Rivian Keeps Promise About Making a Profit, but Stock Falls as Outlook Disappoints

Rivian Automotive Inc. delivered on its promise of achieving its first quarterly gross profit while surpassing Wall Street’s revenue expectations. However, despite an initial surge in its stock price following the earnings release, shares reversed course, heading for a third consecutive day of losses.

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The electric vehicle (EV) maker’s stock initially jumped as much as 8.4% in after-hours trading on Thursday, but quickly retreated as investors analyzed aspects of Rivian’s fourth-quarter report, particularly its weaker-than-expected guidance for the year ahead. By Friday morning, shares had dropped 4%, contributing to a three-day decline totaling 9.5%.

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CFRA analyst Nelson Garrett described the earnings report as mixed. While revenue grew 32% to $1.7 billion—exceeding consensus estimates by approximately $300 million—the outlook for 2025 was underwhelming. Rivian projected an adjusted loss before interest and taxes between $1.7 billion and $1.9 billion, worse than analysts’ expectations of a $1.69 billion loss. Additionally, the company forecasted sales of 46,000 to 51,000 vehicles, implying a potential decline from the 51,579 EVs delivered in 2024.

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The guidance suggests that Rivian will continue to burn cash throughout 2025, Garrett noted. Furthermore, concerns remain over the fate of the $6.6 billion loan Rivian secured from the U.S. Department of Energy under the Biden administration, as there is some uncertainty about whether it could be rescinded.

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On the positive side, Rivian achieved a fourth-quarter gross profit of $170 million, with $110 million from its automotive division and $60 million from its software and services segment. Gross profit represents total revenue minus the cost of revenue, and Rivian benefited from an 18.6% decline in costs while revenue climbed 31.9%.

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This gross profit figure significantly exceeded Wall Street’s expectations of approximately $49 million, RBC Capital Markets analyst Tom Narayan noted. He added that Rivian appears to have sufficient cash to sustain operations until the launch of its next-generation EVs in 2026. However, the company’s long-term viability hinges on improving its core gross profit performance, excluding benefits from regulatory credits.

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Despite the solid quarter, analysts at Evercore ISI acknowledged the difficult market environment and said Rivian produces “remarkable” vehicles. However, they cautioned that investors may continue to struggle with the company’s inability to sell enough EVs at scale to achieve EBITDA or EBIT profitability in the near future.

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Rivian also managed to narrow its fourth-quarter net loss to $743 million, or 70 cents per share, compared to a loss of $1.52 billion, or $1.58 per share, in the same period of 2023. Net losses account for additional operating expenses beyond the cost of revenue, including research and development and administrative costs.

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After adjusting for one-time expenses, Rivian reported a loss of 46 cents per share—narrower than analysts’ consensus estimate of 68 cents per share.

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The company’s $1.73 billion in revenue was largely driven by the sale of regulatory credits, growth in software and services revenue, and a higher average selling price for its first-generation EVs. This result far exceeded analysts’ revenue projection of $1.4 billion.

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Rivian also highlighted operational improvements at its Normal, Illinois, manufacturing facility, stating that these enhancements are expected to provide long-term benefits and help the company achieve a modest gross profit for 2025.

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During a call with analysts, Rivian executives attempted to reassure investors about the government loan, expressing optimism about working with the new administration and the Department of Energy. They emphasized that the loan would help facilitate the creation of approximately 7,500 new manufacturing jobs.

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Looking ahead, Rivian remains focused on scaling production and refining its cost structure to move closer to sustained profitability. However, investor sentiment remains cautious given the company’s ongoing cash burn and concerns over its sales trajectory in the coming year.

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