Greetings, and welcome to Joby Aviation’s Third Quarter 2023 Conference Call and Webcast. At this time, all participants are in listen-only mode. As a reminder, this conference is being recorded. It is now my pleasure to introduce you to our host, Teresa Thuruthiyil. Please proceed.

Thank you. Hi everyone and welcome to Joby Aviation’s third quarter 2023 financial results conference call. I am Teresa Thuruthiyil, Joby's Head of Investor Relations. On the call today, we have JoeBen Bevirt, Founder and Chief Executive Officer; Paul Sciarra, Executive Chairman; Didier Papadopoulos, Head of Aircraft OEM, and Matt Field, Chief Financial Officer. After management's prepared remarks, we will open up the call for questions. Please note that our discussion today will include statements regarding future events and financial performance, as well as statements of belief, expectation, and intent. These forward-looking statements are based on management's current expectations and involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied. For a more detailed discussion of these risks and uncertainties, please refer to our filings with the SEC and the Safe Harbor disclaimer contained in today's Shareholder Letter. The forward-looking statements included in this call are made only as of the date of this call, and the company does not assume any obligation to update or revise them. Also, during the call, we will refer both to GAAP and non-GAAP financial measures. A reconciliation of non-GAAP to GAAP measures is included in our Q2 2023 Shareholder Letter, which you can find on our Investor Relations website along with the replay of this call. With all of that said, I'll now turn the call over to JoeBen.

Thank you, Teresa, and thank you, everyone, for joining us today. In Joby's first quarterly results call as a public company, two years ago this month, we highlighted three long-term goals required to execute on our business plan. First, certifying our aircraft. Second, scaling our manufacturing, and third, preparing for commercial operations. Since then, we've been absolutely laser-focused on these three goals, and we've established a pattern of delivering against them consistently each quarter, and this quarter is no different. On certification, the FAA has now accepted 84% of our Stage 3 certification plans, including the plan that covers our batteries and high-voltage power distribution. This is a critically important milestone for us that builds on a long history of battery development and testing, and brings us one important step closer to certification. We are now proceeding at pace in our work on Stage 4, which Didier will speak about in a moment. On our second key goal of scaling manufacturing, we are ramping up production at our pilot manufacturing facility in Marina, California, with one aircraft in final assembly and two more coming along behind it. Building on the learnings from our pilot production plant, we announced this quarter that we have selected Dayton, Ohio, as the location for our first scaled manufacturing facility. Dayton was the home of the Wright Brothers, and America's first aircraft factory and today, it maintains a deep talent pool for both commercial and defense aerospace. It is also home to the Wright-Patterson Air Force Base, which directs more than 40% of Air Force spending. In his speech at our announcement event, Ohio Governor, Mike DeWine said, 'the aircraft that will roll off the Joby production line in Ohio will redefine urban transportation.' I absolutely agree with that sentiment, and we were pleased to be offered up to $325 million in state and local incentives to support the development of our facility there. Toyota, who have played a vital role in the successful launch of production at Marina earlier this year, has their largest U.S. factory just down the road from Dayton in Georgetown, Kentucky, and we look forward to their continued support as we bring our Ohio facility online. Just a week after making our Ohio announcement, we were at Edwards Air Force Base in California to celebrate a significant milestone on our journey toward our third goal, preparing for commercial service. Several months ahead of schedule, we delivered the first of up to nine aircraft included as part of an expanded AFWERX Agility Prime contract with the U.S. Air Force. Our aircraft became the first electric air taxi to be delivered to the Air Force, and it will be used to demonstrate a range of logistics missions, including cargo and passenger transportation. It will be operated by both Joby and U.S. Air Force personnel, providing invaluable operational and training experience for us as we prepare for the launch of commercial passenger service. NASA also intends to use the aircraft for research purposes that will support the scaling of our industry. NASA Administrator, Bill Nelson, posted about the delivery, saying that the future of aviation is here, and his excitement is indicative of the support we're seeing from all areas of government. At the state and local level, there is a great deal of enthusiasm and support, from the warm welcome and incentives we received in Ohio to Governor Newsom signing legislation in California that brings the entire state government together in a unified way to prepare for commercial operations. That same enthusiasm was present at a community event we hosted in New York City recently, where Delta CEO, Ed Bastian, and I were joined by Rick Cotton, the Executive Director of the Port Authority of New York at New Jersey, and Andrew Kimball, the President and CEO of the New York City Economic Development Corporation. Both are leaning in to ensure that New York City leads the way on the adoption of this new technology. And at the federal level, we welcome the Senate's unanimous bipartisan confirmation of Mike Whitaker as the next FAA Administrator. The United States leads the world in aviation safety, innovation, and regulation, and we believe this appointment will provide the strong and steady leadership required to ensure that continues. While it has been incredibly rewarding to celebrate the hard work of our team through many landmark achievements this quarter, nothing gives me greater pleasure than to stand with a guest at our facility in Marina as they witness our eVTOL aircraft fly for the first time. During the quarter, Toyota Group CEO, Koji Sato, and Toyota CTO, Hiroki Nakajima, joined us in California to see a test flight and visit our manufacturing facilities. We also welcomed members of the FK Telecom team and the Governor of Jeju Province in Korea. We are grateful for all of the deep partnerships we are building around the world, and we look forward to expanding on these in the years ahead. For all of our guests, seeing really is believing, and being able to demonstrate the performance of our aircraft and its low acoustic footprint day in and day out is so important to our work. I was therefore very pleased to see our flight test program expanded this quarter to include flying with a pilot on board. During the test, four of our pilots assessed the ease of conducting a number of maneuvers that pilots will be required to perform during normal operations, including holding a precise hover, tracking the runway center line, and decelerating to a vertical landing. They also performed more complex maneuvers such as flying precise circles around a center point, something which is considerably simpler in our aircraft than in a helicopter. These tests provide important data and feedback to advance our program, and I'm incredibly grateful to every member of our team that made it possible. I also want to congratulate our H2FLY team in Germany for their own flight test campaign. During the quarter, they completed the first ever piloted flight of a liquid hydrogen electric aircraft, an incredible milestone on the path to making long-range emissions-free flight a reality. Just like the team at Joby working on battery electric aviation, they too are focused on delivery and they continue to excel. At the beginning of my remarks, I mentioned the three goals that we set ourselves when Joby first listed two years ago: certifying our aircraft, scaling manufacturing, and preparing for commercial operations. Looking back over this quarter, I'm pleased to see that we've made incredible progress in each of these areas, but I'm also pleased to see that we continue to deliver on two other values we identified during that call: maintaining fiscal discipline and a strong balance sheet, and being transparent about our progress. We continue to have the strongest balance sheet in the sector, and we continue to publish detailed updates about our certification and manufacturing progress like clockwork each quarter. To talk more about that progress, I'd like to hand it over to Didier.

