Q3 2024 Aurora Innovation Inc Earnings Call
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Greetings and welcome to the Aurora 3rd quarter 2020 4th Business Review Call. At this time, all participants are now listening only mode. A question and answer session will follow a formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad.
Speaker Change: As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Stacy Feit, Vice President of Investor Relations. Thank you, Stacy. You may begin.
Thanks Paul. Good afternoon everyone and welcome to our third quarter, 2024 Business Review Call. We announced our results earlier this afternoon. Our shareholder letter and a presentation to a company who is called or available on our investor relations website at IR.org.
The shareholder letter was also furnished with our form 8K filed today with the FCC.
on the call with me today, Chris Urmson, co-founder and CEO, and David Maday, Seattle.
and the progress we have made across the key pillars of our business and David will recap our third quarter financial results. We will then open the call to Q&A.
We're recording of this conference call will be available on our Investor Relations website at ir.erroy.tech shortly after this call is ended.
I'd like to take this opportunity to remind you that during the call we will be making forward looking statement.
Include statements relating to the benefits of integrating artificial intelligence into our product. The safety benefits of our technology and product.
The Achievement of Certain Miles Center Round, Realization of the Potential Benefits of the Development, Manufacturing, Staling.
and Commercialization via Word, Travelling Related Services.
Including Relationships and Intensive Native Benefits with Partners and Customers, and on the time frame we expect to read all the market opportunity, the expected future market size, our products compatibility with those of partners and customers.
and the University of our College of Health and the University of our respective market share. The efficiency of our validation process our remote assistance efficiency for tribal appropriations.
and Prof. Philitya of our product Conservatives.
Ray Lichorey Tell Wins and Framework in which we operate, expect a cash runway and overall future prospects.
These statements are subject to known and unknown risk, among certainties that could cause actual results to differ materialies from those projected or on slide during this call.
In particular, those described in our risk factors included in our annual report on Form 10K for the year ended December 31, 2023, files of the FCC as amended as well as current uncertainty and unpredictability in our business and markets in the economy.
Speaker Change: A additional information will also be set forth on a quarterly report on 410Q for the quarter-ended September 30, 2024.
You should not rely on our forward-looking statements of predictions of future events, all forward-looking statements that we make on this call are based on assumptions and beliefs as of a day to your eyes, and are we're going to claim any obligation to update any forward-looking statements except as required by law.
are discussion today may include non-gap financial measures, use non-gap measures should be considered in addition to and not as a substitute for or a nice relation from our gap result.
Information regarding our non-gapsing answer results including a reconciliation of our historical gap to non-gaps results, maybe found in our shareholder letter which was furniture with our former AK files today with the FCC and may also be found on our Invest Relations website. With that, I'll now turn to call over to Chris. Thanks Stacy.
Today we stand on the brink of a new era and mobility in logistics and we'll bring a safer, more efficient and more accessible future for everyone.
Chris: with commercial launch now within site, we are closer than ever done locking the benefits of the road driver for our customers at the Modering Public.
We're excited that the broader industry shares our vision.
Speaker Change: [inaudible]
Speaker Change: This sentiment was particularly evident at our recent partners summit and its further underscored in our commercial contracting progress.
With another launch customer sign, our expected launch capacity is now fully contracted, and we are in the final stages of contracting our remaining second-happ capacity to match our anticipated supply.
Importantly, with the support of many of Wall Street's largest institutional investors, we completed another successful capital-razen August, adding nearly half a billion dollars to our balance sheet.
This incremental capital extends our runway well into 2026 and we expect to defund the initial phases of our scaling strategy.
As we progress towards commercial launch we continue to lead the industry with our commitment to safety and the autonomy performance transparency.
To begin tribal operations, we must close our safety case for the Delta Houston launch land.
Speaker Change: Our safety case framework is a comprehensive evidence-based approach to confirming that our self-driving vehicles are acceptably saved operate on public roads.
