Q3 2024 Joby Aviation Inc Earnings Call
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Speaker Change: Greetings and welcome to the Joby Aviation 3rd Quarter 2024 Financial Results.
Speaker Change: At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation.
If anyone should require operator assistance, 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, Thuruthiyil Thuruthiyil, Joven Aviation's Head of Investor Relations. Thank you. You may begin.
Speaker Change: Hi everyone and welcome to Joby Aviation's third quarter 2024 financial results conference call. I'm Teresa Thuruthiyil, Joby's Head of Investor Relations.
Speaker Change: On the call today, we have JoeBen Bevirt, Founder and Chief Executive Officer, Paul Sciarra, Executive Chairman, Didier Papadopoulos, President, Aircraft OEM,
Eric Allison, Chief Product Officer, and Matt Field, Chief Financial Officer.
Speaker Change: After management's prepared remarks, we will open the call for questions.
Speaker Change: Please note that 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.
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.
Speaker Change: Also, during the call, we'll refer both to GAAP and non-GAAP financial measures.
Speaker Change: A reconciliation of non-gap-to-gap measures is included in our Q3 2024 shareholder letter which you can find on our investor relations website along with the replay of this call.
Speaker Change: With all of that said, I'll now turn the call over to JoeBen.
JoeBen: Thanks Teresa and thanks everyone for joining us today. This has been another excellent quarter at Joby. We've seen exceptional lean-in from regulators across the globe. We've continued our great momentum on certification. We've significantly strengthened our fortress balance sheet which was already the strongest in the sector.
JoeBen: We've successfully built our first FAA conforming tail.
JoeBen: We've reinforced our partnerships with Toyota, Uber, and Delta through landmark events, and our team has just arrived back from Japan after completing our first international demonstration flight.
JoeBen: Those flights were completed using our third production prototype, an aircraft that rolled off our manufacturing line in California just three months ago.
JoeBen: The flights were more than just a demonstration of our capabilities. They were a celebration.
JoeBen: of our strategic partnership with Toyota and everything we've achieved in nearly seven years of collaboration.
Speaker Change: We completed the flights at Toyota's Higashi Fuji Technical Center, just a few miles from Mount Fuji.
Speaker Change: where we were honored to welcome visits from Toyota Chairman Akiyo Toyota, Toyota CTO Hiroki Nakajima, and Toyota North America CEO and Joby board member Ted Ogawa, along with representatives from JCAB, Japan's aviation regulator.
Speaker Change: Our relationship with Toyota is the strongest it's ever been, and we're incredibly grateful for their continued support.
Speaker Change: For many years, Toyota has worked shoulder to shoulder with us on the production line. They've helped us design tools, they've helped lay out our factories, they've provided parts that go on our aircraft, and they've been the very best partners we could wish for.
Speaker Change: Last month, we took the next step on our journey together, one that is expected to see Toyota increase their position in Joby through two equal investments totaling $500 million.
Speaker Change: This investment, along with the Strategic Manufacturing Alliance that will accompany it, speaks to our shared vision for the future of mobility, and we look forward to sharing more on that topic next year.
Speaker Change: Thank you. Thank you. Thank you.
Speaker Change: Our aircraft is now on its way to Korea where it will be flying as part of the Korean government's KUAM Grand Challenge, a demonstration program launched by the Ministry of Land Infrastructure and Transport to support the commercialization of air taxis in the Korean market.
Speaker Change: As well as celebrating our relationship with Toyota, this quarter we also had the opportunity to highlight our strong partnerships with Delta Airlines and Uber through events in Los Angeles and New York City.
Speaker Change: Across 14 days of public events at the Santa Monica Airport, the Grove Shopping Center in Los Angeles, and at New York's Grand Central Terminal, we were able to share the future of transportation with more than 75,000 community members and other stakeholders.
Speaker Change: including local policy makers, mayors, real estate partners, transport authorities, and our future customers.
Speaker Change: Thank you.
Speaker Change: These events go a long way to building the foundation required on the local level to deliver the infrastructure for our service.
Speaker Change: And on that front, we were pleased to welcome news of Atlantic Aviation beginning work to electrify East 34th Street Heliport in New York City, building on last year's announcement that the downtown Manhattan Heliport would also be electrified.
Speaker Change: Later in the call, we're going to be joined by Eric Allison, our Chief Product Officer, to talk a little bit more about those events and to provide some texture on the ElevateOS operating system we introduced recently.
