Rivian Q4 earnings came in better than Wall Street expected, even as revenue declined sharply year over year and vehicle deliveries weakened. The electric vehicle maker, Rivian Automotive (NASDAQ:RIVN), is navigating a transition period as it works to scale production, expand software services, and move closer to long-term profitability.

While the company posted a narrower-than-expected loss in the fourth quarter of 2025, falling automotive revenue and continued cash burn highlight the challenges ahead. At the same time, strong growth in software and services suggests a potential shift in where future value could be created.

Rivian Q4 Earnings Narrower Than Expected

Rivian Q4 earnings showed a loss of 54 cents per share. That result was better than analysts had forecast, as expectations called for a 69-cent loss. However, the loss was slightly wider than the 52-cent loss reported in the same quarter a year earlier.

Revenue totaled $1.29 billion, topping estimates of $1.26 billion. Despite the beat, total revenue declined 25.8% compared to the fourth quarter of 2024. The year-over-year drop was driven mainly by lower vehicle deliveries and a reduction in regulatory credit sales.

The earnings beat may offer some reassurance to investors, but the broader trend shows that Rivian is still in investment mode, prioritizing growth and product development over short-term profitability.

Deliveries and Automotive Revenue Slide

Vehicle production and deliveries both declined during the quarter. Rivian produced 10,974 vehicles, down from 12,727 in the year-ago period. Deliveries fell even more sharply to 9,745 units, compared with 14,183 a year earlier.

As a result, automotive revenue dropped 45% year over year to $839 million. The decline was attributed to fewer vehicles delivered, lower average selling prices, and reduced sales of regulatory credits.

The Automotive segment posted a gross loss of $59 million, a significant reversal from the $110 million gross profit recorded in the same quarter last year. Although total costs in the segment declined 36.3%, the drop in revenue was too steep to maintain profitability.

This weakness underscores how sensitive Rivian’s financial performance remains to production levels and pricing dynamics in the competitive electric vehicle market.

Software and Services Drive Growth

One of the brighter spots in Rivian Q4 earnings was the performance of the Software and Services segment. Revenue in this division more than doubled year over year to $447 million.

Growth was driven by expanded software development services, new vehicle electrical architecture initiatives, and higher revenue from trade-ins, repairs, and maintenance services. The segment generated a gross profit of $179 million, up from $60 million in the prior-year quarter.

While costs in the segment rose to $268 million from $154 million a year earlier, revenue growth more than offset those increases. This helped lift overall gross profit to $120 million for the quarter, though that was still down from $170 million a year ago.

The strong software performance suggests that Rivian is building a more diversified revenue base. Over time, higher-margin software and service offerings could help stabilize earnings and reduce reliance on vehicle sales alone.

Rising Expenses and Cash Burn

Despite the revenue beat, profitability metrics remain under pressure. Adjusted operating expenses rose to $712 million from $620 million in the prior-year quarter. Adjusted EBITDA showed a loss of $465 million, wider than the $277 million loss reported a year earlier.

Cash flow was another area of concern. Net cash used in operating activities totaled $681 million, compared with net cash provided by operating activities of $1.18 billion in the fourth quarter of 2024. Capital expenditures increased to $463 million from $327 million a year earlier.

Free cash outflow reached $1.14 billion during the quarter. This level of spending reflects ongoing investments in manufacturing capacity, product development, and technology infrastructure.

As of December 31, 2025, Rivian held $3.57 billion in cash and cash equivalents, down from $5.3 billion a year earlier. Long-term debt remained essentially unchanged at $4.44 billion.

Maintaining a healthy balance sheet while funding growth initiatives will be a key challenge moving forward.

2026 Outlook Points to Expansion

Looking ahead, management expects deliveries in 2026 to reach between 62,000 and 67,000 units. That would represent significant growth compared to the 42,284 vehicles delivered in 2025.

However, adjusted EBITDA is still expected to remain negative, projected between $1.80 billion and $2.10 billion. Capital expenditures are anticipated to range from $1.95 billion to $2.05 billion in 2026.

These projections indicate that Rivian is focused on scaling production and expanding its platform, even if that means continued near-term losses. The company appears to be betting that higher volume and stronger software revenue will eventually improve margins.

What Rivian Q4 Earnings Mean for Investors

Rivian Q4 earnings highlight a company in transition. On one hand, the narrower-than-expected loss and strong software growth show progress. On the other, declining automotive revenue and persistent cash burn reveal ongoing challenges.

For investors, the key questions revolve around execution. Can Rivian ramp deliveries to meet its 2026 targets? Will software and services continue to grow fast enough to offset automotive volatility? And how long can the company sustain negative EBITDA while investing heavily in expansion?

If Rivian successfully scales production and continues to build a high-margin software ecosystem, the long-term outlook could improve significantly. Until then, the stock may remain sensitive to delivery numbers, cash flow trends, and updates on profitability.

In short, Rivian Q4 earnings delivered a mixed message: operational progress in some areas, but a demanding road ahead as the company works toward sustainable growth.