We quantify our progress toward closing our doubts to use the launch lane safety case through the autonomy readiness measure or arm, which is a weighted measure of completeness across all claims of the safety case for our launch lane.
We remain the only company in the industry that has provided this level of transparency.
As of the end of October, arm was 97% with our most recent software release we have validated majority of highway driving.
We're now primarily focused on final behavior refinement and validation for components of surface streets that we sequenced later in our work plan, some rare construction elements, and closing a small number of vehicle claims specifically related to redundant systems.
Validation of the Aurora Driver's Perception System is virtually complete with over 400 modes validated and just six remaining.
The perception capabilities are truly outstanding, not just in everyday conditions, but also in just about any condition the world throws at it.
Speaker Change: on page five of our presentation. We've shared a collection of challenges and areas that are rare, do occur.
Speaker Change: In one case, the World Driver detects a motorcycle speeding down the road at an astonishing 150 mAh.
Speaker Change: In another, it's about someone lying under a car on the freeway for over 150 meters away.
The Aurora Driver also skillfully tracks a work-comboi blocking multiple lanes.
Speaker Change: and one of the most unpredictable and dangerous scenarios is a text that Jaywalking Petestrian suddenly emerging from behind trees on a dark rainy night when visibility on the highway is very limited.
YouTube these situations pose as extreme danger, whether due to a small high speed actor, low profile individuals that a human driver would likely not notice in motion work crews or poor visibility and erratic pedestrian movement.
Yet, in every case, the road driver calmly perceives this scenario.
These perception capabilities enable the Lord driver to navigate the complex environments in encounters.
In the video on page 6 of the presentation, you can see the Aurora driver's superhuman perception capabilities on the road.
New Road drivers navigating heavy traffic on I-45, just outside of Houston, and the Texas motorcycle 100 meters behind, the legally lanes flitting through a narrow space between trucks.
Speaker Change: You're a roar driver quickly identify some motorcycle is what we refer to in the self-driving industry, a vulnerable road user, and adjust creating as much space as possible.
I'm like a human driver who would likely focus on the vehicle directly ahead and not anticipate this behavior from behind. The Aurora Driver has 360 degree awareness and correspond proactively to mitigate danger.
Timmeloli, in the video on page 7 of our presentation, we see the Aurora driver traveling through Huntsville, Texas on a dark night at speed.
Speaker Change: from 230 meters away, it detects a person attempting to run across the highway and immediately takes action, slowing down while lane changing away from the pedestrian's path to create additional safe space.
Once it is safely passed, the Aurora driver merges back into his preferred travel lane, successfully navigating this complex, very high-risk scenario with precision and care.
Speaker Change: With further confidence in the Aurora driver's performance, we are transitioning to single vehicle operator for some of our commercial loads as we approach driver's operations.
This operating mode also provides the discipline to fully implement a remote assistance capabilities and supports foreign houses for remote assistance efficiency for driverless operations.
Speaker Change: Based on our current modeling, we expect to be able to operate at least 10 trucks per remote assistance specialists by the end of 2025, which is a meaningful threshold that supports our path to achieving positive growth profit.
We expect to continue increasing this ratio throughout 2026 and beyond.
Speaker Change: Another key metric we use to assess the road driver's performance and commercial readiness is the autonomy performance indicator or API.
The indicator penalizes the use of onsite support, which will be the most expensive support provided to enable the road driver. We are focused on driving up the percentage of commercial loads that did not require any form of onsite support, which we refer to as 100% API loads.
As a reminder, we do not anticipate that aggregate API will ever reach on percent even at launch.
because certain situations will always require onsite support. However, we believe the percentage of 100% API loads is a strong indicator of our progress toward commercial launch. And we expect this metric to reach approximately 90% by commercial launch.
Speaker Change: During the third quarter, 80% of the commercial loads on the Dallas-D Houston launch lane had 100% API, which is a 5% point higher than last quarter, and consistent with the performance we saw in the June Stable Software release.