Thanks, JoeBen, and thanks everyone for joining us today. As JoeBen said, we're proud to share our progress with you, and you'll see from the chart we shared in our shareholder letter today that we've made incredible headway this quarter. But sometimes those percentages hide the remarkable volume of hard work and progress that goes on behind the scenes, both at Joby and at the FAA. The acceptance of our energy storage and distribution system certification plan is a great example of that. It moves us a few very important percentage points closer to completing the third stage of the type certification process, but these percentage points represent more than five years of hard work and collaboration with the FAA to determine the right safety requirements and the right testing approach to demonstrate compliance. Getting to this point has involved completing a wide range of thermal runaway developmental tests on our batteries, as well as 50-foot drop tests and hundreds of functional, environmental and failure mode tests. We perform many of these tests at the cell, the module, the pack, and the aircraft level. Having this plan accepted is a major milestone for Joby and confirms that we have a clear path to certification of our high-voltage power and battery systems. Our functional testing, as well as our ongoing flight testing, continues to support our expectation for the operating range, charging time, and cycle life of our battery packs in operational service. We're excited to be turning our efforts now to stage four of the certification process, where we'll plan and execute the certification testing for our batteries and high-voltage systems. The progress we're making on batteries is representative of what we're seeing across the board. With the vast majority of our team now focused on the fourth stage, where we write and then execute test plans that demonstrate our compliance with safety regulations. As a reminder, we think about testing in stage four as a pyramid. At the bottom of the pyramid are the building blocks of an aircraft: structural materials, software, and individual pieces of equipment. Moving up the pyramid, those building blocks are assembled to form systems and larger aircraft structures. Those are then combined into integrated systems, and finally, the aircraft. The rigor of certification requires us to demonstrate compliance at each and every level of the pyramid, and we're making progress across them all at the same time. On structural materials, this quarter we received acceptance for multiple test plans covering our materials and processes, with more submitted for review. On equipment, we had four qualification plans accepted this quarter and have begun FAA conforming manufacturing and for credit testing, and in a big win for the team, we have submitted to the FAA our static test plan for the tail of the aircraft, our first test plan submittal for a large structure, which is on the next level of the pyramid. Many of these initial test plans are pathfinders for us, meaning that once we get one accepted in a category, we'll be able to take a similar approach with other test items in that category more efficiently. Each of these test plans represents a tremendous amount of work by the team to validate our designs and mature our manufacturing, and then demonstrate that we can perform and pass the required tests, first internally prior to conducting them for FAA credit. While we continue to submit and receive test plan approvals at the lower levels of the pyramid, at the same time, we're demonstrating internally that we have the capability to perform testing at the higher levels of integrated systems and the entire aircraft. With our integrated test lab, we began flying test points in a closed loop simulated environment using real hardware and software. In the lab's control room, one of our pilots or engineers flies the aircraft from a flight simulator using our real flight controls. Next door, in the main lab, real flight hardware receives and distributes those commands through the plane's network, reacting to the inputs by moving actuators and spinning electric propulsion units. This closed loop testing means we've begun collecting high-fidelity data on the performance of our aircraft systems using the integrated test lab. The lab can run many more tests than we can carry out through actual flight and at a fraction of the resources. This is an amazing achievement that demonstrates we have the key capability to perform the integrated system level testing required by the FAA in stages four and five, and finally, the aircraft level. The pilot on board test campaign that JoeBen spoke about was a critical development test where we collected data points on both flight handling qualities and human factors testing. At every level of testing and certification, the Joby team is delivering, and we're delivering on manufacturing too. The headline for this quarter was, of course, the selection of a site in Ohio to support scale production, but I'd like to start by calling out the progress we're seeing in our pilot production lines in Marina and San Carlos, California, because this is critical to the eventual success of a scale facility. We now have three more aircraft in production, with the next one now in final assembly and on track to be delivered to Edwards Air Force Base in early 2024. The majority of large sub-assemblies of the next aircraft are complete, and we're building parts for the aircraft after that, as well as many additional parts to serve as test articles for certification and spares for expanding the flight test program. It is critically important to start at this lower rate of pilot manufacturing so that we can refine and optimize our manufacturing processes. This will allow us to ensure production is as smooth, efficient, and as cost-effective as possible before we scale those processes. Already, we've been able to identify important improvements, with a 30% build time reduction from the previous aircraft to our current build, resulting from improved build methods and airframe assembly flow. With Toyota's help, our team is focused on continuing to identify and implement meaningful workflow refinements that we expect will continue to yield savings as we scale. Likewise, there are many areas where our vertical integration directly enables us to realize improvements to manufacturing quickly, bringing up new processes and equipment to capture costs and time savings. For example, during this quarter, our team was able to meet the delivery schedule on builds of an existing part while in parallel, working to bring online a new injection molding process for those parts. The new equipment and processes deliver greater speed, reliability, and precision, all at a considerable build and part material cost savings. This ability to execute on parallel work streams is a testament to the value of vertical integration. All these learnings will help ensure our Ohio facility is as successful and capital efficient as possible. The 140-acre site we have selected at the Dayton International Airport will enable us to build a facility capable of delivering up to 500 aircraft per year, but it also has the potential to support significant growth over time, providing enough land to build up to two million square feet of manufacturing space. We plan to use existing nearby buildings to begin near-term operations. We already have a number of roles advertised that will support the build-out of the scaled facility and the machining of parts that will initially be incorporated into our low-volume production line in California, prior to investing in scaled operations in Ohio. I am incredibly excited to see production coming to life at Joby and look forward to rolling the next aircraft off our production line. Matt, over to you.

