Rivian's Q3 Revenue Miss: Full-Year Loss Widens, but Q4 Gross Profit Hoped For

Rivian Automotive (RIVN) recently reported a revenue miss for Q3 2024, with a loss per share of 99 cents and revenue of $874 million, falling short of analyst expectations. The company's net loss narrowed year-over-year to $1.1 billion, but its full-year loss projection widened. Despite these challenges, Rivian reconfirmed plans to achieve a "modest positive gross profit" during the fourth quarter of 2024.

Rivian's Q3 revenue miss was primarily driven by a 35% drop in deliveries, largely due to supplier disruptions impacting production. The company lowered its annual production forecast from 57,000 to 47,000-49,000 units, citing a shortage of a shared component for its R1 vehicles and commercial van. Despite the setback, Rivian reconfirmed plans to achieve a "modest positive gross profit" during the fourth quarter.

Rivian's full-year loss projection has widened, with the company now expecting a loss of $1.1 billion for 2024, up from its previous guidance of $800 million. This increase is primarily driven by supplier disruptions that impacted production, leading to a 34.6% drop in revenue compared to the same period last year. Despite the setback, Rivian reconfirmed its plans to achieve a "modest positive gross profit" during the fourth quarter of 2024.

To achieve this goal, Rivian is implementing several initiatives. Firstly, the company is aggressively focused on driving cost efficiency throughout the business, aiming to achieve positive margins. Secondly, Rivian is continuing its company-wide cost transformation program, which has resulted in meaningful reductions in total unit costs for both the R1 and EDV models through engineering design changes, commercial cost downs, and manufacturing efficiencies. Lastly, Rivian is reducing its salaried workforce by approximately 10%, further contributing to cost savings. These initiatives are expected to be effective in helping Rivian achieve its goal of a 'modest gross profit' in Q4.



Rivian's gross profit margins have been negative over the past year, with a loss of $392 million in Q3 2024 compared to a loss of $477 million in Q3 2023. This decline can be attributed to lower delivery totals and higher operating losses. The company's gross profit per delivered vehicle improved by approximately $81,000 in 2023 compared to the fourth quarter of 2022, driven by cost efficiency efforts. Despite the recent revenue miss, Rivian still expects to achieve a "modest positive gross profit" during the fourth quarter of 2024.



Rivian's recent announcement of a 10% reduction in its salaried workforce signals a commitment to cost efficiency, which is crucial for achieving positive margins and supporting long-term growth. This move aligns with the company's ongoing cost transformation program, aimed at reducing total unit costs for both the R1 and EDV models through engineering design changes, commercial cost downs, and manufacturing efficiencies. While the workforce reduction may temporarily impact the company's go-to-market function, it is a strategic step towards improving operational efficiency and enhancing Rivian's long-term growth prospects.

Analysts and investors remain cautiously optimistic about Rivian's future growth potential. Despite the Q3 revenue miss and widening full-year loss projection, Rivian's plans to achieve a "modest positive gross profit" in Q4 indicate a commitment to turning the company around. As Rivian continues to implement cost-saving measures and drive demand through new product introductions, investors should monitor the company's progress closely to capitalize on potential opportunities.

In conclusion, Rivian's Q3 revenue miss and widening full-year loss projection present challenges for the company. However, the company's commitment to achieving a "modest positive gross profit" in Q4, along with its cost-saving initiatives and long-term growth prospects, offer reasons for cautious optimism. Investors should continue to monitor Rivian's progress and evaluate its potential as a long-term investment opportunity.