Speaker Change: The supplement our internal arm and API metrics during the third quarter we invited leading authorities in commercial driver's license training and evaluation, JJ Keller and Roadmaster to assess the Aurora driver's proficiency.
Speaker Change: They evaluated our system as they would assess a traditional truck driver and found the road driver performed exceptionally well, meeting or surpassing the standards expected of a professional driver.
We feel good about our progress and our confident in our ability to close the safety case for driverless operations on our launch lane. With additional visibility on the time needed to complete the aforementioned remaining validation, we now expect to launch commercially in April 2025.
Speaker Change: While this is modestly later than we had intended, this timing remains within the margin of error we have anticipated and conveyed throughout 2024.
with our intention to introduce your road driver with a crawl walk run approach. This shift to our timeline will have a negligible financial impact and does not affect our scaling efforts on our path to self-funding.
During launch, we expected a blow up to 10 drivers trucks in commercial operations, starting with one driver's truck at transitioning the balanced driverless.
Speaker Change: We are deliberately starting this way. As our early efforts will be focused on exercising the full product suite to ensure a seamless product launch while demonstrating the value proposition for our customers and continuing to build trust with all of our stakeholders.
In the second half of 2025, our focus will be expanding our product capabilities, adding new lanes and increasing capacity to tens of trucks by the end of 2025.
To ready our customers for driverless operations, in September we hosted our annual partner summit, where we were joined by more than 20 of the nation's largest and most sophisticated carriers.
In aggregate, these businesses operate well over 100,000 class aid trucks.
Speaker Change: We brought these customers together with industry safety experts, regulators, first responders, and law enforcement for collaborative conversations on driverless operations.
We also announced and soft launched our Partner Success Program in which customers have the opportunity to more deeply evaluate and assess the road driver's performance as a final step to move forward with driverless operations.
and the enthusiasm was palpable.
Some of the participants on average rated the right experience 4.7 out of 5 across the set of 20 criteria.
While all eyes are first on a dial stick used in launch lane, our customers have also been keenly interested in when the Aurora driver will begin to operate beyond Texas.
We regularly gather feedback from many of the industry's leading carriers regarding where the Aurora Driver can at the most value.
At the summit, we announced that in 2025 we planned to extend our Fort Worth to El Paso Lane, on which we are autonomously hauling loads daily to Phoenix. One of our customers most frequently requested lanes.
The Fort Worth Phoenix Lane spends over 1,000 miles and takes at least 15 hours to complete, making it particularly compelling for autonomy since the Aurora driver is in subject to hours of service limitations can operate nearly 24-7.
We expect to begin commercial pilots for customers between Fort Worth and Phoenix in the first half of 2025. With the intent to go driverless on that route later in the year.
With the promise of how the Lord driver can benefit not just the operations between Dallas and Houston, but also their network more broadly. Schneider recently executed their contract for 2020-25th of all you and joins our commercial launch cohort.
As we prepare for commercial launch we continue to autonomously Hall-Fraight for all our pilot customers, including FedEx, Werner, Schneider, Hershback, Uber Freight and others. We are scheduling nearly 160 commercial loads per week or more than double the commercial volume we were executing a year ago.
Speaker Change: Q-Lin of today, we have a tonnily delivered under the supervision of vehicle operators, more than 8,200 loads, driving over 2.2 million commercial miles, with nearly 100% on-time performance for our pilot customers.
As our customers gained confidence through hands-on experience, we're also seeing growing optimism around autonomous technology from state governments, including a request from the California DMV for an formal public input on draft regulatory language regarding the testing and deployment of autonomous trucks.
Speaker Change: Wawperliminary, we view this as an encouraging step toward a process that would explicitly allow deployment of self-driving trucks in the state.
The demonstrate the safety benefits the roar driver would bring to California's roadways, which tragically see more than 400 fatal collisions involving trucks each year. We examine data from 14 fatal crashes on high five in Sacramento County that occur between 2018 and 2022.
We recreated these collisions in a simulation to understand how the road driver would have acted if placed in these situations.
and the North, our analysis found that the Urderriver would not have caused any of the fatal collisions.