Speaker Change: Eric is one of a small handful of folks who has shaped this industry from its earliest days through his work at ZRO and his leadership of the Uber Elevate division and we're lucky to have him at Joby.
Speaker Change: But before I hand it over to the team, I'd like to call out the remarkable momentum we're seeing from regulators in each of our core markets.
Speaker Change: In the U.S., the publication of the SBAR, or Special Federal Aviation Regulation, was a key moment for our industry and another great demonstration of U.S. leadership in our sector.
Speaker Change: Delivered ahead of schedule and with bipartisan support, it lays the final piece of the regulatory puzzle, the commercial operations and pilot qualification requirements for our aircraft.
Speaker Change: We're particularly grateful to the FAA team members that worked with industry to pull this together in record time.
Speaker Change: We're also grateful for the leadership of FAA Administrator Mike Whitaker and the support of the House Aviation Subcommittee led by Representatives Sam Graves and Rick Larson.
Speaker Change: Looking for their field, we also saw great progress in the UAE with the local regulator accepting the full set of qualification plans for our aircraft.
Speaker Change: And last month, we were honored to welcome representatives from the British, Australian, and Japanese regulatory teams, along with members from the FAA to Marina for a week-long tech familiarization session, a key part of the regulatory process.
Speaker Change: To talk more about regulatory progress and the great momentum we have going into the final quarter of the year, I'd like to hand it over to Didier. Didier?
Didier Papadopoulos: Thanks, JoeBen.
Didier Papadopoulos: In my 20 plus years working in aerospace, I cannot think of a more impactful moment than the FAA's publication of the Powered Lift as far last month.
Didier Papadopoulos: This is the first time since the 1940s that the FAA has created operational rules allowing a new class of civil aircraft to enter service.
Speaker Change: This is a huge step forward for our industry and I share JoeBen's gratitude to the FAA for delivering ahead of schedule.
Speaker Change: The rule includes provisions that confirm we have taken the right approach to the design of our aircraft and in our work to prepare for operations.
Speaker Change: On pilot training, the SBAR includes a clear pathway for us to train pilots using the high-fidelity flight simulators we are qualifying alongside CEE and a single set of pilot controls.
Speaker Change: The rule also confirms our expectation that the energy reserves required in service will be equivalent to helicopter operations under VFR rules today.
Speaker Change: Most importantly, the SFAR includes flexible pathways for us to work with the FAA and optimize our approach to operations as we continue working towards commercial launch in the U.S.
Speaker Change: The FAA's continued leadership results in a smoother path to international operations in many of our key markets. As evidenced during the week-long technology familiarization session we hosted in Marina with aviation regulators from the UK, Japan, and Australia alongside staff from the FAA.
Speaker Change: Over the course of the week, dozens of regulatory representatives from these countries witnessed flight tests, observed our system level testing, and discussed the approach that Joby and the FAA are taking to certify our aircraft, particularly in novel technology areas.
Speaker Change: This is a formal part of the process to validate our FAA-type certificate once received into each of these markets to enable commercial operations.
Speaker Change: It's an important step as we continue to support the harmonization of international certification approaches to aircraft like ours. This, in turn, expedites our path to operations around the world.
Speaker Change: As JoeBen mentioned, we also made important progress this quarter with regulators in Korea and in the UAE, where the GCAA accepted all of our qualification plans.
Speaker Change: These plans cover not only approval of the design of our aircraft, but also the approach we will take to the pilot training, maintenance, and commercial operations in Dubai. This is a big win for the team, as we work towards starting commercial service in Dubai as soon as the end of 2025.
Speaker Change: In the U.S., we continue to make great progress on our tax certification program with the FAA.
Speaker Change: On the Joby side, we submitted more Stage 4 documents than in any prior quarter, and in more unique system areas.
Speaker Change: These include key tests and qualification plans related to the propeller system, electric motor, flight controls, batteries, and the main airframe structure.
Speaker Change: We also reached closure with the FAA on key issue papers related to the batteries and electrical systems on our aircraft, cementing for us and the broader industry the certification path for some of the unique aspects of battery electric aircraft.
Speaker Change: On the FAA side, we had more of our test plans accepted than during any prior quarter, moving us from 14% to 21% complete on Stage 4, reflecting a continued lean-in by the FAA.
Speaker Change: These figures also reflect an updated and more streamlined path to certification that aligns with our latest FAA discussions for test plans, which we'll continue to iterate on as we proceed through Stage 4.
