Q4 2021 Embark Trucks, Inc. Earnings Call

Greetings, and welcome to Embark Truck.

Greetings and welcome to embark trucks, Inc. Q4, 2021 earnings conference call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during todays conference. Please press star zero on your touch.

for 2021 earnings conference call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal.

If anyone should require operator assistance during today's conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn this conference over to your host, Mr. Adam Fee, Strategic Finance

The phone keypad as a reminder, this conference is being recorded I would now like to turn this conference over to your host Mr. Adam see strategic finance. Thank you. Sir you may begin your presentation.

Adam Fee: Thank you, operator, and thank you, everyone for joining us today, hosting the call with me, our co founder and CEO , Alex Rodriguez and CFO Richard Allah. Ahead of this call, embark issued its 4th quarter press release and presentation, which we will refer to today. These can be found on the investor relations section of our website at investors that embark trucks dot.

Thank you operator, and thank you everyone for joining us today hosting the call with me are co founder and CEO , Alex Rodriguez and CFO . Richard How are ahead of this call embark issued its fourth quarter press release and presentation, which we will refer to today.

It can be found on the Investor Relations section of our website at investors got embarked trucks dot com.

Adam Fee: Please note that on this call, we'll be making forward looking statements based on current expectations and assumptions, which are subject to risk and uncertainty.

Please note that on this call we will be making forward looking statements based on current expectations and assumptions, which are subject to risks and uncertainties. These statements reflect our views only as of today should not be relied upon as representative about views as of any subsequent date and we undertake no obligation to revise or publicly release the results of any revisions.

Adam Fee: These statements reflect our views only as of today, should not be relied upon as representative about views as of any subsequent date, and we undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events.

These forward looking statements in light of new information or future events. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations for further discussion of the material risks and other important factors that could affect our financial results. Please refer to our filings with the SEC, including our registration.

Adam Fee: These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations.

Adam Fee: For further discussion of the material risks and other important factors that could affect our financial results, please refer to our filings with the SEC, including our registration statement on Form S-1, filed on November 24, 2021, and our annual report on Form 10-K to be filed in the near term. In addition, during today's call, we will discuss non-GAAP financial measures, which we believe are useful as supplemental measures of MBARC's performance.

Statement on form S. One filed on November 24, 2021, and our annual report on Form 10-K to be filed in the near term <unk>.

In addition, during today's call, we will discuss non-GAAP financial measures, which we believe are useful as supplemental measures of Amdocs performance. These.

Adam Fee: These non- GAAP measures should be considered in addition to and not as a substitute for or in isolation from GAP results.

These non-GAAP measures should be considered in addition to and not as a substitute for or in isolation from GAAP results.

Adam Fee: You will find additional disclosures regarding the non-GAAP financial measures discussed on today's call in our press release issued this afternoon and our filings with the SEC, each of which is posted on our website at investors.mbarctrucks.com. The webcast of this call will be available on the investor relations section of our company website. With that, let me turn the call over to Alex. Thank you very much.

You will find additional disclosures regarding the non-GAAP financial measures discussed on today's call in our press release issued this afternoon and our <unk>.

Filings with the SEC each of which is posted on our website at investors dot embark trucks dot com and the webcast of this call will be available on the Investor Relations section of our company website with that let me turn the call over to Alex.

Thank you very much Adam and good afternoon, everyone.

Alex Rodriguez: Given this is our inaugural Earnings Call as a public company, I'd like to begin by sharing some background on the business and how we are leading the way within the autonomous trucking industry.

Given this is our inaugural earnings call as a public company I'd like to begin by sharing some backend on the business and how we are leading the way within the autonomous trucking industry.

I'm going to begin on slide three.

Alex Rodriguez: Embark is the longest-running self-driving truck program in America. Our company, from its founding six years ago, is solely focused on the trucking market, and we believe this focus differentiates Embark, both in the way that we've developed our technology stack, and in the way that we've built it.

Embark is the longest running self driving check program in America, our company from its founding six years ago.

All the focus on the trucking market and we believe this focus differentiates sandbox both in the way that we've developed our technology stack.

And in the way that we go to market.

Alex Rodriguez: We also believe that both aspects are equally important to commercializing at scale. We pride ourselves on developing our innovative purpose-built self-driving technology in parallel with the operational and commercial side of the business.

We also believe that both aspects are equally important commercializing at scale, we pride ourselves on developing our innovative purpose built self driving technology in parallel with the operational and commercial side of the business.

Alex Rodriguez: Our primary offering is the Embark driver, our highly differentiated and advanced software stack.

Our primary offering is the embarq driver are highly differentiated and advanced software stack.

Alex Rodriguez: We deliver this software as a subscription service by partnering with leading carriers who will pay a per mile subscription fee for Embark Driver software as well as a suite of supporting services.

We deliver the software as a subscription service by partnering with leading carriers, who will pay a per mile subscription fee for embark driver software as well as a suite of supporting services.

Alex Rodriguez: Most notably, these services include Guardian, Embark's cloud-based dispatch and monitoring solution, which delivers 24-7 monitoring for the truck, along with remote assist capabilities and over-the-air updates. We also provide carriers with...

Most notably these services include guidance.

<unk> cloud based dispatch and monitoring solution, which delivers 24 seven monitoring for the trucks, along with remote access capabilities and over the air update.

We also provide curious with access to the <unk> coverage map. This.

Alex Rodriguez: This is a nationwide network of sites between which carriers can dispatch Embark-equipped trucks. Within the Embark coverage map, there are sites to support both the transfer point operating model and the direct-to-shipper model.

This is a nationwide network of sites between which carriers can dispatch and bucket what to track within the Embarq coverage map their site to support both the transfer point operating model and the direct ship model.

Alex Rodriguez: In the transfer point model, carriers utilize existing drivers to handle the first and last mile and pick up and drop off at transfer points near city industrial zones where they can make that handoff.

In the transplant model carriers utilize existing drivers to handle the first and last mile and pick up and drop off a transfer point near city industrial zone, where they can make that handoff.

Alex Rodriguez: Under the direct-to-shipper model, carriers can move goods directly to and from shipper facilities, which have been mapped into the embark coverage.

The direct ship model.

If you move goods directly to and from cheaper facility, which had been mapped into the embarq coverage map.

Alex Rodriguez: I want to highlight three areas of key differentiation that are important to the EMBARK story and the result of focusing solely on autonomous trucking since our inception.

I wanted to highlight three areas of key differentiation. They are important to the back story and the result of focusing solely on autonomous trucking since our inception.

Alex Rodriguez: First, Embargo has developed a proprietary and patent-pending technology called VisionMap Fusion.

And Mark has developed a proprietary and patent pending technology called vision map fusion.

Alex Rodriguez: This technology allows EMBARQ's trucks to update the map in real time, which is critical when encountering situations like construction work zones, particularly when you're on a two-lane highway and there are no alternative routes.

Technology allows and box trucks to update them in real time, which is critical when accounting situations like construction works and particularly when you're on a two lane highway and there are no alternative route.

Alex Rodriguez: This is different from other autonomy providers who rely on an alternative technology known as HD mapping, which is brittle and requires constant maintenance to reflect changes in highway conditions.

This is different from other autonomy providers, who rely on an alternative technology HD mapping, which is brittle and requires constant maintenance to reflect changes in highway condition.

Alex Rodriguez: Our technology stack reflects our focus on trucking and we believe it's much more practical for highway driving relative to urban driving.

That reflects our focus on trucking and we believe it is much more practical for highway driving relative to urban driving <unk>.

Alex Rodriguez: For example, in an urban setting, a robotaxi can simply take a different route, which is not a viable alternative for the highway and trucking use case. 2nd, we've developed

For example, in an urban setting a robo taxi can simply take a different route which is not a viable alternative for the highway and checking use case.

Second we have developed the embark a universal interface.

Alex Rodriguez: These are custom-designed sensor and compute modules that, through a set of flexible interfaces, are designed to be integrated with any of the major OEM platforms.

Custom design center in compute module that doest that a flexible interfaces are designed to be integrated with any of the major OEM platform.

Alex Rodriguez: This modular integration approach is designed to enable our carrier partners to purchase embark equipped trucks from their preferred OEM.

This modular integration approach is designed to enable our carrier partners to purchase embarks equipped trucks from their preferred OEM is.

Alex Rodriguez: This approach was born out of close collaboration with our carrier partners who for decades have purchased trucks in multiple OEMs and have been deeply involved in specifying these trucks down to the brakes, steering, and even the type of engine.

