JOBY

1. Executive Summary

• Joby materially strengthened liquidity and execution capacity with a fully subscribed equity raise in October 2025 and continued strategic progress toward 2026 commercial launch milestones.
• Recent updates emphasize a shift from pure development to market activation: integrating Blade’s network, embedding services in Uber, executing public demos (Japan), and securing infrastructure and regulatory pathways (UAE, U.S. eIPP).

Key Takeaways

• Raised approximately $591 million gross at $16.85/share (greenshoe fully exercised), extending runway for certification, manufacturing, and commercialization.
• Certification path refined: first FAA‑conforming aircraft expected 2025; initial TIA flight tests targeted early 2026 (latest update).
• Commercial ramp anchored by exclusive Dubai (UAE) launch (2026), a Japan JV (>100 aircraft) rollout, UK partnership (Virgin), and UAE regional expansion (RAS Al Khaimah by 2027).
• Strategic integration of demand channels and infrastructure via Blade acquisition and planned Uber app integration accelerates go‑to‑market and lowers customer acquisition friction.

2. Financial Performance

Capital Raises & Proceeds

• Oct 9, 2025: Closed an underwritten offering; total shares issued and sold 35,075,000, including 4,575,000 via full greenshoe; ~$591.0 million gross at $16.85. Bookrunner: Morgan Stanley. Latest and superseding terms (positive investor demand signal: full greenshoe).
• May 27, 2025: Closed $250 million first tranche from Toyota (part of a $500 million strategic investment; remaining tranche anticipated per prior disclosures).
• Oct 2024: Prior offering $202 million gross at $5.05/share; contrasts with Oct 2025 pricing, evidencing a higher market-implied valuation and stronger demand.
• Additional non-dilutive support: $9.8 million California GO-Biz grant; $10 million equipment cost reductions via state program.

Early Revenue Initiatives

• Blade passenger business (acquired Aug 29, 2025): Provides an operating revenue base (NY metro, Southern Europe) and branded terminals/lounges to seed eVTOL adoption; figures not disclosed in provided materials.
• Uber integration (announced Sep 10, 2025): Blade services into the Uber app as soon as 2026, laying groundwork for Joby eVTOL uptake; leverages existing high-frequency urban routes.
• Defense pipeline: Continued DoD engagement and advanced autonomy demonstrations (Superpilot) expand dual-use opportunities and near-term funded workstreams; supports credibility and incremental revenue over time.
• Note: Company reported no flight services revenue in Q1’25; Blade contribution should begin post-close, but no updated revenue data provided.

Expense Management & Cash Flow

• Guidance (most recent): 2025 cash use $500–$540 million (ex‑Blade impacts).
• Liquidity: Ended Q2’25 with $991 million cash and short-term investments (before Oct equity raise). Pro forma liquidity further bolstered by ~$591 million gross from October offering.
• Profitability trend: Q2’25 net loss $324.7 million (vs. $82.4 million Q1’25); R&D $136.4 million and total Opex $167.9 million in Q2’25, reflecting certification, manufacturing, and product milestones acceleration. Emphasis remains on investment ahead of commercialization.

3. Guidance and Future Outlook

Production Ramp–Up

• FAA-conforming aircraft: Expected in 2025 (latest: Sep 12, 2025).
• TIA flight tests: Preparing for initial early 2026 start (latest: Sep 23, 2025), superseding earlier 2025 timing.
• Capacity: Expanded Marina, CA facility; near-term capacity up to ~24 aircraft/year; component manufacturing/testing in Dayton, OH; long-term plan to scale to 500 aircraft/year in Dayton.

Expansion Plans

• UAE: Exclusive Dubai operating rights for six years; vertiport construction underway at DXB, completion targeted Q1 2026; commercial service targeted 2026; RAKTA MoU extends network to Ras Al Khaimah by 2027.
• Japan: Expanded partnership with ANA; JV planned; deployment of 100+ aircraft with phased rollout from Tokyo; extensive public demo flights at Expo 2025 Osaka.
• UK: Partnership with Virgin Atlantic for zero-emission air links to major hubs (Heathrow, Manchester).
• Saudi Arabia: MoU with Abdul Latif Jameel for potential distribution of up to 200 aircraft (~$1B value), plus local MRO and service buildout.

Operational Targets

• Certification: ~70% complete on Joby’s work for Stage 4 (Q2’25 update); TIA readiness activities continue into early 2026.
• Manufacturing: Toyota methodologies for quality/scale; Ohio facility commissioning for components; workforce expansion to support ramp.
• Service readiness: Integration of Blade ops and Uber demand funnel; GEACS charging infrastructure (Jetex partnership) to support Middle East operations.

4. Strategic Positioning and Initiatives

Cost Management

• Toyota production system adoption; state incentives to defray equipment costs; increased vertical integration to control unit economics through scale-up.
• Focus on targeted capital deployment aligned with certification and market-entry milestones; however, investment intensity remains elevated near-term.

Product Development

• Superpilot autonomy (ex‑Xwing acquisition): Demonstrated 7,342 autonomous miles over 43.7 hours across complex airspace profiles; informs future dual-use capabilities.
• Hybrid VTOL variant with L3Harris for defense (crewable/autonomous), flight testing expected Fall 2025; broadens addressable market.
• First conforming aircraft assembly for TIA; continued component/system for-credit testing.