Thanks, Didier. This quarter's highlights certainly include significant achievements in terms of operational delivery, as we'll talk about shortly, but first, I'll review our financial results. In the third quarter of 2023, we incurred a net profit of $1.5 million, reflecting other income of about $130 million and a loss from operations of about $128 million. Other income for the quarter primarily reflected the $116 million revaluation gain from our derivative liabilities as our share price changed over the quarter and interest income of $14 million. Adjusted EBITDA, a non-GAAP metric that we reconciled to our net income in our shareholder letter, was a loss of $93 million. This was about $15 million higher than the third quarter of 2022, primarily reflecting increased staffing and costs to support certification. Our adjusted EBITDA loss was about $10 million higher than in the second quarter of 2023, reflecting the growth in our organization, expenses to support manufacturing and certification, and the non-recurrence of specific DOD contract deliverables achieved in the prior quarter. Our global staffing with more than 1,600 employees continues to grow to support our company's certification and manufacturing efforts. Our balance sheet remains the strongest in the industry, as we ended the quarter with $1.1 billion in cash and short-term marketable securities. Cash used in operating activities and purchases of property and equipment totaled $89 million in the third quarter of 2023. The increase in spending compared with the second quarter primarily reflects additional staffing, three pay periods in September compared with two in June, and higher capital expenditures, partly offset by favorable working capital changes. Through the first nine months of 2023, our cash used in operating activities and the purchase of property and equipment totaled $253 million. We remain in line with our spending guidance of $360 million to $380 million for the full year, and we expect that we'll hit the low end of this range. Turning to our operational announcements this quarter, I want to provide some color on our future manufacturing plans and our on-base operations. Both reflect a measured pace of spending consistent with our pragmatic approach and fiscal discipline. Last month, we were excited to announce that Dayton, Ohio would be home to our scaled manufacturing operations. As JoeBen and Didier mentioned, we are planning for an annual capacity of up to 500 aircraft in Ohio, supported by state and local incentives totaling up to $325 million. We expect to invest up to $500 million of capital for buildings and equipment and provide up to 2,000 jobs as we build out capacity. We will start small, with limited operations in Ohio that will support the growth of our production capacity in California. These early operations will allow us to recruit and train a cadre of employees that understand our processes and culture, forming a foundation for our future success with limited capital outlay. Our scaling of Ohio operations will ramp progressively over time in a methodical and systematic manner leveraging the processes that we are refining here in California. We also announced that we were invited to submit part two of our Department of Energy Title 17 loan application to support our manufacturing investment, and we are actively working on preparing these materials. Turning to the announcement of our first aircraft delivery to Edwards Air Force Base in September, ahead of schedule, I want to take the opportunity to provide some clarity around our expected accounting treatment related to payments associated with these activities. While we are completing the evaluation of our accounting treatment, we presently expect to report our first revenue in the fourth quarter, reflecting primarily services associated with government-directed flights. Our contract with the DOD, as a reminder, was expanded in April by $55 million to include operating up to nine aircraft on base, bringing the total potential value of all government contracts received to date to $163 million. As we discussed in our prior quarterly calls, our DOD contract payments related to on-base activities include three primary components: an upfront fee paid in advance of on-base operations, a fixed fee paid quarterly as we operate on base, and a variable fee associated with services related to government-directed flight hours. On-base flights may be conducted by either Joby pilots or government pilots trained by Joby. All three types of contract payments fundamentally support providing flight services to the DOD as they evaluate the operational capabilities, use cases, and benefits of eVTOL aircraft for DOD operations. All three components of our payments will likely be taken together and recognized when we execute services related to our government-directed flights. In the fourth quarter, our expectation for revenue from on-base flight hours is limited initially, as we establish our operational footprint at Edwards Air Force Base, with the opportunity to expand this revenue over time with more aircraft in service and as we fly more regularly. We continue to be excited by the energy behind bringing this revolutionary technology to market, as we saw in Ohio with our manufacturing announcement, at Edwards when we delivered our first aircraft, in New York where we discussed the future potential for passenger service, and internationally when we announced our participation in the Korean Grand Challenge, as well as most recently when we showcased our aircraft at the Japan Mobility Show. In every case, our team has been met with enthusiastic support for Joby, our aircraft, and our role in transforming the future of air transportation. This concludes our prepared remarks. Operator, would you please instruct participants on how to ask questions?