This approach was born out of close collaboration with our carrier partners, who for decades have purchase trucks and multiple Oems and have been deeply involved in specifying these trials down to the brakes gearing and even the type of engine.

Alex Rodriguez: Our interface is designed to accommodate the multi-platform, component-level purchasing behavior that already exists in the trucking market and is highly differentiated from the monolithic platform development approach of the robo-taxi industry.

Our interface and designed to accommodate the multiplatform component level purchasing behavior that already exist in the trucking market is highly differentiated from a monolithic platform development approach of the robo taxi industry.

Alex Rodriguez: Thirdly, Embark has an asset-light business model, where we focus on partnering with the major players in the trucking ecosystem, including carriers, shippers, real estate partners, and tier one manufacturers.

Thirdly.

Embark is an asset light business model, where we focus on partnering with the major players in the trucking ecosystem, including carriers shippers real estate partners and tier one manufacturers.

Alex Rodriguez: Unlike some of our competitors who are focused on owning trucks and developing their own...

Some of our competitors, who are focused on owning Chuck and developing their own fleet embark believes we can be in a position to more rapidly scale by building partnerships, where we benefit from the skills expertise and purchasing power of our partners, resulting in a much more capital efficient business.

Alex Rodriguez: Embark believes we can be in a position to more rapidly scale by building partnerships where we benefit from the skills, expertise, and purchasing power of our partners, resulting in a much more capital efficient business.

Alex Rodriguez: As one example, Embark partners with some of the top carriers in the United States as our customers.

As one example, embark partners with some of the top carriers in the United States as a customer.

Alex Rodriguez: And when you look at the top 100 carriers in the country, they spend approximately $15 billion per year on trucks.

When you look at the top 100 carriers in the country they spend approximately $15 billion per year on track.

Alex Rodriguez: Critically, this asset-led business model also allows us to remain focused on our core competency, building world-class self-driving software for the trucking market. Moving on.

Critically this asset light business model also allows us to remain focused on our core competency building world class self driving software for the trucking market.

Moving on to slide four I'd like to briefly discuss the market opportunity in.

Alex Rodriguez: Embark is focused on the rapidly growing $730 billion U.S. truck trading.

Embark is focused on the rapidly growing 730 billion U S truck rate industry, which is currently experiencing many well known challenges specifically driver shortages diminished carrier margin due to rising labor and fuel costs.

Alex Rodriguez: which is currently experiencing many well-known challenges, specifically driver shortages, diminished carrier margin due to rising labor and fuel costs.

Alex Rodriguez: safety concerns, and increased pressure to expedite delivery times. We believe Embark's technology will address

Safety concerns and increased pressure to expedite delivery times.

We believe in box technology will address all of the challenges and more importantly will help drive a quality of life by allowing drivers to primarily serve as local routes and then returned to their homes each evening.

Alex Rodriguez: And more importantly, will help driver quality of life by allowing drivers to primarily serve at local routes and then return to their homes.

Alex Rodriguez: Additionally, Embargo's autonomous driving solution provides compelling economics for carrier partners.

Additionally, embarks autonomous driving solution provides compelling economics for our carrier partners.

Alex Rodriguez: by enabling carriers to operate for longer hours with meaningfully higher estimated annual revenue per truck.

Enabling carriers to operate with longer hours with meaningfully higher estimated annual revenue per truck.

Alex Rodriguez: Currently, trucks driven by humans are limited by Department of Transportation regulations to 11 hours of operation per day.

Currently trucks driven by humans are limited by Department of Transportation regulations to 11 hours of operation per day.

Alex Rodriguez: Embark-powered autonomous trucks have the potential to dramatically increase that daily driving time while improving delivery speed and

Embark powered autonomous trucks have the potential to dramatically increase that daily driving time.

Improving delivery speed and increasing utilization.

Alex Rodriguez: Also, it's worth noting that one in five loads requested by a shipper today is rejected due to unavailable carrier capacity.

Also.

It's worth noting that one in five loads requested by a shipper today is rejected due to unavailable carrier capacity. We believe our technology will help unlock the supply chain challenges and provide more speed certainty and reliability for shippers in the future.

Alex Rodriguez: We believe our technology will help unlock these supply chain challenges and provide more speed, certainty, and reliability for shippers in the future. Embark technology will also address critical safety issues. As a majority of all

And box technology will also address critical safety issue as a majority of all motor vehicle accidents are caused by human error.

Alex Rodriguez: Embark Trucks has a leading safety record among autonomous software developers, having driven over 1 million real-world miles, and done so without a single Department of Transportation reportable safety.

<unk> is a leading safety record among autonomous outright developers.

Having driven over 1 million real world miles.

And done so without a single department of transportation reportable sake.

Alex Rodriguez: All these factors create a very tangible need for our technology and a compelling business and commercial use case.

All of these factors create a very tangible need for our technology and a compelling business and commercial use case.

Alex Rodriguez: Turning to our business update on slide five, I'd like to highlight several of our accomplishments since announcing our business combination with Northern Genesis last June .

Turning to our business update on slide five I'd like to highlight several of our accomplishments since announcing our business combination with northern Genesis last June .

Alex Rodriguez: In October , we announced that carriers have placed an industry-leading 14,200 reservations for embark equipped autonomous trucks, more than twice the nearest public competitor at the time of announcement.

In October we announced the carriers have placed an industry, leading 14200 reservations for inbox equipped autonomous driving more than twice the nearest public competitor at the time of announcement.

Alex Rodriguez: What makes the reservation announcement even more exciting is that all the carriers that were allowed to place reservations committed to investing today to prepare their operations for autonomous vehicles as part of our partner development program.

We'll make the reservation and asking even more exciting is that all of the carriers that we're allowed to place reservation committed to investing today.

Repair their operation for autonomous vehicles as part of our partner development program.

Alex Rodriguez: These reservations represent a major commitment from fleets that are deeply engaged with us, including many of the largest carriers in the country.

These reservations represent a major commitment from fleets that are deeply engaged with us, including many of the largest carriers in the country.

Alex Rodriguez: This reservation process began with Embark's detailed rollout plan across the Sun Belt, and then overlaid granular lane and load level data from our carrier partners to plan for the conversion of lanes to autonomous based on factors such as lane length, frequency, and market volume density.

This reservation process began with inbox detailed rollout plan across the Sun belt.

Then overlaid granular lane and low level data from our carrier partners to plan for the conversion of lane to autonomous based on factors such as lane like frequency and market volume density.

Alex Rodriguez: combined with insights from how our carrier partners operate trucks today. This allowed us to determine how they would actually deploy and roll out the Embark driver technology within their.

Combined with insights from Howard carrier partners operate trucks today.

This allowed us to determine how they would actually deploy and rollout the embarq driver technology within their fleet.

Alex Rodriguez: And then based on this final output, we were able to identify very specifically the number of embark equipped trucks a given carrier would deploy over the first five years of commercialization.

Then based on this final output, we were able to identify very specifically the number of embargo equipped trucks are getting carrier would deploy over the first five years of commercialization.

Alex Rodriguez: Only then were carrier partners allowed to place a truck reservation, substantiated by this data-driven analysis.

Then where carrier partners allowed to place a truck reservation substantiated by this data driven analysis.

Alex Rodriguez: This process requires significant coordination and collaboration with our partners, many hours of work, and billions of miles of analysis.

This process required significant coordination and collaboration with our partner many hours of work and billions of miles of analysis.

Alex Rodriguez: The result is a high conviction number and associated lane level analysis which allows us to confidently plan our commercial rollout beginning in 2024 and to meet the significant scale demanded by our partners.

The result is a high conviction number and associated lane level analysis, which allows us to confidently plan, our commercial rollout beginning of 'twenty 'twenty four and to meet the significant scale demanded by our partners.

Alex Rodriguez: We also continue to bolster our leadership team with industry veteran executives who have deep autonomous vehicle experience.

We also continue to bolster our leadership team with industry veteran executives with deep autonomous vehicles experienced a.

Alex Rodriguez: A few key hires and promotions I'd like to highlight today. We recently announced the appointment of Stephen Houghton as Embark's Chief Operating Officer.

A few key hires and promotions I would like to highlight today, we recently announced the appointment of Steven Howton. His inbox Chief operating officer, Stephen brings two decades of leadership experience to the team, including six years of autonomous vehicle experience from Amazon increase specifically at cruise, even with responsible the scale increases operations to more than 700 people.

