Rivian’s second quarter was marked by a negative market reaction, reflecting investor concerns about profitability despite modest revenue growth. Management attributed the performance to lower production volumes caused by supply chain issues and shifts in trade policy, which led to weaker fixed cost absorption and higher unit costs. CFO Claire McDonough highlighted that, “the largest driver…was driven by the lower production volume and therefore, the lack of fixed cost leverage,” while CEO RJ Scaringe emphasized ongoing cost reductions and strong uptake for recently launched products such as the R1 Quad-Motor. The company’s software and services segment performed well, supported by its joint venture with Volkswagen Group and increasing contributions from remarketing and charging operations.
Is now the time to buy RIVN? Find out in our full research report (it’s free).
Rivian (RIVN) Q2 CY2025 Highlights:
- Revenue: $1.30 billion vs analyst estimates of $1.28 billion (12.5% year-on-year growth, 2% beat)
- Adjusted EPS: -$0.80 vs analyst expectations of -$0.64 (25.4% miss)
- Adjusted EBITDA: -$667 million vs analyst estimates of -$513.5 million (-51.2% margin, 29.9% miss)
- EBITDA guidance for the full year is -$2.13 billion at the midpoint, below analyst estimates of -$1.84 billion
- Operating Margin: -85.5%, up from -114% in the same quarter last year
- Sales Volumes fell 22.7% year on year (9.1% in the same quarter last year)
- Market Capitalization: $14.52 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Rivian’s Q2 Earnings Call
- Dan Levy (Barclays) asked about cost reductions from R1 to R2 and the company’s confidence in achieving the targeted savings. CEO RJ Scaringe and COO Javier Varela cited contractually secured supplier agreements and design simplifications as key drivers, confirming a 50% reduction in bill of materials costs for R2.
- Adam Jonas (Morgan Stanley) inquired about the status of the $6.6 billion Department of Energy loan for the Georgia plant. CFO Claire McDonough explained that no funds have been drawn yet since construction has not started, but the company intends to utilize the loan as site development progresses.
- Mark Delaney (Goldman Sachs) questioned the sharp increase in cost of goods sold per vehicle and potential pricing impacts from the loss of EV tax credits. McDonough pointed to lower production volumes and warranty costs while Scaringe maintained that R1’s market share leadership supports stable pricing, even with incentive changes.
- Ronald Jewsikow (Guggenheim Securities) asked how policy changes might alter R2 or R3 pricing, cost, or capacity decisions, and about preorder volumes. Scaringe declined to share specific preorder numbers but reiterated confidence in R2’s product-market fit and scalability for both U.S. and European markets.
- Emmanuel Rosner (Wolfe Research) pressed for clarity on software and services revenue growth and its role in EBITDA targets. McDonough emphasized the importance of remarketing, service infrastructure, and the Volkswagen joint venture, noting these areas are expected to be significant contributors through 2027.
Catalysts in Upcoming Quarters
In upcoming quarters, the StockStory team will closely monitor (1) the progress and timeline of R2’s manufacturing validation and supplier ramp, (2) Rivian’s ability to manage higher input costs from tariffs and policy changes while preserving gross margin, and (3) the scaling of its software and services business, especially the Volkswagen joint venture and expansion of the charging and remarketing platforms. The effectiveness of cost optimization measures and developments in autonomy features will also be key indicators of execution.
Rivian currently trades at $11.93, down from $12.18 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).
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