Our next question comes from the line of Andres Sheppard with Cantor Fitzgerald. Please proceed with your question.

Hey, good afternoon, everyone. Congratulations on the quarter and all of the achievements over the last three months, and thank you for taking our questions. Matt, I was hoping to maybe start with you. You alluded to some revenue expectations in Q4. I'm wondering if it's possible to give a little bit more granularity there, and should we assume those revenues to continue to gradually increase through 2024 after they show up in this next quarter? Thank you.

Hi, Andres, thanks for joining. So as I said, in the fourth quarter, we're really excited to have our plane go on base early. We expect that to be joined early next year with the next plane off the line. So I would expect revenues to grow as we have more planes and as we fly more regularly. As I said in the prepared remarks, the services we provide to the DOD largely are going to be tied around flight hours, and so those are directed by the government. So it will in part depend on what the government asks us to do, but I would expect that to grow throughout 2024.

Got it. That's very helpful. Thanks, Matt. Maybe one for either JoeBen or Didier. How should we be thinking about the piloted manned test flights throughout Q4 and into next year? I'm wondering if you can maybe give us some sort of sense as to how you're thinking about that process. How frequent do you anticipate to have some of these flights? We're getting closer and closer to commercialization, and so just wanting to maybe better understand what that process looks like and what that might entail. Thank you.

Yeah, thank you for the question. It was definitely an exciting moment when we had an inhabited flight with multiple pilots. It was really mostly exciting for me when I went there to get a debrief and the pilots said, 'Hey, this was just as expected,' which is really where you want to be in this program because it really says, okay, we're clear to keep going from here. But I do want to come back to a comment I made in one of the earlier calls. We're going to really need to continue to be very judicious and effective in our flight test program as well as our ground test programs where we will fly inhabited wherever it makes sense. So there will be flights where flying qualities and human factor aspects and operational task elements are required, and we will continue to fly inhabited on that front. But our next few airplanes will also have the ability to operate remotely, and we will do that when it makes sense to operate remotely. We'll also take advantage of the integrated test lab, which I'm really excited about because that lab has all the software, all the hardware, as well as a flight deck in it where a pilot can actually sit and fly in a real-world environment and accelerate that level of testing. So we'll really take advantage of all of the test assets we've been investing in over the past few years.

Got it, super helpful. Thanks again, guys. Maybe one last one if I could. I think that the next big phase as we head into next year is going to be around manufacturing and production. I realized that the process has started in choosing the facility in Ohio with all those great incentives is a huge plus. I'm just curious, as I look at the EV sector in particular, they have struggled to ramp up production and manufacturing. Now, granted, they're aiming to make tens of thousands of vehicles annually, which is not going to be the expectation here, but just curious on kind of how you guys are thinking about that manufacturing process. When you anticipate that ramping up, is that something that you'll be doing prior to getting that type certificate with the FAA or maybe in conjunction, or is it one of those things when as soon as that type certificate arrives, then you'll begin ramping up? Just trying to get a sense of kind of how you guys are thinking about that process. Thank you.

Yeah, thanks again for the question. We'll definitely be ramping up and we are ramping up as we speak right now. But what's really important for us is that the future of the Ohio facility or whichever facility we scale in really rests on how we execute here in our pilot plant manufacturing, both in the San Carlos facility as well as Marina and that's exactly what we're doing here. So if you were to go on the line, like we mentioned, the second airplane is in final assembly right now; the one after that has all of the major structures built and so on. So we're actively building multiple airplanes at the same time. It is really important we proceed cautiously here so that we can benefit from all the learnings and we're getting there. So like I said, the second airplane was built 30% faster than the first one, but we're also doing that much more cost-effectively in terms of labor, tooling, material usage, scrap, and so on, and we want to continue to do that and collect all these learnings to continue optimizing the process here in Marina. And relating to the EV, one of the exciting things also about this is remember Toyota is with us here, and so we're getting the learnings, not just from being on site and seeing it here, but we're getting all the learnings that Toyota has been collecting over the years, and so that partnership is really paying off.