Alex Rodriguez: Stephen brings two decades of leadership experience to the team, including six years of autonomous vehicle experience from Amazon and Cruze. Specifically at Cruze, Stephen was responsible for scaling Cruze's operations to more than 700 people.

Alex Rodriguez: Jean-Baptiste Passat recently joined to lead our software engineering efforts. Jean-Baptiste joins Embark after a decade at BrainCorp, where he oversaw nearly 100 software engineers that deployed a fleet of tens of thousands of production-grade robots.

Jamba is the thought recently joined to lead our software engineering effort.

Keith joins embark after a decade of Greencore, where he oversaw a nearly 100 software engineers that deployed a fleet of tens of thousands of production grade robots.

Jean-Baptiste Passat: Jean-Baptiste holds a PhD in computational science and is responsible for more than 30 patents on a variety of robotics applications.

Pes holds a Phd in computational science and responsible for more than 30 patents on a variety of robotics applications.

Speaker Change: The last key hire I'll highlight here is the addition of Sam Flash on the policy side.

The last key hire I'll highlight here is the addition of sandblast on the policy side.

Speaker Change: Sam served as a senior government affairs representative for the International Brotherhood of the Teamsters Union for over eight years before joining Embark.

Served as a senior government affairs representative for the International Brotherhood of the Teamsters Union for over eight years before joining him back.

Sam Flash: and brings over a decade of experience in technology, safety, and labor policy at the federal and state level.

And brings over a decade of experience in technology safety and labor policy at the federal and state level.

Sam Flash: SAM will further strengthen Embark's long-standing relationship with interest groups, unions, and federal policymakers to collectively deliver the safety, labor, and environmental benefits of autonomous trucking. We're excited to have SAM on the team. We believe engaging with labor is critical to our goal of improving drivers' lives and helps advance our objective of bringing more and higher quality jobs to the industry.

Sam will further strengthen embarks a long standing relationship with interest group Union and federal policymakers to collectively deliver the safety labor and environmental benefits of autonomous trucking. We're excited to have Sam on the team. We believe engaging with labor is critical to our goal of improving drivers' lives and helps advance our objective of bringing more and higher quality job for the industry.

Sam Flash: At Embark, we truly value our culture and the people we hire. I'm humbled and excited at the many industry veterans who are wanting to be a part of what we're doing here at Embark.

And embark we truly value our culture and the people, we hire I'm humbled and excited at the many industry veteran who are wanting to be a part of what we're doing here at Baird.

Sam Flash: On the coverage map expansion, we're excited to have recently announced a strategic partnership with Altera Property Group.

On the coverage map expansion, we're excited to have recently announced a strategic partnership with Alterra property group.

Sam Flash: Altera is one of the largest and first real estate investment companies in the US to focus on industrial outdoor storage properties.

<unk> is one of the largest and first real estate investment companies in the U S to focus on industrial outdoor storage property.

Sam Flash: Altares Lines used its national real estate portfolio and private equity funds, together totaling over a billion and a half dollars, to identify sites that embark on use as transfer points in key freight markets. This partnership further highlights the work we're undertaking today in advance of commercialization in 2024, and validates our asset-led strategy and ability to remain focused as a software-as-a-service business.

He is at National real estate portfolio, and private equity funds together totaling over $1 billion to identify site and embarking uses transit points <unk> freight market. This partnership further highlights the work we're undertaking today in advance of commercialization in 'twenty 'twenty, four and validates our asset light strategy and ability to remain focused as a software.

The service isn't it.

Two other key highlights I'll briefly touch on <unk>.

Sam Flash: First, as we announced earlier this year, we expect to demonstrate and provide key results from our snow testing by the end of this one.

First as we announced earlier this year, we expect to demonstrate and provide key results from our snow testing by the end of this winter.

Sam Flash: I can say we've successfully completed testing with our truck in Montana, and we look forward to sharing the results and key learning on this in the very near future.

Because he was successfully completed testing of electronic in Montana.

And we look forward to sharing the results and key learnings on this in the very near term.

Sam Flash: Additionally, and this is an important one for me personally, as part of our commitment to ESG, I'm forgoing my salary and bonus for 2022, and these amounts will be used to launch a grant program and fund a number of projects in STEM education, beginning with a grant to the Afghan girls robotics team, which I'm really excited about. Embark and I are focused on the long term.

Additionally, and this is an important one for me personally as part of our commitment to ESG I forgot my salary and bonus for 2022 and these amounts will be used to launch a grant program and for a number of projects in stem education, beginning with the grant to the Afghan girls robotics team, which I'm really excited about.

And Mark and I are focused on the long term and taking a zero dollar salary and bonus. This year is a clear way of creating alignment with all of them box shareholders and living out our values.

Sam Flash: And taking a $0 salary and bonus this year is a clear way of creating alignment with all of Embark's shareholders and living out our values.

Turning to slide six.

Sam Flash: Those of you who have followed the Embark story for many years have heard me talk repeatedly about avoiding unrealistic goals.

Those of you who followed the story for many years I've heard me talk repeatedly about avoiding unrealistic goals.

Sam Flash: Embark has consistently distinguished ourselves as a company that sets realistic expectation with the objective of exceeding.

Embark is consistently distinguished ourselves as a company that that's realistic expectation with the objective of exceeding that we.

Sam Flash: We did that for five plus years as a private company. And in 2021, I'm very proud that we've continued to build on that track record as a public

We did that for five plus years as a private company and in 2021 I'm very proud that we've continued to build on that track record as a public company from a technology perspective, we kept up our engineering velocity target of delivering two or more new capabilities from our capability roadmap in 'twenty 'twenty. One just as we have every year going back to 2017.

Sam Flash: From a technology perspective, we kept up our engineering velocity target of delivering two or more new capabilities from our capability roadmap in 2021, just as we have every year, going back to 2017 on the commercial side in our very first.

On the commercial side in our very first investor presentation, and a path to going public we outlined three key objectives that we expected to make major announcements on in the following 12 months. Thank.

Sam Flash: In our path to going public, we outlined three key objectives that we expected to make major announcements on in the following 12 months. Secure truck reservations under our partner.

Securing track reservations under our partner development program.

Sam Flash: enable Embark Universal Interface as an option through manufacturing partnership and expanding the Embark coverage.

Enable embarks a universal interface as an option for your manufacturing partnerships and expanding the embarq coverage map.

Sam Flash: As we just walked through, in 2021, Embark excelled in delivering these ambitious objectives, including announcing in October that we have received more than double the number of reservations from major national carriers compared to our nearest public competitor. We continue to provide ourselves on the depth of our relationships with our partners across the trekking ecosystem.

Is it just walked through in 2021 embarked itself delivering these ambitious objectives, including announcing in October that we have received more than double the number of reservations for a major national carriers compared to our nearest public competitor. We continue to provide ourselves on the depth of our relationships with our partners across the trucking ecosystem and our ability to deliver industry leading outcomes.

Sam Flash: and our ability to deliver industry-leading outcomes in a highly capital-efficient manner.

Highly capital efficient manner.

Sam Flash: On to slide 7. I want to take a moment to outline what we intend to accomplish in 2022. First, become the first autonomy developer to deliver trucks into the fleets of carrier customers.

On to slide seven I want to take a moment to outline what we intend to accomplish in 2022.

<unk> become the first autonomy developer to delivery trucks into the fleets of carrier customer.

Sam Flash: Second, accomplish two of the remaining five capabilities in our technological roadmap.

Second accomplished two of the remaining five capabilities and our technological roadmap, bringing the total capabilities accomplished to 13 of 16 by the end of 2022 and third launch the backbone of ironbark coverage map across the Sunbelt region I want to reiterate again that we aim to provide clear milestones. So our progress can be measured and tracked allowing us to.

Sam Flash: bringing the total capabilities accomplished to 13 of 16 by the end of 2022. And third, once the backbone of our Embark coverage map across the Sunbelt.

Sam Flash: I want to reiterate again that we aim to provide clear milestones so our progress can be measured and tracked, allowing us to demonstrate the advancement of our technology and to provide tangibility towards commercialization.

Straight the advancement of our technology and to provide tangibilitate towards commercialization.

Sam Flash: I also want to ensure that not only can you evaluate our technology progress, but also our commercial and operational progress, which is equally important to ensure the tracking ecosystem is ready to deploy our technology.

Just want to ensure that not only can you evaluate our technology progress, but also our commercial and operational progress, which is equally important to ensure the trucking ecosystem is ready to deploy our technology.

