australia and signed a memorandum of understanding with Macamala, a wholly owned subsidiary of Saudi Aramco, an operator of the world's largest fleet of corporate aircraft. Together, we'll be working to introduce JoeB to the Kingdom of Saudi Arabia through the direct purchase of our aircraft.

JoeBen Bevirt: In manufacturing, our second production prototype aircraft began flying during the quarter. Our third rolled off the pilot assembly line, our fourth is in final assembly, and the fuselage and tail for our fifth are already connected and undergoing proof load testing.

Didier: On manufacturing, our second production prototype aircraft began flying during the quarter, our third rolled off the pilot assembly line, our fourth is in final assembly, and the fuselage and tail for our fifth are already connected and undergoing proof load testing.

JoeBen Bevirt: That means we will soon be flying four aircraft as part of our test program. As for commercialization, we applied for certification in Australia and signed a memorandum of understanding with Macamala, a wholly owned subsidiary of Saudi Aramco, an operator of the world's largest fleet of corporate aircraft. Together, we'll be working to introduce Joby to the Kingdom of Saudi Arabia through the direct purchase of our aircraft. As a reminder, the sale of aircraft to customers like McConnell or the U.S. government forms just one pillar of our commercialization strategy, alongside the direct operation of our aircraft in core markets and partnered operations in other markets.

Speaker Change: That means we will soon be flying four aircraft as part of our test program.

Speaker Change: On commercialization, we applied for certification in Australia and signed a Memorandum of Understanding with Macamala, a wholly owned subsidiary of Saudi Aramco, an operator of the world's largest fleet of corporate aircraft.

Didier: Together, we'll be working to introduce Joby to the Kingdom of Saudi Arabia through the direct purchase of our aircraft.

JoeBen Bevirt: As a reminder, the sale of aircraft to customers like McComla or the US government forms just one pillar of our commercialization strategy, alongside the direct operation of our aircraft in core markets and partnered operations in other markets. We expect sales to be an important pillar of our commercialization strategy, offering the opportunity to generate recurring revenue through the provision of training and maintenance services. Each of these achievements demonstrates Jobi's leadership in our sector, and I'm incredibly proud of the team that continues to deliver a quarter over a quarter.

Speaker Change: As a reminder, the sale of aircraft to customers like Macomela, or the U.S. government, forms just one pillar of our commercialization strategy.

Didier: alongside the direct operation of our aircraft in core markets and partnered operations in other markets.

JoeBen Bevirt: We expect sales to be an important pillar of our commercialization strategy, offering the opportunity to generate recurring revenue through the provision of training and maintenance services. Each of these achievements demonstrates Joby's leadership in our sector, and I'm incredibly proud of the team that continues to deliver quarter after quarter.

Speaker Change: We expect sales to be an important pillar of our commercialization strategy, offering the opportunity to generate recurring revenue through the provision of training and maintenance services.

Speaker Change: Each of these achievements demonstrates Joby's leadership in our sector and I'm incredibly proud of the team that continues to deliver quarter over quarter.

JoeBen Bevirt: Before I handed over to Didier, I would like to focus on two other areas that are critical to Jobi's long-term success: our preparation for commercial operations and our investment in future technologies. On operations, we hosted a virtual briefing during the quarter where we introduced our pre-flight checklist, a list of the operational items required to successfully deliver an air taxi service, whether you are operating aircraft yourself or selling them to customers. If you haven't seen the briefing, I'd encourage you to watch it on our YouTube channel. And what I hope you'll take away is that certifying an aircraft is just one piece of the puzzle.

JoeBen Bevirt: Before I hand it over to Didier, I would like to focus on two other areas that are critical to Joby's long-term success, our preparation for commercial operations and our investment in future technology. On operations, we hosted a virtual briefing during the quarter where we introduced our pre-flight checklist, a list of the operational items required to successfully deliver an air taxi service, whether you are operating aircraft yourself or selling them to customers. If you haven't seen the briefing, I'd encourage you to watch it on our YouTube channel.

Speaker Change: Before I hand it over to Didier, I would like to focus on two other areas that are critical to Joby's long-term success.

Speaker Change: our preparation for commercial operations, and our investment in future technologies.

Speaker Change: On operations, we hosted a virtual briefing during the quarter where we introduced our pre-flight checklist, a list of the operational items required to successfully deliver an air taxi service.

Speaker Change: whether you are operating aircraft yourself or selling them to customers.

Speaker Change: If you haven't seen the briefing, I'd encourage you to watch it on our YouTube channel.

JoeBen Bevirt: And what I hope you'll take away is that certifying an aircraft is just one piece of the puzzle. To commercialize it successfully, you also need simulators, pilot training, maintenance, safety management systems, and much more. With our Part 135 and Part 145 certifications in place, we are making sector-leading progress towards being ready to start commercial operations. And during the quarter, we announced that we have also received FAA authorization to use our ElevateOS operating system.

Speaker Change: And what I hope you'll take away is that certifying an aircraft is just one piece of the puzzle.

JoeBen Bevirt: To commercialize successfully, you also need simulators, pilot training, maintenance, safety management systems, and much more. With our Part 135 and Part 145 certifications in place, we are making sector-leading progress towards being ready to start commercial operations. And during the quarter, we announced that we have also received FAA authorization to use our Elevate OS operating system. Elevate OS is an airline operating system developed in-house that is designed to enable high tempo on-demand air taxi operations. It includes pilot tools, schedule management software, a mobile-first rider app, and an intelligent matching engine. It's built on a software foundation developed by Uber that we brought across as part of our Uber Elevate acquisition in 2021.

Speaker Change: To commercialize successfully, you also need simulators, pilot training, maintenance, safety management systems, and much more.

Speaker Change: With our Part 135 and Part 145 certifications in place, we are making sector-leading progress towards being ready to start commercial operations.

Speaker Change: and during the quarter we announced that we have also received fa authorization to use our elevate os operating system

JoeBen Bevirt: ElevateOS is an airline operating system developed in-house that is designed to enable high-tempo, on-demand air taxi operations. It includes pilot tools, schedule management software, a mobile-first rider app, and intelligent matching. It's built on a software foundation developed by Uber that we brought across as part of our Uber Elevate acquisition in 2021. Uber is the undisputed leader in ride-sharing technology.

JoeBen Bevirt: ElevateOS is an airline operating system developed in-house that is designed to enable high-tempo, on-demand air taxi operations. It includes pilot tools, schedule management software, a mobile-first rider app, and an intelligent matching engine. It's built on a software foundation developed by Uber that we brought across as part of our Uber Elevate acquisition in 2021. Uber is the undisputed leader in ride-sharing technology.

Speaker Change: ElevateOS is an airline operating system developed in-house that is designed to enable high-tempo, on-demand air taxi operations.

Speaker Change: It includes pilot tools, schedule management software, a mobile first rider app, and an intelligent matching engine.

Speaker Change: It's built on a software foundation developed by Uber that we brought across as part of our Uber Elevate acquisition in 2021.

JoeBen Bevirt: Uber is the undisputed leader in ride-sharing technology. But the team that joined Joby from Uber also brought direct experience of deploying a multimodal ride-sharing product through Ubercopter. We knew early on in our journey that to deliver the sort of efficient, even magical experiences our customers would expect, we would need to fundamentally rethink the aviation software stack. And that's exactly what we've done. We've built a remarkable set of tools that goes far beyond anything available today and is designed to connect seamlessly into the services of our partners, like Uber and Delta. And we're already testing it in real life so that we'll be ready for day one of operations.

Speaker Change: is the undisputed leader in ride aring technology

JoeBen Bevirt: But the team that joined Joby from Uber also brought direct experience of deploying a multimodal ride-sharing product through Uber Copter. We knew early on in our journey that to deliver the sort of efficient, even magical experiences our customers would expect, we would need to fundamentally rethink the aviation software stack. And that's exactly what we did.

Speaker Change: But the team that joined Joby from Uber also brought direct experience of deploying a multimodal ride-sharing product through Uber Copter.

Speaker Change: We knew early on in our journey that to deliver the sort of efficient, even magical experiences our customers would expect, we would need to fundamentally rethink the aviation software stack.

JoeBen Bevirt: We've built a remarkable set of tools that goes far beyond anything available today and is designed to connect seamlessly into the services of our partners like Uber and Delta, and we're already testing it in real life so that we'll be ready for day one of operation. Looking beyond our initial service launch, the second area I'd like to focus on is our investment in future technology. Our goal has always been to broaden access to flights as widely as possible while reducing the environmental impact of travel.

Speaker Change: and that's exactly what we've done

Speaker Change: We've built a remarkable set of tools that goes far beyond anything available today and is designed to connect seamlessly into the services of our partners like Uber and Delta.

Speaker Change: And we're already testing it in real life, so that we'll be ready for day one of operations.

JoeBen Bevirt: Looking beyond our initial service launch, the second area I'd like to focus on is our investment in future technology. Our goal has always been to broaden access to flight as widely as possible while reducing the environmental impact of travel. Our battery electric aircraft is going to help us take the first step on that journey, but it is also going to act as a platform for us to take the next steps on that journey. Because the vast majority of the design, testing, and certification work we've completed on the aircraft will carry over into future aircraft or future integrations of the same aircraft.

Speaker Change: Looking beyond our initial service launch, the second area I'd like to focus on is our investment in future technologies.

Speaker Change: Our goal has always been to broaden access to flight as widely as possible while reducing the environmental impact of travel.

JoeBen Bevirt: Our battery-electric aircraft is going to help us take the first step on that journey, but it is also going to act as a platform for us to take the next steps on that journey. Because the vast majority of the design, testing, and certification work we've completed on the aircraft will carry over into future aircraft or future integrations of the same aircraft. In other words, we can build on the investments we've already made to open up new and adjacent markets.

Speaker Change: Our battery electric aircraft is going to help us take the first step on that journey.

Speaker Change: But it is also going to act as a platform for us to take the next steps on that journey.

Speaker Change: Because the vast majority of the design, testing, and certification work we've completed on the aircraft will carry over into future aircraft or future integrations of the same aircraft.

JoeBen Bevirt: In other words, we can build on the investments we've already made to open up new and adjacent markets. We're able to do that because of the vertically integrated way in which we've built our company, and our record-breaking 561-mile hydrogen electric flight is a great example of that. This range would make it possible to connect Baltimore to Boston or San Francisco to San Diego, changing how people think about transportation between cities. We converted our own battery electric aircraft to complete a hydrogen electric flight in a matter of weeks with only a small team. Our ex-wing acquisition tells the same story of small but important investments that leverage our existing technology to make a big difference.

Speaker Change: In other words, we can build on the investments we've already made to open up new and adjacent markets.

JoeBen Bevirt: We're able to do that because of the vertically integrated way in which we built our company, and our record-breaking 561-mile hydrogen electric flight is a great example of that. This range would make it possible to connect Baltimore to Boston or San Francisco to San Diego, changing how people think about transportation between cities.

JoeBen Bevirt: We're able to do that because of the vertically integrated way in which we built our company, and our record-breaking 561 mile hydrogen electric flight is a great example of that. This range would make it possible to connect Baltimore to Boston or San Francisco to San Diego, changing how people think about transportation between cities.

Speaker Change: We're able to do that because of the vertically integrated way in which we built our company, and our record-breaking 561-mile hydrogen electric flight is a great example of that.

Speaker Change: This range would make it possible to connect Baltimore to Boston or San Francisco to San Diego, changing how people think about transportation between cities.

JoeBen Bevirt: We converted our own battery-electric aircraft to complete a hydrogen-electric flight in a matter of weeks with only a small team. Our X-Wing acquisition tells the same story of small but important investments that leverage our existing technology to make a big difference. We believe autonomy has the potential to widen access to flight on the consumer side and enable a larger set of applications on the government side. And in X-Wing, we've been able to bring it to a team that has demonstrated true leadership in the field.

Speaker Change: We converted our own battery electric aircraft to complete a hydrogen electric flight in a matter of weeks with only a small team.

Speaker Change: Our X-Wing acquisition tells the same story of small but important investments that leverage our existing technology to make a big difference.

JoeBen Bevirt: We believe autonomy has the potential to widen access to flight on the consumer side and enable a larger set of applications on the government side. And in ex-wing, we've been able to bring it on a team that has demonstrated true leadership in the field. At the Farmboro Air Show back in July, the excitement around our work in automation and hydrogen took me back to 2017. The year we first flew our full-size battery electric prototype aircraft and demonstrated what EV tall could be. Those flights played an incredibly important role in bringing this sector to life and catalyzing the regulatory work required to commercialize battery electric technology.

Speaker Change: we believe autonomy has the potential to widen access to flight on the consumer side and enable a larger set of applications on the government side

Speaker Change: And in X-Wing, we've been able to bring on a team that has demonstrated true leadership in the field.

JoeBen Bevirt: At the Farnborough Air Show back in July, the excitement around our work in automation and hydrogen took me back to 2017, the year we first flew our full-size battery electric prototype aircraft and demonstrated what eVTOL could be. Those flights played an incredibly important role in bringing this sector to life and catalyzing the regulatory work required to commercialize battery electric technology. My hope is that our hydrogen and autonomy work will do the same thing and help lay the groundwork for those technologies to enjoy the broad bipartisan and global support we're seeing for our battery-electric aircraft today.

Speaker Change: At the Farmboro Air Show back in July , the excitement around our work in automation and hydrogen took me back to 2017.

Speaker Change: the year we first flew our full-sized batter electric prototype aircraft and demonstrated what etoallll could be

Speaker Change: Those flights played an incredibly important role in bringing this sector to life and catalyzing the regulatory work required to commercialize battery electric technology.

JoeBen Bevirt: My hope is that our hydrogen and autonomy work will do the same thing and help lay the groundwork for those technologies to enjoy the broad bipartisan and global support we're seeing for our battery electric aircraft today. It's an honor to be able to share our progress with you each quarter.

Speaker Change: My hope is that our hydrogen and autonomy work will do the same thing and help lay the groundwork for those technologies to enjoy the broad bipartisan and global support we're seeing for our battery electric aircraft today.

JoeBen Bevirt: It's an honor to be able to share our progress with you each quarter, and I'd like to hand it over to Didier to look in more detail at our future technology and our core work on certifying and manufacturing our battery electric aircraft. Didier, over to you.

Speaker Change: It's an honor to be able to share our progress with you each quarter, and I'd like to hand it over to Didier to look in more detail at our future technology and our core work on certifying and manufacturing our battery electric aircraft. Didier, over to you.

JoeBen Bevirt: And I'd like to hand it over to DDA to look in more detail at our future technology and our core work on certifying and manufacturing our battery electric aircraft.

Didier Papadopoulos: DDA, over to you. Thanks, Joven. It was exhilarating to witness our team complete multiple 500 plus mile EV tall flights using our hydrogen electric demonstrator aircraft. This was truly a landmark achievement. And I want to take a moment to explain how we were able to quickly and efficiently demonstrate an ex-generation technology and why we did it. Our battery electric pre-production prototype completed its mission as a test asset on May 2nd, and less than two months later, it demonstrated the regional emission-free flight is possible. Looking at the aircraft from the outside, you can tell that the vast majority of it is fundamentally the same aircraft as the battery electric prototype.

Didier Papadopoulos: It was exhilarating to witness our team complete multiple 500-plus mile eVTOL flights using our hydrogen-electric demonstrator aircraft. This was truly a landmark achievement, and I want to take a moment to explain how we were able to quickly and efficiently demonstrate a next-generation technology and why we did it. Our battery-electric reproduction prototype completed its mission as a test asset on May 2nd, and less than two months later, it demonstrated that regional emission-free flight is possible.

JoeBen Bevirt: It was exhilarating to witness our team complete multiple 500-plus mile eVTOL flights using our hydrogen-electric demonstrator aircraft. This was truly a landmark achievement, and I want to take a moment to explain how we were able to quickly and efficiently demonstrate a next-generation technology and why we did it. Our battery-electric reproduction prototype completed its mission as a test asset on May 2nd, and less than two months later, it demonstrated that regional emission-free flight is possible. It has the same six propellers, is driven by the same six electric propulsion units, and has the same airframe structure.

Didier: Thanks, JoeBen.

Didier: It was exhilarating to witness our team complete multiple 500-plus-mile eVTOL flights using our hydrogen electric demonstrator aircraft.

Didier: This was truly a landmark achievement, and I want to take a moment to explain how we were able to quickly and efficiently demonstrate in next-generation technology and why we did it.

Didier: Our battery electric pre-production prototype completed its mission as a test asset on May 2nd.

Didier: and less than two months later it demonstrated their regional emission free flight is possible

Didier Papadopoulos: Looking at the aircraft from the outside, you can tell that the vast majority of it is fundamentally the same aircraft as the battery-electric prototype. It has the same six propellers, is driven by the same six electric propulsion units, and the same airframe structure. The wiring and electronics inside the aircraft are nearly identical as well.

Didier: Looking at the aircraft from the outside, you can tell that the vast majority of it is fundamentally the same aircraft as the battery electric prototype.

Didier Papadopoulos: It has the same six propellers driven by the same six electric propulsion units and the same airframe structure. The wiring and electronics inside the aircraft are nearly identical as well. A small team at Jobi worked with H2Fly, a wholly owned subsidiary we acquired in 2021, for our pioneers in hydrogen-powered flight to develop a hydrogen electric powertrain that we were able to integrate into the aircraft and fly in a matter of weeks. This is the power of the vertical integration at Jobi that we've been describing for the past three years. From composites to metallics, electronics to mechanical systems, hardware to software, the design, manufacturing, and testing of all of these, as well as the integrated systems testing that brings each of these elements together.

Didier: it has the same six propellers driven by the same six electric proportion units and the same airframe structure

Didier: The wiring and electronics inside the aircraft are nearly identical as well.

JoeBen Bevirt: A small team at Joby worked with H2Fly, a wholly owned subsidiary we acquired in 2021, who are pioneers in hydrogen-powered flight, to develop a hydrogen electric power train that we were able to integrate into the aircraft and fly in a matter of weeks. This is the power of the vertical integration at Joby that we've been describing for the past three years. The investments we've made in people, technology, test assets, and certification of novel aircraft systems allow us to not only bring our revolutionary battery-electric aircraft to market but to make improvements to our core aircraft or develop entirely new products.

Didier Papadopoulos: A small team at Joby worked with H2Fly, a wholly owned subsidiary we acquired in 2021 for our pioneers in hydrogen-powered flight, to develop a hydrogen electric powertrain that we were able to integrate into the aircraft and fly in a matter of weeks. This is the power of the vertical integration at Joby that we've been describing for the past three years. From composites to metallics, electronics to mechanical systems, hardware to software, the design, manufacturing, and testing of all of these, as well as the integrated systems testing that brings each of these elements together, we have all of this under one roof.