Market Expansion

• Blade acquisition: Instant access to premium urban terminals, frequent flyers, and operational muscle; accelerates adoption and reduces infrastructure/customer acquisition costs.
• Uber platform: Mainstream distribution and multimodal integration.
• Regulatory partnerships: U.S. eIPP for early market operations; ongoing alignment with JCAB, GCAA (UAE), and other global regulators.

5. Competitive Positioning and Market Trends

Market Positioning

• Leading indicators: First piloted eVTOL flight between U.S. public airports; advanced Stage‑4 certification progress; exclusive market rights (Dubai); JV scale in Japan; integrated ops via Blade/Uber.

Competitive Strengths

• Vertical integration across design, certification, manufacturing, and operations.
• Tier‑one partners (Toyota, ANA, Virgin, Uber, Skyports, Jetex).
• Defense credibility (DoD operations; autonomy demonstrations) and diversified commercialization pathways (owned ops, partnered ops, aircraft sales in select markets).

Emerging Industry Trends

• FAA SFAR establishes pilot training/ops framework—key U.S. regulatory unlock.
• Global regulator engagement (UK, Japan, Australia, Korea, UAE) accelerating cross-border validation.
• Infrastructure buildout (vertiports, charging) advancing in parallel with vehicle certification.

6. Technology and Innovation Strategy

Technological Advancements

• Piloted full-transition flights completed; integrated in FAA-controlled airspace.
• Autonomy (Superpilot): Multi-mission profiles in complex airspace; lays groundwork for future ops and cost reduction.
• Hybrid powertrain development to extend mission sets (defense/ISR/logistics).

New Product Developments

• Conforming aircraft for TIA; expanding test fleet; GEACS charging deployment with Jetex beginning in the Middle East.
• Defense-tailored hybrid VTOL with L3Harris entering flight testing in late 2025.

Alignment with Market Needs

• Low noise, zero operating emissions, and 200 mph top speed aligned with urban mobility constraints and customer expectations.
• Uber app integration and Blade lounges streamline discovery, booking, and premium service experience for early adopters.

7. Risk and Reward Analysis

Growth Catalysts

• Liquidity uplift from Oct 2025 equity raise; continued Toyota support.
• Certification milestones (conforming aircraft in 2025; TIA early 2026).
• Dubai 2026 launch, Japan JV rollout, UK partnership, and Uber integration broaden launch vectors and utilization.
• Defense contracts and demonstrations (autonomy/hybrid) offer non-civil revenue streams and tech validation.

Downside Risks

• Certification timing risk: Latest guidance shifts TIA flight tests to early 2026; further slippage would push revenue inflection.
• Cash burn remains high through pre-revenue ramp; dependence on capital markets if delays extend.
• Infrastructure/ops readiness (vertiports, AOC processes, pilot training) and supply-chain scaling (including battery systems) must synchronize with aircraft deliveries.
• Integration risk for Blade operations and brand alignment; regulatory and community acceptance in dense urban corridors.

Valuation Metrics

• P/E and EV/EBITDA not meaningful near-term due to negative earnings and EBITDA during certification ramp.
• Scenario frameworks advisable:
• EV/Sales on 2026–2028 commercialization ramp (sensitivity to aircraft in service, load factor, pricing, and fleet uptime).
• Sum-of-the-parts: (i) Owned/operated air-taxi NPV in anchor markets (UAE, Japan, U.S./UK), (ii) aircraft sales/licensing in partner geographies (e.g., Saudi), (iii) defense/autonomy optionality, and (iv) Blade/adjacent operations value.
• Market-implied confidence increased versus 2024: $16.85/share offering with full greenshoe vs $5.05/share in Oct 2024; however, execution against 2026 milestones remains the pivotal driver of multiple expansion.

8. Investment Thesis

Investment Rationale

• Joby combines sector‑leading certification progress, substantial capital availability, and a de‑risked go‑to‑market through Blade infrastructure and Uber distribution, anchored by exclusive and scaled launch markets (Dubai, Japan).

Price Target Justification

• Recommend a scenario-based approach anchored on 2026–2028 utilization and margin ramps; adjust EV/Sales multiples for regulatory/on‑time delivery probabilities and capital intensity.
• Given the recent successful raise at $16.85 with full greenshoe and extended runway, upward bias to prior scenario assumptions is warranted; however, publish targets only after updated revenue/CapEx ramps and share count are available from the next financial update.

Influencing Market Dynamics

• Regulatory momentum (FAA SFAR; eIPP), partner-led market access (UAE/Japan/UK), and platform distribution (Uber) support adoption.
• Macro factors (rates, risk appetite for pre-revenue tech, energy storage supply chains) and competitive certification outcomes will influence relative valuation.

9. Macroeconomic and Industry Trends

Regulatory Changes

• FAA SFAR published (Oct 2024) establishes near-term operating rules for powered-lift aircraft—key enabler for U.S. ops.
• International alignment: Ongoing JCAB collaboration (Japan) with Expo 2025 data informing frameworks; UAE AOC pathway active; U.S. eIPP to enable limited early operations.

Supply Chain Dynamics

• Manufacturing scale-up in Marina, CA and Dayton, OH; Toyota methodologies applied for quality/throughput.
• State programs lowered equipment costs; workforce expansion underway; continued focus on vertically integrated approaches to mitigate supplier risk.

Technology Adoption Trends

• Ride-hailing integration (Uber) and premium air networks (Blade) normalize discovery and booking.
• Vertiport development (Dubai/Skyports; Jetex GEACS charging) advancing alongside aircraft readiness—critical to utilization and ROI.
• Defense autonomy/hybrid interest accelerates dual-use investment and technology maturation, reinforcing civil readiness.