Sam Flash: As I said before, we can't simply ask carriers to download an app and start using trucks in 2024 without proper preparation.

As I said before we can't simply as carriers to download an app and start using trucks in 2024, it without proper preparation instead, we are actively preparing our partners today setting up the operational framework to ensure our software is tightly integrated within their fleet.

Sam Flash: Instead, we are actively preparing our partners today, setting up the operational framework to ensure our software is tightly integrated within their.

Sam Flash: This preparation is critical to our long-term successful commercialization and provides another tangible checkpoint as we work with our partners and prepare to put self-driving trucks into service across the sun.

This preparation is critical to our long term successful commercialization and provides another tangible checkpoint as we work with our partners and prepare to put self driving trucks into service across the sunbelt.

Sam Flash: With the first of the technology roadmap on slide eight, we're providing even more detail around the five capabilities that remain and the timing of when we intend to achieve them. As you can see, two of these capabilities, emergency vehicle interactions and evasive maneuvers, are scheduled to be accomplished this year.

Looking first at the Technology Road map on slide eight we provide even more detail around the five capabilities that remained and the timing of when we intend to achieve them.

Two of these capability emergency vehicle interactions and invasive maneuvers are scheduled to be accomplished this year.

Sam Flash: On slide nine, we can dig into more detail on emergency vehicle interaction.

Slide nine we can dig into more detail on emergency vehicle interaction.

Sam Flash: Emergency vehicle interactions involve the multi-step process of an embarked driver responding to a traffic.

Emergency vehicle interactions involve multi step process of embark driver responding to a traffic stop.

Sam Flash: This includes sensing an emergency vehicle and knowing it needs to pull over.

This includes <unk> sensing and emergency vehicle and knowing it needs to pullover.

Sam Flash: confirming the traffic stop with Guardian, pulling over to the side of the road, informing the officer to call Guardian, and providing access to key documents by a lock.

The Capex type of Guardian.

Pulling over to this side of the road and Formula Obviously to call Guardian, and providing access to key documents via a lockbox.

Sam Flash: We've collaborated closely with the California Highway Patrol to test this capability, and we expect completion in the second quarter of this year. We also intend to work with additional local authorities to refine this capability.

We collaborated closely with the California Highway patrol test this capability and we expect completion in the second quarter of this year.

We also intend to work with additional local authority to refine this capability.

Sam Flash: Moving on to slide 10, I want to discuss the main areas of commercial focus for Embark in 2022.

Moving on to Slide 10, I wanted to discuss the main areas of commercial focus for embarked in 2020.

Sam Flash: First, the truck transfer program is an industry first program and a major step in the evolution of autonomous trucking that we'll be executing over the course of the year. I will speak to this in more detail on the next slide.

First the truck Transit program is an industry first program and a major step in the evolution of autonomous trucking it will be executing over the course of the year I will speak to this in more detail on the next slide.

Sam Flash: Second, as I mentioned, we're going to continue to be focused on expanding the Embark coverage map, continuing to build upon our relationships with Altera and Rider. We're excited to truly operationalize the backbone of our coverage map across the Sunbelt by the end of the year.

Second as I mentioned, we're going to continue to be focused on expanding the <unk> coverage map continuing to build upon our relationships with altera and Ryder, we're excited to truly operationalize the backbone of our coverage map across the send out by the end of the year.

Sam Flash: Third, we remain committed to our manufacturing strategy of developing Embark universal interface to work across multiple OEM platforms.

Third we remain committed to our manufacturing strategy of developing embark a universal interface to work across multiple OEM platform.

Sam Flash: As I will highlight, the truck transfer program will be a great proof point of a carrier being able to use their preferred truck platform simply by selecting it and having the Embark universal interface installed.

I will highlight the truck transit program will be a great proof point of the carrier being able to use that preferred truck platform simply by selecting it and having the embarq universal interface installed.

Sam Flash: Lastly, the Partner Development Program will continue to mature.

Lastly, the partner development program will continue to mature.

Sam Flash: And we expect to execute from a set of 40-plus projects across 15 primary workstreams over the course of 2022. This will further inform the roadmap towards commercial deployment with our existing carrier partners. While also adding

And we expect to execute from its at a 40 plus projects across 15 primary work stream over the course of 2022.

This will further inform the roadmap towards commercial deployment with our existing carrier partners.

We're also adding new partners to the program.

Sam Flash: We're excited to share more details on our partner development program work over the course of the year as we execute on these initiatives.

We're excited to share more details on our partner development program work over the course of the year as we execute on these initiatives.

Sam Flash: Moving on to slide 11, I want to talk about the Truck Transfer Program, or as we call it TTP. This is an exciting next step.

Moving on to slide 11, I want to talk about the truck transit program or as we call. It TTP isn't.

It's an exciting next step for the autonomous trucking industry.

Sam Flash: To date, Embark and other autonomous developers have operating a testing model in which the AV provider owns, maintains, and dispatches autonomous trucks, placing their own driver behind the wheel during hauls for shipper and carrier parts.

To date embark and other autonomous developers have operating a testing model in which the Avi provider owned maintained and dispatches autonomous truck, placing their own driver behind the wheel drink halls, with shipper and carrier partners.

Sam Flash: This existing configuration has generated valuable early insights into real-world technology performance.

This existing configuration has generated valuable early insight into real world technology performance.

Sam Flash: and how to best integrate embark equipped trucks within the existing supply chain operation.

And how to best integrate embargo equipped trucks within the existing supply chain operations.

Sam Flash: The truck transfer program represents the next logical step towards commercialization.

The truck Transit program represents the next logical step towards commercialization.

Sam Flash: marking the first time that the carrier, NYSWIFT, will own an autonomous truck, maintain and deploy that truck, and place their own driver behind the wheel.

Marking the first time that the carrier nice with bone antonymous truck, maintaining deploy that truck and place their own driver behind the wheel.

Sam Flash: This program will unlock the next level of integration and deployment learning ahead of scaled commercialization.

This program will unlock the next level of integration and deployment learning ahead of scale commercialization.

Sam Flash: Last month, we announced that by the end of 2022, we intend to equip a set of NYSWIFT trucks from the carrier's slated 2022 OEM deliveries with Embark Universal Interface for use in their day-to-day operations.

Last month, we announced that by the end of 2022, we intend to equip a nice lift trucks and the carriers played at 2022 OEM deliveries with Embarq Universal interface for use in their day to day operation. We will work closely to develop workflows and account for truck maintenance dispatching and it integration point among other things to ensure a seamless integration of embark.

Sam Flash: We will work closely to develop workflows and account for truck maintenance, dispatching, and IT integration points, among other things, to ensure seamless integration of Embark technology.

<unk>.

Sam Flash: This will be yet another tangible proof point of Embark achieving our commercialization target, and a great example of how the depth of partner relationship is critical to preparing the ecosystem for autonomous traffic.

This will be yet another tangible proof points of embark achieving our commercialization target and a great example of how the depth of partner relationship is critical to preparing the ecosystem for autonomous truck.

Sam Flash: And with that, I'll turn it over to Richard to discuss the financial details.

With that I'll turn it over to Richard to discuss the financial details.

Richard Allah: Thank you, Alex. Turning to slide 12, let me highlight some of the key financial and operational metrics that support our business progress.

Thank you Alex turning to slide 12, let me highlight some of the key financial and operational metrics that support our business progress.

Richard Allah: First, we're excited about the $245 million of net proceeds raised during the transaction to go public last year.

First we're excited about the $245 million of net proceeds raised during the transaction to go public last year embark has developed a leading technology stack and industry, leading business partnerships and a highly capital efficient manner and we believe this additional capital will continue to support the business going forward by maintaining focus and discipline, we can deploy our resources.

Richard Allah: Embark has developed a leading technology stack and industry-leading business partnerships in a highly capital-efficient manner, and we believe that this additional capital will continue to support the business going forward. By maintaining focus and discipline, we can deploy our resources efficiently and effectively.

Additionally, and effectively we believe our balance sheet is very robust given the operational and commercial goals and objectives to Alex just walked through and further highlights why having clear and focused efforts is critical to maintaining capital efficiency.

Richard Allah: We believe our balance sheet is very robust given the operational and commercial goals and objectives that Alex just walked through and further highlights why having clear and focused efforts is critical to maintaining capital efficiency.

Richard Allah: As we look at key financial and operational metrics, I want to really focus on several areas. First, free cash flow spend is a metric we monitor very closely. For the fourth quarter of 2021, Embark had free cash flow spend of $34.2 million. And for the full year 2021, we had free cash flow spend of $68.8 million. These are net of certain one-time cash expenditures related to transaction costs.

