Rivian Automotive, Inc. (RIVN) reported better-than-expected fourth-quarter results after market close on Thursday. The electric vehicle manufacturer is advancing its R2 model launch, confirming the vehicle is on track for a second-quarter release this year.

Quarterly revenue reached $1.286 billion, surpassing the Bloomberg consensus estimate of $1.26 billion, though it represented a decline of approximately 27% year-over-year. The decrease in revenue was attributed to reduced sales of regulatory credits, the expiration of federal EV tax credits, and a lower average selling price.

The company reported an adjusted loss per share of $0.59, which was narrower than the anticipated loss of $0.69. Its adjusted EBITDA loss was $465 million, an improvement compared to the expected loss of $568.2 million.

Buoyed by the positive news, Rivian's stock surged 19.7% in pre-market trading on Friday.

A core development is the planned second-quarter delivery of the R2 model. The company stated that the first validation vehicles were built in January, with customer deliveries for the new midsize vehicle scheduled to begin in the second quarter.

"For us, this is a truly critical inflection point. We will demonstrate the long-term profitability of the business with R2; this vehicle is essential for us to scale," CEO RJ Scaringe said in an interview.

Rivian achieved a positive gross profit for the second consecutive quarter, reporting a quarterly gross profit of $120 million. This was composed of a $59 million loss from the automotive business and a $179 million profit from the software and services segment. The company noted that the significant profit growth in software and services was primarily driven by revenue from "vehicle architecture and software development services" related to its joint venture with Volkswagen Group.

For the full year 2025, Rivian's adjusted EBITDA loss was $2.063 billion, which fell within the company's provided guidance. Full-year capital expenditures were $1.71 billion, coming in below expectations. The company ended the fourth quarter with $6.082 billion in cash and cash equivalents, and total liquidity stood at $6.588 billion.

The CEO indicated that the company would "opportunistically pursue additional financing" and expects the joint venture with Volkswagen to contribute approximately $2 billion in cash and debt financing this year.

Looking ahead to 2026, Rivian provided guidance forecasting vehicle deliveries between 62,000 and 67,000 units, which aligns with Wall Street expectations. The company anticipates an adjusted EBITDA loss in the range of $1.8 billion to $2.1 billion for 2026, with capital expenditures projected to be between $1.95 billion and $2.05 billion.

Regarding production risks, the CEO acknowledged that the most significant challenge during the production ramp-up remains supply chain complexity, including uncertainties related to memory, chips, and aluminum.

A key strategic focus is on autonomous driving and AI. Rivian plans to significantly increase its investment in these areas centered around the R2 platform. Initiatives include launching an Autonomy Platform and a Large Driving Model (LDM). The company aims to expand its "Universal Hands-Free" driving capability to second-generation R1 vehicles, covering 3.5 million miles of US roads. A point-to-point hands-free system is slated for release within the year, to be followed by a hands-free, eyes-off advanced autonomous driving product. The ultimate goal is to achieve personal Level 4 autonomy.

To support this ambition, Rivian is developing its own autonomous driving chip, the Rivian Autonomy Processor, intended to replace the previously used NVIDIA Orin chips.

"We decided on a completely new architectural design for the autonomy platform, including the camera perception platform, the compute platform, and re-architecting the entire system around AI. Vehicles on the road will become a massive data flywheel; we collect data and use it to train the models," Scaringe stated.