Rivian Automotive reported positive consolidated gross profit during the second quarter of 2026 as its software and services business offset continued losses from vehicle manufacturing.
Consolidated gross profit reached $179 million, improving by $385 million from a $206 million gross loss during the second quarter of 2025.
The company’s software and services segment generated $215 million of gross profit, exceeding Rivian’s total consolidated gross profit.
The segment’s 42% gross margin was sufficient to offset a $36 million gross loss in the Automotive segment.
This means Rivian’s vehicle business remained unprofitable before research, development, sales, and administrative expenses, despite a substantial year-over-year improvement.
The Automotive gross loss narrowed by $299 million from $335 million during the prior-year quarter.
Higher vehicle deliveries and production volumes, regulatory-credit revenue, and a tariff-refund receivable contributed to the improvement.
Those benefits were partly offset by approximately $100 million of incremental cost of revenue associated with ramping R2 production compared with more normalized manufacturing levels.
Rivian began delivering the R2 to external customers on June 9.
The mid-size electric sport utility vehicle is designed to bring Rivian’s technology and product experience to a broader market at a lower price point than the company’s R1 vehicles.
R2 is manufactured on a new production line at Rivian’s facility in Normal, Illinois.
Rivian is also constructing a second manufacturing facility in Georgia that is expected to add up to 300,000 units of annual capacity.
The Georgia plant is intended to support R2, a future robotaxi version of the R2, and additional vehicles including the R3.
Rivian produced 12,613 vehicles during the second quarter and delivered 12,194 vehicles.
Delivery volume increased approximately 14% from the prior-year period.
Consolidated revenue increased 27% to $1.66 billion.
Automotive revenue increased 23% to approximately $1.14 billion, driven by higher vehicle deliveries and a $103 million increase in regulatory-credit revenue.
Those gains were partly offset by lower average selling prices resulting from a larger mix of commercial vans and R2 deliveries.
The changing product mix reflects Rivian’s transition toward higher-volume vehicles with lower selling prices.
Rivian recorded $108 million of total regulatory-credit revenue during the quarter.
The credits contributed to both consolidated revenue growth and the narrowing of the Automotive segment’s gross loss.
Software and services revenue increased 37% to $515 million.
Growth came from vehicle electrical architecture and software-development services, vehicle repair and maintenance, and Rivian’s Autonomy+ offering.
Lower remarketing revenue partly offset those increases.
Rivian’s joint venture with Volkswagen Group accounted for $308 million, or approximately 60%, of software and services revenue.
The Volkswagen relationship therefore supplied a substantial portion of the revenue generated by the segment responsible for Rivian’s consolidated gross profit.
Software and services gross profit increased by $86 million from the prior-year quarter, primarily because of electrical architecture and software-development services provided through the Volkswagen joint venture.
Rivian is using its vertically integrated electrical architecture, software platform, and vehicle technology to create revenue sources beyond manufacturing and selling its own vehicles.
The approach could provide higher-margin revenue that helps offset the capital intensity and lower near-term profitability of vehicle production.
However, Rivian continued to report substantial losses after operating expenses.
Total operating expenses increased to approximately $1.02 billion from $908 million.
Research and development expense increased to $466 million from $410 million, reflecting spending on artificial intelligence, autonomous-driving technology, and the R2 launch.
Selling, general and administrative expense increased to $549 million from $498 million.
Rivian attributed the increase to the expansion of its sales and service footprint for R2, along with higher payroll, stock-based compensation, facilities, and software costs.
The operating loss narrowed to $836 million from approximately $1.11 billion, representing an improvement of $278 million.
Adjusted operating expenses increased to $731 million from $681 million.
Adjusted research and development expense rose to $347 million, while adjusted selling, general and administrative expense increased to $384 million.
Rivian’s adjusted EBITDA loss improved to $379 million from $667 million.
The net loss attributable to common shareholders narrowed to $837 million from approximately $1.12 billion.
Despite the earnings improvement, Rivian’s cash consumption increased substantially.
Net cash used in operating activities reached $487 million, compared with $64 million of operating cash generated during the prior-year quarter.
The change primarily reflected inventory purchases supporting the R2 launch. The prior-year period also benefited from deferred revenue associated with Volkswagen Group’s investment.
Capital expenditures declined to $362 million from $462 million.
Free cash flow was negative $849 million, compared with negative $398 million during the second quarter of 2025.
Rivian ended June with approximately $5.31 billion in cash, cash equivalents, and short-term investments.
Total available liquidity, including capacity under its asset-backed revolving credit facility, was approximately $5.85 billion.
A July equity offering generated approximately $1.32 billion in net proceeds, increasing pro forma liquidity to roughly $7.16 billion.
Rivian expects to receive another $1 billion of non-recourse debt financing from Volkswagen and a $250 million equity investment from Uber, subject to the completion of certain conditions.
The company said its current available liquidity and targeted future capital for growth initiatives exceed $14 billion. That figure includes conditional investments and financing sources that have not yet been fully received.
Rivian also continued expanding its commercial-vehicle platform.
Amazon now operates more than 40,000 Rivian Electric Delivery Vans across thousands of North American cities.
The Commercial Van platform surpassed one billion miles driven during the quarter, and Rivian is developing larger-battery and all-wheel-drive versions for Amazon.
The company raised its 2026 delivery outlook by 3,000 vehicles following progress with production and expected second-half deliveries.
Rivian also improved the midpoint of its adjusted EBITDA guidance by $50 million, reflecting stronger regulatory-credit revenue and higher delivery expectations.
The midpoint of capital expenditure guidance was reduced by $250 million because of project efficiencies and changes in spending timing.
Rivian’s second-quarter results show that the company is making substantial progress toward vehicle-level profitability, but its automotive operations have not yet reached gross break-even.
Software and services, particularly revenue from the Volkswagen joint venture, are currently supplying the gross profit needed to keep Rivian profitable at the consolidated gross-margin level while the R2 production ramp continues.
KEY QUOTES:
“This quarter we began external deliveries of R2. I believe R2 will be a game changer for our customers and a driver of Rivian’s long-term growth and profitability.”
“The U.S. automotive marketplace is starved for high-quality EV choice, and I believe R2 is an attractively priced option for everyday adventures that will resonate with a broad set of consumers.”
RJ Scaringe, Founder And Chief Executive Officer Of Rivian