Didier: A small team at Joby worked with H2Fly, a wholly owned subsidiary we acquired in 2021, who are pioneers in hydrogen-powered flight, to develop a hydrogen electric powertrain that we were able to integrate into the aircraft and fly in a matter of weeks.

Didier: This is the power of the vertical integration at Joby that we've been describing for the past three years.

Didier: From composites to metallics, electronics to mechanical systems, hardware to software, the design, manufacturing, and testing of all of these, as well as the integrated systems testing that brings each of these elements together. We have all of this under one roof.

Didier Papadopoulos: We have all of this under one roof.

Didier Papadopoulos: In more than 20 years, I spent at CAE and Garmin, I saw many products through the life cycle of development, from drawings to technology demonstrators, through prototyping and then finally into formal certification programs. As we move through the cycle on future products and future upgrades, our vertically integrated approach allows us to invest efficiently in staying ahead of the competition. That in-house engine of technological development is what enables us to do incredible things on relatively short timelines, while leveraging existing resources for minimal incremental expense. The investments we've made in people, technology, test assets, and certification of novel aircraft systems allows us to not only bring our revolutionary battery electric aircraft to market, but to make improvements to our core aircraft or develop entirely new products.

Didier Papadopoulos: In the more than 20 years I spent at CAE and Garmin, I saw many products through the life cycle of development, from drawings to technology demonstrators, through prototyping, and then finally into formal certification programs. As we move through the cycle on future products and future upgrades, our vertically integrated approach allows us to invest efficiently in staying ahead of the competition. Their in-house engine of technological development is what enables us to do incredible things on relatively short timelines while leveraging existing resources for minimal incremental expense.

Speaker Change: In more than 20 years I spent at CAE and Garmin, I saw many products through the life cycle of development.

Didier: From drawings to technology demonstrators, through prototyping, and then finally into formal certification programs.

Speaker Change: as we move through the cycle on future products and future upgrades our vertically integrated approach allows us to invest efficiently in staying ahead of the competition

Speaker Change: Their in-house engine of technological development is what enables us to do incredible things on relatively short timelines.

Speaker Change: while leveraging existing resources for minimal incremental expense.

Didier Papadopoulos: The investments we've made in people, technology, test assets, and certification of novel aircraft systems allow us to not only bring our revolutionary battery-electric aircraft to market but to make improvements to our core aircraft or develop entirely new products. These investments are the pillars of the future.

Speaker Change: The investments we've made in people, technology, test assets, and certification of novel aircraft systems allows us to not only bring our revolutionary battery electric aircraft to market, but to make improvements to our core aircraft or develop entirely new products.

Didier Papadopoulos: These investments are the pillars of the future. With the team that has already progressed through the development life cycle on novel flight control systems, propulsion, wiring, and energy storage, we know what types of challenges to expect, and we can use that knowledge to be even more efficient developing new technologies. As we continue to explore opportunities, including new manufacturing methods like thermoplastics, we believe that this will lead to products with a lower bill of material that are cheaper and easier to build and operate, and have additional capabilities that open up new markets. Over the next year, as we move further into the final stages of certification, members of our core design and technology prototyping teams will be freed up to focus on future technologies, much like we did this quarter with our hydrogen electric demonstrator supported by our contract with Agility Prime.

Didier: These investments are the pillars of the future.

Didier Papadopoulos: With a team that has already progressed through the development lifecycle on novel flight control systems, propulsion, wiring, and energy storage, we know what types of challenges to expect, and we can use that knowledge to be even more efficient in developing new technology. As we continue to explore opportunities, including new manufacturing methods like thermoplastics, we believe that this will lead to products with a lower bill of materials that are cheaper and easier to build and operate and have additional capabilities that open up new markets.

JoeBen Bevirt: With a team that has already progressed through the development lifecycle on novel flight control systems, propulsion, wiring, and energy storage, we know what types of challenges to expect, and we can use that knowledge to be even more efficient in developing new technology. Over the next year, as we move further into the final stages of certification, members of our core design and technology prototyping teams will be freed up to focus on future technology.

Didier: with a team that has already progressed through the development lifecycle on novel flight control systems propulsion wiring and energy storage we know what types of challenges to expect and we can use that knowledge to be even more efficient developing new technologies

Didier: As we continue to explore opportunities, including new manufacturing methods like thermoplastics, we believe that this will lead to products with a lower bill of material that are cheaper and easier to build and operate, and have additional capabilities that open up new markets.

Didier Papadopoulos: Over the next year, as we move further into the final stages of certification, members of our core design and technology prototyping teams will be freed up to focus on future technology. Much like we did this quarter with our hydrogen electric demonstrator, supported by our contract with Agility Prime. We plan to take similar steps with work on flight automation, supported by our acquisition of X-Wing's autonomy division. Like H2Fly, the X-Wing's team has pushed the boundaries of what is possible in aviation, completing more than 250 fully automated gate-to-gate flights using their SuperPilot technology and a Cessna Caravan fitted with a suite of sensing and autonomy solutions that can be applied to a variety of aircraft types.

Didier: Over the next year, as we move further into the final stages of certification, members of our core design and technology prototyping teams will be freed up to focus on future technologies.

JoeBen Bevirt: Much like we did this quarter with our hydrogen electric demonstrator, supported by our contract with Agility Prime, we plan to take similar steps on work with flight automation, supported by our acquisition of X-Wings Autonomy Division. Like H2Fly, the X-Wings team has pushed the boundaries of what is possible in aviation, completing more than 250 fully automated gate-to-gate flights using their SuperPilot technology and a Cessna Caravan fitted with a suite of sensing and autonomy solutions that can be applied to a variety of aircraft types.

Didier: Much like we did this quarter with our hydrogen electric demonstrator, supported by our contract with Agility Prime.

Didier Papadopoulos: We plan to take similar steps on work with flight automation, supported by acquisition of X-Wings autonomy division. Like H2Fly, the X-Wings team has pushed the boundaries of what is possible innovation. Corporation, completing more than 250 fully automated gate-to-gate flights using their super pilot technology and a Cessna Caravan fitted with a suite of sensing and autonomy solutions that can be applied to a variety of aircraft types. We see the potential for this technology to both expand our government contracts and bring new safety capabilities to our civil products through block upgrades in an amended type certificate.

Didier: We plan to take similar steps on work with flight automation, supported by our acquisition of X-Wing's Autonomy Division. Like H2Fly, the X-Wing's team has pushed the boundaries of what is possible in aviation.

Didier: completing more than 250 fully automated gate-to-gate flights using their SuperPilot technology and a Cessna Caravan fitted with a suite of sensing and autonomy solutions that can be applied to a variety of aircraft types.

JoeBen Bevirt: We see the potential for this technology to both expand our government contracts and bring new safety capabilities to our civil products through block upgrades in an amended type certificate. Last week, we rolled out our third production prototype of the manufacturing line in Merino, where it has already begun ground testing in preparation for flight later this month. By the time we speak next quarter, we expect to have four aircraft in active flight test, with additional aircraft being assembled behind them.

Didier Papadopoulos: We see the potential for this technology to both expand our government contracts and bring new safety capabilities to our civil products through block upgrades in an amended type certificate. Turning now to the core focus of our business, the team continues to make great progress towards bringing our battery-electric aircraft to market. Last week, we rolled out our third production prototype on the manufacturing line in Merino, where it has already begun ground testing in preparation for flight later this month.

Didier: We see the potential for this technology to both expand our government contracts and bring new safety capabilities to our civil products through block upgrades in an amended type certificate.

Didier Papadopoulos: Turning now to the core focus of our business, the team continues to make great progress towards bringing our battery electric aircraft to market. Last week, we rolled our third production prototype of the manufacturing line in Marina, where it has already begun ground testing in preparation for flight later this month. By the time we speak, next quarter, we expect to have four aircraft inactive flight tests, with additional aircraft being assembled behind them. With each completed build cycle, we learn a tremendous amount that enables us to increase production speed, reduce cost, and move closer to receiving our production certificate shortly after TC.

Didier: Turning now to the core focus of our business, the team continues to make great progress towards bringing our battery electric aircraft to market.

Teresa Thuruthiyil: As a reminder, this conference is being recorded, it is now my pleasure to introduce your host, Theresa Thuruthiyil, JoeB's head of in reservations. Thank you. Good afternoon and evening everyone. Welcome to the JoeB aviation conference call to discuss the company's financial results for the second quarter of 2024. We announced our results earlier today, both our Q2 2024 shareholder letter and a webcast of this call are available online at the investor relations page of our website at ir.jobaviation.com.

Didier: Last week we rolled our third production prototype of the manufacturing line in Marina, where it has already begun ground testing in preparation for flight later this month.

Didier Papadopoulos: By the time we speak next quarter, we expect to have four aircraft in active flight tests, with additional aircraft being assembled behind them. With each completed build cycle, we learn a tremendous amount that enables us to increase production speed, reduce costs, and move closer to receiving our production certificate shortly after TC. We remain on track to reach our previously stated goal of a production capacity equivalent to one aircraft per month by the end of this year and to ramp beyond that through our expansions in Marina and Ohio.

Didier: By the time we speak next quarter, we expect to have four aircraft in active flight test, with additional aircraft being assembled behind them.

Didier: With each completed build cycle, we learn a tremendous amount that enables us to increase production speed, reduce costs, and move closer to receiving our production certificate shortly after TC.

Teresa Thuruthiyil: Our discussion today will include statements regarding future events and financial performance, as well as statements of belief, expectation and intent. These forward-looking statements are based on management's current expectations and involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied. For a more detailed discussion of these risks and uncertainties, please refer to our filings with the SEC and the Safe Harbor Disclaimer contained in today's shareholder letter.

Didier Papadopoulos: We remain on track to reach our previously stated goal of a production capacity equivalent to one aircraft per month by the end of this year and to ramp beyond that through our expansions in Marina and Ohio. The team is continuing to increase the rate of production and, at the same time, the amount of conforming hardware being built. Turning to certification, I have never been more confident than I am today about our program. As Joban mentioned, we first flew and transitioned a full-scale EVTOL aircraft in 2017, and we did it again with our pre-production prototype beginning in 2020, with those aircraft completing more than 33,000 miles of flight over four years.

JoeBen Bevirt: We remain on track to reach our previously stated goal of a production capacity equivalent to one aircraft per month by the end of this year and to ramp beyond that through our expansions in Marina and Ohio. The team is continuing to increase the rate of production, and at the same time, the amount of conforming hardware being built. I have never been more confident than I am today about our program.

Didier: we remain on track to reach our previously stated goal of a production capacity equivalent to one aircraft per month by the end of this year and to ramp beyond that through our expansions in marina and ohio

Didier Papadopoulos: The team is continuing to increase the rate of production, and at the same time, the amount of conforming hardware being built. Turning to certification, I have never been more confident than I am today about our program.

Didier: the team is continuing to increase the rate of production and at the same time the amount of conforming hardware being built

Didier: Turning to certification.

Teresa Thuruthiyil: The forward-looking statements included in this call are made only as of the date of this call, and the company does not assume any obligation to update or revise them. Please note that today's call will include results reported on a non-gap basis. Our Q2 2024 shareholder letter provides a reconciliation between gap and non-gap measures.

Didier: I have never been more confident than I am today about our program.

Didier Papadopoulos: As JoeBen mentioned, we first flew and transitioned a full-scale eVTOL aircraft in 2017. And we did it again with our pre-production prototype beginning in 2020, with those aircraft completing more than 33,000 miles of flight over four years. During the proof of concept and prototyping stages of development, flying as much as possible is critical to demonstrating the viability of the overall program and fully characterizing the design. Now that we are deep in the certification process,

Didier: As JoeBen mentioned, we first flew and transitioned a full-scale eVTOL aircraft in 2017.

JoeBen Bevirt: And we did it again with our pre-production prototype beginning in 2020, with those aircraft completing more than 33,000 miles of flight over four years.

Didier Papadopoulos: During the proof of concept and prototyping stages of development, flying as much as possible is critical to demonstrating the viability of the overall program and to fully characterize the design. Now that we are deep in the certification process, the vast majority of the necessary work we have to do to get to the market is the less visible behind-the-scene work to develop conforming software and hardware, as well as building conforming test assets that will support the bulk of our certification activities in stages 4 and 5. This is our primary area of focus combined with our work on submitting stage 4 test plans.

Teresa Thuruthiyil: On the call today, we have Joe Ben Bevert, founder and chief executive officer, DDA Papadopoulos, president of aircraft OEM, Matt Field, chief financial officer, and joining us for Q&A, we also have Paul Chiara, executive chairman. After management's prepared remarks, we will open the call for questions.

Speaker Change: During the proof-of-concept and prototyping stages of development, flying as much as possible is critical to demonstrating the viability of the overall program and to fully characterize the design.

Didier Papadopoulos: The vast majority of the necessary work we have to do to get to the market is the less visible, behind-the-scenes work to develop conforming software and hardware, as well as to build conforming test assets that will support the bulk of our certification activities in Stages 4 and 5. Included in this were FAA acceptances for numerous test plans related to onboard equipment and structural materials and processes, as well as our integrated flight and propulsion control system operational test plan, a key system level test covering system area and structures across the aircraft program.

Didier Papadopoulos: The vast majority of the necessary work we have to do to get to the market is the less visible, behind-the-scenes work to develop conforming software and hardware, as well as to build conforming test assets that will support the bulk of our certification activities in Stages 4 and 5. This is our primary area of focus, combined with our work on submitting stage four test plans. This quarter, we made more progress on both sides of Stage 4 of certification than any previous quarter, moving from 9% to 14% complete on the FAA side.

Speaker Change: Now that we are deep in the certification process,

JoeBen Bevirt: And with all of that said, I'll turn the call over to Joe Ben.

Didier: The vast majority of the necessary work we have to do to get to the market is the less visible, behind-the-scene work to develop conforming software and hardware, as well as building conforming test assets that will support the bulk of our certification activities in Stages 4 and 5.

JoeBen Bevirt: Thanks, Teresa, and thank you everyone for joining us today. I'm pleased to report that we've had another great corner making important progress across all three of our core focus areas. Certification, manufacturing, and commercialization.

JoeBen Bevirt: While investing in JoeB's long-term success, DDA is going to speak to the detail of this in a few moments, but I'd like to call out some of the headlines. On certification, we saw a significant momentum during the quarter, and we're now at 37% complete on the JoeB side of stage 4. On manufacturing, our second production prototype aircraft began flying during the quarter. Our third rolled off the pilot assembly line. Our fourth is in final assembly, and the fuselage and tail for our fifth are already connected and undergoing proofload testing.

Didier: this is our primary area of focus combined with our work on submitting stage foretest plans

Didier Papadopoulos: This quarter we made more progress on both sides of stage 4 of certification than any previous quarter, moving from 9% to 14% complete on the FAA side. Included in this were FAA acceptances for numerous test plans related to onboard equipment and structural materials and processes, as well as our integrated flight and propulsion control system operational test plan, a key system level test. We also submitted a number of test plans for FAA review. covering system area and structures across the Aircraft program. But I want to draw your attention to two in particular that demonstrate our leadership on certification.

Didier: This quarter, we made more progress on both sides of Stage 4 of certification than any previous quarter.

Didier: moving from 9% to 14% complete on the FAA side.

Didier Papadopoulos: Included in this were FAA acceptances for numerous test plans related to onboard equipment and structural materials and processes, as well as our integrated flight and propulsion control system operational test plan, a key system level test. We also submitted a number of test plans for FAA review, covering system area and structures across the aircraft program. But I want to draw your attention to two in particular that demonstrate our leadership on certification. The first is a system-level test plan covering the endurance of our propulsion system. But I want to step back for a moment. There are multi-billion dollar aerospace companies dedicated to developing, certifying, and manufacturing propulsion systems alone.

Didier: included in this were fa acceptances for numerous test plans related to onboard equipment and structural materials and processes as well as our integrated flight and propulion control system operational test plan a key system level test

JoeBen Bevirt: That means we will soon be flying four aircraft as part of our test program. On commercialization, we applied for certification in Australia and signed a memorandum of understanding with Macamala, a wholly owned subsidiary of Saudi Aramco, an operator of the world's largest fleet of corporate aircraft. Together, we'll be working to introduce JoeB to the Kingdom of Saudi Arabia through the direct purchase of our aircraft. As a reminder, the sale of aircraft to customers like McComla or the US government forms just one pillar of our commercialization strategy alongside the direct operation of our aircraft in core markets and partnered operations in other markets, we expect sales to be an important pillar of our commercialization strategy, offering the opportunity to generate recurring revenue through the provision of training and maintenance services.

Didier: We also submitted a number of test plans for FAA review.

Didier: covering system area and structures across the aircraft program.

Didier: But I want to draw your attention to two in particular that demonstrate our leadership on certification.

Didier Papadopoulos: The first is a system-level test plan covering the endurance of our propulsion system. To step back for a moment, there are multi-billion dollar aerospace companies dedicated to developing, certifying, and manufacturing propulsion systems alone. Electric motors are a core technology that will drive the next area of aviation. And we are trailblazers here, working closely with the FAA to develop certification standards that allow us to demonstrate the safety and performance of electric motors. The second is our first human factors evaluation plan, which will see the FAA carry out certification tests in a Joby engineering simulator that conforms to our TC intent aircraft.

Didier: The first is a system-level test plan covering the endurance of our propulsion system.

Speaker Change: You step back for a moment.

Didier: There are multi-billion dollar aerospace companies dedicated to developing, certifying, and manufacturing propulsion systems alone.

Didier Papadopoulos: Electric motors are a core technology that will drive the next era of aviation, and we are trailblazers here, working closely with the FAA to develop certification standards that allow us to demonstrate the safety and performance of electric motors. The second is our first human factors evaluation plan, which will see the FAA carry out certification tests in a Joby engineering simulator that conforms to our TC intent aircraft. These are huge steps forward, and we expect the pace of this progress to increase over the balance of the year. Key to the progress we're making in Stage 4 are the regular technical discussions taking place between Joby and FAA staff. During the quarter, we hosted three teams from the FAA at our site in California.

Didier: Electric motors are a core technology that will drive the next era of aviation, and we are trailblazers here, working closely with the FAA to develop certification standards that allow us to demonstrate the safety and performance of electric motors.

Speaker Change: The second is our first human factors evaluation plan.

Speaker Change: which will see the ffaa carryout certification test in a joby engineering simulator that conforms to our tc intent aircraft

Didier Papadopoulos: These are huge steps forward, and we expect the pace of this progress to increase over the balance of the year. Due to the progress we're making in stage four, are the regular technical discussions taking place between Joby and FAA staff. During the quarter, we hosted three teams from the FAA at our site across California. Staff from the FAA electrical and propulsion engineering team witnessed a battery safety thermal runaway test in our newly built battery test facility that was representative of the test we intend to conduct for FAA credit. The FAA Flight Test and Human Factors Division completed a two-week visit that include an initial round of FAA pilot training as well as human factors development testing and flight test techniques development using our simulator.