Speaker Change: Hand-in-hand with certification is our increasing focus on building conforming parts.
Speaker Change: We have now reached a point where 35% of the composite components being manufactured today at Jobi are for FAA-conforming bills, intended for use on TIA aircraft, and in for credit testing
Speaker Change: And on that note, I am very excited to share that the team has completed the build of our first major sub-assembly intended to be used in for-credit testing.
Speaker Change: The tail assembly in question is now in the process of FAA conformity inspection preparation and will begin the testing regime laid out in our approved static tail test plan shortly thereafter.
Speaker Change: Alongside our progress on certification and testing, we've continued to mature and develop our flight testing.
Speaker Change: Over the last month, we've been flying nearly simultaneously on two different continents.
Speaker Change: In California, we've been flying regularly in support of our certification program, including flying our second production prototype through transition, accumulating valuable data on handling qualities and system performance, and maturing our well-become FAA flight test plans.
Speaker Change: © 2012 University of Georgia College of Agricultural and Environmental Sciences UGA Extension Office of Communications and Creative Services
Speaker Change: And at the same time, we completed a number of exhibition flights in Japan.
Speaker Change: We're now looking forward to doing the same in Korea, showcasing our aircraft's revolutionary capabilities and strengthening our relationships in key markets.
Speaker Change: Our fleet has continued to grow with our fourth aircraft nearing completion and set to join our flight test program soon.
Speaker Change: With each completed aircraft, we continue to improve our efficiency and production cycle time across many aspects of the process. These learnings are only possible because we're building aircraft and going through improvement cycles across every aspect of production, assembly, and integration.
Speaker Change: For this aircraft, the fourth to come off our production line, and through a continuous improvement culture, we introduced new processes for final integration that saw many sub-assemblies built in standalone workshelves and then installed onto the aircraft as completed systems.
Speaker Change: This approach has improved the efficiency of final integration by more than 30%.
Speaker Change: And by the way, the fixtures for these new processes were designed and provided to us by our incredible partner at Toyota. Just one of many examples of their invaluable support of our mission.
Speaker Change: Since we first formed our manufacturing partnership with Toyota in 2019, we have worked side-by-side on projects like the design of our manufacturing facility in Marina, including the expansion that will double our manufacturing space at the airport and the facility we're bringing online in Ohio.
Speaker Change: Toyota has also helped us to implement aspects of the Toyota production system and the mindset of Kaizen or continuous improvement through our manufacturing lines and our manufacturing culture.
Speaker Change: Our Toyota colleagues, embedded across Joby's manufacturing teams and supporting from Japan, provide us with the resources and the knowledge to more quickly mature our production process.
Speaker Change: As just one example, we have doubled our battery module production rate and significantly increased our yield in the past six months on key processes through a joint effort with Toyota in identifying bottlenecks and improving line layout and efficiency.
Speaker Change: The deep partnership between Joby and Toyota is all about building on each other's strength through continuous reviews of areas of new opportunities.
Speaker Change: During our recent visit to Japan, I was honored to tour Toyota's motor and powertrain test site and spent several hours discussing new areas for potential collaboration with Hiroki Nakajima, their group CTO.
Speaker Change: I am looking forward to working ever more closely with the Toyota team as we move through certification, scale up our manufacturing, and prepare for commercial service. And on that note, Eric, over to you.
Eric Allison: Thanks, Didier.
Eric Allison: I joined Joby from Uber, where I built out the Elevate team, championed Uber's $125 million strategic investment in Joby, and laid out a vision for aerial mobility that continues to be embraced by the entire sector.
Speaker Change: In 2019, my team at Elevate built and ran UberCopter, which was the first-ever multimodal air taxi service in New York City.
Speaker Change: It was an incredibly valuable learning experience, but it also taught us that the sort of software we would require to deliver high-tempo, on-demand services just didn't exist, even amongst the most sophisticated helicopter operators.
Speaker Change: As Chief Product Officer at Joby, I've been working with many members of the original Elevate team, alongside new team members, to distill the learnings from UberCopter into a set of tools ready to support commercial operations.
Speaker Change: The ElevateOS operating system we announced earlier this year delivers tools like a rider app, a flight planning tool, a pilot app, and a matching engine, all of which work seamlessly together to maximize the efficiency of our service and deliver true time savings to our customers.
