JOBY

1. Executive Summary

• Joby advanced from development to pre-commercial execution with a clear 2026 commercialization arc anchored in Dubai, supplemented by a Saudi regulatory “sandbox” and Kazakhstan aircraft-and-services LOI with pre-delivery payments.
• Liquidity inflected positively post–Q3 2025 via a fully upsized equity raise; cash runway now supports certification, initial manufacturing scale-up, and first-ops build-out.
• Certification and manufacturing milestones are converging: first FAA‑conforming aircraft is powered on (final stage of Type Certification), with FAA “for-credit” flight testing expected in 2026.

Key Takeaways

• Stronger balance sheet: ~$978M Q3 cash plus ~$576M net October equity proceeds; Toyota $250M tranche closed in May 2025.
• Commercialization path: six‑year exclusive Dubai agreement, vertiports mapped, first commercial ops targeted in 2026; Saudi sandbox and pre-commercial flights in 1H26.
• Early revenue ramp: Blade integration contributed to $23M Q3 revenue (incl. $14M Blade), adding near-term, de‑risking cash inflows and demand priming (Uber app integration planned).
• Defense and platform adjacencies: first flight of turbine‑electric hybrid demonstrator; autonomy stack (SuperPilot, NVIDIA IGX Thor) progressing toward dual‑use optionality in 2026 demos.

2. Financial Performance

Capital Raises & Proceeds

• October 2025 underwritten equity offering:
• Priced at $16.85/share, gross ~$591M; net proceeds ~$576M (greenshoe fully exercised).
• Investor read‑through: solid demand and execution amid capital-intensive ramp signals confidence in 2026 launch.
• Strategic investment:
• Toyota $250M tranche closed (May 27, 2025) as part of a $500M commitment, reinforcing manufacturing collaboration.
• Pro forma liquidity:
• $978M cash and short-term investments at Q3 2025 end; plus $576M net in October materially extends runway into certification/early ops.

Early Revenue Initiatives

• Blade passenger services (acquired Aug 2025) integrated:
• Q3 2025 revenue $23M (incl. $14M Blade). Early contribution validates route economics, customer access, and operations muscle.
• Pilot commuter program (Manhattan–Westchester) launching Dec 1; Ryder Cup air mobility execution; Uber-app integration planned, broadening funnel and lowering CAC.
• International aircraft-and-services sales funnel:
• Kazakhstan LOI up to $250M (includes pre‑delivery payments) with regulatory MoU and materials sourcing collaboration.
• Saudi distribution exploration with Abdul Latif Jameel (up to 200 aircraft, ~$1B value) plus GACA alignment with FAA to streamline certification acceptance.

Expense Management & Cash Flow

• Q3 2025:
• GAAP net loss $401M (incl. $262M noncash revaluation items), Adjusted EBITDA loss $133M**.
• Use-of-cash 2025 guidance unchanged at $500–$540M (per Q1/Q2 disclosures), now better covered post raise.
• Cost discipline levers:
• Vertical integration (in‑house propeller blades in Dayton), 15× ramp in FAA‑conforming parts vs. 2024, and Toyota lean methodologies expected to improve unit economics through ramp.

3. Guidance and Future Outlook

Production Ramp–Up

• Certification pathway:
• First TIA-ready, FAA‑conforming aircraft powered on; Joby pilot flights in 2025; FAA for‑credit flight testing expected in 2026.
• Near-term manufacturing cadence:
• Capacity to ~24 aircraft/year from expanded Marina, CA footprint; long-term Dayton site envisioned up to 500 aircraft/year.
• Propeller blade production initiated; conforming blades targeted for installation on test aircraft next year.

Expansion Plans

• UAE:
• Dubai: 6‑year exclusive; vertiports confirmed (Dubai Mall, Atlantis The Royal, American University of Dubai; DXB vertiport completion targeted Q1 2026); commercial passenger service targeted in 2026.
• Ras Al Khaimah: inter‑emirate network with Skyports; launch by 2027.
• Saudi Arabia:
• GACA MoU to align with FAA standards and enable rapid deployment; RSG + THC MoU to run pre‑commercial evaluation flights 1H26 and a sandbox for charging/airspace/ground comms.
• Additional markets:
• Kazakhstan (AAAG): LOI up to $250M and regulatory/industrial support; aims for regional AAM hub.
• Japan: JV with ANA to deploy 100+ aircraft (phased rollout, Tokyo start); extensive public demos.
• UK: partnership with Virgin Atlantic to launch city–airport routes.

Operational Targets

• Efficiency and margin path:
• 15× increase in conforming parts production vs. 2024; in‑house blade manufacturing; supplier clustering around Dayton; Toyota process rigor.
• U.S. eIPP program participation could pull forward U.S. revenues pre-Full TC; downselect mid‑2026 expected per Joby.

4. Strategic Positioning and Initiatives

Cost Management

• Vertical integration to limit COGS volatility (prop blades, conforming parts).
• Toyota manufacturing alignment to compress cycle times, reduce scrap/rework.
• Site selection (Dayton) to optimize local sourcing and logistics.

Product Development

• Turbine‑electric hybrid demonstrator flown; partnered with L3Harris for 2026 defense demos (extended range/payload, hold times).
• SuperPilot autonomy matured via REFORPAC (7,342 autonomous miles); compute stack enhanced via NVIDIA IGX Thor for certifiable autonomy.

Market Expansion

• Multi‑pronged go‑to‑market: owned/operated air taxi (Dubai/UAE), aircraft sales/partnered ops (Saudi/Kazakhstan/Japan), and defense.