Wonderful, thank you so much everyone and congratulations again on the quarter. I'll pass it on, thank you.

Thank you. Our next question comes from the line of Kristine Liwag with Morgan Stanley. Please proceed with your question.

Hey, good afternoon everyone.

Hi Kristine, good afternoon.

Hey, following up on your first Joby aircraft that you delivered to the Edwards Air Force Base, and congratulations on that milestone. What's been the customer feedback so far? How have they used the aircraft and have they used it for passenger flights and any commentary that you could share about what they've been doing so far would be helpful.

Yeah, thanks Kristine. This is Didier. Thanks again for recognizing the delivery to the customer ahead of time. So one important thing to remember here is that we have been working with the customer for a long time right now, right? So the DOD, whether it be the Air Force or the Marine, has been working with us on site here for the past few years. So we have been flying with them the prior airplane. And so we have had a lot of time to work with them through the training curriculum, through development, and flying the aircraft here, and the feedback has been positive and has built up from one flight after another. We've used a lot of that feedback to implement some of those changes in our flight profiles. We're now really excited about being able to do that also on site at the Edwards Air Force Base. A lot of the initial feedback from them has been really positive. I got the opportunity to be there during the opening, and it was really an emotional moment, and so we're building from here on the prior flights we've been executing before.

Thanks, that's really helpful. And going to the certification plans, and by the way, the progress that you share in your investor letter is very helpful. For stage three certification, you guys highlighted, you got 84% now versus 68% last quarter. These are pretty significant strides. So what's on the remaining 16%? And also, if I go back to stage two means of compliance, the FAA acceptance has been around 97% and has been there for the past few quarters. What's left and how big of a deal is what's left over?

Yeah, thanks for the question. So both 97% and 98% are amazing numbers. Just want to reiterate that. With respect to stage two, I think one of the things we mentioned last time is we expect that there will be one, two, or three percentage remaining open, and those are usually working throughout a separate process that's sort of similar to one example is an issue paper process and those processes just tend to take longer by virtue of the path that they take, but they're in no way a concern or a risk for us right now. So we're really full steam ahead into stage four. And then for stage three, the difference between 98% and 84% really should be thought of as the remaining part is by the vast majority of it has been going on back and forth constructively with the FAA over a very, very long time. So we have really, really high confidence that the path forward is positive for us. Most of the team's focus honestly right now is on stage four. The FAA's acceptance, the 84%, really says, 'Hey, the ball is with you, Joby. Now continue and proceed with the testing.' And that's exactly where we're spending most of our focus.

Thanks, Didier. That's really helpful. And then lastly, if I could sneak a third one in, maybe for Matt, you've got $1.1 billion of cash on the balance sheet, but with a new Dayton, Ohio facility, and you guys alluded to a potential loan that you could get a low-interest one from the DOE. What does cash flow usage in 2024 look like? Should we see that usage be greater than 2023 as we see a ramp up on CapEx?

Yeah, thanks for the question, Kristine. So as you know, we'll provide guidance when we do our fourth quarter results. That's typically when we talk about forward projections. But as you mentioned, we're really pleased with the strength of our balance sheet and the progress we're making on certification and manufacturing. This provides us such a solid foundation going forward. The one thing I want to highlight, though, in terms of our cash is the quality of spend we have visibility into, and that's really a testament to the work Didier and the team have talked about in terms of understanding what we need to spend on and when we need to spend. So as JoeBen alluded to or mentioned very directly in his first remarks, we remain incredibly frugal, demonstrating fiscal discipline and making sure every dollar stretches as far as it can, and we look forward to discussing 2024 next year.

Great, thank you very much.

Thank you. Our next question comes from the line of Bill Peterson with JP Morgan. Please proceed with your question.

Yeah, hi, good afternoon, and thanks for taking the questions and nice job on a consistent execution of financial discipline. I guess as we think about your ability to build aircraft in the next few years, you alluded to an increase in throughput. So I guess, how should we think about the number of aircraft you can or intend to build your capability? And then what you intend to build in 2024? I recall between Santa Clarita and Marina, I think you're able to build around low double-digit aircraft per year. So trying to get an update there, assuming that's higher now. But, and then I guess in 2025, it seems like you're, by what you said about Dayton, you're kind of planning on building this or building this out more slowly. So again, how to think about volumes or volume capabilities from Marina and then on Dayton, when should we think about when you could start building and subsequently start delivering aircraft from Dayton?