Speaker Change: because we're confident that while some of our customers might book well in advance,
Speaker Change: The majority of them are likely to treat Flying with Joby like ordering an Uber today, as a relatively last-minute thought, and we need the capabilities to offer that kind of on-demand, multi-modal service.
Speaker Change: Thank you for watching!
Speaker Change: Getting a head start on this work is critically important because it needs to be ready when the aircraft is ready.
Speaker Change: It's simply not viable to drop a novel aircraft like the ones being designed in our sector into one of today's existing airline or helicopter operations.
Speaker Change: and expect them to be successful.
Speaker Change: You have to do the hard miles in the software, and you have to do those miles in time for the start of operations.
Speaker Change: At Joby, we're already using these software tools in real life through our Part 135 operating certificate.
Speaker Change: Allowing us to constantly improve, test, and iterate our software. In fact, some of these tools are already on their third iteration.
Speaker Change: We're also working with our partners like Uber and Delta to integrate our software so that passengers are able to book seamless journeys in one process, connecting their ground transportation to their air taxi, and perhaps on to their Delta flight.
Speaker Change: The partnership we enjoy with Delta and Uber is incredibly strong, as evidenced by our recent joint event at New York City's Grand Central Station.
Speaker Change: At that event, as well as in our showcase events in LA, we were able to bring our Air Taxi to the public for the first time, letting them sit inside it and experience what it might be like to fly with Joby.
Speaker Change: We were also able to highlight our commitment to fostering local connections as we plan for commercialization.
Speaker Change: In LA, we are proud to highlight our partnership with the Fly Compton Foundation, a non-profit organization focused on training the next generation of pilots.
Speaker Change: We are working with them to deliver free pilot ground school for their students, similar to the work we are doing with the Bay Area Urban Eagles in Northern California.
Speaker Change: In New York, we were joined by students from Aviation High School, who we are working with to prepare the next generation of aircraft maintenance technicians and aerospace leaders.
Speaker Change: What I took away from these events is that the incredible excitement around what we are doing in this sector, that we first began to harness at Uber Elevate, is now stronger than ever.
Speaker Change: And that was true in Japan, too, where our aircraft was met with great enthusiasm, and we look forward to continuing our work with Toyota and our airline partner, ANA, Japan's leading airline.
Speaker Change: I'm confident that we have the best team in the industry working on this, and we're looking forward to bringing our service to life. Matt, over to you.
Matt Field: Thanks, Eric, and good afternoon, everybody, and thanks for joining us today. As you've heard from the team, we've had an exciting quarter, where we made meaningful headway on multiple strategic initiatives, including certification progress, strengthening our balance sheet.
Matt Field: deepening our premier partnerships and building community engagement.
Matt Field: We ended the third quarter of 2024 with cash and short-term investments totaling seven hundred and ten million dollars.
Speaker Change: Our use of cash totaled $115 million, which was higher than our second quarter spending as we had additional operating expenses arising from increased staffing and one additional pay period in the quarter.
Speaker Change: This spending also included about $10 million on property and equipment.
Speaker Change: As you know, we are in the process of expanding our testing capabilities and our facility in Marina, California, which explains the sequential increase.
Speaker Change: We remain on track with our full year 2024 cash spending outlook of $440 to $470 million and anticipate that we will come in towards the bottom end of this range.
Speaker Change: We incurred a Q3 net loss of $144 million, reflecting a loss from operations of about $157 million, partly offset by interest and other income of $13 million.
Speaker Change: Our net loss was $21 million higher when compared with the prior quarter, reflecting a higher loss from operations and a lower favorable revaluation of our warrants and earn out shares.
Speaker Change: Higher operating expenses for the quarter reflected increased personnel expenses, which included a full quarter of employees from our X-Wing acquisition and lower R&D contract payments from fewer Agility Prime deliverables per our contracts.
Speaker Change: Revenue was largely consistent with prior quarters.
Speaker Change: Our net loss in the quarter compares with the net gain in the same period of 2023, reflecting the non-recurrence of the sizable favorable revaluation of our warrants and earn-out shares last year, and higher expenses this year reflecting the growth in our operations.
Speaker Change: Adjusted EBITDA, a non-gap metric that we reconcile to our net income in our shareholder letter, was a loss of $120 million in the third quarter.
Speaker Change: This was about $13 million higher than in the prior quarter, reflecting the higher operating expenses noted previously, and $27 million higher than the same period last year, reflecting the growth in our operations.
Speaker Change: Lastly, I'd like to provide some color around the steps we took in October to further strengthen our balance sheet.