We included one of these simulations on page 14 of the presentation.
Speaker Change: In the original incident on I-5, a three-way collision occurred due to a wrong way driver on the highway.
We created a variation of the original incident by simulating, in simulation, by placing the Aurora driver in the position of avoiding the wrong way driver while accounting for a passenger vehicle alongside it in the adjacent lane.
In the simulated scenario, a proprietary long range first light light are recognises the wrong way driver, foreign advance and an able-zero driver to safely complete a contested lane change to move out of the way, preventing the collision.
Speaker Change: More than 5,000 fatal crashes involving large trucks occur on our nation's highways annually. We applaud the California DNV for undertaking the robust stakeholder driven process as it considers the development of a regulatory framework that would enable the safe deployment of autonomous trucks in California to fully realize
Safety and Economic Benefits of this Technology.
We submitted public comments which were due to the DMV earlier this month and we look forward to continuing our work to help move these regulations forward.
Speaker Change: In the meantime, under existing law and regulation, autonomous trucks can be deployed today in the fast-preachered state of the US.
All of the work we're doing to launch travel operations in Texas is supporting the development of our playbook for rapid-lane expansion to capitalize on the significant autonomous trucking opportunity.
Speaker Change: Last month McKinsey and Company projected that the U.S. will have the fastest autonomous truck adoption rate globally with a autonomous heavy duty trucks accounting for 13% of trucks on the road in 2035.
Given the self-similarity of the U.S. Intercent Highway System and the power of our verifiable AI technology, we expect the Aurora Driver to capture a considerable share of this opportunity.
We anticipate the road driver's capabilities to transfer across lanes, with the opening of new lanes requiring limited development just for incremental features.
Speaker Change: In fact, our team recently completed bi-directional mapping of the L. Passo to Phoenix Route, 450 miles each way in just two weeks.
Speaker Change: The Aurora Driver navigated a vast majority of the late Atonom Slee at its first round trip. Atonomy software capabilities transferred seamlessly to the Phoenix Lane as we anticipated with vehicle operator inventions for the Imland Border Patrol Station and some complex construction.
We also expect the efficiency of our validation process to score more expeditious safety case closure for future lanes as the subsequent turns of the crank will naturally be faster.
These factors give us the confidence in our plan to rapidly expand driver's operations to the Fort Worth to a pass-on lane, and then further to Phoenix before unlocking additional lanes across the southern coast.
To commercialize autonomous trucking across these lanes at scale, deep integration with OEMs on scalable, autonomous, double truck platforms is needed.
We continue to make good progress with our early imp partners on our vehicle programs.
Speaker Change: During the third quarter, we integrated several new Aurora Driver equipped Volvo VNL autonomous trucks into our fleet and they're now operating in autonomy on the road alongside our Pat-Car Peter Bills 5.7 9 trucks.
Our exclusive partnership with Continental is designed to support scaling of the road driver hardware for high volume, line-side installation at ROMs.
This month, Aurora and Constantinant will reach another partnership milestone. We finalize the detailed system of component level architecture and hardware selections for the scalable, hardware's service generation of your ROR driver.
Our teams are preparing to start a initial testing in the first half of 2025, as we continue to progress towards the start of production planned for 2027.
Speaker Change: At Aurora, we're driven by a mission to deliver the benefit of self-driving technology safely, quickly and broadly. That mission is led us to now where the Aurora driver is on the cost of making self-driving trucks the new standard per safety, efficiency and sustainability in the logistics industry.
Commandous Opportunity lies ahead and we're working tirelessly to capitalize on it.
with that I'll now pass it over to Dave who review our financial results.
Thank you, Chris. Let's discuss our financial results. We have provided a summary on page 18 of the slide deck for reference.
During the third quarter of 2024, we continued to demonstrate strong fiscal discipline.
Dave: 3rd quarter 2024 operating expenses, including stock base compensation totaled $196 million.