Hey, thanks for the question. This is Didier. So I want to go back again to the strategy we've outlined and we really want to remain consistent with that, which is we want to make sure that we start and continue the ramp-up in our pilot plant manufacturing, both in Marina and San Carlos, and that's exactly what we're going to be doing. You mentioned double digits. We had mentioned in the past, we expect to produce tens of airplanes from these sites, and that's still on track. That's our expectation that we'll be able to do that. We're doing that right now. One of the key things I want to add here and highlight, we are able to exercise that not just through building the airplanes, but the number of test assets that we have to produce in order to deliver on stage four is equally important. So we have that ability and capability to learn and practice and ramp up for the certification process, as well as for the production process, while delivering to our customers, so all things are coming together very nicely right now. And then back to Ohio, one of the key things about that is we'll be able to progressively build and manufacture parts in Ohio that will serve the Marina. Having that ability to cross from one manufacturing site to another is a really key strength, in my opinion, which is supported even more so by the vertical integration that we have. So we're able to play on all these fronts, and then, like we said, lastly, we expect to start producing airplanes in 2025. So we remain consistent with that.

Okay, yeah, thanks for that. I want to follow up on certification plans, and you talked about some of the larger systems. You mentioned the airframe. What's next in terms of, I guess, static test plans? Is it the wings? How should we think about the next steps for some of the larger parts of the airframe?

Yeah, so maybe the best way to think about it is we've got the large airframe structures and the various mechanical systems that come with that. So you'd be able to see the tail, the wing, the fuselage, and then proceed into things like landing gear and so on. So all of these things are to proceed back to back. One of the key things that one of the statements we made earlier is about the Pathfinder approach. It is very important for us to build upon the Pathfinder. If you think about that pyramid, we're going to tackle software, we're going to tackle equipment, and we're going to tackle the airframe one piece at a time, and then once we fine-tune these, that enables us to proceed much more efficiently with the others to follow.

Okay, lastly, and if I can sneak in one more, it's more about overseas opportunities. So you said that you're with SK and expecting flight testing in '24. I think earlier this year, you announced a partnership with ANA and you also mentioned Japan, a recent show there. So I guess, how should we start thinking about market adoption outside of the US, including prioritization, the placements of your aircraft globally? A lot of this discussion has been on the US thus far. And maybe lastly, it's been a while, but you talked about having the ability to get CAA certification that'd be recognized in the FAA. Wondering what the latest is on that, or if there's anything new in regards to other parts of Europe as it relates to ANA. Again, it's been several quarters since we've heard about some of these overseas opportunities and certification.

Hi Bill, this is Paul. There are a few different pieces here. I'll probably let Didier perhaps cover the CAA, but I want to take the broader strategy on international and customer sets. So, Joby has always had a sort of multi-pronged approach to go to market. One is through the FAA, in terms of broader commercial service here in the US, and we also have other customer sets, like the DOD, where the requirement is not FAA certification, but instead military airworthiness. So you've seen us over the course of this last quarter execute across both of those and obviously we're nearer to the sort of revenue opportunity on the DOD side right now, insofar as we're able to sort of recognize that as soon as this quarter. When we think about prioritizing international markets, we want to ensure that we do the right groundwork to ensure the success of those services, and that's what you've seen us do. The partnership with ANA in Japan, and additional work with the regulator there, is to really assess how quickly we might be able to scale service, and who would the right partner set be to execute on that successfully. You've seen us do the same, obviously in South Korea. Our participation in the upcoming grand challenge is a critical piece of broader market acceptance. We really feel like SK Telecom is the sort of right partner to execute on that front. Our goal as we move forward is to make sure that we have a few different places to place aircraft as they roll off the manufacturing line. Maybe the best place for them to go is with the DOD. Maybe the best place for them to go is in service here in the US. Maybe the best place for them to go is outside of the US. So we want to ensure that we have a number of those pots boiling, so that we've got the right places for aircraft to go, depending on what we're trying to optimize for, whether it's early revenue or long-term profitability, and that's the setup that we want to ensure that we have when it comes to broader commercialization. Does that make sense?

Yeah, no, that actually makes a lot of sense. I understand that. That makes it perfectly clear, and then I guess just on the certification, if Didier can address that.

Yeah, thank you. So we remain consistent on the certification with a few facts here. So we've started with the FAA for a long time here. As you can see, the progress we've had with most of the first three stages here behind us lays the foundation for our certification path forward, and it remains fundamental to our focus and our progress. As we continue to progress on that front, we have incrementally been engaging various cert agencies, CAA being one of them, but as you know, we've also been engaging with Japan and some other places. We continue to do debriefs and collaborations with them as we make progress with the FAA. So sort of coming along progressively here, and I think I expect that to continue to be our strategy up to TC and PC thereafter.

Yeah, thanks for all the color and we'll pass on here. Thanks again. Thank you.

Thank you. Our next question comes from Savi Syth with Raymond James.

Hey, good afternoon, everyone. Just maybe first off to follow up on Bill's question on the international side of things with SK and the flight operations that you plan to do next year. Is there any kind of funding components from that or is that just going to be more cash outflow from both SKT and Joby?

Hi Savi. So we do have arrangements with SK Telecom on that. So we don't expect that to be a significant cash outflow to support the grand challenge.

And then just on the operation side of things, I know there's a lot of learnings happening from what you're doing with Agility Prime in terms of what you might need for training and things like that, but just wondering, what other steps you've taken lately in terms of understanding what you need to do for setting up the operations and just beyond wanting to meter that progress with the certification timeline, what are the major gating factors there?