JoeBen Bevirt: Each of these achievements demonstrates Jobi's leadership in our sector, and I'm incredibly proud of the team that continues to deliver a quarter over a quarter.

Speaker Change: These are huge steps forward and we expect the pace of this progress to increase over the balance of the year.

JoeBen Bevirt: Before I handed over to Didier, I would like to focus on two other areas that are critical to Jobi's long-term success, our preparation for commercial operations and our investment in future technologies. On operations, we hosted a virtual briefing during the quarter where we introduced our pre-flight checklist, a list of the operational items required to successfully deliver an air taxi service, whether you are operating aircraft yourself or selling them to customers. If you haven't seen the briefing, I'd encourage you to watch it on our YouTube channel.

Speaker Change: Key to the progress we're making in Stage 4 are the regular technical discussions taking place between Joby and FAA staff.

Speaker Change: During the quarter, we hosted three teams from the FAA at our site across California.

Didier Papadopoulos: Staff from the FAA electrical and propulsion engineering team witnessed a battery safety thermal runaway test in our newly built battery test facility that was representative of the tests we intend to conduct for FAA credit. The FAA Flight Test and Human Factors Division completed a two-week visit that included an initial round of FAA pilot training, as well as human factors development testing and flight test techniques development using our simulator. This visit marked an important step towards FAA pilots later carrying out flight testing on our aircraft and working to certify our pilot training program in advance of a commercial operation.

Didier Papadopoulos: Staff from the FAA electrical and propulsion engineering team witnessed a battery safety thermal runaway test in our newly built battery test facility that was representative of the test we intend to conduct for FAA credit. The FAA Flight Test and Human Factors Division completed a two-week visit that included an initial round of FAA pilot training, as well as human factors development testing and flight test techniques development using our simulator. This visit marked an important step towards FAA pilots later carrying out flight testing on our aircraft and working to certify our pilot training program in advance of a commercial operation.

Speaker Change: Staff from the FAA Electrical and Propulsion Engineering team witnessed a battery safety thermal runaway test in our newly built battery test facility that was representative of the test we intend to conduct for FAA credit.

Speaker Change: The FAA Flight Test and Human Factors Division completed a two-week visit that included an initial round of FAA pilot training, as well as human factors development testing and flight test techniques development using our simulator.

JoeBen Bevirt: And what I hope you'll take away is that certifying an aircraft is just one piece of the puzzle. To commercialize successfully, you also need simulators, pilot training, maintenance, safety management systems, and much more. With our Part 135 and Part 145 certifications in place, we are making sector-leading progress towards being ready to start commercial operations. And during the quarter, we announced that we have also received FAA authorization to use our Elevate OS operating system.

Didier Papadopoulos: This visit marked an important step towards FAA pilots later carrying out for credit flight testing on our aircraft and working to certify our pilot training program in advance of a commercial operation. We also hosted a group from the FAA Aircraft Evaluation Division, which is charged with ensuring the operational safety and readiness of our aircraft before it enters commercial service. These sessions included careful review of operational aspects that are required as part of our type certification, such as Instructions for Continued Airworthiness and our Planned Maintenance Program for the aircraft. These technical engagements with the FAA are my favorite part of the certification process, where we work together to hammer out all of the final details for the key tests that will bring our aircraft safely into commercial service.

Speaker Change: this visit mark an important step towards fa pilots later carrying out for credit flight testing on our aircraft and working to certify our pilot training program in advance of a commercial operation

Didier Papadopoulos: We also hosted a group from the FAA Aircraft Evaluation Division, which is charged with ensuring the operational safety and readiness of our aircraft before it enters commercial service. These sessions included careful review of operational aspects that are required as part of our type certification, such as instructions for continued airworthiness and our planned maintenance program for the aircraft. These technical engagements with the FAA are my favorite part of the certification process, where we work together to hammer out all of the final details for the key tests that will bring our aircraft safely into commercial service.

Didier Papadopoulos: We also hosted a group from the FAA Aircraft Evaluation Division, which is charged with ensuring the operational safety and readiness of our aircraft before it enters commercial service. These sessions included careful review of operational aspects that are required as part of our type certification, such as Instructions for Continued Airworthiness and our Planned Maintenance Program for the aircraft. These technical engagements with the FAA are my favorite part of the certification process, where we work together to hammer out all of the final details for the key tests that will bring our aircraft safely into commercial service.

Speaker Change: We also hosted a group from the FAA Aircraft Evaluation Division, which is charged with ensuring the operational safety and readiness of our aircraft before it enters commercial service.

JoeBen Bevirt: Elevate OS is an airline operating system developed in-house that is designed to enable high tempo on-demand air taxi operations. It includes pilot tools, schedule management software, a mobile first rider app, and an intelligent matching engine. It's built on a software foundation developed by Uber that we brought across as part of our Uber Elevate acquisition in 2021. Uber is the undisputed leader in ride sharing technology. But the team that joined Joby from Uber also brought direct experience of deploying a multimodal ride sharing product through Ubercopter.

Speaker Change: These sessions included careful review of operational aspects that are required as part of our type certification.

Speaker Change: such as instructions for continued airworthiness, and our planned maintenance program for the aircraft.

Speaker Change: These technical engagements with the FAA are my favorite part of the certification process, where we work together to hammer out all of the final details for the key tests that will bring our aircraft safely into commercial service.

Didier Papadopoulos: These conversations are progressing very well, and we expect to conduct for credit testing in many of our test assets, including the WERLEE track, our battery test facility, and our integrated test lab. As Joven said, we're now more than one third complete with stage 4 on the Jovi side and expect progress to continue to accelerate in the back half of the year. As we take these strides forward, we believe the environment around us is the most supportive it has ever been for bringing our revolutionary technology to market. In May, Congress passed the FAA reauthorization bill, highlighting the desire of US lawmakers to make sure America is a global leader in advanced air mobility.

Didier Papadopoulos: These conversations are progressing very well, and we expect to conduct credit testing on many of our test assets, including the Worley track, our battery test facility, and our integrated test lab. As JoeBen said, we're now more than one-third complete with stage four on the Joby side and expect progress to continue to accelerate in the back half of the year.

Speaker Change: These conversations are progressing very well, and we expect to conduct for-credit testing in many of our test assets, including the Worley track, our battery test facility, and our integrated test lab.

JoeBen Bevirt: We knew early on in our journey that to deliver the sort of efficient, even magical experiences our customers would expect, we would need to fundamentally rethink the aviation software stack. And that's exactly what we've done. We've built a remarkable set of tools that goes far beyond anything available today and is designed to connect seamlessly into the services of our partners like Uber and Delta. And we're already testing it in real life so that we'll be ready for day one of operations.

JoeBen Bevirt: As JoeBen said, we're now more than one-third complete with Stage 4 on the Joby side, and expect progress to continue to accelerate in the back half of the year.

Didier Papadopoulos: As we take these strides forward, we believe the environment around us is the most supportive it has ever been for bringing our revolutionary technology to market. In May, Congress passed the FAA Reauthorization Bill, highlighting the desire of U.S. lawmakers to make sure America is a global leader in advanced air mobility. The bill specifically calls on the FAA to prioritize work on the type certification of air taxis and to publish the necessary rulemaking to enable commercial operations.

Didier Papadopoulos: As we take these strides forward, we believe the environment around us is the most supportive it has ever been for bringing our revolutionary technology to market. In May, Congress passed the FAA reauthorization bill, highlighting the desire of U.S. lawmakers to make sure America is a global leader in advanced air mobility. The bill specifically calls on the FAA to prioritize work on the type certification of air taxis and to publish the necessary rulemaking to enable commercial operations.

Speaker Change: As we take these strides forward, we believe the environment around us is the most supportive it has ever been for bringing our revolutionary technology to market.

Speaker Change: In May, Congress passed the FAA Reauthorization Bill, highlighting the desire of U.S. lawmakers to make sure America is a global leader in advanced air mobility.

Didier Papadopoulos: The bill specifically calls on the FAA to prioritize work on the type certification of air taxis and to publish necessary rulemaking to enable commercial operations. With the FAA on track to finalize the power lift as far, which outlines the operational rules for our aircraft, we are extremely pleased with the support for our mission at the federal level. The momentum we're seeing on our FAA certification work puts us in a great position for our international expansion plans. During the quarter, we were pleased to add Australia to the list of countries where we are pursuing bilateral validation, where the US-Australian bilateral aviation safety agreement already considers power lift aircraft.

Speaker Change: The bill specifically calls on the FAA to prioritize work on the type certification of air taxis and to publish necessary rulemaking to enable commercial operations.

Didier Papadopoulos: With the FAA on track to finalize the powered lift as far as, which outlines the operational rules for our aircraft, we're extremely pleased with the support for our mission at the federal level. The momentum we're seeing on our FAA certification work puts us in a great position for our international expansion plan. During the quarter, we were pleased to add Australia to the list of countries where we are pursuing bilateral validation, where the U.S.-Australian Bilateral Aviation Safety Agreement already considers powered lift aircraft.

Speaker Change: With the FAA on track to finalize the Powered Lift SFAR, which outlines the operational rules for our aircraft, we are extremely pleased with the support for our mission at the federal level.

Speaker Change: The momentum we're seeing on our FAA certification work puts us in a great position for our international expansion plans.

JoeBen Bevirt: Because the vast majority of the design, testing, and certification work we've completed on the aircraft will carry over into future aircraft or future integrations of the same aircraft. In other words, we can build on the investments we've already made to open up new and adjacent markets. We're able to do that because of the vertically integrated way in which we've built our company and our record-breaking 561-mile hydrogen electric flight is a great example of that.

Speaker Change: During the quarter, we were pleased to add Australia to the list of countries where we are pursuing bilateral validation.

Speaker Change: where the U.S.-Australian Bilateral Aviation Safety Agreement already considers powered lift aircraft.

Didier Papadopoulos: Under these agreements, international regulators can leverage the work conducted under the FAA tax certification effort, expediting our path to market in those countries. Validation is already underway in Japan and the UK. During the FAA International Air Show, two weeks ago, we had very productive conversations with the UK Civil Aviation Authority, as well as a range of other policymakers, business partners, airport operators, and the public. I'm excited about what lies ahead, including our first overseas demonstrations later this year and continued progress in Dubai to deliver on our exclusive access to that market.

Didier Papadopoulos: Under these agreements, international regulators can leverage the work conducted under the FAA-type certification effort, expediting our path to market in those countries. Validation is already underway in Japan and the UK. During the Farnborough International Air Show two weeks ago, we had very productive conversations with the UK Civil Aviation Authority, as well as a range of other policymakers, business partners, airport operators, and the public. I'm excited about what lies ahead. Including our first overseas demonstrations later this year and continued progress in Dubai to deliver on our exclusive access to that market, with groundbreaking on the first VirtaPort expected this year and in-region flight testing to begin in 2025. Matt, it's over to you.

Didier Papadopoulos: Under these agreements, international regulators can leverage the work conducted under the FAA tax certification effort, expediting our path to market in those countries. Validation is already underway in Japan and the UK. During the Farnborough International Airshow two weeks ago, we had very productive conversations with the UK Civil Aviation Authority, as well as a range of other policymakers, business partners, airport operators, and the public. I'm excited about what lies ahead. With groundbreaking on the first VirtaPort expected this year and in-region flight testing to begin in 2025, Matt, over to you.

Speaker Change: Under these agreements, international regulators can leverage the work conducted under the FAA-type certification effort, expediting our path to market in those countries.

JoeBen Bevirt: This range would make it possible to connect Baltimore to Boston or San Francisco to San Diego, changing how people think about transportation between cities. We converted our own battery electric aircraft to complete a hydrogen electric flight in a matter of weeks with only a small team. Our ex-wing acquisition tells the same story of small but important investments that leverage our existing technology to make a big difference. We believe autonomy has the potential to widen access to flight on the consumer side and enable a larger set of applications on the government side. And in ex-wing, we've been able to bring it on a team that has demonstrated true leadership in the field.

Speaker Change: Validation is already underway in Japan and the UK.

Speaker Change: During the Farnborough International Air Show two weeks ago, we had very productive conversations with the UK Civil Aviation Authority, as well as a range of other policymakers, business partners, airport operators, and the public.

Speaker Change: I'm excited about what lies ahead, including our first overseas demonstrations later this year, and continued progress in Dubai to deliver on our exclusive access to that market.

Matthew Field: With groundbreaking on the first vertiport expected this year and in-region flight testing to begin in 2025, Matt, over to you.

Speaker Change: With groundbreaking on the first VirtaPort expected this year, and in-region flight testing to begin in 2025. Matt, over to you.

Matthew Field: Thanks, Didier, and good afternoon, everybody. In addition to the progress highlighted by Joe Ben and Didier, I'd like to share our recent accomplishments in two adjacent areas. First, in July, we published our 2023 Impact Report, which highlights our actions to make the world a better place for our communities, employees, and shareholders. It addresses enterprise-level safety management systems, expanding climate impact and waste reporting, work first development, and more. This report represents our second year sharing information on these subjects, and it's another area where we leave the industry with reporting that embodies good governance and showcases our progress in matters core to Joe B since our founding in 2009.

Matt Field: Thanks, Didier, and good afternoon, everybody. In addition to the progress highlighted by JoeBen and Didier, I'd like to share our recent accomplishments in two adjacent areas. First, in July, we published our 2023 Impact Report, which highlights our actions to make the world a better place for our communities, employees, and shareholders. It addresses enterprise-level safety management systems, expanding climate impact and waste reporting, workforce development, and more.

Matt Field: Thanks, Didier, and good afternoon, everybody. In addition to the progress highlighted by JoeBen and Didier, I'd like to share our recent accomplishments in two adjacent areas.

JoeBen Bevirt: At the Farmboro Air Show back in July, the excitement around our work in automation and hydrogen took me back to 2017. The year we first flew our full-size battery electric prototype aircraft and demonstrated what EV tall could be. Those flights played an incredibly important role in bringing this sector to life and catalyzing the regulatory work required to commercialize battery electric technology. My hope is that our hydrogen and autonomy work will do the same thing and help lay the groundwork for those technologies to enjoy the broad bipartisan and global support we're seeing for our battery electric aircraft today.

Speaker Change: first in july republished our two thousand and twenty-three impact report which highlights our actions to make the world a better place for our communities employees and shareholders

Matt Field: It addresses enterprise-level safety management systems, expanding climate impact and waste reporting, workforce development, and more.

Matt Field: This report represents our second year sharing information on these subjects, and it's another area where we lead the industry with reporting that embodies good governance and showcases our progress in matters core to Joby since our founding in 2009. Another area of progress relates to our activities to reduce our capital needs for the business, such as training programs, tax incentives, and loan opportunities.

Matthew Field: Another area of progress relates to our activities to reduce our capital needs for the business. In this case, training programs, tax incentives, and loan opportunities. We are grateful to the FAA for a recently awarded grant to support the development of maintenance training programs. The application process was highly competitive, and it's a testament to the team and our commitment to our employees that Joe B was awarded this grant. We also were granted another round of California tax incentives for manufacturing. Equipment, which builds on our first grant received in 2019.

JoeBen Bevirt: It's an honor to be able to share our progress with you each quarter.

Speaker Change: Another area of progress relates to our activities to reduce our capital needs for the business. In this case, training programs, tax incentives, and loan opportunities.

JoeBen Bevirt: And I'd like to hand it over to DDA to look in more detail at our future technology and our core work on certifying and manufacturing our battery electric aircraft.

Matt Field: We are grateful to the FAA for a recently awarded grant to support the development of a maintenance training program. The application process was highly competitive, and it's a testament to the team and our commitment to our employees that Joby was awarded this grant. We also were granted another round of California tax incentives for manufacturing.

Speaker Change: We are grateful to the FAA for a recently awarded grant to support the development of maintenance training programs.

Didier Papadopoulos: DDA, over to you.

Speaker Change: The application process was highly competitive, and it's a testament to the team and our commitment to our employees that Joby was awarded this grant.

Didier Papadopoulos: Thanks, Joven. It was exhilarating to witness our team complete multiple 500 plus mile EV tall flights using our hydrogen electric demonstrator aircraft. This was truly a landmark achievement.

Matt Field: We also were granted another round of California tax incentives for manufacturing equipment, which builds on our first grant received in 2019.

Matthew Field: Lastly, we submitted our Part Two application for a Department of Energy Title 17 loan. This loan application represents significant effort across multiple teams, and represents an opportunity to support a large portion of our capital needs through scaling. Substantial work remains ahead to evaluate our application, but getting this far is a sizable accomplishment. This application highlights our commitment to fund and build a business for the long term, not just the next quarter.

Didier Papadopoulos: And I want to take a moment to explain how we were able to quickly and efficiently demonstrate an ex-generation technology and why we did it. Our battery electric pre-production prototype completed its mission as a test asset on May 2nd and less than two months later it demonstrated the regional emission free flight is possible. Looking at the aircraft from the outside, you can tell that the vast majority of it is fundamentally the same aircraft as the battery electric prototype.

Speaker Change: Lastly, we submitted our Part 2 application for a Department of Energy Title 17 loan. This loan application represents significant effort across multiple teams and represents an opportunity to support a large portion of our capital needs through scaling.

Matt Field: This loan application represents a significant effort across multiple teams and represents an opportunity to support a large portion of our capital needs through scaling. Substantial work remains ahead to evaluate our application, but getting this far is a sizable accomplishment. This application highlights our commitment to fund and build a business for the long term, not just the next quarter. Shifting to our quarterly financial results, we ended the second quarter of 2024 with cash and short-term investments totaling $825 million.

Speaker Change: Substantial work remains ahead to evaluate our application, but getting this far is a sizable accomplishment.

Speaker Change: This application highlights our commitment to fund and build a business for the long term, not just the next quarter.

Matthew Field: Chifting to our quarterly financial results, we ended the second quarter of 2024 with cash and short-term investments totaling $825 million. Our use of cash totaled $99 million, lower than last quarter as we had one fewer pay period in the quarter, as well as higher contract deliverables. This spending also included about $8 million on property and equipment. We remain on track with our full year 2024 cash spending outlook of $440 to $470 million. We incurred a Q2 net loss of $123 million, reflecting a loss from operations of about $144 million, partly offset by interest and other income of $21 million.

Matt Field: Our use of cash totaled $99 million, lower than last quarter as we had one fewer pay period in the quarter, as well as higher contract deliverables. This spending also included about $8 million on property and equipment. We remain on track with our full year 2024 cash spending outlook of $440 to $470 million. We incurred a Q2 net loss of $123 million, reflecting a loss from operations of about $144 million, partly offset by interest and other income of $21 million. Our net loss was $29 million higher compared to the prior quarter, reflecting a lower favorable revaluation of our warrants and earn out shares.