As we look at key financial and operational metrics I want to really focus on several areas first free cash flow spend is a metric we monitor very closely for the fourth quarter of 2021 embark had free cash flow spend of $34 2 million and for the full year 2021, we had free cash flow spend of $68 8 million.

These are net of certain one time cash expenditures related to transaction costs.

Richard Allah: It's worth noting that Q4 reflects approximately $12.5 million of prepaid expenses and other working capital adjustments. So if you look at Q4, without the impact of those adjustments, free cash flow spend is closer to $21.7 million per quarter. These metrics are also net of one-time related expenses.

It's worth noting that Q4 flex approximately $12 5 million of prepaid expenses and other working capital adjustments. So if you look at Q4 without the impact of those adjustments free cash flow spend is closer to $21 7 million for the quarter.

These metrics are also not a one time related transaction costs.

Richard Allah: As a pre-revenue company, we are very cognizant that every dollar we spend must have a clear and obvious use to advance us towards commercialization. While sometimes this focus can be to the detriment of marketing our story publicly, we believe the technology and what we've accomplished with our resources to date ultimately speaks for itself. To reiterate, we believe we have deployed a leading technology relative to our competitors with less capital because of our focus and discipline.

As a pre revenue company, we are very cognizant that every dollar we spend must have a clear and obvious use to advance us towards commercialization, while sometimes just focus could be to the detriment of marketing our story publicly we believe the technology and what we've accomplished with our resources to date ultimately speaks for itself.

Reiterate we believe we have deployed a leading technology relative to our competitors with less capital because of our focus and discipline.

Richard Allah: During a full year 2022 guidance, we expect free cash flow spend to be in the range of $125 million to $140 million.

Turning to full year 2022 guidance, we expect free cash flow spend to be in the range of $125 million to $140 million, we believe our ability to develop a leading technology, while being extremely capital efficient is a direct result of our focus which helps ensure we continue to be prudent stewards of capital as we advance towards commercialization in 2024.

Richard Allah: We believe our ability to develop a leading technology while being extremely capital efficient is a direct result of our focus, which helps ensure we continue to be prudent stewards of capital as we advance towards commercialization in 2024.

Richard Allah: At an AV company, we also don't need to build a manufacturing facility or hard asset to have one sale. We are able to continually evaluate the tradeoffs on where and how we deploy capital to ensure we are efficient with our resources. And most importantly, this enables us to ensure we remain focused on the main objective of commercializing our AV trucking technology at scale.

Ivy Company, we also don't need to build a manufacturing facility or hard asset to have one sale.

Cable to continually evaluate the trade offs on where and how we deploy capital to ensure we are efficient with our resources and most importantly, this enables us to ensure we remain focused on the main objective of commercializing our AB trucking technology at scale.

Richard Allah: To provide a bit more detail on the quarter and the year, net loss was 76.4 million for the fourth quarter, and it was 124.2 million for the full year 2021. Adjusted EBITDA loss was 20.3 million for the fourth quarter compared to adjusted EBITDA loss of 6.1 million in the prior year period.

To provide a bit more detail on the quarter and the year net loss was $76 4 million for the fourth quarter and it was $124 2 million for the full year 2021, adjusted EBITDA loss was $20 3 million for the fourth quarter compared to adjusted EBITDA loss of $6 1 million in the prior year period.

Richard Allah: Full year 2021 adjusted EBITDA loss was $53.5 million. These are net of one-time related transactions.

Full year 2021, adjusted EBITDA loss was $53 5 million.

These are net of one time related transaction costs.

Richard Allah: These figures include stock-based compensation expense of $44.2 million for the fourth quarter and $47.6 million for the year 2021. For 2022, we expect stock-based compensation expense to be in the $70 to $75 million range.

Figures include stock based compensation expense of $44 2 million for the fourth quarter and $47 6 million for the year 2021 for 2022, we expect stock based compensation expense to be in the $70 million to $75 million range. It's worth noting that approximately $10 6 million of stock based compensation expense is related to our founders.

Richard Allah: It's worth noting that approximately $10.6 million of this stock-based compensation expense is related to our Founders PSU grant. That does not begin to vest until our share price is at least $20. And then the vesting schedule grows in five price increments up to $100 per share, aligning our Founders interest with long-term investment.

You grab that does not begin to vast until our share price is at least $20.

And then the vesting schedule grows in five price increments up to a $100 per share aligning our founders interest with long term investors.

Richard Allah: Since it's always a top question, I include some additional detail here, so you have to go digging through our filing.

Since it's always a tough question I include some additional detail here you have to go through our filing.

Richard Allah: As of March 7, 2022, Embark had 450 million basic shares outstanding. You will also see in the appendix, I included a summary of our share count for your benefit, which also summarizes the warrants we have outstanding that remain out of the money today.

As of March seven 2020 to embark had 450 million basic shares outstanding you will also see in the appendix I included a summary of our share count for your benefit which also summarizes the warrants we have outstanding debt remain out of the money today.

Richard Allah: Lastly, a few key operational metrics I want to highlight. At year end, we had 18 trucks in our testing fleet.

Lastly, a few key operational metrics I want to highlight at year end, we had 18 trucks and are testing fleet.

Richard Allah: And we believe we are highly efficient in the way we utilize these assets, which allows us to have very robust road testing. We had 235 employees at year end of which 171 are related to our R&D.

And we believe we are highly efficient in the way we utilize these assets, which allows us to have very robust road testing. We had 235 employees at year end of which 171 are related to our R&D organization.

Richard Allah: Lastly, and certainly most importantly, we continue to be excited about our safety record. We have had zero DOT reportable incidents or failed inspections through 2021.

And certainly most importantly, we continue to be excited about our safety record, we've had zero reportable incidents or filled inspections through 2021.

Richard Allah: Moving to slide 13, I want to provide an update on our business prospects and the financial framework which you can evaluate and mark. Before I get into the details, I would like to reiterate the criticality of the preparation we are conducting today with our partners to both inform our assumptions and our expectations regarding ultimately realizing.

Moving to slide 13, I want to provide an update on our business prospects and the financial framework, which you can evaluate embark.

Before I get into the details I would like to reiterate the criticality of the preparation we were conducting today with our partners to both inform our assumptions and our expectations regarding ultimately realizing them.

Richard Allah: We are preparing our carrier partners networks today on covering the operational, organizational, and technological friction points that slow deployments and then smoothing them out.

We are preparing our carrier partners networks today, uncovering the operational organizational and technological friction points that slow deployments and that's moving the mouse.

Richard Allah: We are continuing to learn where the technology makes sense and where it does not and building deployment plans against these shared perspectives.

Turning to learn where the technology makes sense and where it does not and building deployment plans against these shared perspectives.

Richard Allah: Given this unique perspective that MBARC has been able to develop, we believe there are two ways to credibly evaluate this framework, top-down and bottoms-up. From a top-down perspective, we've taken a set of assumptions around the total addressable market and then distilled this down into the lanes that we believe are economically viable for autonomous trucking. Lastly, we have further filtered this funnel to the operational design domains where we believe our technology will be viable in the near future. This is our serviceable market.

Given this unique perspective, the embark has been able to develop we believe there are two ways to credibly evaluate this framework top down and bottoms up from a top down perspective, we've taken a set of assumptions around the total addressable market and then there's still this down into the lanes that we believe are economically viable for autonomous trucking lastly, we further built.

This funnel to the operational design domain, where we believe our technology will be viable in the near future. This is our serviceable market.

Richard Allah: From a bottoms-up perspective, we are looking at our partners today to understand their current size, ability to scale autonomous trucking across their networks, available pine power, et cetera. Today, our carrier partners drive roughly three billion miles annually and have 38,000 trucks under management. And this is achieved under the constraints of human driver hiring and hours of service. The 14,200 truck reservations that these fleets have placed represent nearly 10 billion miles over the entire life cycle of the reservation.

From a bottoms up perspective, we're looking at our partners today understand their current size ability to scale autonomous trucking across our networks available time power et cetera today, our carrier partners drive roughly 3 billion miles annually and have 38000 trucks under management and this is achieved under the constraints of human driver hiring and hours of service to <unk>.

<unk> 14200 truck reservations that these fleets have placed represent nearly 10 billion miles over the entire lifecycle of the reservations. Additionally, these reservations are backed by deep network analysis as Alex explained earlier.