So, hey, this is Didier, Savi. Maybe a few points to hit on here. One of the learnings we've had with our DoD operations is through delivering on many of the missions they were expecting, and sort of we've been able to hit on those is learnings associated with operation that tie back into things like maintainability, as an example. We've talked a lot about understanding the operation of our airplane, but also how we can be cost-effective, and we're learning quite a bit from these flights on how to improve the maintainability of the airplane, which feeds actually into your type certification. So that's a critical component of things you need to feed into certification. Sometimes you only find those things later after TC when you're in the field, and it's a bit too late to come back and fix them in time. So those are some of the great learnings we're getting from a TC standpoint. I will also say we've learned quite a bit about laying out the charging infrastructure, having done this for the first time outside of Joby and that's been foundational in terms of us growing that knowledge base, so that now we know how we're going to be able to scale in New York and so on moving forward.

That's helpful. And then just on the follow-up on the production facility, any kind of, maybe this is what you alluded to earlier, Matt, about waiting for 2024, but just curious, I know that $500 million is a long-term CapEx spend. Just what's the type of CapEx that you need to kind of set up the early-stage phase one operations here?

Yeah, exactly. That $500 million is something that could play out over time as we expand production. It would be significantly less for phase one, the initial tranche of capacity, and we can talk about that more as that comes together and it's closer. But it is very tied with our discussions with Ohio. When we look at the $500, that excludes any incentives. One of the things that was particularly, where Ohio was a particularly great partner and worked with us is how to think about incentives relative to capacity and how those come together. So we will talk more about that as we get closer to those dates, but that's really how to think about it, it's significantly lower in the startup and our approach, which is methodical and frugal. We'll be talking more about that as we get closer to those dates as well.

Thanks. And just one quick follow-up for Didier, just on the pilot on board, anything that's kind of come out of that that's causing you to change, either to make software tweaks or anything like that, or is that kind of pretty consistent with what you expected?

Pretty consistent, which is very, very good news. The feedback from the team, and again, part of what's great about this is it was conducted by multiple pilots. So we had really consistent feedback across all of the pilots, and we're really, really excited about that. Not just in terms like the flight results were great, but they also correlated quite a bit to some of the flight deck simulation and integrated test lab efforts that we have been doing. For me, that means that we have a very, very strong foundation in the test assets that we have developed, and I'm really excited about that as well.

Great, thank you.

Thank you. Our next question comes from the line of Austin Moeller with Canaccord Genuity. Please proceed with your question.

Hi, good evening. My first question here, what can you talk about in regards to the battery cell design and selecting a pouch cell relative to a cylindrical cell and the amounts of testing in terms of volume over cycles that's been done both on the ground and with the aircraft to verify the safety of that design in terms of thermal runaway and just your confidence in that design relative to competing systems?

Thanks so much, Austin, and it was great to see you at the New York event. This is JoeBen. As you know, the batteries are an area of the aircraft that I'm incredibly passionate about, and it's something that we've been working on for many years. We've been flying our batteries at full scale since 2017, so for more than six years now, and we've been continuing to refine our battery pack design to deliver really spectacular performance across a number of critical metrics that you mentioned, including cycle life, which as we've talked about before is incredibly important for the operating economics, and also incredibly important to have the lowest environmental impact that we possibly can. The battery pack design is crucial when it comes to ensuring safety, and this quarter, we had a huge milestone there with the approval by the FAA for our battery pack area specific certification plan, and this means that we have a very clear and well-defined path from where we are through stage four and the testing. This is something that we've been working with the FAA on for more than five years now, and so there's a significant milestone that lays the path and gives definitive clarity about exactly what we need to do. As Didier also mentioned, we've been doing this testing for years at the cell, module, pack, and aircraft levels, and so we have incredible confidence in the performance of the batteries, the safety of the batteries, and the life cycle of the batteries. We are really grateful to the FAA for the degree to which they've engaged and delivered to carry the certification of this new industry forward.

Excellent, that's really exciting. My next question is probably for Matt.

Austin, did we lose you there?

Oh, yes, sorry about that. I think Austin was asking a second question. Alicia, if you can put him back through.

Earnings Call remark: Austin, did we lose you there? Oh, yes, sorry about that. I think Austin was asking a second question. Alicia, if you can put him back through.

Hey, Austin, if you can ask the question again, that'd be great.

Okay, okay, great. Yeah, my next question's for Matt. I know in the US you've opted to go with the vertically integrated company-owned company-operated model and providing the service and operating the aircraft. Overseas, you've discussed the potential to do an OEM-type model and so I'm just wondering, are you considering pursuing some OEM sales where you could draw PDPs overseas to collect cash? Or are you potentially looking to do more JVs which might get a potential equity investment from other partners?

Hey, Austin, thanks for the question. While we do have a vertically integrated approach in the US, as we've talked about on prior calls, we do see a spectrum of approaches internationally, and that could be anything from an OEM model where you could envision something like a PDPs. It could be something like a joint venture model, which again could result in something very similar because of arms-length arrangements or so forth, or it could be a wholly-owned model. So all of those spectrum of alternatives are being evaluated on a case-by-case and legal entity-by-legal entity basis.

Excellent, thanks for the interesting call.

Thank you. Our next line comes from the line of Edison Yu with Deutsche Bank. Please proceed with your questions.

