Q3 2025 Aurora Innovation Inc Earnings Call
Speaker #1: On our investor Relations website at IRR . Shortly after this call has ended , I'd like to take this opportunity to remind you that during the call , we will be making forward looking statements .
Stacy Feit: Available on our investor relations website at ir.aurora.tech shortly after this call has ended. I'd like to take this opportunity to remind you that during the call, we will be making forward-looking statements. These statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed, projected, or implied during the call. In particular, those described in our risk factors, including in our annual report on Form 10-K for the year ended December 31, 2024, and other documents filed with the SEC, as well as the current uncertainty and unpredictability in our business, the markets, and economy. Additional information will also be set forth in our quarterly report on Form 10-Q for the quarter ended September 30, 2025. You should not rely on our forward-looking statements as predictions of future events.
Speaker #1: These statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied during the call .
Speaker #1: In particular , those described in our Risk factors , including in our Annual Report on Form 10-K for the year ended December 31st , 2024 and other documents filed with the SEC , as well as the current uncertainty and unpredictability in our business , the markets and economy .
Speaker #1: Additional information will also be set forth in our quarterly Report on Form 10-q for the quarter ended September 30th , 2025 . You should not rely on our forward looking statements as predictions of future events .
Speaker #1: All forward looking statements that we make on this call are based on assumptions and beliefs . As of the date hereof , and disclaims any obligation to update any forward looking statements except as required by law .
Stacy Feit: All forward-looking statements that we make on this call are based on assumptions and beliefs as of the date hereof, and Aurora Innovation disclaims any obligation to update any forward-looking statements except as required by law. Our discussion today may include non-GAAP financial measures. These non-GAAP measures should be considered in addition to, and not as a substitute for, or in isolation from our GAAP results. Information regarding our non-GAAP financial results, including a reconciliation of our historical GAAP to non-GAAP results, may be found in a shareholder letter, which was furnished with our Form 8-K filed today with the SEC, and may also be found on our investor relations website. Our discussion today may also include reference to forward-looking free cash flow, a non-GAAP financial measure.
Speaker #1: Our discussion today may include non-GAAP financial measures . These non-GAAP measures should be considered in addition to , and not as a substitute for or in isolation from our GAAP results .
Speaker #1: Information regarding our non-GAAP financial results, including a reconciliation of our historical GAAP to non-GAAP results, may be found in a shareholder letter, which was furnished with our Form 8-K filed today with the SEC and may also be found on our Investor Relations website.
Speaker #1: Our discussion today may also include reference to forward looking free cash flow , a non-GAAP financial measure . To the extent that this forward looking financial measure is provided is presented on a non-GAAP basis without a reconciliation due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation .
Stacy Feit: To the extent that this forward-looking financial measure is provided, it's presented on a non-GAAP basis without a reconciliation due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation. With that, I will now turn the call over to Chris.
Speaker #1: With that , I will now turn the call over to Chris . Thanks , Stacey .
Chris Urmson: Thanks, Stacy. In the third quarter and early October, Aurora achieved several more driverless trucking industry firsts, rapidly advancing our path to scale and further extending our leadership position. The crank we set in motion with commercial launch is now accelerating, delivering compounding returns across our technology, operations, and customer adoption. Earlier this month, the Aurora Driver surpassed 100,000 driverless miles on public roads. Importantly, we've maintained 100% on-time performance while upholding our perfect driverless safety record. Last week, we launched driverless commercial operations on the westbound 600-mile lane from Fort Worth to El Paso, setting a new benchmark for autonomous trucking. This expansion, accomplished just six months after our driverless launch, is faster than any other self-driving company has scaled to a second U.S. market.
Speaker #2: In the third quarter , an early October Aurora achieved several more driverless trucking industry firsts . Rapidly advancing our path to scale and further extending our leadership position .
Speaker #2: The crank we set in motion with commercial launch is now accelerating , delivering compounding returns across our technology , operations and customer adoption .
Speaker #2: Earlier this month , the Aurora driver surpassed 100,000 driverless miles on public roads . Importantly , we've maintained 100% on time performance while upholding our perfect driverless safety record .
Speaker #2: Last week, we launched driverless commercial operations on the westbound 600-mile lane from Fort Worth to El Paso, setting a new benchmark for autonomous trucking.
Speaker #2: This expansion, accomplished six months after our driverless launch, is faster than any other self-driving company has scaled to a second U.S. market.
Speaker #2: The Aurora driver unlocks substantial value on this lane, and we're thrilled to add multiple customers, including one of the leading carriers in the U.S., to our driverless cohort.