Richard Allah: Additionally, these reservations are backed by deep network analysis, as Alex explained earlier, and is yet another proof point on the depth of the work and analysis we conduct as part of our partner development program to inform our overall framework.

Yet another proof point on the depth of the work and analysis, we conduct as part of our partner development program to inform our overall framework.

Richard Allah: As we progress towards commercialization, we look forward to refine the connective tissue from the top-down and bottoms-up frameworks to provide a high-fidelity view of our scaling plan. With that, I'll turn it back to Alex for closing remarks.

As we progress towards commercialization, we look forward to refine the connective tissue from the top down and bottoms up frameworks provide a high fidelity view of our scaling plan with that I'll turn it back to Alex for closing remarks.

Alex Rodriguez: Thank you, Richard. I'd like to conclude on slide 14 by thanking our partners and customers, our employees for all their hard work, and our investors for their continued long-term support.

Thank you Richard I'd like to conclude on slide 14 by thanking our partners and customers our employees for all of their hard work and our investors for their continued long term support.

Alex Rodriguez: I want to finish with one final observation. When we look at the broader mobility landscape, we believe that autonomy is the most attractive opportunity in the near to medium term. There are less players relative to other subsegments, and the financial profile is materially more attractive.

Wanted to finish with one final observation when we look at the broader mobility landscape. We believe the economy is the most attractive opportunity in the near to medium term.

Players relative to other sub segment and the financial profile is materially more attractive.

Alex Rodriguez: Within autonomy, we believe the trucking application is the most obvious and practical use case given the size of the market and the constraints our technology will unlock in the industry.

Autonomy, we believe the trucking application is the most obvious and practical use case, given the size of the market and the constraints are technology will unlock in the industry and.

Alex Rodriguez: Embark has been solely focused on the self-driving truck problem from the beginning over six years ago, and we're excited to see the leading technology and clear go-to-market strategy that we've developed over many years intersecting with the most compelling opportunity in the mobility space today. With that, we'll open the call to Q&A. At this time, we will be conducting a

<unk> has been solely focused on the cells, having try problem from the beginning over six years ago.

Excited to see the leading technology and clear go to market strategy that we've developed over many years intersecting with the most compelling opportunity in the mobility space today.

With that we'll open the call for Q&A.

At this time, we'll be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two to remove your question from the queue for participants using speaker equipment it may be necessary.

Alex Rodriguez: star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two to remove.

Alex Rodriguez: For participants using speaker equipment, it may be necessary for you to pick up your handset before pressing the star keys one moment while we

<unk> to pick up your handset before pressing the star keys, one moment, while we poll for questions. Our first question comes from the line of Chris Wetherbee with Citigroup. You May proceed with your question.

Speaker Change: Our first question comes from the line of Chris Weatherby with Citigroup. You may proceed with your question.

Hey, Thanks, and good afternoon guys.

Chris Weatherby: Maybe we could start with the truck transfer program. I wanted to get a sense of what you thought, you know, maybe what the progress might look like this year in terms of timing of getting the trucks from the OEM, you know, upfitting them, getting them to Knight Swift.

Maybe we could start with the truck transfer program wanted to get a sense of what you thought.

Maybe what's the progress might look like this year in terms of timing of getting the trucks from the OEM.

Getting them getting them to Knight Swift and then.

Chris Weatherby: Do you think that this opens the door for other potential participants in the program? Do you think you could see other carriers sign up over the course of this year?

Do you think that this opens the door for other potential participates in the program do you think you could see other carrier sign up over the course of this year, maybe think about how you can scale that over time.

Speaker Change: Yeah, the expectations for this program, as we sort of laid out the presentation, we're expecting to have the 1st set of trucks over tonight with running in their day to day operations for the end of the year. Um, as far as the intermediate milestones, obviously, a bunch of those things, they're going to all need to take place between now and then we'll look forward to giving you the updates as they come along. But I think you should feel sort of a pretty clear and status to where we're driving and we're excited to provide some updates.

Hey, guys, yeah, the expectations for this program.

As we sort of laid out in the presentation.

We're expecting to have the first set of trucks over the nice win.

Running in their day to day operations before the end of the year.

As far as the intermediate milestones, obviously, a bunch of those things are going to need to take place between now and then.

We look forward to giving you the updates as they come along but you should feel.

Pretty clear and state as to where we're driving and we're excited to provide some updates.

Speaker Change: In terms of how we see this expanding, I think we see it expanding potentially in two directions. One will be continuing to increase the set of features that these trucks are actually equipped with. So adding more and more of the features from our level four system to give a more sophisticated experience inside the fleet. And then on the other side, as you mentioned, I think this is an exciting program that we see the potential and demand for significantly more than just NightSwift.

In terms of how we see this expanding I think we see it expanding potentially.

Potentially in two directions, one will be continuing to increase the set of features.

These trucks are actually equivalent so adding more and more of the features from a level four system.

To give a more sophisticated experience.

Inside the fleet and then on the other side as you mentioned I think this is an exciting program that we see the potential and demand for <unk>.

Any more than just nice lift.

Speaker Change: And that's something that we're definitely evaluating.

And that's something that we do.

Definitely definitely evaluating.

Speaker Change: Okay, that's helpful. I appreciate it. And then, you know, on the on the five remaining milestones that you're working on, I think you have two of them.

Okay.

I appreciate it and then.

The five remaining milestones that you're working on I think you have two of them highlights.

Speaker Change: So I guess I want to think you gave us a little bit of color on the emergency vehicle interaction.

Two block so I guess I wanted to you gave us a little bit of color on the emergency vehicle interactions.

Speaker Change: You have evasive maneuvers as the next one beyond that. You know, any way for us to think about the timing of those as we go through the year, obviously a lot of the stuff that we're going to be asking is about sort of measuring your progress against some of your big milestones.

You have a visa maneuvers as the next one beyond that any way for us to think about the timing of those as we go through the year, obviously, a lot of the stuff that we're gonna be asking us about sort of measuring your progress against some of your big milestones and ultimately working towards those goals in the out years. So is there any help in terms of how we should be thinking about that process.

Speaker Change: and ultimately working towards those goals of the out year. So is any help in terms of how we should be thinking about that process?

Speaker Change: Yes, I think once the webcast comes out, or if you have the slides in front of you taking a look at slide eight, there's actually a lot more detail there than sort of what I gave on the call. We talked through both the timing, so those two, the first one in Q2, the second one in the back part of the year, as well as the timing for the remaining milestones, kind of a little bit more about what that includes and why we think those are important.

Yes, I think.

Once the webcast.

Slide eight is actually a lot more detail there and then sort of what I.

On the call we talked through.

The timing so those two the first one and in Q2 the second one.

Part of the year as well as the timing of the remaining milestone as kind of a little bit more about what that includes and why we think those are important.

Okay.

For us than it is.

Speaker Change: I didn't know it just says 2022, so I guess that's sort of just by year end is the way to think about it. That's right, yeah. And then the other three are for 2023. Understood. Thank you.

I didn't notice it is 2022 so I guess that sort of just by year end is the way to think about it.

That's right yes.

And then the other.

Understood. Thank you and then last question for me just wanted to get a sense of sort of cash burn Richard you walked us through that I appreciate it.

Speaker Change: through cash burn you know richard you you walked us through that i appreciate it uh...

Speaker Change: thoughts on your cash profile today and then if you feel good about the rate of cash burn to kind of get you to commercialization.

You know thoughts on on your cash profile as it stands today and then.

If you feel good about the rate of cash burn to kind of get you to commercialization and scale.

Speaker Change: Yeah, Chris, let me just walk you through our balance sheet today and where we are. At year-end, we had approximately $265 million of cash on our balance sheet, and we have ample runway to execute on the set of initiatives we just outlined for 2022. As we've talked about, being an AD company, we always have flexibility in our plan to define and refine these key initiatives, key partners, and the number of resources required to execute upon them.

Yes, Chris Let me, let me just walk you through our balance sheet today, and where we are at year end, we had approximately $265 million of cash on our balance sheet and we have ample runway to execute on a set of initiatives. We just outlined for 2022.

As we've talked about <unk> being a company, we always have flexibility in our plan to define and refine these key initiatives key partners and a number of resources required to execute upon them.

Okay. So I guess that sort of made you feel good about where you are.

We feel good where we are today.

Got it alright, well thanks very much for your time. This afternoon, guys I really appreciate it.

Speaker Change: As a reminder, if you would like to ask a question, please press star 1 on your telephone keypad.

As a reminder, if you would like to ask a question. Please press star one on your telephone keypad.