Speaker Change: shifting to our quarterly financial results we ended the second quarter of two thousand and twenty four with cash and short-term investments totaltally eight hundred and twenty-five million dollars

Matt Field: Our use of cash totaled $99 million, lower than last quarter as we had one fewer pay period in the quarter, as well as higher contract deliverables. This spending also included about $8 million on property and equipment. Our net loss was $29 million higher compared to the prior quarter, reflecting a lower favorable revaluation of our warrants and earn out shares, work directly supporting our certification effort. As a reminder, these payments show up as a reduction of R&D expenses.

Speaker Change: Our use of cash totaled $99 million, lower than last quarter as we had one fewer pay period in the quarter, as well as higher contract deliverables.

Speaker Change: This spending also included about $8 million on property and equipment.

Speaker Change: We remain on track with our full year 2024 cash spending outlook of $440 to $470 million.

Speaker Change: We incurred a Q2 net loss of $123 million, reflecting a loss from operations of about $144 million, partly offset by interest and other income of $21 million.

Didier Papadopoulos: This is the power of the vertical integration at Jobi that we've been describing for the past three years. From composites to metallics, electronics to mechanical systems, hardware to software, the design, manufacturing and testing of all of these as well as the integrated systems testing that brings each of these elements together. We have all of this under one roof.

Matthew Field: Our net loss was $29 million higher compared to the prior quarter, reflecting a lower favorable revaluation of our warrants and earnout shares. Total operating expenses for the quarter were nearly $2 million lower than the first quarter, as our increased staffing and spending was more than offset by increased government contract deliverables, which are recorded as a reduction of our expenses. These deliverables, which included our hydrogen powered flight, reflect our ongoing prioritization of government contract resources across three elements: work directly supporting our certification effort, R&D work that supports mutual areas of interest to Joby and our DOD partners, and on-base revenue generating activities.

Speaker Change: Our net loss was $29 million higher compared to the prior quarter, reflecting a lower favorable revaluation of our warrants and earn-out shares.

Matt Field: Total operating expenses for the quarter were nearly $2 million lower than the first quarter as our increased staffing and spending was more than offset by increased government contract deliverables, which are recorded as a reduction of our expenses. These deliverables, which included our hydrogen-powered flight, reflect our ongoing prioritization of government contract resources across three elements, work directly supporting our certification effort. R&D work that supports mutual areas of interest to Joby and our DoD partners and OnBase revenue-generating activities.

Speaker Change: Total operating expenses for the quarter were nearly $2 million lower than the first quarter as our increased staffing and spending was more than offset by increased government contract deliverables, which are recorded as a reduction of our expenses.

Didier Papadopoulos: In more than 20 years I spent at CAE and Garmin, I saw many products through the life cycle of development, from drawings to technology demonstrators through prototyping and then finally into formal certification programs. As we move through the cycle on future products and future upgrades, our vertically integrated approach allows us to invest efficiently in staying ahead of the competition. That in-house engine of technological development is what enables us to do incredible things on relatively short timelines, while leveraging existing resources for minimal incremental expense.

Speaker Change: These deliverables, which included our hydrogen-powered flight, reflect our ongoing prioritization of government contract resources across three elements.

Speaker Change: work directly supporting our certification effort.

Speaker Change: R&D work that supports mutual areas of interest to Joby and our DoD partners.

Matthew Field: In the first half of this year, we prioritized the first two of these areas through things like HRF and wind tunnel testing in Q1 and R&D projects like the hydrogen powered demonstrator, which was important to our customer in Q2. As a reminder, these payments show up as a reduction of R&D expenses. We will continue to manage our engagements across these three elements of our government contracts, and we expect an increase in on-base government-directed operations late this year and next year. We expect to deliver our second aircraft to Edwards Air Force Base late this year and two additional aircraft to McDial Air Force Base in Tampa next year.

Speaker Change: and OnBase revenue generating activities.

Matt Field: In the first half of this year, we prioritized the first two of these areas through things like HEERF and wind tunnel testing in Q1, and R&D projects like the hydrogen power demonstrator, which was important to our customer in Q2. As a reminder, these payments show up as a reduction of R&D expenses.

Speaker Change: In the first half of this year, we prioritized the first two of these areas through things like HRF and wind tunnel testing in Q1, and R&D projects like the hydrogen power demonstrator, which was important to our customer in Q2.

Speaker Change: As a reminder, these payments show up as a reduction of R&D expenses.

Didier Papadopoulos: The investments we've made in people, technology, test assets and certification of novel aircraft systems allows us to not only bring our revolutionary battery electric aircraft to market, but to make improvements to our core aircraft or develop entirely new products. These investments are the pillars of the future. With the team that has already progressed through the development life cycle on novel flight control systems, propulsion, wiring and energy storage, we know what types of challenges to expect and we can use that knowledge to be even more efficient developing new technologies.

Matt Field: We will continue to manage our engagements across these three elements of our government contracts, and we expect an increase in on-base government-directed operations late this year and next year. We expect to deliver our second aircraft to Edwards Air Force Base late this year and two additional aircraft to MacDill Air Force Base in Tampa next year. Adjusted EBITDA, a non-gap metric that we reconcile to our net income in our shareholder letter, was a loss of $107 million in the second quarter. This was about $3 million lower than the prior quarter, reflecting the increased contract deliverables mentioned earlier. Our adjusted EBITDA loss was $24 million higher than the same period last year, reflecting growth in our organization.

Speaker Change: We will continue to manage our engagements across these three elements of our government contracts and we expect an increase in on-base government-directed operations late this year and next year.

Speaker Change: We expect to deliver our second aircraft to Edwards Air Force Base late this year and two additional aircraft to MacDill Air Force Base in Tampa next year.

Matthew Field: Adjusted EBITDA, a non-GAAP metric that we reconciled to our net income and our shareholder letter, was a loss of $107 million in the second quarter. This was about three million lower than the prior quarter, reflecting the increased contract deliverables mentioned earlier. Our adjusted EBITDA loss was $24 million higher than the same period last year, reflecting the growth in our organization. As you heard from Joe Van at the top of the call, we continue to make sector-leading progress across all elements of our business, and I'm pleased to say that we do that with the strongest balance sheet in this section.

Speaker Change: Adjusted EBITDA, a non-gap metric that we reconciled to our net income in our shareholder letter, was a loss of $107 million in the second quarter. This was about $3 million lower than the prior quarter, reflecting the increased contract deliverables mentioned earlier.

Speaker Change: Our adjusted EBITDA loss was $24 million higher than the same period last year, reflecting the growth in our organization.

Didier Papadopoulos: As we continue to explore opportunities, including new manufacturing methods like thermoplastics, we believe that this will lead to products with a lower bill of material that are cheaper and easier to build and operate and have additional capabilities that open up new markets. Over the next year, as we move further into the final stages of certification, members of our core design and technology prototyping teams will be freed up to focus on future technologies, much like we did this quarter with our hydrogen electric demonstrator supported by our contract with agility prime.

Matt Field: As you heard from JoeBen at the start of the call, we continue to make sector-leading progress across all elements of our business, and I'm pleased to say that we do that with the strongest balance sheet in the sector. We have real momentum behind our certification workstream, reaching 37% on the Joby side of stage four. We're about to have four aircraft in test flight, and we're on track to reach our goal of having production capacity equivalent to one aircraft per month by the end of this year.

Speaker Change: As you heard from JoeBen at the top of the call, we continue to make sector-leading progress across all elements of our business, and I'm pleased to say that we do that with the strongest balance sheet in this sector.

Matthew Field: Director. We have real momentum behind our certification workstream, reaching 37% on the Jobyside of Stage 4. We're about to have four aircraft in test flight. We're on track to reach our goal of having production capacity equivalent to one aircraft per month by the end of this year. We're on track to deliver demonstration flights overseas this year. And we continue to ensure we're well positioned to deliver long-term growth by capitalizing on new technologies through discipline and investments.

JoeBen Bevirt: We have real momentum behind our certification work stream, reaching 37% on the Joby side of Stage 4. We're about to have four aircraft in test flight.

JoeBen Bevirt: We're on track to reach our goal of having production capacity equivalent to one aircraft per month by the end of this year.

Matt Field: We're on track to deliver demonstration flights overseas this year, and we continue to ensure we're well-positioned to deliver long-term growth by capitalizing on new technologies through disciplined investment. With that, I'd like to ask the operator to please instruct participants on how to ask

Speaker Change: We're on track to deliver demonstration flights overseas this year.

JoeBen Bevirt: And we continue to ensure we're well-positioned to deliver long-term growth by capitalizing on new technologies through disciplined investments.

Didier Papadopoulos: We plan to take similar steps on work with flight automation, supported by acquisition of X-Wings autonomy division. Like H2Fly, the X-Wings team has pushed the boundaries of what is possible innovation. Corporation, completing more than 250 fully automated gate-to-gate flights using their super pilot technology and a Cessna caravan fitted with a suite of sensing and autonomy solutions that can be applied to a variety of aircraft types. We see the potential for this technology to both expand our government contracts and bring new safety capabilities to our civil products through block upgrades in an amended type certificate.

Operator: With that, I'd like to ask the operator to please instruct participants on how to ask questions. Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tool will indicate a line in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment and maybe necessary to pick up your handset before pressing the star keys. One moment, please, while we pull four questions.

Speaker Change: With that, I'd like to ask the operator to please instruct participants on how to ask questions.

Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key.

Speaker Change: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad.

Speaker Change: A confirmation call will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Operator: One moment, please, while we poll for questions. And our first question comes from the line of Andres Sheppard with Cantery Fitzgerald. Please proceed with your question.

Speaker Change: One moment please while we poll for questions.

Speaker Change: And our first question comes from the line of Andres Sheppard with Cantery Fitzgerald. Please proceed with your question.

Andres Sheppard: Hey, good morning, everyone. Thanks for taking our question and congratulations on the quarter. JoeBen, Didier, and Teresa, it was also great seeing you at Farnborough a few weeks ago.

Andres Sheppard: Hey, good morning everyone. Thanks for taking our question and congratulations on the quarter. JoeBen, Didier, and Teresa, it was also great seeing you at Farnborough a few weeks ago.

Andres Sheppard: JoeBen, question for you. I'm wondering if you could maybe..., help share with us your vision regarding commercialization. Now with the application into Australia, obviously the FAA, Korea, Japan, and the UAE, just wondering kind of how you envision that commercialization process taking place in the near term. Just curious to get your thoughts there. Thank you.

JoeBen Bevirt: JoeBen, question for you. I'm wondering if you could maybe help share with us your vision regarding commercialization. You know, now with the application into Australia, obviously the FAA, Korea, Japan, and the UAE, just wondering kind of how you envision that commercialization process taking place in the near term. Just curious to get your thoughts there. Thank you.

JoeBen Bevirt: Joven, question for you. I'm wondering if you could maybe help share with us your vision regarding commercialization. Now with the application into Australia, obviously the FAA, Korea, Japan, and the UAE, just wondering how you envision that commercialization process taking place in the near term. Just curious to get your thoughts there. Thank you.

Speaker Change: JoeBen, question for you, I'm wondering if you could maybe...

Speaker Change: Help share with us your vision regarding commercialization, you know, now with the application into Australia, obviously the FAA.

Didier Papadopoulos: With each completed build cycle, we learn a tremendous amount that enables us to increase production speed, reduce cost, and move closer to receiving our production certificate shortly after TC. We remain on track to reach our previously stated goal of a production capacity equivalent to one aircraft per month by the end of this year and to ramp beyond that through our expansions in Marina and Ohio. The team is continuing to increase the rate of production and at the same time the amount of conforming hardware being built.

Speaker Change: Korea, Japan, and the UAE. Just wondering kind of how you envision that commercialization process taking place in the near term. Just curious to get your thoughts there. Thank you.

JoeBen Bevirt: Thank you, Andres. I think you did a fantastic job of summing it up with, beginning.

JoeBen Bevirt: Thank you, Andre. I think you did a fantastic job of summing it up with beginning next year. We're targeting the commercial launch in Dubai.

JoeBen Bevirt: Thank you, Andres. I think you did a fantastic job of summing it up with...

JoeBen Bevirt: Next year, we're targeting the commercial launch in Dubai. We're seeing fantastic support from multiple dimensions of the government, including the RTA and the GCAA, and as well as momentum on building out infrastructure. So you can expect us to announce the groundbreaking on the first infrastructure there later this year, as well as the first flights in the first half of next year and commercialization towards the back half of the year.

JoeBen Bevirt: Next year, we're targeting the commercial launch in Dubai. We're seeing fantastic support from multiple dimensions of the government, including the RTA and the GCAA, and as well as momentum on building out infrastructure. So you can expect us to announce the groundbreaking on the first infrastructure there later this year, as well as the first flights in the first half of next year, and commercialization towards the back half of the year.

Speaker Change: You know beginning

Speaker Change: Next year, we're targeting the commercial launch in Dubai.

Matthew Field: We've seen fantastic lean in there from multiple dimensions of the government, including the RTA and the GCA, as well as momentum on building out infrastructure. So you can expect us to announce the groundbreaking on the first infrastructure there later this year, as well as first flights in the first half of next year and commercialization towards the back half of the year. And then you rightly pointed out the fantastic progress we're making in Japan, Korea, UK, and the recent announcement of progress in Australia and leveraging in all of those markets the bilateral relationships that the FAA has with the local regulators where we're leverage all of the incredible work that the team is doing on certification with the FAA across the world.

Speaker Change: We've seen fantastic lean-in there from multiple dimensions of the government, including the RTA and the

Didier Papadopoulos: Turning to certification, I have never been more confident than I am today about our program. As Joban mentioned, we first flew and transitioned a full-scale EVTOL aircraft in 2017 and we did it again with our pre-production prototype beginning in 2020, with those aircraft completing more than 33,000 miles of flight over four years. During the proof of concept and prototyping stages of development, flying as much as possible is critical to demonstrating the viability of the overall program and to fully characterize the design.

Speaker Change: and the GCAA and as well as momentum on on building out infrastructure so you you can expect us to announce the groundbreaking on the first

Speaker Change: infrastructure there later this year, as well as.

Speaker Change: first flights in the first half of next year and.

Speaker Change: commercialization towards the back half of the year.

JoeBen Bevirt: And then you rightly pointed out the fantastic progress we're making in Japan, Korea, the UK, and the recent announcement of progress in Australia, and leveraging in all of those markets the bilateral relationships that the FAA has with the local regulators, where we're able to leverage all of the incredible work that the team is doing on certification with the FAA across the world. So, we do see tremendous international opportunities and then. The other element, of course, is our operations here at home and our partnerships with Uber and Delta on the demand-gen side and... the infrastructure side at the airports with Delta. We're really excited about the momentum we're seeing in New York and LA.

JoeBen Bevirt: And then you rightly pointed out the fantastic progress we're making in Japan, Korea, the UK, and the recent announcement of progress in Australia, and leveraging in all of those markets the bilateral relationships that the FAA has with the local regulators, where we're able to leverage all of the incredible work that the team is doing on certification with the FAA across the world. So we do see tremendous international opportunities. And then. The other element, of course, is our operations here at home and our partnerships with Uber and Delta on the demand-gen side and the infrastructure side at the airports with Delta. We're really excited about the momentum we're seeing in New York and LA.

Speaker Change: And then you rightly pointed out the fantastic progress we're making in

Speaker Change: Japan, Korea.

Andres Sheppard: Got it. That's super helpful.

Didier Papadopoulos: Now that we are deep in the certification process, the vast majority of the necessary work we have to do to get to the market is the less visible behind the scene work to develop conforming software and hardware as well as building conforming test assets that will support the bulk of our certification activities in stages 4 and 5. This is our primary area of focus combined with our work on submitting stage 4 test plans.

JoeBen Bevirt: UK, and the recent announcement of progress in Australia, and

Speaker Change: Leveraging in all of those markets, the bilateral relationships.

Speaker Change: It's a tremendous initiative that the FAA has with the local regulators where we're able to leverage all of the incredible work that the team is doing on certification with the FAA across the world. So we do see tremendous international opportunities. And then.

Matthew Field: So we do see tremendous international opportunities.

Matthew Field: And then the other element, of course, is our operations here at home and our partnerships with Uber and Delta on the demand gen and the infrastructure side of the airports with Delta. We're really excited about the momentum we're seeing in New York and LA. Got it.

Didier Papadopoulos: This quarter we made more progress on both sides of stage 4 of certification than any previous quarter, moving from 9% to 14% complete on the FAA side, including in this were FAA acceptances for numerous test plans related to onboard equipment and structural materials and processes as well as our integrated flight and propulsion control system operational test plan, a key system level test. We also submitted a number of test plans for FAA review, covering system area and structures across the aircraft program.

Speaker Change: The other element, of course, is our operations here at home and our partnerships with Uber and Delta on the demand gen.

Speaker Change: ah

Speaker Change: The infrastructure side at the airports with with Delta We're really excited about The momentum we're seeing in New York and LA

Andres Sheppard: I appreciate all that detail. And maybe just a quick follow-up, maybe a question more for Matt or Paul or Didier, potentially, but just with the rollout of the third prototype aircraft and now the fourth one being in final assembly, I'm wondering, you know, what lessons have been learned that will help with, you know, the more. Significant ramp-up in production, you know, once you are operating these or selling these in those international markets.

Andres Sheppard: Got it. That's super helpful. I appreciate all that detail. And maybe just a quick follow-up, maybe a question more for Matt or Paul or Didier, potentially, but just with the rollout of the third prototype aircraft and now the fourth one being in final assembly, I'm wondering what lessons have been learned that will help with the next one. And maybe more specifically on, kind of from a cost perspective, you know, and the process, you know, what are some things that maybe you Just a curious kind of what that process has shown. Thank you.

Matthew Field: That's super helpful. I appreciate all that detail, and maybe just a quick follow-up.

Speaker Change: Got it. That's super helpful. I appreciate all that detail and maybe just a quick follow-up, maybe a question more for Matt or Paul or Didier potentially, but just...

Matthew Field: Maybe a question more for Matt or Paul or Didier potentially, but just with the rollout of the third prototype aircraft and now the fourth one being in final assembly, I'm wondering, you know, what lessons have been learned that will help with, you know, the more significant ramp up in production? You know, once you are operating these or selling these in those international markets, just curious, you know, what lessons have been learned and maybe more specifically on kind of from a cost perspective, you know, in the process, you know, what are some things that maybe you've identified that you can automate or accelerate, just curious kind of what that process has shown.

Didier Papadopoulos: But I want to draw your attention to two in particular that demonstrate our leadership on certification. The first is a system-level test plan covering the endurance of our propulsion system. To step back for a moment, there are multi-billion dollar aerospace companies dedicated to developing, certifying, and manufacturing propulsion systems alone. Electric motors are a core technology that will drive the next area of aviation. And we are trailblazers here, working closely with the FAA to develop certification standards that allow us to demonstrate the safety and performance of electric motors.