Speaker Change: when combined with the $710 million in cash and short-term investments as of the end of the third quarter.
Speaker Change: The additional approximately $222 million we raised in October and the expected additional $500 million investment from Toyota would bring our total available balances to approximately $1.4 billion.
Speaker Change: The $500 million Toyota investment will come in two equal tranches as we've outlined in our filings with the SEC.
Speaker Change: The workstreams to support the first tranche are well underway and we hope to complete them by year-end or potentially early next year depending on the timing of regulatory approvals.
Speaker Change: With the second tranche of the Toyota investment, we are already starting discussions to scope the Manufacturing Strategic Alliance for our commercial production, and we'll have more to share on this in due course.
Speaker Change: We expect to close on the second tranche next year.
Speaker Change: We are tremendously grateful for Toyota's support to date and look forward to working together even more closely in the years ahead.
Speaker Change: Following the Toyota investment and the formal release of the FAA SFAR for operational procedures, we saw an opportunity to further strengthen our balance sheet and executed a follow-on offering of 46 million shares of our common stock.
Speaker Change: This capital raise closed on October 28 and was, we believe, an important opportunity to ensure that we continue to benefit from having the strongest balance sheet in the sector.
Speaker Change: As we have said from the outset, this is a capital-intensive industry.
Speaker Change: as demonstrated by certain recent developments within our sector.
Speaker Change: But our judicious approach to spending, effective planning and coordination across initiatives, and a fortress balance sheet puts us in the best possible position to succeed and deliver long-term value for our shareholders.
Speaker Change: Thanks again for joining us today. Operator, would you please instruct participants on how to ask questions?
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. A confirmation tone will indicate your line is in the question key.
Speaker Change: You may press star to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star key.
Speaker Change: Our first question comes from the line of Austin Muller with Canaccord Denuity.
Speaker Change: Please proceed with your question.
Austin Muller: Hi, good afternoon, JoeBen and Matt.
Speaker Change: Just my first question here. This might be a bit premature, but given the strong regulatory process momentum you have,
Speaker Change: Have you started thinking about how long it would take to deploy a first small fleet of aircraft, software, and FBO personnel to a site after getting the TC and the manufacturing certificate?
Speaker Change: Hey Austin, thanks so much for your question. Yes, we're absolutely doing that that planning work and Bonny would probably be the best person to answer that in detail but she's been laying out a very detailed plan including the plans for the commercialization work in Dubai.
Austin Muller: Okay, and just a follow-up. Given the change in administration, do you view there being budget risk to Agility Prime funding or do you think DOD is still very supportive of fostering new aviation technology?
Speaker Change: In point of fact I mean you can take our work in Ohio as sort of demonstrative of that. We were able to kind of successfully navigate both.
Speaker Change: Generally speaking, you know, the North Star has been ensuring that
Speaker Change: It's still quite early, so it's hard to know whether or not there's going to be any changes on that front, but
Speaker Change: As I've mentioned on previous calls, we have, by design, sort of steadily expanded the scope of potential branches that we've been working with and even government agencies. So I think that gives us a pretty rich set of potential customers to continue to work through regardless of administration.
Speaker Change: Thank you very much.
Speaker Change: Excellent, thanks for all the color.
Speaker Change: Thank you.
Speaker Change: Our next question comes from the line of Savi Sith with Raymond James. Please proceed with your question.
Savi Sith: Hey, good afternoon, everyone.
Savi Sith: Can I clarify if the kind of the current pre-production prototypes that you've been flying remotely
Savi Sith: And just, as you think about kind of launching operations in the UAE, would you be able to launch those operations with this kind of pre-production prototype, or would you need...
Speaker Change: kind of the certification-conforming approach of aircraft that you're building currently to be completed.
Speaker Change: There is a possibility where we would be able to take some of these airplanes and start operating in Dubai. Those airplanes are, by design, intended to be inhabited.
Speaker Change: As you saw, some of them have also room for passenger carrying operations, but that's an option we are not decided on at this time.
Speaker Change: Bonny Simi, Didier Papadopoulos, Bonny Simi, Didier Papadopoulos, Bonny Simi, Didier Papadopoulos,
Speaker Change: That's super helpful. And if I might, on the Dubai operations, are there any kind of particular milestones that we should be looking for to kind of get comfortable that it's progressing and and you know what all needs to be done before you can kind of start a lot kind of operations there?