Speaker Change: Our next question comes from the line of George Gianniagricis with Baird. You may proceed with your question.

Our next question comes from the line of George Junior Gregus with Baird. You May proceed with your question.

Hey, guys. Good afternoon, Thanks for taking my question.

George Gianniagricis: So maybe to start, can you talk about any momentum you've seen in conversations with

So maybe to start.

Can you talk about any momentum you've seen in conversations with potential partners.

George Gianniagricis: ecosystem given the current state of affairs, supply chain and trucking shortages, any incremental insights you could share would be much appreciated.

<unk> system, given the current state of affairs in supply chain and trucking shortages any incremental insights you could share would be much appreciated.

Speaker Change: Yeah, I think we've definitely seen the focus on the trucking industry from shippers and then the focus on sustainability from carriers that certainly come a lot sharper in the last quarter. I think that the two things that we're hearing in our conversation.

Yes, I think we've definitely seen.

Our focus on the trucking industry.

From shippers and then the focus on sustainability.

That has certainly come a lot sharper in the last quarter.

I think the two things that we're hearing in our conversations.

Speaker Change: is one with oil at, you know, close to all-time highs and that potentially being a long-term thing. Suddenly, the focus on that 10% plus fuel efficiency improvement that driverless can enable is pretty significant. And then, this one's maybe been going on for more like six or nine months, but when you look at the impact of the supply chain crisis and the shortage of truck drivers...

One with <unk>.

Close to all time highs and that potentially being a long term thing suddenly to focus on that 10% plus fuel efficiency improvement the driverless can enable.

Pretty significant.

And then just want to maybe thank Glenn for more like six or nine months, but when you look at the.

The impact of the <unk>.

Jason the shortage of truck drivers.

Speaker Change: We're really seeing that demand driving for how can we improve not just today's logistics, but really the long-term demographic profile, which is the underlying cause of this problem.

We're really seeing that that demand driving for how can we improve not just todays logistics, but really the long term demographic profile, which is the underlying causes problem.

Speaker Change: at it, and maybe to focus on the technology piece. One of your competitors recently talked about co-developing an ADC with NVIDIA, and you've taken a little bit of a different approach. I'm curious as to why you think getting a little bit more deeply embedded with some of your semiconductor or component partners is not essential, and that you can sort of.

Got it.

And maybe to focus on the technology piece.

One of your competitors recently talked about co developing an ADC with a video.

You've taken a little bit of a different approach and I'm curious as to why.

A little bit more deeply embedded with some of your semiconductor component partners is not a central that you can sort of us.

Speaker Change: allow the market to come to you as opposed to addressing these concerns.

The market to come to you as opposed to two.

Addressing these concerns directly.

Speaker Change: Yeah, I think, first off, I want to say that we work pretty closely with NVIDIA. We think they make absolutely great hardware and that's the reason that we trust them to be a pretty significant partner in the technology development that we're doing. I think the trade-off in our minds is really about whether or not you want to in-house hardware development or pieces of the stack.

Yes, I think first off I wanted to say that.

We work pretty closely with India, we think they need absolutely great hardware.

That's the reason that.

We try to be a pretty significant partner in.

The technology development that we're doing I think the trade offs in our mind is really about whether or not you want to in house hardware development or pieces of the stack.

Speaker Change: And I think what we've seen, and certainly if you look at Embark historically, we're a very focused company and we've talked consistently about how that drives capital efficiency. I think what's clear from our perspective is that if you're going to choose between investing in

And I think what we've seen and so I think if you look at and Mark Historically, we're very focused company and we've talked consistently about how that drive capital efficiency.

I think whats clear from our perspective is that if youre going to see.

Skus between investing in.

Speaker Change: proprietary hardware versus investing in better software, that software investment paired with really great partnerships is going to be the way to go. We've seen this in the past for us when we think about the LiDAR space, for example.

A variety of hardware versus investing in better software that software investment paired with really great partnerships is going to be the way to go.

<unk> seen this in the past for us when we think about the Lidar space for example, where embark has partnered with Illumina. We've invested very heavily in building best in class Lidar classification machine learning software for the benefit of this approach whether that's in Lidar.

Speaker Change: where Embark has partnered with Luminar. We've invested very heavily in building best-in-class LiDAR classification machine learning software. And the benefit of this approach, whether that's in LiDAR or it's in.

Speaker Change: compute is that if someone's making proprietary hardware, they then need to

Compute is that.

Someone's, making proprietary hardware.

Then need to be.

Speaker Change: be on the hook for every incremental scale up or improvement of that system.

Beyond the hub for every incremental scale up for improvement of that system, whereas if embarking investing in setting green software and today, we have a hardware platform and media.

Speaker Change: Whereas if Embark is investing instead in great software, and today we have a hardware platform through our work with NVIDIA that's best in class and that our software is able to run within, that's a great outcome. If our investment brings the compute to a point where it runs within the computer, that is something that we can continue to benefit from over the long term.

Best in class and that our software is able to run with him.

That's a great outcome by investment, bringing the compute to a point where it runs within the computing that is something that we can continue to benefit from over the long term.

Speaker Change: Thank you. And one more, if I may, just in terms of the milestones, you've said for 22 and 23, and I think the slide deck is great. You guys did a really good job of laying out exactly what we should expect. There's not a driver out test in there. Why is that not something that you feel that you need to prove out your product and to begin the rollout.

Thank you and one more if I may just in terms of the milestones you've said for 'twenty, two and 'twenty three and I think the slide deck. It's great you guys did a really good job of laying out exactly what we should expect.

There is not a drive road test them there.

Why is that not something that you feel like you need to prove out your product and to begin the rollout in 2024.

Speaker Change: Yeah, I think when we look at the capabilities of the system, our focus is really on making sure that we have a complete and commercially viable system, and then ultimately handing that to our carrier partners in a way that they feel is safe and credible.

Yeah, I think when we look at the capabilities of the system.

Our focus is really on making sure that we have a complete and commercially viable system and then ultimately handing that to our carrier partners.

It's incredible.

Speaker Change: Obviously, the end state here is running the truck without a driver, but our view is that doing that on a partial set of capabilities, one that's not yet commercially ready is a distraction from the real engineering work that we need to be doing and we're doing all of our.

Obviously, the entity, who is running the truck and a driver, but our view isn't doing that on a partial 17 ability is one that is not yet commercially ready.

The distraction from the real engineering work that we need to be doing.

And we're doing all of our system validation in parallel such that any as we're doing these capability that reliability work is being done alongside them, but I think we really want to see something that's ready to go to market with capabilities like emergency given interaction.

Speaker Change: system validation in parallel such that as we're doing each capability, that reliability work is being done alongside. But I think we really want to see something that's ready to go to market with capabilities like emergency vehicle interaction before we start handing it over to carriers without a driver.

Before we start turning it over to carriers.

Got it.

Understood. Thank you guys.

Speaker Change: Our next question comes from the line of Todd Fowler with Caping Capital Markets. You may proceed with your question.

Our next question comes from the line of Todd Fowler with Keybanc capital markets. You May proceed with your question.

Todd Fowler: Okay, great. Alex, Richard, congratulations on the first quarter as a public company.

Okay great.

Alex Richard Congratulations on the first quarter as a public company.

Speaker Change: I guess I agree with the last comment. The slide deck here is pretty helpful. Alex, I wanted to ask on slide 10, kind of on the commercial milestones that you're looking at, do you view these as kind of being in order or from a priority standpoint that the most important is the truck transfer program and then kind of moving through those one, two, three, and four? Or do you think about the commercial milestones? Is there something that you view as kind of more important on the road to commercialization?

I guess I agree with the last comment the slide deck here is pretty helpful.

Wanted to ask on slide 10 kind of on the commercial milestones that Youre looking at do you view these as kind of being an order or from a priority standpoint that the most important is the truck transfer program and then kind of moving through those 123 and four or do you think about the commercial milestones is there something that you view as kind of more important on the road to commercialization.

Alex Rodriguez: Yeah, I would say really the first two here are the ones that we think are going to be certainly the most differentiated if you look to what we're doing in 2022. and so I really look at the truck transfer program where we're going to be the 1st player to actually be putting trucks into real fleet, which I think is a huge step on the commercial side and then the rollout of our partner base

Yes, I would say really the first two here are the ones that we think are going to be certainly the most differentiated as you look to what we're doing in 2022.

So I really look at the truck transfer program, where we're going to be the first player to actually be putting trucks into real fleet, which I think is a huge step on the commercial side and then the rollout.