Andres Sheppard: With the rollout of the third prototype aircraft, and now the fourth one being in final assembly, I'm wondering...

Andres Sheppard: I'm just curious, you know, what lessons have been learned and maybe more specifically, kind of from a cost perspective, you know, in the process, you know, what are some things that maybe you've identified that you can automate or accelerate? Just curious kind of what that process has shown. Thank you.

Speaker Change: You know, what lessons have been learned that will help with, you know, the more significant ramp-up in production, you know, once you are operating these or selling these in those international markets? I'm just curious, you know, what lessons...

Speaker Change: have been learned and maybe more specifically on, kind of from a cost perspective, you know, in the process, you know, what are some things that maybe you've identified that you can automate or accelerate? Just curious kind of what that process has shown. Thank you.

Matthew Field: Thank you.

Matt Field: Hey, Andres. It's Matt.

Matthew Field: Hey, Andreas. It's Matt.

Matthew Field: I'll take part of that and then hand off to Didier to talk a bit about the manufacturing. So, in terms of cost, you know, we're really pleased with the progress. I know we've talked on a past call about seeing reductions, kind of plain over plain, as I like to think of it. And we continue to see those; we continue to incorporate lessons in our manufacturing plant operations. Kind of across the board because our vertical integration allows us to look at every part of the plane and not just limit ourselves. So let's say final assembly, our partnership with Toyota continues to be dividends there.

Speaker Change: Hey Andres, it's Matt. I'll take part of that and then hand off to Didier to talk a bit about the manufacturing.

Didier Papadopoulos: The second is our first human factors evaluation plan, which will see the FAA carry out certification tests in a Joby engineering simulator that conforms to our TC intent aircraft. These are huge steps forward, and we expect the pace of this progress to increase over the balance of the year. Due to the progress we're making in stage four are the regular technical discussions taking place between Joby and FAA staff. During the quarter, we hosted three teams from the FAA at our site across California.

Matt Field: I'll take part of that and then hand off to Didier to talk a bit about the manufacturing. So, in terms of cost, you know, we're really pleased with the progress. I know we talked on a past call about seeing reductions kind of plane over plane, as I like to think of it. And we continue to see those.

Speaker Change: So in terms of cost, you know, we're really pleased with the progress. I know we've talked on a past call about seeing reductions kind of plane over plane, as I like to think of it, and we continue to see those. We continue to incorporate lessons in our manufacturing plant operations.

Matt Field: We continue to incorporate lessons in our manufacturing plant operations kind of across the board because our vertical integration allows us to look at every part of the plane and not just limit ourselves to, let's say, final assembly. Our partnership with Toyota continues to pay dividends. And so, really pleased with the progress on that. Lessons in terms of going to market, too early to say, but really pleased with how we bring up planes.

Speaker Change: Kind of across the board because our vertical integration allows us to look at every part of the plane and not just not just limit ourselves to let's say final assembly.

Didier Papadopoulos: And so really pleased with the progress on that lessons in terms of go to market, you know, too early to say, but really pleased with how we bring up planes. So we're learning as we have the plane roll off and bring that into Operations. So incorporating that with each success of plane as well and seeing an increase in the pacing cadence there.

Speaker Change: Our partnership with Toyota continues to pay dividends there.

Speaker Change: and so really pleased with the progress on that. Lessons in terms of go-to-market, you know, too early to say, but...

Didier Papadopoulos: Staff from the FAA electrical and propulsion engineering team witnessed a battery safety thermal runaway test in our newly built battery test facility that was representative of the test we intend to conduct for FAA credit. The FAA flight test and human factors division completed a two-week visit that include an initial round of FAA pilot training as well as human factors development testing and flight test techniques development using our simulator. This visit marked an important step towards FAA pilots later carrying out for credit flight testing on our aircraft and working to certify our pilot training program in advance of a commercial operation.

Matt Field: So, we're learning as we have the plane roll off and bring that into operations. So, incorporating that with each successive plane as well and seeing an increase in the pace and cadence there. I'll hand it off to Didier to talk a little bit about the manufacturing shop floor as well.

Speaker Change: Really pleased with how we bring up planes. So we're we're learning as we

Speaker Change: have the plane roll off and bring that into operation. So incorporating that with each successive plane as well and seeing an increase in the pace and cadence there. I'll hand it off to Didier to talk a little bit about the manufacturing shop floor as well.

Didier Papadopoulos: I'll hand it off to Didier to talk a little bit about the manufacturing shop for as well.

Didier Papadopoulos: Yeah, thanks for the question, Andres, and good to see you at Farnborough, by the way. A very exciting show there.

Didier Papadopoulos: Yeah, thanks for the question.

Didier Papadopoulos: Andreas, and good to see you at Farm World. By the way, very exciting show there. You know, the past few months have been really exciting on the manufacturing. It gave us the opportunity through, you know, those three airplanes to truly fine-tune the value stream of manufacturing of the airplane right from receiving other raw materials all the way to the work instructions leading to the integration at the end. That taught us on multiple fronts, optimizing the workflows, building some automation that we hadn't started with at the beginning because we really wanted to understand the process. And then on top of that.

Didier: Yeah, thanks for the question, Andres, and good to see you at Farnborough, by the way, very exciting show there. You know, the past few months have been really exciting on the manufacturing. It gave us the opportunity through, you know, those three airplanes to truly fine-tune the value stream of manufacturing the airplane, right?

Didier Papadopoulos: You know, the past few months have been really exciting in the manufacturing. It gave us the opportunity through, you know, those three airplanes to truly fine-tune the value stream of manufacturing the airplane, right, from receiving the raw materials all the way to the work instructions leading to integration at the end. And that helped us on multiple fronts, optimizing the workflows, and building some automation that we hadn't started with at the beginning because we really wanted to understand the process.

Didier Papadopoulos: You know, the past few months have been really exciting in the manufacturing. It gave us the opportunity through, you know, those three airplanes to truly fine-tune the value stream of manufacturing the airplane, right, from receiving the raw materials all the way to the work instructions leading to integration at the end. That helped us on multiple fronts, optimizing the workflows, and building some automation that we hadn't started with at the beginning because we really wanted to understand the process.

Speaker Change: Receiving of the raw materials all the way to the work instructions leading to the integration at the end. That helped us on multiple fronts, optimizing the workflows, building some automation that we hadn't started with at the beginning because we really wanted to understand the process.

Didier Papadopoulos: We also hosted a group from the FAA aircraft evaluation division, which is charged with ensuring the operational safety and readiness of our aircraft before it enters commercial service. These sessions included careful review of operational aspects that are required as part of our type certification, such as instructions for continued airworthiness and our planned maintenance program for the aircraft. These technical engagements with the FAA are my favorite part of the certification process, where we work together to hammer out all of the final details for the key tests that will bring our aircraft safely into commercial service.

Didier Papadopoulos: And then on top of that, in terms of yields, you know, we were – from month to month, we're seeing double-digit yield improvements on multiple sides of the vertical integration on the manufacturing side. As we've mentioned earlier, those yields and those efficiencies are helping us get closer and closer to our target of producing one aircraft a month. In fact, on multiple fronts, we've exceeded that already here in barely past the middle of this year.

Didier Papadopoulos: But in terms of yields, you know, we were from one month to month, we're seeing two double-digit yield improvements on multiple sides of the vertical integration on the manufacturing side. And as we've mentioned also earlier, those yields and those efficiencies are helping us get closer and closer to our target of producing one aircraft a month. In fact, on multiple fronts, we've exceeded that already here in barely past this year, the middle of this year. All of these translate into cost reductions and also quality improvement, which, most importantly for me right now, helps us support a mature quality management system, which is a direct correlation to getting a production certificate right after TC.

Didier Papadopoulos: And then on top of that...

Didier Papadopoulos: in terms of yields we were

Didier: From month to month we're seeing two double-digit yield improvements on multiple side of the vertical integration on the manufacturing side.

Didier Papadopoulos: As we've mentioned also earlier, those yields and those efficiencies are helping us

Didier: get closer and closer to our target of producing

Didier Papadopoulos: These conversations are progressing very well and we expect to conduct for credit testing in many of our test assets, including the WERLEE track, our battery test facility, and our integrated test lab. As Joven said, we're now more than one third complete with stage 4 on the Jovi side and expect progress to continue to accelerate in the back half of the year.

Speaker Change: one aircraft a month. In fact, on multiple fronts, we've exceeded that already here in barely past this year, the middle of this year.

Didier Papadopoulos: All of these translate into cost reductions and also quality improvements, which, most importantly for me right now, helps us support a mature quality management system, which is a direct correlation to getting a production certificate right after TC.

Didier Papadopoulos: All of these translate into cost reductions and also quality improvements, which most importantly for me right now helps us support a mature quality management system, which is a direct correlation to getting a production certificate right after TC.

Matthew Field: Wonderful, super helpful, appreciate all that color. Congrats again on the quarter, and I'll pass it on. Thank you.

Andres Sheppard: Wonderful, super helpful. I appreciate all that color. Congratulations again on the quarter. I'll pass it on.

Didier Papadopoulos: As we take these strides forward, we believe the environment around us is the most supportive it has ever been for bringing our revolutionary technology to market. In May, Congress passed the FAA reauthorization bill highlighting the desire of US lawmakers to make sure America is a global leader in advanced air mobility. The bill specifically calls on the FAA to prioritize work on the type certification of air taxis and to publish necessary rulemaking to enable commercial operations.

Speaker Change: Wonderful. Super helpful. Appreciate all that color. Congrats again on the quarter. I'll pass it on.

Operator: Thank you. Our next question comes from the line of Bill Peterson with J.P. Morgan. Please proceed with your question.

Didier Papadopoulos: Thank you.

Bill Peterson: Our next question comes from the line of Bill Peterson with JP Morgan.

Speaker Change: Thank you. Our next question comes from the line of Bill Peterson with J.P. Morgan. Please proceed with your question.

Bill Peterson: Please receive a true question. Yeah, hi. Good afternoon and thanks for all his details as far in the talk, but I want to see if you can elaborate more on the mid to longer term vision for the hydrogen aircraft. So I guess you do intend to develop a hydrogen version of the current, you know, 4-seat model, or would this be envisioned for other models down the line? And, you know, can you elaborate a bit on what kind of modifications you need to do to accommodate payload as well as the hydrogen fuel system? And then, I guess, you need to do it, but what is the current spend that, you know, in terms of R&D that you have internally, I guess, met at proceeds, and how do you see that evolving in 2025 and beyond?

Bill Peterson: Yeah, hi, good afternoon, and thanks for all the details thus far in the talk, but I want to elaborate, see if you can elaborate more on the mid to longer-term vision for the hydrogen aircraft. So, I guess, do you intend to develop a hydrogen version of the current, you know, four-seat model, or would this be envisioned for other models down the line? You know, can you elaborate a bit on what kind of modifications you need to do to accommodate the payload as well as the hydrogen fuel system?

Speaker Change: Yeah, hi, good afternoon and thanks for all the details thus far in the talk, but I want to elaborate, see if you can elaborate more on the mid to longer term vision for the hydrogen.

Speaker Change: aircraft. So I guess do you intend to develop a hydrogen version of the current you know four-seat model or would this be envisioned for other models down the line?

Didier Papadopoulos: With the FAA on track to finalize the power lift as far, which outlines the operational rules for our aircraft, we are extremely pleased with the support for our mission at the federal level. The momentum we're seeing on our FAA certification work puts us in a great position for our international expansion plans. During the quarter, we were pleased to add Australia to the list of countries where we are pursuing bilateral validation, where the US-Australian bilateral aviation safety agreement already considers power lift aircraft.

Speaker Change: Can you elaborate a bit on what kind of modifications you would need to do to accommodate payload as well as the hydrogen fuel system?

Bill Peterson: And then, I guess, you alluded to it, but what is the current spend on R&D that you have internally, I guess, net of proceeds, and how do you see that evolving in 2025 and beyond?

Speaker Change: And then, I guess, you alluded to it, but what is the current spend that, you know, in terms of R&D that you have internally, I guess, meta-proceeds, and how do you see that evolving in 2025 and beyond?

JoeBen Bevirt: Hey, Bill. Thanks. This is Joe.

JoeBen Bevirt: Hey Bill, thanks. This is Joe Ben, and I'll take the first piece of that and then hand it to Matt on the spending side.

JoeBen Bevirt: And I'll take the first piece of that and then hand it to Matt on the spending side. So we do see our hydrogen electric program as being a game changer from a technology standpoint that has potential to dramatically improve not just the sustainability. But the performance of aircraft writ large, when we began pulling the thread on this five years ago, it was much more nascent. But the more we pull on it, the more confident we've become that this is massively disruptive technology that can really change the future of aviation writ large.

Didier Papadopoulos: Hey Mel, thanks. This is JoeBen and I'll take the first piece of that and then hand it to Matt on the spending side.

JoeBen Bevirt: So, we do see our hydrogen electric program as being a game changer from a technology standpoint that has the potential to dramatically improve not just the sustainability but the performance of aircraft writ large. When we began pulling the thread on this five years ago, it was much more nascent, but the more we pull on it, the more confident we've become that this is a massively disruptive technology that can really change the future of aviation writ In terms of the specific demonstration that we did, it was just a demonstration.

Speaker Change: So, we do see our hydrogen electric program as being a game changer from a technology standpoint that has the potential to dramatically

Didier Papadopoulos: Under these agreements, international regulators can leverage the work conducted under the FAA tax certification effort, expediting our path to market in those countries. Validation is already underway in Japan and the UK. During the FAA international air show, two weeks ago, we had very productive conversations with the UK civil aviation authority, as well as a range of other policymakers, business partners, airport operators and the public.

Speaker Change: improve not just the sustainability but

Speaker Change: The performance of aircraft writ large, when we began pulling the thread on this five years ago, it was much more nascent, but the more

Didier Papadopoulos: I'm excited about what lies ahead, including our first overseas demonstrations later this year and continued progress in Dubai to deliver on our exclusive access to that market.

Speaker Change: The more we pull on it, the more confident we've become that this is...

Speaker Change: massively disruptive

Speaker Change: Thank you. Thank you. Thank you.

Speaker Change: that can really...

Matthew Field: With groundbreaking on the first vertiport expected this year and in-region flight testing to begin in 2025, Matt, over to you.

JoeBen Bevirt: In terms of the specific demonstration that we did, it was just a demonstration. We took our battery electric aircraft and we retrofitted it with the hydrogen electric system, and as you saw, delivered substantially more range with it. But the purpose of this was really to begin to get regulators, both here in the US and around the world, to lean in and to work with us on putting the processes and the regulatory steps in place for us to be able to certify a production version. And, as we mentioned in our prepared remarks, the amount of spend on this was extremely small.

Speaker Change: change the future of aviation writ large.

Speaker Change: In terms of the specific demonstration that we did, it was just a demonstration. We took our

JoeBen Bevirt: We took our battery-electric aircraft, and we retrofitted it with a hydrogen electric system, and as you saw, delivered substantially more range with it, but the purpose of this was really to begin to get regulators both here in the U.S. and around the world to lean in and to work with us on putting the processes and the regulatory steps in place for us to be able to certify a production version. As we mentioned in our prepared remarks, the amount spent on this was extremely small.

Matthew Field: Thanks, Didier, and good afternoon, everybody. In addition to the progress highlighted by Joe Ben and Didier, I'd like to share our recent accomplishments in two adjacent areas.

Speaker Change: Our battery electric aircraft, and we retrofitted it with

Speaker Change: with the hydroelectric system, and as you saw...

Speaker Change: Delivered substantially more range with it.

Matthew Field: First, in July, we published our 2023 impact report, which highlights our actions to make the world a better place for our communities, employees and shareholders. It addresses enterprise-level safety management systems, expanding climate impact and waste reporting, work first development, and more. This report represents our second year sharing information on these subjects, and it's another area where we leave the industry with reporting that embodies good governance and showcases our progress in matters core to Joe B since our founding in 2009.

Speaker Change: But the purpose of this was really to begin to get regulators, both here in the U.S. and around the world, to lean in and to work with us on putting the processes and

Speaker Change: The regulatory steps in place for us to be able to certify a production version as we mentioned our prepared remarks

Matthew Field: The number of people we have working on this is quite small. But the potential upside impact is incredibly exciting in that we can take a small amount of spend and a small incremental amount of work. On modifying a contained number of systems on the aircraft and give it outsize new capabilities that allow us to address adjacent large and adjacent terms, where instead of just being able to provide services across town, we're now able to provide regional service. From the same vertiport investments, the same software operating, Elevator OS operating system, the same pilot training, etc. Now all of a sudden, we massively increased.

Speaker Change: The amount of spend on this was extremely small. The number of people we have working on this is quite small.

JoeBen Bevirt: The number of people we have working on this is quite small, but the potential upside impact is incredibly exciting in that we can take a small amount of spend and a small incremental amount of work on modifying a contained number of systems on the aircraft and give it outsized new capabilities that allow us to address adjacent, large, and adjacent TAMs where instead of just being able to provide services across town, we're now able to provide regional service from the same Now, all of a sudden, we've massively increased the value that we can provide to our customers. And then I'll hand the financial piece over to Paul. Oh, sorry, over to Matt. That's all right; that's all right.

Speaker Change: But the potential upside impact is incredibly exciting in that we can take a small amount of spend and a small incremental amount of work on

Matthew Field: Another area of progress relates to our activities to reduce our capital needs for the business. In this case, training programs, tax incentives, and loan opportunities. We are grateful to the FAA for a recently awarded grant to support the development of maintenance training programs. The application process was highly competitive and it's a testament to the team and our commitment to our employees that Joe B was awarded this grant. We also were granted another round of California tax incentives for manufacturing. Equipment, which builds on our first grant received in 2019.

Speaker Change: on modifying a

Speaker Change: a contained number of systems on the aircraft.

Speaker Change: and give it a

Speaker Change: outsize new capabilities that allow us to address adjacent

Speaker Change: Large and adjacent TAMs, where instead of just being able to provide services across town, we're now able to provide regional service.

Matthew Field: Lastly, we submitted our part two application for a Department of Energy Title 17 loan. This loan application represents significant effort across multiple teams, and represents an opportunity to support a large portion of our capital needs through scaling. Substantial work remains ahead to evaluate our application, but getting this far is a sizable accomplishment. This application highlights our commitment to fund and build a business for the long term, not just the next quarter.

Speaker Change: From the same VertiPort investments, the same software operating, ElevateOS operating system, the same pilot training, etc., now, all of a sudden, we've massively increased

Matthew Field: The value that we can provide to our customers.

Matthew Field: And then I'll hand the financial piece over to Paul.

Didier Papadopoulos: the value that we can provide to our customers. And then I'll hand the financial piece over to Paul.

Matthew Field: Sorry, over the back. That's right.

