Rivian's Software Revenue Surges 49% as Auto Gross Profit Swings to Loss
The EV maker's consolidated revenue grew 11% to $1.38 billion, but automotive margins buckled under a $100 million drop in regulatory credit sales.
Rivian Automotive, Inc. (RIVN) posted a 11% rise in first-quarter revenue to $1,381 million, but the electric-vehicle maker's consolidated gross profit fell 42% to $119 million as a sharp decline in regulatory credit sales and a shift toward commercial van mix eroded automotive margins.
The quarter underscored a structural pivot taking hold at Rivian. While vehicle deliveries rose 20% year-over-year to 10,365 units, production actually fell 30% to 10,236 units. The company drew down inventory rather than building it, a move that flattered delivery numbers but left the manufacturing base running well below capacity. That dynamic, combined with a $100 million reduction in high-margin regulatory credit sales, pushed the automotive segment into a $62 million gross loss, swinging from a $92 million profit a year earlier.
Software and services filled the gap. Segment revenue climbed 49% to $473 million, marking a fifth consecutive quarter of sequential growth from $318 million a year ago. The unit's gross profit rose $67 million to $181 million, effectively offsetting the automotive segment's deterioration at the gross-profit line. The gains were driven by vehicle electrical architecture and software development work tied to the Volkswagen Group joint venture, alongside expanding repair, maintenance, and remarketing activity.
The top-line growth, however, could not keep pace with rising costs. Total operating expenses increased to $1,000 million from $861 million, with research-and-development spending rising to $458 million and selling, general and administrative costs climbing to $542 million. The loss from operations widened to $881 million from $655 million, and adjusted EBITDA deteriorated to $(472) million from $(329) million. Net loss, by contrast, narrowed to $(416) million from $(541) million, aided by a $506 million gain linked to the Series A capital raise and deconsolidation of Mind Robotics.
Cash consumption accelerated. Net cash used in operating activities surged to $(703) million from $(188) million, and free cash flow deepened to $(1,075) million from $(526) million, reflecting working capital demands, higher operating expenses, and the absence of prior-year credit sales. Cash, equivalents, and short-term investments stood at $4,830 million at quarter-end, down from $6,082 million at the end of 2025 and $7,178 million a year ago.
Rivian reiterated its full-year 2026 guidance of 62,000 to 67,000 vehicle deliveries, adjusted EBITDA of $(2.10) billion to $(1.80) billion, and capital expenditures of $1.95 billion to $2.05 billion, unchanged from the outlook provided in the prior quarter.
The company also disclosed several strategic developments. Saleable production of the R2 platform began in the first quarter, with employee deliveries underway and external customer deliveries expected in the second quarter. Rivian announced a robotaxi partnership with Uber Technologies for up to 50,000 fully autonomous R2 vehicles, with Uber committing up to $1.25 billion through 2031 and an initial $300 million equity investment expected in the second quarter. Separately, Volkswagen unlocked a $1 billion equity investment after the joint venture's zonal architecture completed winter testing, and the company said initial production capacity at its Georgia plant would be 50% larger than previously planned at 300,000 vehicles annually, with a first draw on its Department of Energy loan expected in early 2027.