Speaker Change: Thanks everybody, this is Eric. I think that one of the things that we were excited to see is that one of the milestones that we've accomplished this quarter is the acceptance of all of our qualification plans.
Speaker Change: for the operations in Dubai and we're working pretty closely with the RTA on laying out a series of stages that we'll be going over through over the next months and quarters ahead as we march toward that launch as early as the end of next year.
Speaker Change: Thank you for watching!
Speaker Change: Any kind of major milestones that we should be looking for or dating factors ascend?
Matt Field: Hi, Sabi. It's Matt. Just to add a little bit more texture, one of them will be, and we talked about this on last quarter's call, is groundbreaking on the first takeoff and landing location. We expect that later this year. The other thing is, we talked about, is bringing an aircraft into Dubai to do some testing, and so that'll be next year. And so those will be the two major milestones leading up to service.
Sabi: Appreciate that. Thank you. Thanks, honey.
Sabi: Thank you.
Speaker Change: Our next question comes from the line of Edison Yu with Deutsche Bank. Please proceed with your question.
Edison Yu: Hey, thank you for taking our question, and congrats on the progress during the quarter. So, my question is about, with this new, like, 700 million new capital raise, I mean, how much capital runway do we think we have now?
Speaker Change: Yes, we're really pleased to take the opportunity to build on the momentum on both the Toyota investment
David Zazula: David Zazula, David Zazula,
David Zazula: Please see the complete disclaimer at https://sites.google.com or at https://sites.google.com
Speaker Change: Okay, thank you. I have a second question about our recent, or we recently flew the latest version of aircraft in Japan and could you elaborate a little bit more about what improvements were made on this one compared to like the aircraft at World Air Force Base?
Speaker Change: Yeah, could you give him more color under?
Speaker Change: Yeah, so, um...
Speaker Change: The airplane that was...
Speaker Change: Flown in Japan is the third one to come off our manufacturing line. One of the things we talked about is as we're building these airplanes we're making manufacturing improvements as well as
Speaker Change: improvement to some of the performance of these airplanes that we're bringing into those aircraft. But for the most intended purposes, all of these airplanes are capable of the same thing really. Some of them have additional payload capabilities, others have a bit less because of the instrumentation it has in them, but for all intended purposes the airplanes are all capable of similar missions.
Speaker Change: Okay, thank you very much for that.
Speaker Change: Thank you.
Speaker Change: And as a reminder, if anyone has any questions, you may press star 1 on your telephone keypad to join the queue and ask a question.
Speaker Change: Our next question comes from the line of Mahima Kakani with J.P. Morgan. Please proceed with your question.
Mahima Kakani: Hi, good afternoon. In the prepared remarks, it was mentioned that service in Dubai could begin as soon as late 2025. Is there a chance that this could slip into 2026, and does it imply any kind of delay relative to prior expectations?
Speaker Change: RTA leadership and and also sorry the GCA leadership and
Speaker Change: They are very engaged.
Speaker Change: and providing incredible support.
Speaker Change: That said, there is a significant amount of work that we're also doing on our end. As a reminder, this is...
Speaker Change: certification work that is the same certification work we're doing for the FAA and so as we execute those tests that will give us the clearance to begin passenger service.
Speaker Change: in the UAE, but we still have significant work to do and we're putting points on the board each and every day.
Speaker Change: Can you also provide any guidance around the expected timeline to convert all of your sub-assemblies to conforming assets and what the requirements to do so would be, and is any of this contingent upon JoeB submitting additional test plans to the FAA?
Speaker Change: Thank you for watching!
Speaker Change: Yeah, great questions. So, the...
Speaker Change: So we talked about as we're making progress all along sort of the certification pyramid where the basis is the components then you move into
Speaker Change: major subsystems and substructures and then all the way up to the aircraft.
Speaker Change: As we progress through the design, the test plans, and the test setup, so those are sort of the three things we talked about we want to focus on.
Speaker Change: Once you complete those three and you execute the test, that's how you collect points.
Speaker Change: So, in terms of thinking about the conversion, everything we're doing right now all along is trying to execute on those three areas, building conforming parts, delivering test plans, and then setting up the test setups to mature.
Speaker Change: As you were able to see in our report, we're making great progress on test plans, better than ever before, both in terms of submittals and acceptance on the FAA, so that's progressing well. In terms of conformity, we also continue to make progress at all these levels. One of the most exciting things
Speaker Change: to talk about here is the fact that 35% of all of our composite structures are now intended
Speaker Change: to go into FAA-conforming bills.