Matthew Field: Hi, Belle. Thanks for the question. So, as you think about the R&D costs and you think about this program specifically, you know, I think of R&D right now in kind of three buckets. We'll expect that to taper off at this point in the going years. But what that really means is that, as we get this plane closer and closer to certification, there'll be resources that roll off on other projects, block upgrades, and so forth. And so that's really the beauty of what's being built here around vertical integration: you're creating an engineering base that can do amazing things time and time again.

Matt Field: Hi Bill, thanks for the question. So as you think about the R&D costs and you think about this program specifically, I think of R&D right now in kind of three buckets. First of all, is the engineering factory, if you will, or the certification factory, which is a real muscle, and as Didier likes to call it, it's the machine that makes the machine. And we'll expect that to taper off at this point in the coming years.

Speaker Change: As you think about the R&D costs and you think about this program specifically, you know, I think of R&D right now in kind of three buckets.

Didier Papadopoulos: First of all is the engineering factory, if you will, or the certification factory, which is a real muscle, and as Didier likes to call it, it's the machine that makes the machine.

Didier Papadopoulos: And that, you know, we'll expect that to taper off at this point in the going years. But what that really means is that as we get this plane closer and closer to certification, there'll be resources that roll off.

Matt Field: But what that really means is that as we get this plane closer and closer to certification, there'll be resources that roll off on other projects, block upgrades, and so forth. And so that's really the beauty of what's being built here around vertical integration, you're creating an engineering base that can do amazing things time and time again. And so some of those will be block upgrades; some of those, eventually, would be things like hydrogen or autonomous roadmaps or so forth.

Didier Papadopoulos: on other projects, block upgrades, and so forth. And so that's really the beauty of what's being built here around vertical integration is.

Matthew Field: We incurred a Q2 net loss of $123 million, reflecting a loss from operations of about $144 million, partly offset by interest and other income of $21 million. Our net loss was $29 million higher compared to the prior quarter, reflecting a lower favorable revaluation of our warrants and earnout shares. Total operating expenses for the quarter were nearly $2 million lower than the first quarter as our increased staffing and spending was more than offset by increased government contract deliverables which are recorded as a reduction of our expenses.

Speaker Change: You're creating an engineering base that can do amazing things time and time again, and so some of those will be block upgrades, some of those eventually would be things like hydrogen or autonomous roadmaps or so forth.

Matthew Field: And so some of those we block upgrades, some of those eventually would be things like hydrogen or autonomous road maps or so forth.

Matthew Field: So that's the first part of the factory. The second piece you see in our cost today is the cost of building in the plant and the material we use to build prototypes or to build test articles. What you'll see there is you'll see continued growth as we build more units. And so we would expect that cost to increase, but it'll shift into a traditional kind of manufacturing cost of goods or, you know, a different form factor, if you will, to support our ongoing operations. So you'll see a growth there over time, but really a migration into supporting commercialization and the growth of our production.

Matt Field: So, that's the first part of the factory. The second piece you see in our cost today is the cost of building the plant and the materials we use to build prototypes or to build test articles. What you'll see there is continued growth as we build more units. And so, we would expect that cost to increase, but it'll shift into a traditional kind of manufacturing cost of goods or, you know, a different form factor, if you will, to support our ongoing operations.

Speaker Change: So that's the first part of the factory.

Speaker Change: The second piece you see in our cost today is the cost of building in the plant and the material we use to build prototypes or to build test articles. What you'll see there is you'll see continued growth as we build more units.

Speaker Change: And so we would expect that cost to increase.

Matthew Field: These deliverables, which included our hydrogen powered flight, reflect our ongoing prioritization of government contract resources across three elements, work directly supporting our certification effort, R&D work that supports mutual areas of interest to Joby and our DOD partners, and on base revenue generating activities. In the first half of this year, we prioritized the first two of these areas through things like HRF and wind tunnel testing in Q1 and R&D projects like the hydrogen powered demonstrator, which was important to our customer in Q2.

Speaker Change: But it'll shift into a traditional kind of manufacturing cost of goods or, you know, a different form factor, if you will, to support our ongoing operations.

Matt Field: You'll see a growth there over time, but really a migration into supporting commercialization and the growth of our production. And then the last piece is government contracts. You know, that's going to be something we will always evaluate and pursue where there's opportunities and mutual benefit. But, you know, that will probably ebb and flow depending on how we see those evolve. But the bigger two pieces, which is the engineering factory and kind of the manufacturing piece of it, will stabilize on the factory and continue to grow on the manufacturing piece, but in support of production and commercialization.

Speaker Change: You'll see a growth there over time, but really a migration into supporting commercialization and the growth of our production. And then the last piece is government contracts.

Matthew Field: And then the last piece is government contracts; you know, that's going to be something we will always evaluate and pursue where there's opportunities and mutual benefit. But, you know, that will probably have been flow depending on how we see those evolve, but the bigger two pieces, which is the engineering factory and kind of the manufacturing piece of it will stabilize on the factory and continue to grow on the manufacturing piece. But in support of production and commercialization.

Speaker Change: That's going to be something we will always evaluate and pursue.

Speaker Change: where there's opportunities and mutual benefit

Speaker Change: but you know that will probably ebb and flow depending on on how we see those evolve but

Matthew Field: As a reminder, these payments show up as a reduction of R&D expenses. We will continue to manage our engagements across these three elements of our government contracts, and we expect an increase in on base government directed operations late this year and next year. We expect to deliver our second aircraft to Edwards Air Force Base late this year and two additional aircraft to McDial Air Force Base in Tampa next year.

Speaker Change: The bigger two pieces, which is the engineering factory and kind of the manufacturing piece of it, will stabilize on the factory and continue to grow on the manufacturing piece, but in support of production and commercialization.

David Zazula: Thanks, thanks. Joe Leonard here. Pivoting to certification and something we've discussed, I think maybe around a year ago, but in light of the statement published by the FAA around harmonizing certification standards with the ASA. What is your latest thinking around ASA validating FAA type certification despite the former's higher safety standards?

Matt Field: Thanks, Matt. Thanks, JoeBenert here.

Didier Papadopoulos: Thanks, Matt. Thanks, Joe Benner here. Pivoting to certification and something we've discussed I think maybe around a year ago, but

Speaker Change: In light of the statement published by the FAA around harmonizing certification standards with EASA,

Matthew Field: Adjusted EBITDA, a non-gap metric that we reconciled to our net income and our shareholder letter was a loss of $107 million in the second quarter. This was about three million lower than the prior quarter, reflecting the increased contract deliverables mentioned earlier. Our adjusted EBITDA loss was $24 million higher than the same period last year, reflecting the growth in our organization.

Bill Peterson: Pivoting to certification and something we've discussed, I think, maybe around a year ago, but in light of the statement published by the FAA around harmonizing certification standards with EASA, what is your latest thinking around EASA validating FAA-type certification, despite the former's higher safety standards? I guess, how does this impact your outlook on entering the European market down the line? I mean, obviously, you have a lot of opportunities in the US, the UAE, Japan, the UK, and Australia, but obviously, Europe's a big market as well.

Speaker Change: What is your latest thinking around EASA validating FAA-type certification despite the former's higher safety standards?

David Zazula: I guess, how does this impact your outlook entering maybe the European market down a line? I mean you obviously have a lot of opportunities in the US, you know, US, you're in Japan, UK, in Australia, but you know obviously Europe's a big market as well.

Speaker Change: I guess, how does this impact your outlook entering maybe the European market down the line? I mean, you obviously have a lot of opportunities in the U.S., U.K., and Australia, but, you know, obviously Europe's a big market as well.

Didier Papadopoulos: Thanks for the question, Bill. So we continue to work directly with the YASA, but also with the FAA in order to be aligned on the path for certification with YASA. Our focus has been and continues to be the FAA and working with the FAA to see how we can get closer and closer and closer. And we've seen steps in the past few months where there's more and more alignment on some of the key points on that front. We'll continue working through that or continue expanding with UK CAA as well.

Didier Papadopoulos: Thanks for the question, Bill.

Didier Papadopoulos: Yeah, thanks for the question, Bill. So we continue to work directly with the EASA but also with the FAA in order to be aligned on the path towards certification with EASA. Our focus is, has been, and continues to be the FAA and working with the FAA to see how we can get closer and closer. We've seen steps in the past few months where there's more and more alignment on some of the key points on that front. We'll continue working through that, and we'll continue expanding with UKCAA as well. Once we get those completed, we expect to have a much closer path to EASA certification after that.

Matthew Field: As you heard from Joe Van at the top of the call, we continue to make sector-leading progress across all elements of our business, and I'm pleased to say that we do that with the strongest balance sheet in this section. Director. We have real momentum behind our certification workstream, reaching 37% on the Jobyside of stage 4. We're about to have four aircraft in test flight. We're on track to reach our goal of having production capacity equivalent to one aircraft per month by the end of this year. We're on track to deliver demonstration flights overseas this year. And we continue to ensure we're well positioned to deliver long-term growth by capitalizing on new technologies through discipline and investments.

Speaker Change: Thanks for the question, Bill. So, we continue to work directly with the IASA, but also with the FAA in order to

Didier Papadopoulos: be aligned on the path towards certification with YASA. Our focus has been and continues to be the FAA and working with the FAA to see how we can get closer and closer. And we've seen steps.

Speaker Change: where there's more and more alignment on some of the key

Didier Papadopoulos: We'll continue working through that. We'll continue expanding with UKCAA as well. Once we get those complete, we expect to have a much closer path to EASA certification after that.

Didier Papadopoulos: Once we get those complete, we expect to have a much closer path to the ASA certification after that.

Operator: With that, I'd like to ask the operator to please instruct participants on how to ask questions. Thank you.

Didier Papadopoulos: Thanks.

Didier Papadopoulos: Thank you.

Austin Moeller: Our next question comes from the line of Austin and Moeller with Anapurgynuity. Please proceed with your question. Hi, good evening and great to see everyone at Farnborough. Just my first question. This is a follow-up on Bill's question.

Operator: Thank you. Our next question comes from the line of Austin Moeller with Anacord Unuity. Please proceed with your question.

Didier Papadopoulos: Thank you.

Operator: We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tool will indicate a line in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment and maybe necessary to pick up your handset before pressing the star keys. One moment, please while we pull four questions.

Speaker Change: Our next question comes from the line of Austin Moeller with Anacord Genuity. Please proceed with your question.

Austin Moeller: Hi, good evening, and great to see everyone at Farnborough. Just my first question, which is a follow-up to Bill's question.

Speaker Change: Hi, good evening and great to see everyone at Farnborough.

Speaker Change: Just my first question, which is a follow-up on Bill's question. If you want to submit a hydrogen variant of your VTOL aircraft to the FAA for certification, presumably this would require a new SFAR and certification basis to be established for a hydrogen propulsion system, correct? And so that was kind of the objective of doing this flight testing?

Austin Moeller: If you want to submit a hydrogen variant of your VTOL aircraft to the FAA for certification, presumably this would require a new SFAR and certification basis to be established for a hydrogen propulsion system, correct? And so that was kind of the objective of doing this flight testing? Yeah.

Austin Moeller: If you want to submit a hygiene variant of your veto aircraft of the FAA for certification, presumably this would require a new ASFAR and certification basis to be established for a hydrogen propulsion system, correct. And so that was kind of the objective of doing this flight testing.

Andres Sheppard: And our first question comes from the line of Andre's secretary with Cantry Fitzgerald. Please proceed with your question. Hey, good morning, everyone. Thanks for taking our question. And congratulations on the quarter. Joven Didier and Teresa was also great at seeing you at FarmBore a few weeks ago. Joven, question for you. I'm wondering if you could maybe help share with us your vision regarding commercialization. Now with the application into Australia, obviously the FAA, Korea, Japan and the UAE, just wondering how you envision that commercialization process taking place in the near term. Just curious to get your thoughts there. Thank you. Thank you, Andre.

JoeBen Bevirt: Yeah, great question.

Didier Papadopoulos: Yeah, great question. So maybe up front on the question.

JoeBen Bevirt: So maybe upfront on the question, there's nothing necessarily to require a new ASFAR. As far as much more focus on the operational aspects in general and let's so on the technologies that go into the certification of the aircraft, though there are some byproducts and implications. So we expect to be able, or at least the desire is to be able to leverage the path on that front.

Speaker Change: Yeah, great question. So, maybe up front on the…

Didier Papadopoulos: This doesn't necessarily require a new ASFAR. ASFAR is much more focused on the operational aspects in general and less so on the technologies that go into the certification of the aircraft, though there are some byproducts and implications. So we expect to be able, or at least the desire is to be able to leverage the path on that front. In terms of the type certificate, I think one of the most exciting things about where we are today and introducing technologies like hydrogen is that there are two fronts.

Speaker Change: question. This doesn't necessarily require a new ASFAR. ASFAR is much more focused on the operational aspects in general and less so on the technologies that go into the certification of the aircraft, though there are some

Speaker Change: byproducts and implications. So we expect to be able, or at least the desire is to be able to leverage the path on that front. In terms of the type certificate, I think one of the most exciting things about

JoeBen Bevirt: In terms of the type certificate, I think one of the most exciting things about where we are today and introducing technology like hydrogen, is that two fronts. One, we've built a platform, which I'll call the aircraft right now, where a lot of the certification basis on that aircraft is reusable. And that's why we talk about introducing new technologies through amended TCs after this initial TC. So the foundation of the aircraft platform is here, and the introduction of the new technologies will be focused on those changes only.

Speaker Change: where we are today and introducing technologies like hydrogen

Didier Papadopoulos: One, we've built a platform, which I'll call the aircraft right now, where a lot of the certification basis for that aircraft is reusable, and that's why we talk about introducing new technologies through amended TCs after this initial TC. So the foundation of the aircraft platform is here, and the introduction of the new technologies will be focused on those changes only.

JoeBen Bevirt: I think you did a fantastic job of summing it up with beginning next year. We're targeting the commercial launch in Dubai. We've seen fantastic lean in there from multiple dimensions of the government, including the RTA and the GCA and as well as momentum on building out infrastructure so you can expect us to announce the groundbreaking on the first infrastructure there later this year as well as first flights in the first half of next year and commercialization towards the back half of the year.

Speaker Change: is that two fronts. One, we've built a platform, which I'll call the aircraft right now,

Speaker Change: What a lot of the certification basis on that aircraft is reusable, and that's why we talk about introducing new technologies.

Speaker Change: through ama tcs after this initial tc

Speaker Change: So the foundation of the aircraft platform is here, and the introduction of the new technologies will be focused on those changes only.

Didier Papadopoulos: The other big element that's really critical here in what Matt was talking about, making the machine that makes the machine, we've built the infrastructure at Joby to where we're able to develop and certify software. We're able to develop and certify hardware, components, systems, and airplanes. That whole machine that sort of develops the plans and leads them to certification is really important for us, and we'll be able to reuse all of this as we introduce new technologies.

JoeBen Bevirt: The other big element that's really critical here in what Matt was talking about: making the machine and make the machine. We built the infrastructure at Joby to where we're able to develop and certify software; we're able to develop and certify hardware components, systems, and airplanes. That whole machine that sort of develops the plans and leads them to certification is really what's really important for us, and we'll be able to reuse all of this as we introduce new technologies.

Speaker Change: The other big element that's really critical here

Didier Papadopoulos: And what Matt was talking about, making the machine that makes the machine. We've built the infrastructure at Joby to where we're able to develop and certify software. We're able to develop and certify hardware components, systems, and airplanes.

Speaker Change: That whole machine that sort of develops the plans and leads them to certification is really what's really important for us, and we'll be able to reuse all of this as we introduce new technologies.

JoeBen Bevirt: And then you rightly pointed out the fantastic progress we're making in Japan, Korea, UK and the recent announcement of progress in Australia and leveraging in all of those markets the bilateral relationships that the FAA has with the local regulators where we're leverage all of the incredible work that the team is doing on certification with the FAA across the world. So we do see tremendous international opportunities. And then The other element, of course, is our operations here at home and our partnerships with Uber and Delta on the demand gen and the infrastructure side of the airports with Delta. We're really excited about the momentum we're seeing in New York and LA. Got it. That's super helpful. I appreciate all that detail and maybe just a quick follow up.

JoeBen Bevirt: What we did today, like Jovan said, is a demonstrator, and that's really important to think about that and understand what that means. In order to be able to certify something novel with the FAA, first and foremost, we have to demonstrate that we understand the technology and that we understand what the technology is capable of doing and not capable of doing. That's step one, and it was a success. We're really excited about that. Past that is where we start working with the FAA on the rules applicable to this technology only that may affect the certification basis, but that would be at a smaller scale, focusing on those changes relating to hydrogen.

Didier Papadopoulos: What we did today, like JoeBen said, is a demonstrator. And that's really important to think about that and understand what that means. In order to be able to certify something novel with the FAA, first and foremost, we have to demonstrate that we understand the technology and that we understand what the technology is capable of doing and not capable of doing. That's step one, and it was a success. We're really excited about that.

Didier Papadopoulos: What we did today, like JoeBen said, is a demonstrator, and that's really important to think about that and

Speaker Change: understand what that means.

Speaker Change: In order to be able to certify something novel with the FAA, first and foremost, we have to demonstrate that we understand the technology.

Speaker Change: and that we understand what the technology is capable of doing and not capable of doing. That's step one, and it was a success. We're really excited about that.

Didier Papadopoulos: Past that is where we start working with the FAA on the rules applicable to this technology only that may affect the certification basis, but that would be at a smaller-scale focus on those changes relating to hydrogen.

Speaker Change: Past that, is where we start working with the FAA on the rules applicable to this technology only, that may affect the certification basis, but that would be at a smaller scale, focused on those changes relating to hydrogen.

JoeBen Bevirt: Great, that's helpful.

Austin Moeller: Great, that's helpful. And just my second question, given stage four of the FAA process is 37% complete, can you go into detail on what you will be doing with the aircraft at the show and verification stage? What does the timeline look like on that, given you're aiming to have a type certificate by late 2025?

Didier Papadopoulos: And just my second question, given stage four is of the FAA process, is 37% complete. Can you go into detail on what you will be doing with the aircraft and the show and verify stage? What does the timeline look like on that given year aiming to have a type certificate by late 2025? So I think thanks for highlighting that we're really excited about the progress we've had on stage 4, having more than a third complete at this point. It's been more progress this quarter than any other previous quarter. And we expect to be able to continue to accelerate in the latter part of this year.

Speaker Change: Great, that's helpful. And just my second question, given stage 4 of the FAA process is 37% complete, can you go into detail on what you will be doing with the aircraft in the show and verify stage? What does the timeline look like on that, given you're aiming to have a type certificate by late 2025?

Didier Papadopoulos: And so I think, thanks for highlighting that we're really excited about the progress we've had on stage four, having more than a third complete at this point. There has been more progress this quarter than any other previous quarter, and we expect to be able to continue to accelerate in the latter part of this year.