Hey, thanks for taking the questions. First, I was wondering if you could give an update on when the fully conforming aircraft will be ready, or in other words, when we can start beginning for credit testing with the FAA?

Yeah, hey Edison, this is Didier. So we're starting to take for credit testing with the FAA now. That's really the focus of the effort here moving into stage four and five. So maybe peeling the onion here a bit more. It's really important to think about in aircraft conformity as a progressive step that builds on the pyramid that I talked about earlier. Every component in an aircraft needs to earn its way into a conforming build and passing its tests on your way to getting to a conforming airplane. So that's why I'm so excited to be in the stage now where for the equipment, we are actually building FAA conforming parts on the manufacturing line, where we're going to get our production certificate. We're actually running for credit testing. So that's your equivalent of TIA, but at a component level, and so it's exciting to be at a stage where we're submitting the test plan for the tail, for example, for a conforming tail. That's kind of how you have to build that. Progressively, we're moving into the integrated test lab where I talked about us having been able to complete a closed-loop flight controls test sequence recently. That's how we do that. Our focus for the next stage is really on building that pyramid and progressively moving into the airplane. That's exactly where we need to be right now. This is the efficient way of doing it and that's what you should expect us to focus on.

Just to follow up on that. So is it safe to say, or can you maybe distinguish when we will transition from a company conforming aircraft, which is what I think you had labeled the one that was delivered versus a fully conforming aircraft? Do we know when that timeline to transition will occur?

We know where that timeline is. Right now the focus remains on building on those foundational elements. This is what's really important for us to move forward towards TC.

Okay. And then just one more for me. On the piloted testing so far, are you able to provide any metrics around, in terms of how much you pushed the plane, the aircraft, how fast, how high, how much distance, just any sort of metrics you can provide around that and sort of what you'd be ultimately targeting to do in the next three to six months?

Yeah, so we haven't really provided metrics per se, but the expectation is to continue to progressively build throughout the flight test envelope, right starting with the basic hovers and then moving into the transition and then on-wing. That's what you should expect us to be doing next. Again, though, it is important to think about this in stages, and some will be inhabited, others will be remotely operated. Some elements are really important for us to have a pilot on board, others are inconsequential, and so we're going to continue to be diligent and smart about how we execute this because really that's what's going to allow us to proceed faster. We really want to ensure we use multiple assets in every asset where it's most effective.

Thank you. Our next question comes from the line of David Zazula with Barclays. Please proceed with your question.

Hey, congratulations on getting the battery testing plan through. It's a big milestone. Thanks for taking the question. I guess, for Matt, you talked a little about the total CapEx. Can you discuss the financing plan to the extent you have it on the whiteboard for the Ohio facility? What you would expect the pace of incentives to be and any prerequisites or contingencies for this?

Yeah, so the way we think about Ohio, obviously, is progressive and over time, and so that's also how we think of the financing plan because we don't want to scale the wrong processes, which is why our work in California is so critical. As we think about that, obviously the Ohio incentives and Ohio has supported us with a JobsOhio incentive of 110, which is supportive of capital expenditures, which is really great support from Ohio, and then also looking at Title 17 loans. I know we've talked about on multiple occasions as supporting manufacturing and clean energy loans, which is really what the purpose of that program is. So that's how we're thinking about it at this time. But again, think about this as staged over time through a very practical and methodical approach to our spending and ramping up capacity.

Great, and then you made a comment, I think, during the prepared remarks or answering one of the earlier questions about whatever facility you start ramping up. Was that a reference to potential additions to potential facilities or is there a possibility that this facility ends up getting moved if something happens?

No, I think if we implied that, we did not intend that. So really the way we think of it is ramping up California and Ohio, supporting the California initial ramp to build an initial footprint in Ohio that then is the kernel from which we scale, and so I think that might have been what you were hearing.

Great, and then just the last one. Have you had dialogue with the new FAA administrator or their office, and have they given you any priorities or any change from what you'd previously gotten from the FAA?

Thanks, David, this is JoeBen. We are incredibly pleased that we now have a Senate-confirmed FAA administrator. This is a spectacular moment for the nation, for the aviation industry, and for our sector, and so we're very grateful for that. We have not spoken to the new administrator, but we are very grateful that the FAA has somebody fully confirmed in place and we think this is fantastic for the aviation industry writ large.

Thank you. I would now like to turn the conference back over to Joby Aviation CEO, JoeBen for closing remarks.

Well, I just want to reiterate how grateful I am to everyone who joined the call today. I also want to give a huge shout-out to the spectacular work from the entire Joby team who continues to excel. We had a spectacular quarter, whether that's on the battery certification plan, the delivery to Edwards, the announcement of our facility in Ohio, our piloted flight test campaign, the team just continues to deliver day in and day out quarter after quarter, and that's what we're going to continue to do. We are laser-focused on certification and really, really pleased to be into the heart of stage four, testing all of our components, building conforming components, and really excited about the momentum and the progress. We're thrilled about the support from communities across the nation and countries around the world for this vital new transportation technology. Thank you again for joining and can't wait to talk to you all again next quarter. Have a wonderful day.