Speaker Change: both for test assets as well as for real airplanes.
Speaker Change: And culminating out of that is the fact that we were able to complete a complete tail that's going to go for FAA conformity. So what you should expect from us is, again, a continuation of all that, from components to systems to airplanes, particularly here as we progress into next year.
Speaker Change: Thank you.
Speaker Change: Our next question comes from the line of David DeZula with Barclays. Please proceed with your question.
Speaker Change: Thank you. Bye. Bye.
Speaker Change: Hey, this is...
Speaker Change: Hey, this is David. Thanks for including me in.
Speaker Change: In the FR, it seemed like the industry broadly did not get everything they were looking for in terms of the reserve requirements from the FAA. Could you speak to the requirements as printed and the operational impacts on your aircraft operations?
Speaker Change: Yeah, I won't speak about the industry per se, but I'll say we're extremely excited about both the timing, as JoeBen mentioned earlier, as well as the content of the SFAR. The reserve came out exactly where we want it to be, so I'm ecstatic honestly about that one, so really happy with the outcome.
Speaker Change: So I guess that's specifically, you know, as the reserve requirements, you don't feel like it'll operationally limit you in any way with, you know, your operational role in plan?
Speaker Change: No, and particularly referring to the broadly called the 20-minute VFR reserve, that definitely is within our design. It's honestly something that we've planned on from the very beginning, so it's what we had expected.
Speaker Change: Thank you. Bye.
Speaker Change: Thanks. And then I guess...
Speaker Change: Didier, you had some mention about flexible pathways and optimizing your approach with the FAA.
Speaker Change: I was wondering if you could elaborate a little bit more on what you mean there and how you intend to partner going forward.
Speaker Change: Yeah, I think, you know, one of the things that, uh...
Speaker Change: The SFR left room for, in some ways, is specific operations and missions that are tailored to each of the eVTOLs. Like, not every eVTOL is the same as every other one of them.
Speaker Change: particularly talking about, you know, emission profile, takeoffs, crews, landings.
Speaker Change: where you're flying and how you're intending to fly and operate the airplane. I think the SFAR left enough room for discussions and alignment with the FAA following the SFAR. And I think that's how it needs to be because you really need to understand the intended use of the aircraft and make sure that the regulation is well-rounded around that.
Speaker Change: Great. Thanks very much. Appreciate it. Big pleasure.
Speaker Change: Thank you.
Speaker Change: Thank you.
Speaker Change: Our next question comes to the line of Amit Dayal with HCE Wainwright. Please proceed with your question.
Amit Dayal: Thank you, Graf and everyone. Congrats on all the progress. With respect to all the certification, etc. that's going on, is there a potential end date within which you think all these certification steps can be completed?
Speaker Change: Yeah, I'll take that question. So, we haven't communicated a specific date on the TC specifically because it involves a lot of things, both Joby as well as the CERT agencies.
Speaker Change: What we remain committed to is working with the FAA along their certification path.
Speaker Change: on both on the powered lift as well as the TC itself as well as as the as far so the good news now is the third path is pretty clear and we're executing on that along the same lines of that
Speaker Change: We're working on a parallel path with operations in Dubai, which effectively mimic the FAA and allows us that optionality to deliver on multiple markets as quickly as possible with each of those.
Speaker Change: Thank you. And then with respect to the, you know, potential operations coming up in Dubai, what kind of infrastructure do you need to build out over there? Who is responsible, you know, for building that out? Any color on that would be helpful. Thank you.
Speaker Change: Yeah, thanks for the question.
Speaker Change: We are working with, so just as a repressure on our agreement in Dubai, we have a six-year exclusive to operate the air taxi service there. This is an agreement with the RTA, which governs air taxi flights within the Emirates.
Speaker Change: As part of that, we have a partnership with Skyports, where they will be building out up to four Vertaports in Dubai. And as Matt highlighted earlier, look for news of the groundbreaking on that first Vertaport.
Speaker Change: the ability to really begin to operationalize that and validate.
Speaker Change: All of the features that we've been building out as we take and bring that device service live. And again,
Speaker Change: This is a follow-on to the work we've been doing with the DOD as we
Speaker Change: build muscle on operating muscle and operating experience and this will prepare us as we begin as we start to plan for launches both here in the US and in other important markets for us around the world.
Speaker Change: Understood. And then, just in relation to that...