Didier Papadopoulos: And so I think, thanks for highlighting that we're really excited about the progress we've had on stage four having more than a third complete at this point. It's been more progress this quarter than any other previous quarter, and we expect to be able to continue to accelerate in the latter part of this year.

Didier Papadopoulos: In addition to the percentage, I think one thing that's really unique and something I'm trying to highlight in the prepared remark is the fact that we're now touching on multiple fronts of the FAA certification branches and as well as on multiple systems. You want to see that breadth of exposure, whereas a year ago, we were working, for example, on materials or then moved on and made progress toward equipment qualifications. Now we're talking about more complex systems like flight control propulsion, endurance testing, human factors, and so on.

In addition to the percentage, I think one thing that's really unique and trying to highlight in the prepared remark also is the fact that we're now touching on multiple fronts of the FAA certification branches and as well as on multiple systems. You want to see that breadth of exposure, whereas a year ago, we were working, for example, on materials, or then moved on and made progress towards equipment qualifications. Now we're talking about more complex systems like flight control, propulsion, endurance testing, human factors, and so on.

Didier Papadopoulos: In addition to the percentage, I think one thing that's really unique and trying to highlight in the prepared remark also

Didier Papadopoulos: And the fact that we're now touching on multiple fronts of the FAA certification branches and as well as on multiple systems, you want to see that breadth of exposure, whereas a year ago we were working, for example, on materials or then moved on and made progress towards equipment qualifications. Now we're talking about more complex systems like flight control, propulsion, endurance testing, human factors, and so on. So we're very excited to have a broader exposure on that front. Now, if you think about the aircraft pyramid, where you start with component systems and move all the way to the aircraft, you can naturally expect us to start moving into the aircraft, progressing from there.

Didier Papadopoulos: is the fact that we're now touching on multiple fronts of the FAA certification branches and as well as on multiple systems.

Didier Papadopoulos: You want to see that breadth of exposure.

Didier Papadopoulos: Whereas a year ago we were working, for example, on materials, or then moved on and made progress towards equipment qualifications. Now we're talking about more complex systems, like flight control, propulsion.

Matthew Field: Thank you. Hey, Andreas. It's Matt. I'll take part of that and then hand off to Didier to talk a bit about the manufacturing. So in terms of cost, you know, we're really pleased with the progress. I know we've talked on a past call about seeing reductions kind of plain over plain as I like to think of it. And we continue to see those we continue to incorporate lessons in our manufacturing plant operations.

Didier Papadopoulos: So we're very excited to have a broader exposure on that front. Now, if you think about the aircraft pyramid, where you start with component systems and move all the way to the aircraft, you can naturally expect us to start moving into the aircraft, progressing from there. So that's the direction you should expect us to progress into here in the near future.

Didier Papadopoulos: endurance testing, human factors, and so on. So we're very excited to have a broader exposure on that front.

Didier Papadopoulos: Now if you think about the aircraft pyramid where you start with component systems and move all the way to the aircraft, you can naturally expect us to start moving into the aircraft, progressing from there. So that's the direction you should expect us to progress into here in the near future.

Didier Papadopoulos: So that's the direction you should expect us to progress into here in the near future.

Matthew Field: Kind of across the board because our vertical integration allows us to look at every part of the plane and not just not just limit ourselves. So let's say final assembly our partnership with Toyota continues to be dividends there. And so really pleased with the progress on that lessons in terms of go to market, you know, too early to say, but really pleased with how we bring up planes. So we're learning as we have the plane roll off and bring that into into operations.

Didier Papadopoulos: Excellent.

Didier Papadopoulos: Thank you for the call. Thank you.

Speaker Change: Excellent. Thanks for the call.

Didier Papadopoulos: Thank you. Our next question comes from the line of Savvy Sith with Raymond James. Please proceed with your question.

David Zazula: Hey, good afternoon, everyone. I was kind of curious if you could share, you know, what type of flying you've done with the production conforming aircraft. You know, what you're doing is extremely challenging, but I was kind of curious if you've kind of gone through the thrust-borne and transition flights yet or where you are in that flight test process.

Speaker Change: Hey, good afternoon, everyone.

David Zazula: I was kind of curious if you could share, you know, what type of flying you've done with the, you know, the production conforming aircraft. I know what you're doing is extremely challenging, but I was kind of curious if you've kind of, you know, gone through the thrust-borne and transition flights yet, or where that, you know, where you are in that flight test process.

Matthew Field: So incorporating that with each success of plane as well and seeing an increase in the pacing cadence there. I'll hand it off to Didier to talk a little bit about the manufacturing shop for as well. Yeah, thanks for the question. Andreas and good to see you at Farm World, by the way, very exciting show there. You know, the past few months have been really exciting on the manufacturing. It gave us the opportunity through, you know, those three airplanes to truly fine tune the value stream of manufacturing of the airplane right from receiving other raw materials all the way to the work instructions leading to the integration at the end.

Savanthi Prelis: What you're doing is extremely challenging, but I was kind of curious if you've kind of gone through the trussborne and transition flights yet or where you are in that flight test process.

Savanthi Prelis: Yeah, thank you for the question.

Didier Papadopoulos: So, with respect to flying, I think it's really important to step back and remember we started flying a full-scale aircraft in 2017 and then in 2020 again, a full-scale pre-production prototype aircraft. And over the past three years, we've consistently continued flying that airplane. In fact, you know, we've been flying it even as recently as a few days ago here. What's really important about that is during the early stages of a program, you want to fly as much as possible in order to gain confidence and mature your design as it relates to the arrow structures, the flight controls, and the propulsion units.

Didier Papadopoulos: With respect to flying, I think it's really important to step back and remember we started flying a full-scale aircraft in 2017, and then in 2020, again, a full-scale pre-production prototype aircraft.

Speaker Change: Yeah, thank you for the question.

Matthew Field: That taught us on multiple fronts, optimizing the workflows, building some automation that we hadn't started with at the beginning because we really wanted to understand the process. And then on top of that. But in terms of yields, you know, we were from one month to month, we're seeing two double digit yield improvements on on multiple side of the vertical integration on the manufacturing side. And as we've mentioned also earlier, those yields and those efficiencies are helping us get closer and closer to our target of producing one aircraft a month.

Didier Papadopoulos: with respect to fing i think it's really important to step back and remember we started flying a for scale aircraft in two thousand and seventeen in then in two thousand and twenty again a full scale preproduction prototype aircraft

Didier Papadopoulos: And over the past few years, we've consistently continued flying that airplane. In fact, you know, we've been flying it even as recently as a few days ago here.

Didier Papadopoulos: What's really important about that is during the early stages of a program, you want to fly as much as possible in order to gain confidence and mature your design as it relates to the aerostructures, the flight controls, the propulsion units.

Didier Papadopoulos: All of those elements, you really need to properly understand. You need to lock in the design, and you also need to build a proper model around these so you can evolve the design as need might be with high confidence.

Speaker Change: All of those elements you really need to properly understand.

Speaker Change: You need to lock in the design and you also need to build a proper model around these so you can evolve the design as need might be with high confidence.

Didier Papadopoulos: All of this is behind us at this point. And so for us, spending a lot of time flying is not necessarily the highest priority, though it is something that is part of our plan. Most of the focus right now is where it should be, which is making progress in stage four across all of the pyramids for the equipment, the systems leading to the aircraft, particularly three things we've been spending time on the past quarter and we'll continue to do so here moving forward. One, continuing to make progress on building certified software and hardware. So that's what builds sort of the equipment.

Speaker Change: All of this is behind us at this point, and so for us...

Speaker Change: Spending a lot of time flying is not necessarily the highest priority, though it is something that is part of our plan.

Matthew Field: In fact, on multiple fronts, we've exceeded that already here in barely past this year, the middle of this year. All of these translate into cost reductions and also quality improvement, which most importantly for me right now helps us support a mature quality management system, which is a direct correlation to getting a production certificate right after TC.

Speaker Change: Most of the focus right now is where it should be, which is making progress in stage four across all of the pyramids, so the equipment, the systems leading to the aircraft, particularly three things we've been spending time on the past quarter, and we'll continue to do so here moving forward.

Speaker Change: One, continuing to make progress on building certified software and hardware, so that's what builds sort of the equipment.

Didier Papadopoulos: Number two, converting the development test assets into conforming test assets, because you need these to actually take credit for FAA. And then number three, continuing to make progress on test plans, submitting these to the FAA and getting acceptance on these. So this is our strategy here, trying, making sure we're continuing to be on pace and making progress on that, and, you know, obviously excited about having gotten to 37% submittal on that front. You should expect us to continue in that direction and continue to make progress on those airplanes. And as we said earlier, we should start seeing all of the airplanes flying here in the next quarter.

Andres Sheppard: Wonderful, super helpful, appreciate all that color, congrats again on the quarter, and I'll pass it on. Thank you.

Speaker Change: Number two, converting the development test assets into conforming test assets because you need these to actually take credit for FAA. And then number three,

Bill Peterson: Our next question comes from the line of Bill Peterson with JP Morgan.

Bill Peterson: Please receive a true question. Yeah, hi.

Speaker Change: Continuing to make progress on test plans, submitting these to the FAA, and getting acceptance on these.

JoeBen Bevirt: Good afternoon and thanks for all his details as far in the talk, but I want to see if you can elaborate more on the mid to longer term vision for the hydrogen aircraft. So I guess you do intend to develop a hydrogen version of the current, you know, 4-seat model, or would this be envisioned for other models down the line? And, you know, can you elaborate a bit on what kind of modifications you need to do to accommodate payload as well as the hydrogen fuel system?

Speaker Change: So this is our strategy here, making sure we're continuing to be on pace and making progress on that, and, you know, obviously excited about having gotten to 37% submitted on that front.

Speaker Change: You should expect us to continue in that direction and continue to make progress on those airplanes. And as we said earlier, we should start seeing all of the airplanes flying here in the next quarter and in the not-too-distant future.

Didier Papadopoulos: And then up to this stage.

Didier Papadopoulos: Just to clarify that on DBA. So I think I know these are full scale, but I think there are differences with the production version.

JoeBen Bevirt: And then, I guess, you need to do it, but what is the current spend that, you know, in terms of R&D that you have internally, I guess, met at proceeds, and how do you see that evolving in 2025 and beyond? Hey, Bill. Thanks. This is Joe. And I'll take the first piece of that and then hand it to Matt on the spending side. So we do see our hydrogen electric program as being a game changer from a technology standpoint that has potential to dramatically improve not just the sustainability.

Didier Papadopoulos: Just to clarify that on Didier, so...

Speaker Change: I think, I know these are full scale, but I think there are differences with the production version. So, is there any kind of reason you haven't kind of gone through that or you just want to kind of have a lot more flying to have more productivity or some reason around how you do those test slides?

Didier Papadopoulos: So is there any kind of reason you haven't gone through that, or you just want to have a lot more flying to have more productivity, or some reason around how you do those test flights? Yeah, there's no reason if we're really confident about the design here, and this is part of sort of the evolution of going through the flight testing. I want to make sure that, most importantly, Savanthi, what we're working on is getting towards a conformity because we want to make sure that every aspect, every energy we're spending here is something that goes directly towards FAA conformity and then FAA points as soon as the FAA is available.

Didier Papadopoulos: Yeah, there's no reason. We're really confident about the design here, and this is part of sort of the evolution of going through flight testing. We want to make sure that, most importantly, what we're working on is getting towards conformity, because we want to make sure that every aspect, every energy we're spending here is something that goes directly towards FAA conformity and then FAA points as soon as the FAA is available.

Didier Papadopoulos: Yeah, there's no reason of, we're really confident about the design here, and this is part of sort of the evolution of going through the flight testing. We want to make sure that

Savi: Most importantly, Savi, what we're working on is getting towards a conformity.

JoeBen Bevirt: But the performance of aircraft writ large, when we began pulling the thread on this five years ago, it was much more nascent. But the more we pull on it, the more confident we've become that this is massively disruptive technology that can really change the future of aviation writ large. In terms of the specific demonstration that we did, it was just a demonstration. We took our battery electric aircraft and we retrofitted it with with the hydrogen electric system and as you saw, delivered substantial more range with it.

Didier Papadopoulos: Because we want to make sure that every aspect, every energy we're spending here is something that goes directly towards

Didier Papadopoulos: FAA conformity, and then FAA points as soon as the FAA is available. That's why you see engagement from the FAA here on a regular basis. We want to see them with us, seeing some of those test executions, so that we can get high confidence that when we submit these and invite them next time, it's for credit.

Didier Papadopoulos: That's why you see engagement from the FAA here on a regular basis. We want to see them with us seeing some of those test executions so that we can get high confidence that we'll resubmit these and invite them next time.

Didier Papadopoulos: That's why you see engagement from the FAA here on a regular basis. We want to see them with us doing some of those test executions so that we can get high confidence that when we submit these and invite them next time, it's for credit.

Didier Papadopoulos: It's for credit. And actually, that ties in with my second question, which is I imagine building these aircraft is really expensive.

David Zazula: And actually, that ties in well with my kind of second question, which is, I imagine building these aircraft is really expensive. I'm so curious.

David Zazula: And actually that ties in well with my kind of second question which is I imagine building these aircraft are really expensive so curious...

Didier Papadopoulos: So curious why kind of continue to build kind of production conforming aircraft versus kind of switching to certification conforming aircraft. It seems like the rule of thumb is to build six or seven of the conforming aircraft so that you have enough kind of testing and flight hours and everything's curious of what the strategy there is. Yeah, I'll start with this and pass it a bit on.

Speaker Change: Why continue to build production-conforming aircraft versus switching to certification-conforming aircraft? It seems like the rule of thumb is to build six or seven of the conforming aircraft so that you have enough testing and flight hours and everything. I'm curious what the strategy there is.

JoeBen Bevirt: But the purpose of this was really to begin to get regulators both here in the US and around the world to lean in and to work with us on putting the processes and the regulatory steps in place for us to be able to certify a production version. And as we mentioned our prepared remarks, the amount of spend on this was extremely small. The number of people we have working on this is quite small.

Didier Papadopoulos: I think it's important to remember that the airplanes we're building today have multiple purposes, and it's kind of a two axes. The first axis is really maturing our quality management system. We have to nail this down in terms of product quality and getting a path towards PC so that when it's time to scale, we're able to scale cost-effectively and we're able to scale quickly. So you can learn on paper, but you can the best way to learn is to build airplanes, right? And this is how we're learning right now. On the other side of the axes, we're fortunate in that every one of these airplanes has a purpose, right?

Speaker Change: Yeah, I'll start with this and pass it a bit on. I think it's important to remember that the airplanes we're building today have multiple purposes.

David Zazula: And it's kind of a two axes. The first axis is really...

Speaker Change: Maturing our quality management system, we have to nail this down in terms of product quality and getting a path towards PC, so that when it's time to scale, we're able to scale cost effectively and we're able to scale quickly.

JoeBen Bevirt: But the potential upside impact is incredibly exciting in that we can take a small amount of spend and a small incremental amount of work. On modifying a contained number of systems on the aircraft and give it outsize new capabilities that allow us to address adjacent large and adjacent terms where instead of just being able to provide services across town, we're now able to provide regional service. From the same vertiport investments, the same software operating, elevator OS operating system, the same pilot training, etc.

Speaker Change: You can learn on paper, but the best way to learn is to build airplanes, right? And this is how we're learning right now. On the other side of the axis...

Didier Papadopoulos: We're fortunate in that every one of these airplanes has a purpose, right? So some of these airplanes are used directly for the program in order to mature and do verification activities for engineering and test purposes. Others of these airplanes are intended, like we mentioned earlier, for DOD applications, and then the third group of these is intended for international demonstrations. So every one of these airplanes has a dual purpose, and we're fortunate that way it has an end goal utilization, and then also it has a short-term use for us that's extremely important for TC and P.

Didier Papadopoulos: We're fortunate in that every one of these airplanes has a purpose, right?

Didier Papadopoulos: So some of these airplanes are used directly for the program in order to mature and do verification activities for engineering and TC purposes. Others of these airplanes are intended, like we mentioned earlier, for DOD applications, and then the third group of these is intended for international demonstrations. So every one of these airplanes has dual purpose, and we're fortunate that way. It has an end goal utilization, and then also it has a short term use for us. It's extremely important for TC and PC.

Didier Papadopoulos: Some of these airplanes are used directly for the program in order to mature and do verification activities for engineering and TC purposes.

Didier Papadopoulos: Others of these airplanes are intended, like we mentioned earlier, for...

Didier Papadopoulos: DOD applications, and then the third group of these is intended for international demonstrations. So every one of these airplanes has dual purpose, and we're fortunate that way it has an end goal utilization, and then also it has a short-term use for us that's extremely important for TC and PC.

Didier Papadopoulos: Yes, I mean, I did need to just cover kind of what I would have said on that, but I just want to add in a traditional aviation program; I think you're absolutely right. You probably only just build your conforming aircraft because you don't need to show what these aircraft are capable of. With a new and novel aircraft, we have so much demand, whether that's engagements with the DOD or international areas where people want to explore what the art of the possible is or how they might want these to operate in air space. It has traditionally been restricted to helicopters and had very limited helicopter use. That were an unfortunate position where people are asking us to bring the aircraft.

Speaker Change: yes i v did just covered kind of what i would have said on that but i just want to add

JoeBen Bevirt: Now all of a sudden we massively increased. The value that we can provide to our customers. And then I'll hand the financial piece over to Paul. Sorry, over the back. That's right. Hi, Belle. Thanks for the question.

Didier Papadopoulos: In a traditional aviation program, I think you're absolutely right. You'd probably only just build your conforming aircraft because you don't need to show what these aircraft are capable of. With a new and novel aircraft, we have so much demand, whether that's, you know, engagements with the DoD or international areas where people want to explore, you know, what the art of the possible is or how they might want these to operate in airspace that's traditionally been restricted to helicopters and has very limited helicopter use. We're in a fortunate position where people are asking us to bring the aircraft.

Matthew Field: So as you think about the R&D costs and you think about this program specifically, you know, I think of R&D right now in kind of three buckets. We'll expect that to taper off at this point in the going years. But what that really means is that as we get this plane closer and closer to certification, there'll be resources that roll off on other projects, block upgrades and so forth. And so that's really the beauty of what's being built here around vertical integration is you're creating an engineering base that can do amazing things time and time again.

Didier Papadopoulos: With a new and novel aircraft, we have so much demand.

Didier Papadopoulos: whether that's, you know, engagements with the DoD or international areas where people want to explore, you know, what the art of the possible is.

Didier Papadopoulos: or how they might want these to operate in airspace that's traditionally been restricted to helicopters and had very limited helicopter use.

Didier Papadopoulos: that we're in a fortunate position where people are asking us to bring the aircraft. And so, unlike, I think, a traditional kind of routine aviation program where you might only have

Didier Papadopoulos: And so unlike, I think, a traditional kind of routine aviation program where you might only have, you know, four or five conforming aircraft, we're building more, one, for that manufacturing muscle that Didier talked about, two, to refine our processes so that we know they're scalable, and then three, because there's a great opportunity to to bring those into service, get paid in many cases for doing so, and to kind of educate the public, which is going to be really important for us to be welcomed in the community.