Excluding stock-based compensation, operating expenses, total $161 million dollars.
Within operating expenses, our R&D expenses, excluding stock-based compensation, totaled $139 million.
The Samount Reflect $834,000 in pilot revenue, which is up 75% year over year, in which we record as a contra R&D expense.
After our commercial launch, pilot revenue will be recognized as standard revenue, rather than as a contra R&D expense.
A CNX expenses excluding stock base compensation or $22 million.
We used approximately $143 million in operating cash during the third quarter of 2024.
Capital expenditures totaled $7 million.
This guest pen was below our externally communicated target reflecting our continued commitment to fiscal prudence.
For the fourth quarter of 2024, we expect cash use to be within 175 to $185 million a quarterly average rate.
We expect our 2025 quarterly average cash use to be in this range as well.
During the third quarter, we opportunistically raised $483 million in gross proceeds from a public offering of our Class A Common Stock.
Net Proceeds totaled 466 million dollars.
We ended the third quarter with a very strong balance sheet, including approximately $1.4 billion in cash in short-term and long-term investments.
We expect this liquidity to support our planned commercial launch and fund our operations well into 2020-6.
Speaker Change: with that will now open the call to Q&A.
Speaker Change: [inaudible]
Thank you. We'll now make an update at question and answer session. If you're like us a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. May press star 2 if you'd like to remove your question from the queue.
For participants, even speaker, equipment and may be necessary to pick up your hands at before processing the star keys.
One more please, while we call for questions.
Speaker Change: Episode 2
Speaker Change: Thank you. Our first question is from George Jenner Ricos with Cana Courts in the Way. Please proceed with your question.
Hi, I'm Good afternoon and thank you for taking my questions.
You know, Mike, can you please give us a little bit more detail on the remaining validation required to launch commercially.
and April is next year and also given that the timeline has been somewhat extended. Can you help us understand your conviction that this is...
The last target and it's not going to move from April to another date after that in the future. Thank you very much.
Speaker Change: Thank you George for your great question. First, we're just really, honestly very excited with the progress we've been making. If you look at some of the performance for highlighting this call, and obviously what we see entirely, the quality of driving and the safety of folks are putting on the road, we're becoming more and more proud of.
Mike conviction on our ability to get across the finish line and get this launch is only increasing with every step.
For us when we had an internal milestone just recently where we assessed the progress we've been making. And we came to the conclusion that just given the work that we had scheduled in front of us, that we weren't going to be able to get that finished by the end of the year. So we thought it prudent to share that as early as we could. And this is that moment.
When I look at the conferences that date for the last year to half or so we've been talking about the Arab R spying months We see this modest delay as being very consistent with that at this point we see the Arab R's and our estimate of being weeks
So we're very excited about where we stand here. In terms of the work best to be done, it's really primarily in the areas of some elements of surface tree driving and some elements of construction that we see on the freeway.
At a point that's really important to make is that that API number that we share the 100% API number which is at 80%.
of trips being without the need for driver intervention encompasses driving through construction and on the service streets between our terminals. So in practice...
are System Handle these scenarios very well today. And it's just we want to have extremely eye confidence in the system as we go forward. And it's just work we had scheduled that we just take a little bit longer for us to get to.
Speaker Change: So these require this validation is, it sounds like it's software and training ish, it's nothing as I think to do with your OEM partners commitment to the product or other partners commitment to the launch date.
Now this is our internal execution. We continue to have a very strong working relationship with the Royal partners. The work we're doing with the vehicles at this point is primarily focused on validating the redundant systems of the vehicles.
Speaker Change: and maybe as a follow up to the extent there are commercial loads that are dedicated to caring at $0.45 and now looks like the time runs are going to extend it by a few months. Is there any impact financially, are there any penalties you have to pay or any other issue with regard to those contracts? Thank you.
No, no, there aren't. And we'll continue to be building our load volume over this time.
Episode 2
The New Year's Day.
Thank you. Our next question is from David Vernon with Burns Dean. Please pursue your question.