Of our <unk>.

Alex Rodriguez: transfer hub network in the Sun Belt that really laid the groundwork for being able to do this at scale with our carrier partners. So I think those are the two biggest, and certainly, of course, we'll be working on all four.

Hardware based.

Transfer how network in the Sun belt, it really lays the groundwork for being able to do this at scale with our carrier partners. So I think those are the two biggest certainly.

Certainly of course, where we will be working on all four.

Speaker Change: Got it. And then, Alex, I know you've done a good job in talking about the reason why, you know, being platform agnostic makes sense, you know, certainly the way, you know, the carriers purchase trucks, you know, currently. Can you help us think about, you know, as you get closer to commercialization, how you see the retrofit, you know, moving into the install process with the OEMs and maybe a little bit of color around the conversations that you're having to have, you know, trucks equipped with hardware to run your software as you get closer to commercialization?

Got it and then you also I know you've done a good job in talking about the reason why being platform agnostic makes sense here is certainly the way the carriers purchase trucks. Currently can you help us think about as you get closer to commercialization, how you see the the retrofit moving into the install process with the Oems and maybe a little bit of color around the <unk>.

Patients that you're having to have trucks equipped with hardware to run your software as you get closer to commercialization.

Alex Rodriguez: Yeah, absolutely. I think maybe two thoughts on the manufacturing side. It's our view that

Yeah, absolutely I think maybe two thoughts on on the manufacturing side.

It's our view that.

Alex Rodriguez: By having a platform agnostic approach, we're able to really meaningfully burn down the manufacturing risk.

By having a platform agnostic approach, we're able to really meaningfully bring down the manufacturing rent I think some people.

Alex Rodriguez: I think some people have sort of asked the question.

It has sort of asked the question.

Alex Rodriguez: it doesn't just add risk to the system. And I think actually from our view, the riskier thing to do would be to rely on a single OEM development timeline as a single point of failure on the company's business model. And we see building something that's platform agnostic and therefore allows us to diversify in the same way that our carrier partners want to diversify across the different OEM platforms. It's something that really helps bring down risk and give us confidence and certainty about our ability to deliver on time because it puts more things within our control.

It doesn't add to the system and I think actually from our view the risk do you think to deal with each relying on a single OEM development timeline.

A single plant failure on the company's business model and we see building something is platform agnostic and therefore allows us to diversify in the same way that our carrier partners wanted to diversify across a different OEM platform is something that really helps bring down risking give us confidence uncertainty about our ability to deliver on time, because it puts more things within our control.

Alex Rodriguez: And I think we're continuing to see progress towards showing that be really successful.

And I think we're continuing to see progress towards showing that be really successful.

Alex Rodriguez: So the, I mentioned a little bit, the truck transfer program work that we're doing, it's actually not going to be based on a platform that Embargo has integrated to in the past. Instead, it's going to be based on the Kenworth T-680 platform, which Nightswift provides a lot of, and so Nightswift is taking existing trucks out of that order that are going to be upfitted, and we've been working with them, with their contacts at the OEM, and we feel very good about that install process and being able to deliver those trucks.

So that I mentioned, a little bit the Chuck answered program work that we're doing and it's actually not going to be based on a platform that embargo integrated too in the past and that has been.

Based on the <unk> platform, which.

Nice to have a lot of.

By taking an existing trucks out of that order.

Theyre going to be updated and we've been working with them with the context of the OEM.

And we feel very good about that install process and being able to deliver those trucks.

Alex Rodriguez: in exactly the way that we sort of targeted and based on some of the partnerships and the development work we've been doing over the last couple of years.

Exactly the way that we sort of targeted and based on some of the partnerships and the development work we've been doing over the last couple of years.

Speaker Change: Got it. That makes a ton of sense. That's helpful, Alex, Richard, a couple for you, you know, just on the cash.

Got it that makes a ton of sense. That's helpful. Alex Richard a couple for you just on the cash the free.

Speaker Change: the free cash burn guidance for this year, the 125 to the 140. Can you, I guess, help us think about a couple of things. I mean, the split between R&D and G&A, how that, you know, kind of breaks out. And then what's your expectation from a cadence standpoint? I mean, based on where you were in the fourth quarter, if we adjust for the prepaid, it feels like that that's going to ramp as we move through the year on a quarterly basis. Is that the right way to think about the quarterly cadence of cash burn?

Free cash burn guidance for this year, the 125 to $1 40.

Can you I guess help us think about a couple of things I mean, the split between R&D and G&A and how that kind of breaks out and then what's your expectation from a cadence standpoint, I mean based on where you were in the fourth quarter. If we adjust for the prepaid it feels like that that's going to ramp as we move through the year on a quarterly basis is that the right way to think about the quarterly cadence of cash burn.

Speaker Change: Yeah, Todd, certainly as we grow, it will certainly ramp quarter over quarter. Obviously, we continue to monitor, as I mentioned, the tradeoffs, the resources and where we deploy them against our initiatives and objectives.

Yes, Todd.

Certainly as we grow it will certainly ramp quarter over quarter.

Obviously, we continue to monitor as I mentioned, the tradeoffs to resources, and where we deploy them against our initiatives and objectives.

Speaker Change: On your first question on the split, we haven't provided that detail, but I think as we've said before, we are an engineering-led organization, and when you think about where that spend is, it goes towards people, and when you think about where those people are, they're typically in engineering, so it's a significant chunk of where that spend will go.

On your first question on the split we haven't provided that detail.

As we've said.

Before we are an engineering led organization and when.

When you think about where that spend is it goes towards people and when you think about where those people are typically an engineering center significant chunk of where that spend will go.

Speaker Change: Got it. Okay. That makes sense. And then just the last one for me, yeah, I know in the financial projections that you guys laid out in, in, you know, 2024, you know, there was a substantial amount of revenue that you had, you know, kind of in your forecast and building into 25.

Got it okay that makes sense and then just the last one for me.

I know in the financial projections that you guys laid out in 2024, if there was a substantial amount of revenue that you had you kind of in your forecast and then building into 25.

Speaker Change: Can you help us think about, I mean, the timing of when, you know, revenue is going to start to materialize? It doesn't seem like it's going to be something that we see in 22. Is it something that, you know, starts to come in in 23, and then it's a big ramp into 24? Or just how do we think about, you know, kind of the revenue cadence, you know, as you move through the milestones? Thanks for the time.

Can you help us think about I mean, the timing of when revenue is going to start to materialize. It doesn't seem like it's going be something that we seen in 'twenty two or is it something that starts to come in in 'twenty. Three and then it's a big ramp into 'twenty four or just how do we think about kind of the revenue cadence as you move through the milestones. Thanks for the time.

Speaker Change: So nothing's changed from what we've previously said at this point, Todd, I think what we have provided is a framework of how we think about where that looks based on a top down and a bottoms up approach.

So nothing has changed from what we've previously said at this point Todd I think what we have provided US a framework of how we think about.

Where that looks based on a top down and a bottoms up approach what I would say is the ability to generate I would say a nominal amount of revenue moving goods between now we don't see a benefit.

Todd Fowler: What I would say is the ability to generate, I would say, a nominal amount of revenue moving goods between now, we don't see a benefit until we're prepared to commercialize at scale in 2024. And that's how we've designed at least the way that we test and how our engineering team works and how we utilize our fleet.

We're preparing to commercialize at scale in 2024, and that's how we've designed at least the way that we test and our engineering teams.

Works and how we utilize our fleet.

Got it thanks again for the time Tonight.

Speaker Change: Ladies and gentlemen, we have reached the end of today's question and answer session. I would like to turn this call back over to Mr. Alec Rodriguez for closing remarks.

Ladies and gentlemen, we have reached the end of today's question and answer session I would like to turn this call back over to Mr. Alex Rodriguez for closing remarks.

Alec Rodriguez: Awesome. Thanks everybody for joining us. It's great first earnings call, a lot of good questions, and we're looking forward to dealing with this with you guys more often and updating you all on our progress over the course of the year.

Awesome, Thanks, everybody for joining us.

Great first earnings call a lot of good.

And we're looking forward to doing this with you guys more often and updating you on our progress over the course of the year.

Alec Rodriguez: This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation and enjoy the rest of your day.

This concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation during the rest of your day.

Speaker Change: bye

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Speaker Change: The the the the the

Speaker Change: © transcript Emily Beynon

Yes.

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Speaker Change: Thank you for watching. We hope to see you again soon. Thank you. 2