David Zazula: So, unlike I think a traditional kind of routine aviation program where you might only have four or five conforming aircraft, we're building more, one for that manufacturing muscle that DINIA talked about to refine our processes so that we know they're scalable, and then three because there's a great opportunity to bring those into service, get paid in many cases for doing so, and to kind of educate the public, which is going to be really important for us to be welcome. Thank you, and our last question comes from the line of David Zazula with Barclays; please proceed with your question.

Didier Papadopoulos: You know, four or five conforming aircraft.

Didier Papadopoulos: We're building more, one, for that manufacturing muscle.

Didier Papadopoulos: that Didier talked about, two, to refine our processes so that we know they're scalable, and then three, because there's a great opportunity to bring those into service, get paid in many cases for doing so, and to kind of educate the public, which is going to be really important for us to be welcomed into communities.

Matthew Field: And so some of those we block upgrades, some of those eventually would be things like hydrogen or autonomous road maps or so forth. So that's the first part of the factory. The second piece you see in our cost today is the cost of building in the plant and the material we use to build prototypes or to build test articles. What you'll see there is you'll see continued growth as we build more units.

Didier Papadopoulos: Hopefully, thank you.

Operator: Thank you. And our last question comes from the line of David Zazula with Barclays. Please proceed with your question. Hey, thanks for squeezing me in.

Speaker Change: Thank you. And our last question comes from the line of David Zazula with Barclays. Please proceed with your question.

JoeBen Bevirt: Hey, thanks for rescuing me in. For Joe Ben or Paul Maybeven, you guys had a number of great opportunities to kind of expand the scope of Joe B, you know, thinking internationally, thinking hydrogen, thinking autonomy. I guess when I started covering you guys a couple of years ago, what struck me was an intense focus, singular focus on certifying the best possible aircraft with the FAA. So just be interested in your assessment of the risk that you're straying from that focus. And to the extent you assess any risk or have considered that, you know, what mitigation efforts you put in, kind of from a high-level company line.

David Zazula: for JoeBen or Paul, maybe even.

David Zazula: Hey, thanks for squeezing me in.

Speaker Change: For JoeBen or Paul maybe even.

Matthew Field: And so we would expect that cost to increase, but it'll shift into a traditional kind of manufacturing cost of goods or you know a different form factor if you will to support our ongoing operations. So you'll see a growth there over time, but really a migration into supporting commercialization and the growth of our production. And then the last piece is government contracts, you know, that's that's going to be something we will always evaluate and pursue where there's opportunities and mutual benefit.

David Zazula: I think you guys have had a number of great opportunities to kind of expand the scope of Joby, you know, thinking internationally, thinking hydrogen, thinking autonomy. I guess when we started covering you guys a couple years ago, what struck me was

Speaker Change: An intense singular focus on certifying the best possible aircraft with the FAA. So I'd just be interested in your assessment of the risk that you're straying from that focus.

Matthew Field: But, you know, that will probably have been flow depending on on how we see those evolve, but the bigger two pieces, which is the engineering factory and kind of the manufacturing piece of it will stabilize on the factory and continue to grow on the manufacturing piece. But in support of production and commercialization. Thanks, thanks Joe Leonard here.

Speaker Change: And, you know, to the extent you assess any risk or have considered that, you know, what mitigation efforts, you know, you've put in kind of from a high level company-wide.

JoeBen Bevirt: Yeah, thank you. I think we are very, as we said before, extremely focused on the certification of the battery electric aircraft and making fantastic progress there. We do see incredible opportunities to build on the platform of the battery electric aircraft as we layer on these incremental technologies, as did he spoke about, and really substantially expand the opportunity before us. And so we are extremely optimistic about our progression as we expanded to a next generation aviation company.

Speaker Change: Yeah, thank you.

Speaker Change: I think we are very, as we said before, extremely focused on the certification of the battery electric aircraft and making fantastic progress there. We do see...

Bill Peterson: Pivoting to certification and something we've discussed, I think maybe around a year ago, but in light of the statement published by the FAA around harmonizing certification standards with the ASA. What is your latest thinking around ASA validating FAA type certification despite the former's higher safety standards? I guess how does this impact your outlook entering maybe the European market down a line? I mean you obviously have a lot of opportunities in the US, you know, US, you're in Japan, UK, in Australia, but you know obviously Europe's a big market as well.

David Zazula: incredible opportunities to build on the platform of the battery electric aircraft as we layer on these incremental technologies as Didier spoke about and

Speaker Change: really substantially expand the opportunity before us. And so we are...

Speaker Change: Extremely optimistic about

Bill Peterson: Thanks for the question Bill, so we continue to work directly with the YASA, but also with the FAA in order to be aligned on the path for certification with YASA. Our focus is has been and continues to be the FAA and working with the FAA to see how we can get closer and closer and closer. And we've seen steps in the past few months where there's more and more alignment on some of the key points on that front. We'll continue working through that or continue expanding with UK CAA as well. Once we get those complete, we expect to have a much closer path to the ASA certification after that.

Speaker Change: our progression as

David Zazula: as we expand into a next-generation aviation company.

Paul Sciarra: Okay, thanks. And then if I could just have one more you use in a couple of releases recently, the term core markets.

David Zazula: Okay, thanks. And then if I could just have one more. You used in a couple of releases recently the term core markets. I wonder if you could kind of define what you mean by core versus non-core markets, and potentially even is there a possibility that a market within the U.S. be defined as a non-core market?

Didier Papadopoulos: Thank you.

Paul Sciarra: I wonder if you could kind of define what you mean by core versus non-core markets and potentially even is there a possibility that a market within the US be defined as a non-core market.

David Zazula: I wonder if you could kind of define what you mean by core versus non-core markets and, you know, potentially even if there is, you know, a possibility that a market within the U.S. could be defined as a non-core market?

Paul Sciarra: I'm not sure which press releases, and sorry, this is Paul, David, you might be referring to, but. I mean, at this point, all of the markets that we've talked about are potentially core. So you shouldn't read anything into that particular phrasing.

Paul Sciarra: I'm not sure which press releases, and sorry, this is Paul David; you might be referring to. But I mean, at this point, all of the markets that we've talked about are potentially core. So you shouldn't read anything into that particular phrasing.

Paul Sciarra: I'm not sure which...

Paul Sciarra: Press releases, I'm sorry this is Paul, David, you might be referring to, but

Speaker Change: I mean, at this point, all of the markets that we've talked about are potentially core. So you shouldn't read anything into that particular phrasing. JB mentioned on his prior answer.

Paul Sciarra: JB mentioned in his prior answer, you know, that we are sort of in full lean-in mode across Dubai and the opportunity for commercialization there. But we are also actively working on potential services here in the U.S. in conjunction with Delta, in conjunction with Uber. And some of the work that we highlighted both this quarter and on previous calls about activating the bilateral arrangements between the U.S. FAA and other regulatory bodies around the world, whether that's the U.K., Australia, JCAB, and Japan, that should allow us to continually expand from some of these early markets to a broader set of markets over time. But, long and short, I don't think there's any magic to core or not

Austin Moeller: Our next question comes from the line of Austin and Moeller with Anapurgynuity. Please proceed with your question.

Paul Sciarra: JB mentioned on his prior answer, you know, that we are sort of in full lean-in mode across Dubai and the opportunity for commercialization there. But we are also actively working on a potential service here in the US; you can junction with Delta and conjunction with Uber. And some of the work that we highlighted both this quarter and on previous calls about activating the bilateral arrangements between US FAA and other regulatory bodies around the world. Whether that's UK, Australia, J Cab, and Japan, that should allow us to continually expand from some of these early markets to a broader set of markets over time.

Austin Moeller: Hi, good evening and great to see everyone at Farnborough. Just my first question, this is a follow-up on Bill's question. If you want to submit a hygiene variant of your veto aircraft of the FAA for certification, presumably this would require a new ASFAR and certification basis to be established for a hydrogen propulsion system correct. And so that was kind of the objective of doing this flight testing. Yeah, great question. So maybe upfront on the question, there's nothing necessarily to require a new ASFAR.

Paul Sciarra: that we are sort of in full lean in mode across Dubai and the opportunity for commercialization there. But we are also actively working on.

Paul Sciarra: potential service here in the U.S.

Paul Sciarra: in conjunction with Delta, in conjunction with Uber.

Paul Sciarra: and some of the work that we highlighted both this quarter and on previous calls.

Paul Sciarra: about activating the bilateral arrangements between USFAA and other regulatory bodies around the world, whether that's

Paul Sciarra: UK, Australia, JCAB, and Japan, that should allow us to continually expand from some of these early markets to a broader set of markets over time. But long and short, I don't think there's any magic to core or not core. All of these markets are markets that we are very excited about.

Paul Sciarra: But long and short, I don't think there's any magic to core or not core. All of these markets are markets that we are very excited about.

Paul Sciarra: All of these markets are ones that we are very excited about.

Austin Moeller: As far as much more focus on the operational aspects in general and let's so on the technologies that go into the certification of the aircraft, though there are some byproducts and implications. So we expect to be able, or at least the desire is to be able to leverage the path on that front. In terms of the type certificate, I think one of the most exciting things about where we are today and introducing technology like hydrogen, is that two fronts.

Speaker Change: Great. Thanks very much. I appreciate the time.

Paul Sciarra: Thank you.

Operator: And we have reached the end of the question in our session. And this also includes today's teleconference. You made this going to chill out at this time. Thank you for your participation.

Paul Sciarra: right

Speaker Change: Thank you. And we have reached the end of the question and answer session, and this also concludes today's teleconference. You may disconnect your line at this time. Thank you for your participation.

Austin Moeller: One, we've built a platform, which I'll call the aircraft right now, where a lot of the certification basis on that aircraft is reusable. And that's why we talk about introducing new technologies through amended TCs after this initial TC. So the foundation of the aircraft platform is here and the introduction of the new technologies will be focused on those changes only. The other big element that's really critical here in what Matt was talking about making the machine and make the machine.

Austin Moeller: We built the infrastructure at Joby to where we're able to develop and certify software, we're able to develop and certify hardware components systems and airplanes. That whole machine that sort of develops the plans and leads them to certification is really what's really important for us and we'll be able to reuse all of this as we introduce new technologies. What we did today, like Jovan said, is a demonstrator and that's really important to think about that and understand what that means.

Austin Moeller: In order to be able to certify something novel with the FAA first and foremost, we have to demonstrate that we understand the technology and that we understand what the technology is capable of doing and not capable of doing. That's step one and it was a success. We're really excited about that. Past that is where we start working with the FAA on the rules applicable to this technology only that may affect the certification basis but that would be at a smaller scale focus on those changes relating to hydrogen.

Didier Papadopoulos: Great, that's helpful. And just my second question, given stage four is of the FAA process, is 37% complete. Can you go into detail on what you will be doing with the aircraft and the show and verify stage? What does the timeline look like on that given year aiming to have a type certificate by late 2025? So I think thanks for highlighting that we're really excited about the progress we've had on stage 4 having more than a third complete at this point.

Didier Papadopoulos: It's been more progress this quarter than any other previous quarter. And we expect to be able to continue to accelerate in the latter part of this year. And the fact that we're now touching on multiple fronts of the FAA certification branches and as well as on multiple systems, you want to see that breadth of exposure, whereas a year ago we were working for example on materials or then moved on and made progress towards equipment qualifications.

Didier Papadopoulos: Now we're talking about more complex systems like flight control, propulsion, endurance testing, human factors and so on. So we're very excited to have a broader exposure on that front. Now if you think about the aircraft pyramid where you start with component systems and move all the way to the aircraft, you can naturally expect us to start moving into the aircraft progressing from there.

Didier Papadopoulos: So that's the direction you should expect to expect us to progress into here in the near future.

David Zazula: Excellent. Thank you for the call.

David Zazula: Thank you.

Savanthi Prelis: Our next question comes from the line of SAVC with Raymond James. Please proceed with your question. Hey, good afternoon, everyone. I was kind of curious if you could share what type of flying you've done with the production conforming aircraft. What you're doing is extremely challenging, but I was kind of curious if you've kind of gone through the trussborne and transition flights yet or where you are in that flight test process. Yeah, thank you for the question.

Savanthi Prelis: So with respect to flying, I think it's really important to step back and remember we started flying a full scale aircraft in 2017 and then in 2020 again, a full scale pre production prototype aircraft. And over the past three years, we've consistently continued flying that airplane. In fact, you know, we've been flying it even as recently as a few days ago here. What's really important about that is during the early stages of a program, you want to fly as much as possible in order to gain confidence and mature your design as it relates to the arrow structures, the flight controls, the propulsion units.

Savanthi Prelis: All of those elements, you really need to properly understand, you need to lock in the design and you also need to build a proper model around these so you can evolve the design as need might be with high confidence. All of this is behind us at this point. And so for us, spending a lot of time flying is not necessarily the highest priority, though it is something that is part of our plan.

Savanthi Prelis: Most of the focus right now is where it should be, which is making progress in stage four across all of the pyramids for the equipment, the systems leading to the aircraft, particularly three things we've been spending time on the past quarter and we'll continue to do so here moving forward. One, continuing to make progress on building certified software and hardware. So that's what builds sort of the equipment. Number two, converting the development test assets into conforming test assets, because you need these to actually take credit for FAA.

Savanthi Prelis: And then number three, continuing to make progress on test plans, submitting these to the FAA and getting acceptance on these. So this is our strategy here, trying, making sure we're continuing to be on pace and making progress on that and, you know, obviously excited about having gotten to 37% submittal on that front. You should expect us to continue in that direction and continue to make progress on those airplanes. And as we said earlier, we should start seeing all of the airplanes flying here in the next quarter.

Savanthi Prelis: And then up to this stage. Just to clarify that on DBA. So I think I know these are full scale but I think there are differences with the production version. So is there any kind of reason you haven't gone through that or you just want to have a lot more flying to have more productivity or some reason around how you do those test flights? Yeah there's no reason of we're really confident about the design here and this is part of sort of the evolution of going through the flight testing.

Savanthi Prelis: I want to make sure that most importantly, Savanthi, what we're working on is getting towards a conformity because we want to make sure that every aspect, every energy we're spending here is something that goes directly towards FAA conformity and then FAA points as soon as the FAA is available. That's why you see engagement from the FAA here on a regular basis. We want to see them with us seeing some of those test executions so that we can get high confidence that we'll resubmit these and invite them next time.

Savanthi Prelis: It's for credit. And actually that ties in with my second question, which is I imagine building these aircraft are really expensive. So curious why kind of continue to build kind of production conforming aircraft versus kind of switching to certification conforming aircraft. It seems like the rule of thumb is to build six or seven of the conforming aircraft so that you have enough kind of testing and flight hours and everything's curious of what the strategy there is.

Savanthi Prelis: Yeah, I'll start with this and pass it a bit on. I think it's important to remember that the airplanes we're building today have multiple purposes and it's kind of a two axes. The first axis is really maturing our quality management system. We have to nail this down in terms of product quality and getting a path towards PC so that when it's time to scale, we're able to scale cost effectively and we're able to scale quickly.

Savanthi Prelis: So you can learn on paper, but you can the best way to learn is to build airplanes, right? And this is how we're learning right now. On the other side of the axes, we're fortunate in that every one of these airplanes has a purpose, right? So some of these airplanes are used directly for the program in order to mature and do verification activities for engineering and TC purposes. Others of these airplanes are intended like we mentioned earlier for DOD applications and then the third group of these is intended for international demonstrations.

Savanthi Prelis: So every one of these airplanes has dual purpose and we're fortunate that way it has an end goal utilization and then also it has a short term use for us. It's extremely important for TC and PC. Yes, I mean, I did need to just cover kind of what I would have said on that, but I just want to add in a traditional aviation program, I think you're absolutely right. You probably only just build your conforming aircraft because you don't need to show what these aircraft are capable of.

Savanthi Prelis: With a new and novel aircraft, we have so much demand whether that's engagements with the DOD or international areas where people want to explore what the art of the possible is or how they might want these to operate in air space has traditionally been restricted to helicopters and had very limited helicopter use that were an unfortunate position where people are asking us to bring the aircraft. So unlike I think a traditional kind of routine aviation program where you might only have four or five conforming aircraft, we're building more one for that manufacturing muscle that DINIA talked about to refine our processes so that we know they're scalable and then three because there's a great opportunity to to bring those into service, get paid in many cases for doing so and to kind of educate the public, which is going to be really important for us to be welcome Thank you, and our last question comes from the line of David Zazula with Barclays, please proceed with your question.

Savanthi Prelis: Hey, thanks for rescuing me in. For Joe Ben or Paul Maybeven, you guys had a number of great opportunities to kind of expand the scope of Joe B, you know, thinking internationally, thinking hydrogen, thinking autonomy. I guess when I started covering you guys a couple of years ago, what struck me was an intense focus, singular focus on certifying the best possible aircraft with the FAA. So just be interested in your assessment of the risk that you're straying from that focus.

Savanthi Prelis: And to the extent you assess any risk or have considered that, you know, what mitigation efforts you put in kind of from a high level company line. Yeah, thank you. I think we are very, as we said before, extremely focused on the certification of the battery electric aircraft and making fantastic progress there. We do see incredible opportunities to build on the platform of the battery electric aircraft as we layer on these incremental technologies as did he spoke about and really substantially expand the opportunity before us.

Savanthi Prelis: And so we are extremely optimistic about our progression as we expanded to an next generation aviation company. Okay, thanks. And then if I could just have one more you use in a couple of releases recently, the term core markets. I wonder if you could kind of define what you mean by core versus non core markets and potentially even is there a possibility that a market within the US be defined as a non core market.

Savanthi Prelis: I'm not sure which press releases and sorry, this is Paul David, you might be referring to. But I mean, at this point, all of the markets that we've talked about are potentially core. So you shouldn't read anything into that particular phrasing. JB mentioned on his prior answer, you know, that we are sort of in full lean in mode across Dubai and the opportunity for commercialization there. But we are also actively working on a potential service here in the US, you can junction with Delta and conjunction with Uber.

Savanthi Prelis: And some of the work that we highlighted both this quarter and on previous calls about activating the bilateral arrangements between US FAA and other regulatory bodies around the world. Whether that's UK, Australia, J Cab, and Japan, that should allow us to continually expand from some of these early markets to a broader set of markets over time. But long and short, I don't I don't think there's any magic to core or not core, all of these markets are markets that we are very excited about. Thank you. And we have reached the end of the question in our session. And this also includes today's teleconference.

Operator: You made this going to chill out at this time.

Operator: Thank you for your participation.

Q2 2024 Joby Aviation Inc Earnings Call

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