5. Competitive Positioning and Market Trends

Market Positioning

• Certification lead indicators: first to TIA final stage; FAA pilots slated 2026.
• Unique market access: Dubai exclusivity and aligned regulators (UAE, GACA in Saudi) provide early operating theaters.

Competitive Strengths

• Deep partner ecosystem: RTA, Skyports, Jetex, ANA, Virgin, Uber, and Toyota.
• Demonstrated execution: first piloted A‑to‑B eVTOL flight in U.S.; first UAE piloted point‑to‑point e‑air taxi flight; extensive public demos.
• Balance sheet reinforcement to fund ramp, reducing near-term dilution risk.

Emerging Industry Trends

• Regulator-enabled early ops: eIPP in U.S.; Saudi sandbox models and FAA alignment.
• Infrastructure scaling: vertiports co‑developed with real estate majors in Dubai; private terminal integration via Jetex.
• Dual-use adoption: autonomy and hybrid platforms aligned with defense mission needs.

6. Technology and Innovation Strategy

Technological Advancements

• TIA conforming aircraft power‑on; thousands of subsystem tests underway.
• SuperPilot autonomous ops validated in complex airspace under IFR/VFR; integration path to certified autonomy via IGX Thor.

New Product Developments

• Hybrid turbine‑electric VTOL for longer missions (civil/defense); government mission demos in 2026.
• GEACS charging deployment with Jetex to standardize ground energy infrastructure.

Alignment with Market Needs

• UAE/Saudi tourism and executive mobility demand: quiet, fast, zero‑operating‑emission transport.
• Defense logistics/ISR needs for persistence and autonomy.
• Consumer access through Uber app integration and Blade lounges to lower friction at launch.

7. Risk and Reward Analysis

Growth Catalysts

• 2026 milestones: Dubai commercial service launch; FAA for‑credit flight testing; Saudi pre‑commercial flights; eIPP downselect.
• Commercial funnel: Kazakhstan PDPs, Saudi aircraft exploration (up to 200), ANA JV in Japan.
• Manufacturing scale proofs: sustained conforming parts output; blade line maturity; first TIA aircraft flight.

Downside Risks

• Certification timing and scope creep; FAA workload/priorities could shift.
• Manufacturing ramp execution (yield, supply chain, workforce scale).
• Capital intensity and potential future dilution if timelines extend.
• International execution risk (regulatory changes, infrastructure delivery).
• Order conversion risk: LOIs/MOUs are non-binding and timing/volume may vary.

Valuation Metrics

• Traditional P/E not meaningful at current loss profile; EBITDA multiples likewise limited until operations scale.
• Framework:
• Sum‑of‑the‑parts: near‑term Blade services (observable revenue), medium‑term Dubai/UAE ops, aircraft sales/services (Kazakhstan/Saudi/Japan), defense (hybrid/autonomy).
• Milestone‑based re‑rating: certification (FAA for‑credit start), Dubai service launch, initial aircraft deliveries/pre‑delivery cash receipts.
• Data constraints: absent share count/EV and forward revenue guidance in the latest docs, investors should triangulate EV/Sales on:
• Near‑term: Blade revenue run‑rate (Q3 arrival), plus pre‑delivery payments.
• 2026: Dubai ramp scenarios (aircraft in service, utilization, price per trip) once disclosed.

8. Investment Thesis

Investment Rationale

• Liquidity secured to bridge certification and first commercial ops; reduces near-term financing overhang.
• First‑mover advantage in a flagship market (Dubai) with regulatory sponsorship and infrastructure commitment.
• Diversified revenue paths: owned ops, aircraft sales/services, defense technology—mitigates single-path dependence.
• Manufacturing readiness advancing with Toyota support and in‑house critical components.

Price Target Justification

• Without explicit forward financials/market cap in recent documents, a numerical target is not defensible. Near-term valuation upside catalysts:
• Evidence of Dubai revenue plan (fares, utilization, aircraft count) and vertiport commissioning on time in Q1 2026.
• FAA for‑credit TIA flight testing commencement in 2026.
• Conversion of LOIs (Kazakhstan/Saudi) into firm orders with PDPs timing and margin visibility.

Influencing Market Dynamics

• Macro risk appetite for pre‑profit aerospace; rates sensitive.
• Regulatory momentum (U.S. eIPP, Saudi FAA alignment) versus potential certification bottlenecks.
• Competitive newsflow from eVTOL peers impacting sector multiples.

9. Macroeconomic and Industry Trends

Regulatory Changes

• U.S. eIPP to enable pre‑cert ops in select markets; downselect mid‑year 2026 could accelerate U.S. revenues.
• Saudi GACA aligning with FAA to streamline acceptance; sandbox in 1H26 to de‑risk ops.
• UAE agencies (RTA/GCAA) actively enabling a 2026 commercial launch with exclusive rights and vertiport build‑out.

Supply Chain Dynamics

• Dayton localization (many blade components within 30 minutes) reduces logistics risk.
• Kazakhstan collaboration to source titanium/rare earths supports material resilience.
• In‑house blade production and 15× conforming parts output signal maturing supply chain control.

Technology Adoption Trends

• Urban air mobility integration with established platforms (Uber) shortens consumer adoption curve.
• Airport‑centric vertiports and premium corridors (e.g., Dubai DXB–city) likely early demand nodes.
• Defense interest in autonomy and hybrid endurance validates dual-use tech, potentially subsidizing R&D and accelerating maturity.