Thanks for hosting the call today. I just wanted to ask you if you could maybe sort of help me understand the commentary around the technology sort of adapting wealth of Phoenix.
I'm just looking at it from the lens that's kind of sitting here and watching you guys kind of working on the autonomous, sweaty measurement index and trying to get yourself very, very experienced in the Dallas-De Houston lane. You know, why wouldn't there be additional time in that to extend to new lanes as you go forward in terms of just making sure that the system would be ready and capable of adapting to that new operating environment?
Yeah, so we do anticipate they're being a small amount of work, but a core thesis that we've had is that driving on a freeway, whether you're in Texas or California or Montana.
Speaker Change: is basically the same.
and we believe this and we're starting to see it empirically as well.
Speaker Change: and so part of, you know, we've been saying this for a few years.
Part of what we wanted to do was to validate that hypothesis. So we've built out that lane.
We know that members in the best community, sometimes have questions about can you map this at a rate that's efficient? The answer is yes we can and here we are this is before we've really optimized the mapping process. And then what we see is that the execution on the driving quality of that is consistent with what we would have expected.
We have a strong relationship with the Border Patrol team, the Customer Border Patrol Agency.
Speaker Change: But the work where we so far engage most closely is with the El Paso Administration.
and so in the interest of maintaining the quality of that partnership and not surprising folks.
when we went through this board of control station between El Paso of Phoenix. We just disengage for it.
and then we mentioned earlier that we have some work to do to finalize validation on construction zones and this was particularly complicated bit of construction that we had to operate through.
I'm just trying to think of like sample size wise, right? I imagine the number of hours in your denominator for your indices for a galaxy-hused.
Speaker Change: and a lot higher than you'd have for Phoenix. As you think about that scale factor, except essentially the question I'm trying to get out for is how quickly will this be scalable when in the lane?
Speaker Change: [inaudible]
Structured our validation. We've talked in the past about these three buckets of...
Stuff we see all the time, stuff we see rarely, and then amplify and stuff that we go to the nitsacratch tech's ought to be to build simulations against. That gives us a very granular view of the capabilities your or driver has.
and when we open a new lane, we'll look at other new features or new capabilities required in that lane that don't map onto the validation that we've already done.
and generally because, again, freeways with very similar industrial parts look very similar wherever you are in the nation, there's not that much that you need to add.
and so you know the second line that we add we expect to have a little bit more work to do than the third lane and the fourth lane and at some point much like you are able to drive the vast majority of places without retraining, we expect the road driver to be able to do the same.
Speaker Change: Awesome. Thanks very much.
Speaker Change: Thanks for questioning.
As a reminder, if you would like to ask a question, please press star 1 on your telephone keypad.
Our next question is from Mark Delaney with Goldman Sachs. Please proceed with your question.
Good afternoon. Thanks very much for taking my questions. First, I was hoping you could share an update on operational readiness of the supply chain, including working with parts suppliers in areas like sensors and compute, truck OEM partners. You mentioned Volvo and PACCAR, and then also some of your contract manufacturing partners.
Absolutely. So we see no parts constraints or blockers in getting to commercial watch.
that, you know, we are in good position there.
I believe we've pre-purchased already everything that we need for those launch vehicles. So do not have concerns with that. We continue to build relationships because for us what we don't want to be doing is sprinting and then having to, you know, sleep or stand still for a while before we can hit this curve, the
and so we're continuing to work with both of those. We have, you know, strong partnership with Continental and a great working relationship with Fabernet.
and we're already beginning to bring up hardware for that mid-generation. And we talked a little bit about the state of the progress with Continental and that longer-term hardware-as-a-service platform. So things are moving very well for us in those directions.
Thanks for that, Chris. My second question was around the contracting and you mentioned additional progress that occurred during the last quarter and doing well with the 2025 bookings in total. I believe the view from Investor Day was that pricing would be relatively in line with market rates and hoping to better understand as you've gone further into the bookings process, is that still materializing as you had expected?
