0001874178-26-000035
SEC filingRivian's Q1 2026 revenue grew 11% YoY to $1.38B, but gross margin turned negative due to lower regulatory credit sales and higher costs, while net loss improved on a $506M gain.
Rivian's consolidated revenue for Q1 2026 increased 11.4% YoY to $1.38 billion, driven by strong growth in the Software and Services segment. However, gross profit declined sharply from $206 million to $119 million, resulting in a gross margin contraction from 16.6% to 8.6%. The decline was primarily due to a $100 million reduction in automotive regulatory credit sales and higher per-unit depreciation costs as production volumes fell 30% YoY to 10,236 units. Operating expenses rose 16% to $1.00 billion, with R&D increasing 20% to support the R2 launch and autonomy initiatives, and SG&A increasing 13% from expanding go-to-market operations. Loss from operations widened from $655 million to $881 million. Net loss attributable to common stockholders improved to $416 million from $545 million, benefiting from a $506 million gain on the deconsolidation of Mind Robotics recorded in Other income, net.
Automotive: Segment revenues decreased 2% YoY to $908 million despite a 20% increase in delivery volumes to 10,365 units. The revenue decline reflected lower regulatory credit sales and a shift in mix toward lower-priced commercial vans. Automotive gross profit swung from a positive $92 million to a loss of $62 million, as cost of revenues rose 17% due to higher depreciation and stock-based compensation per unit from reduced production.
Software and Services: Segment revenues surged 49% YoY to $473 million, driven by vehicle electrical architecture and software development services from the Rivian-Volkswagen Joint Venture, along with growth in vehicle repair, maintenance, and remarketing. Cost of revenues increased 43%, but gross profit expanded 59% to $181 million, reflecting higher-margin software services. Management expects continued gross profit improvement from Autonomy+, Connect+, and FleetOS subscriptions, though a reduction is anticipated in 2028 upon expected satisfaction of the Joint Venture's combined performance obligation.
Management highlighted several strategic priorities and outlook items. R2 deliveries began in late April 2026, and the company expects this midsize platform to be foundational for long-term growth and margin expansion. The Normal Factory has been upgraded to 215,000 units annual capacity. R&D spending for R2 launch is expected to decrease in Q2 2026, but investments in future platforms, AI, and autonomy will continue. The company anticipates automotive gross profit losses to improve over time through R2's margin profile, material cost reductions, and manufacturing efficiencies. Software and Services gross profit is expected to increase near-term from joint venture services, remarketing, and paid software, though 2028 will see a reduction from the Joint Venture performance obligation. Liquidity stood at $5.39 billion as of March 31, 2026, including $2.85 billion cash, $1.99 billion short-term investments, and $0.56 billion available under the ABL facility. Future funding includes up to $300 million from Uber subject to closing, $1.0 billion received from Volkswagen Group in April 2026, and potential additional equity and loan proceeds.
As of March 31, 2026, Rivian held $2.845B in cash and equivalents and $1.985B in short-term investments, totaling $4.830B in liquid assets. The company’s total debt stood at $4.442B, primarily comprising convertible and secured notes. Shareholders’ equity was $4.429B, down from $4.594B at year-end 2025 due to the net loss and deconsolidation of Mind Robotics. Inventory decreased slightly to $1.543B, with finished goods declining while raw materials increased.
Rivian disclosed no specific purchase commitments in the Notes. However, the company has significant contractual obligations related to its joint venture with Volkswagen Group, including a committed $1B term loan facility available from October 2026. Additionally, Rivian entered into a DOE loan arrangement for up to $3.67B (including capitalized interest) to support the Stanton Springs North Facility, with conditions precedent for drawdown. Loss contingencies related to supply contracts and legal proceedings were accrued at $110M as of March 31, 2026, with reasonably possible losses up to $170M.
No share repurchases or dividends were authorized or paid during the period. Rivian’s capital expenditures totaled $372M in Q1 2026, representing 26.9% of revenue, as the company continued to invest in manufacturing capacity. Debt was essentially flat, with a $2M increase from unamortized discount amortization. The company’s focus remains on funding operations and growth investments through equity and debt financing, including the $1B Volkswagen investment received after quarter-end.
Rivian operates two reportable segments: Automotive and Software and Services. Automotive revenue declined 1.5% YoY to $908M, primarily due to lower regulatory credit sales, while Software and Services revenue surged 48.7% to $473M, driven by Joint Venture development services and remarketing. Automotive gross profit swung from $92M positive to -$62M, reflecting higher costs and lower credits. Software and Services gross profit improved to $181M with a 38.3% margin. No geographic breakdown was provided in the Notes.
Rivian's operating cash flow (CFO) worsened significantly to -$703 million in Q1 2026 from -$188 million in Q1 2025, despite a slight improvement in net loss (-$416M vs -$541M). The divergence is largely due to a $290 million decrease in deferred revenues and a $182 million decrease in accounts payable and accrued liabilities, indicating unfavorable working capital dynamics. Depreciation and amortization remained stable at $194M, while stock-based compensation increased to $207M. A large non-cash gain on strategic investments of $506M inflated net income relative to cash flow, highlighting that CFO is a more conservative measure of cash generation.
Capital expenditures (capex) stayed high at $372 million, representing approximately 53% of CFO (in absolute terms), underscoring Rivian's continued heavy investment in manufacturing capacity. With no free cash flow explicitly reported and no capital returns (share repurchases or dividends), the company remains in a cash-burn phase, relying on debt and equity raises (e.g., $1B received post-quarter from Volkswagen in April 2026).
Anomalies include the deconsolidation of Mind Robotics, which contributed a non-cash impact and a $114M cash outflow in investing activities. Overall, the cash flow statement reflects a growth-stage automaker prioritizing investment over cash generation.