Speaker Change: The launch in Dubai, you know, from the Elevate side, will it sync up with the Uber app on launch or will that potentially come, you know, down the line in the future?
Speaker Change: This is Eric. Thanks for the question on that. We actually think that the way we envision this service working is multimodal. It's really important to get our future customers from where they are to where they want to go. And to and from the Skyports is a really important piece of that.
Speaker Change: So, we're committed to having multi-modal solutions as part of our thinking when we roll out our service, and more to come on that in the future, but we think it's a really key part of the experience.
Speaker Change: Just last one, these prototypes that are flying around right now, what kind of distances are they covering today and are they sort of in line with how you think they should be performing from a range perspective?
Speaker Change: around the 20 to 30 miles. That's about the 90 plus percent of the missions we see. Obviously, we've been able to demonstrate much more with that and we fly on a regular basis here to continue to optimize those missions. That really is the focus of what we're doing right now.
Speaker Change: Okay guys, thank you so much. I appreciate it. Thanks, Howard. Thank you.
Speaker Change: Thank you.
Speaker Change: That is our last question.
Speaker Change: We have the line of Andre Sheppard with
Speaker Change: Hi everyone, this is Anand on behalf of Andres. Congrats on the quarter and thanks for taking our questions. My first question is, you know, just jumping back on some commentary on the Middle East, I just wanted to confirm if you're on track to enter into service in the Middle East within the next...
Speaker Change: Didier Papadopoulos, JoeBenBevirt, Matthew Field, Bonny Simi, Didier Papadopoulos
Speaker Change: met with the leadership.
Speaker Change: there recently and they've also had significant presence here at our sites in California. The engagement is is very strong so on that path I think we're making good progress. I think on the build out of the
Speaker Change: The
Speaker Change: relationship with the RTA and with the Emirate of Dubai.
Speaker Change: broadly is very, very strong and we're very grateful for their partnership. I would say that region as a whole is very forward-leaning on this technology, as are a number of
Speaker Change: are other key markets around the world. We're seeing more enthusiasm and momentum than ever before, as Eric highlighted in his remarks, and then with that I'll hand it over to Matt.
Matt Field: Yeah, hi Anon. Unit Economics, we'll talk about closer to entry into service. I mean, it'll be an interesting market as a first one because there is so much experience-based activities and so many visitors through that market. So it's a great, stronger market in our mind, and so we'll talk more about that closer to service.
Matt Field: http://TheBusinessProfessor.com
Speaker Change: Gotcha, and to follow up and to confirm, I was wondering if the aircraft that you're currently building were the same ones that you're planning to deliver to the UAE next year, and I guess to follow up from Savi's question as well, do you foresee a scenario where you might be able to enter into service without full FAA conforming aircraft?
Speaker Change: Yeah, thanks for the question. So, I'll take the first part first. So, like I said in the
Matt Field: earlier commentary. The airplanes we're building right now are an option to potentially go into Dubai. We have not made a decision on which one of these airplanes coming out of the manufacturing line will go there.
Matt Field: As discussed, we've got the fourth one coming up here, and there's more to follow after that. We'll be opportunistic about which airplane we decide to take there.
Matt Field: In terms of FAA conformity, so it's important to recognize that the qualification plan that we have, the GCA accepted, aligns very much with
Matt Field: the conformity plan with the FAA.
Matt Field: It doesn't necessarily or technically require an FAA conformity, just, you know, it's a different CERT agency, so I want to be crystal clear on that.
Matt Field: But the type of material and supporting documentation and manufacturing build is very similar to what you would expect from that standpoint.
Speaker Change: Thanks, that was very helpful. And finally, regarding the recent Toyota capital raise, we're wondering if you're able to share some of the conditions or from the second trench and roughly when in 2025 might you expect to receive it?
Speaker Change: So in terms of the conditions, it's really a manufacturing strategic alliance.
Speaker Change: We're still in discussion on that. The specific timing of that we're not going to provide guidance on, but really it pulls us much closer together starting, basically growing from the basis upon which we have today where we're working shoulder to shoulder with Toyota on a daily basis.
Speaker Change: Gotcha. Thank you very much. I appreciate the caller. Thanks for taking our questions. I'll pass it on.
Speaker Change: Thank you.
Speaker Change: Thank you. That is all the time we have today and this concludes today's teleconference. We thank you for your participation. You may disconnect your lines at this time.
Speaker Change: [music]
Matt Field: [music]