Speaker Change: Hey Mark, it's Dave. Thanks for the question. Yeah, so without getting into any specifics because we don't release the individual ones, you know, the market itself is down a little bit this year on pricing and, you know, we generally set up our pricing very consistent with what the market rates are with any adjustments that may be needed, you know, for our, you know, for our launch partners and things like that. So I would say, you know, generally speaking, we're kind of in line with what we expected and what the market rates are indicating.
I think for us, it's really important to build that base of business and establish, you know, these footholds with all of our partners and continuing to move forward. So, we're pretty happy. Overall, I think the entire market would like to have a little bit more robust pricing, and we will benefit from that as well.
Thanks, Dave. One more financial question, if I could, please. You mentioned in your prepared remarks, if I heard correctly, that once the company begins commercial operations,
David Maday, Coordinator for Contra R&D, Inc.
Yeah this last quarter we were a little under a million for Contra R&D based on our pilot revenue and essentially every load that we carry for a customer we bill out right and so you'll you'll continue to see that build up over time so if you're doing your modeling and things like that it's just building off of that so.
Speaker Change: Thank you.
Speaker Change: Thank you.
Speaker Change: Mm-hmm.
Thank you. Our next question is from Jeff Osborne with TD Cowan. Please proceed with your question.
Okay, great, thank you. Just a couple quick ones on my side. I was wondering, I might have missed it, but did you quantify the launch capacity that you've contracted in the duration of the the contracts that you signed?
Speaker Change: No, so what we we talked about in the remarks is that we're going to begin with one truck and then we're going to scale that up to ten and that no we haven't shared the duration of the contracts but they're in line with industry practices.
So you just just add just add into that the market generally
There's a couple of things. One, the market generally contracts on an annual basis and we tend to follow that practice in our contracts because we've been working with these people for these partners for a long time. We've got automatic renewals and setup and triggers. We're going to start up again with like up to 10 and then at the end of 25 we're going to be into the tens of trucks, right? So you'll see us focus the first half of the year really on execution and making sure everything is flawless for our partners and then we'll start to scale up the business in the second half of the year.
And just to be clear, were there any contracts signed before that you might have, like, termination causes or delays? Does the four-month delay lead to any hardship for the counterparty? Yeah, not at all. As a matter of fact, I think George might have mentioned that as well.
The last thing we want to do is incentivize to get something out before we get it right, and so all of our partners
All of our customers all have the same value and perception of what this can provide for us. And the number one element is safety, and it's much more important to ensure that we get it right than to try to meet some arbitrary date. And none of our contracts have any penalties, restrictions, or anything like that for not launching in a certain time frame.
Speaker Change: and Matt Hughes.
Matt Hughes: I was going to say I think that that's consistent with the way we think about the partnerships we're trying to build. We're looking for customers who see this as a strategic long-term opportunity and want to be ready themselves for this next generation of the logistics business.
Makes perfect sense. Maybe the last one for you, Chris, is just could you be more granular, I think, when you've done the ride and drives with investors and analysts, we've gone through construction zones. Could you just give us a few examples of edge cases that you're still overcoming as it relates to the interaction with construction zones?
Yeah, it's not really about edge cases. It's about ensuring that across the variability of how a construction site can be configured.
that we have validated that.
It turns out when you drive back and forth between Dallas and Houston, the construction kind of looks the same every day. And so there's limited exposure to different ways that folks can close off lanes and whatnot. And so it's not that this is something new and surprising.
It's just that it, you know, it's kind of, it's been in this particular place in the schedule of work and it's just taken us a little bit longer to get some of the stuff done that we had intended.
And I think important to note is that when we look at the actual on-road performance of the trucks, that we actually haven't had a disengagement caused by construction zones since May.
on the Dallas to Houston line.
It's good to hear. Thank you. That's all I had. Yeah.
Speaker Change: Thank you for the question.
Thank you. There are no further questions at this time. This does conclude today's conference call. You may disconnect your lines at this time. Thank you for your participation.