Chris Urmson: The Aurora Driver unlocks substantial value on this lane, and we're thrilled to add multiple customers, including one of the leading carriers in the U.S., to our driverless cohort for this route. To meet expected customer demand in the second quarter of 2026, we plan to launch our second-generation commercial hardware kit on a new fleet of trucks that will enable driverless operation without a partner-requested observer. This third vehicle fleet fortifies our near-term capacity plan and supports our scaling objectives for 2026. Let's dig into what we've been up to. Following earlier-than-anticipated validation of night driverless operations in July, we're already seeing the utilization potential of our self-driving trucks. Our highest mileage driverless truck logged nearly 18,000 miles in a single month. This demonstrates the confidence we have to operate trucks at an annual run rate that doubles the industry average.
Speaker #2: For this route to meet expected customer demand in the second quarter of 2026 , we plan to launch our second generation commercial Hardware kit on a new fleet of trucks that will enable driverless operation without a partner , requested observer .
Speaker #2: This third vehicle fleet fortifies our near-term capacity plan and supports our scaling objectives for 2026. Let's dig into what we've been up to following earlier-than-anticipated validation of night driverless operations.
Speaker #2: In July . We're already seeing the utilization potential of our self-driving trucks , our highest mileage driverless truck logged nearly 18,000 miles in a single month .
Speaker #2: This demonstrates the confidence we have to operate trucks at an annual run rate that doubles the industry average . Our team's focus has since turned to driverless lane expansion and validation in more challenging weather conditions .
Chris Urmson: Our team's focus has since turned to driverless lane expansion and validation in more challenging weather conditions to further increase the value of the Aurora Driver for our customers. Our second driverless commercial lane from Fort Worth to El Paso directly addresses critical customer pain points. This route is notoriously hard to staff and challenging for traditional drivers to complete within a single day. Launching driverless operations on this lane demonstrates the significant efficiency and value potential the Aurora Driver brings to the freight ecosystem by enabling nearly continuous operations. We're now nearing completion of driverless validation for the return trip, as well as the Phoenix extension, with our software release planned for January 2026. The Phoenix expansion will add another 400 miles to establish a continuous 1,000-mile-plus multi-state route between Fort Worth and Phoenix, which far exceeds hours of service limitations for a traditional driver.
Speaker #2: To further increase the value of the Aurora driver for our customers . Our second driverless commercial lane from Fort Worth to El Paso directly addresses critical customer pain points .
Speaker #2: This route is notoriously hard to staff and challenging for traditional drivers to compete . Complete within a single day . Launching driverless operations on this lane demonstrates the significant efficiency and value potential the Aurora driver brings to the freight ecosystem .
Speaker #2: By enabling nearly continuous operations . We're now nearing completion of driverless validation for the return trip , as well as the Phoenix extension with our software release planned for January 2026 .
Speaker #2: The Phoenix expansion will add another 400 miles to establish a continuous thousand mile plus mile multi-state route between Fort Worth and Phoenix , which far exceeds hours of service limitations for a traditional driver .
Speaker #2: We're also working with multiple customers to identify locations along the I-20 corridor and in the Phoenix area . For the first customer endpoints , we plan to support with driverless operations .
Chris Urmson: We're also working with multiple customers to identify locations along the I-20 corridor and in the Phoenix area for the first customer endpoints we plan to support with driverless operations in early 2026. As you can see in the case study on page 16 of the presentation, on these long-haul lanes, the Aurora Driver has the potential to more than double revenue and deliver several-fold higher profit per truck for our customers. Looking ahead to 2026, we expect to rapidly unlock lanes across the Sunbelt. Future planned expansions include lanes between Dallas and Laredo, a critical route for one of our key customers, and between Dallas and Atlanta, which will extend the driverless I-10, I-20 corridor to approximately 2,000 miles.
Speaker #2: In early 2026 . As you can see in the case study on page 16 of the presentation , on these long haul lanes , the Aurora driver has the potential to more than double revenue and deliver several fold higher profit per truck for our customers .
Speaker #2: Looking ahead to 2026 , we expect a rapidly unlock lanes across the Sun Belt , a future planned expansions include lanes between Dallas and Laredo , a critical route for one of our key customers , and between Dallas and Atlanta , we'll which will extend the driverless I-10 , I-20 corridor to approximately 2000 miles .
Speaker #2: Launching driverless operations from Fort Worth to El Paso, and soon the Phoenix extension required us to validate behavior against dust storms, which are prevalent in some parts of Texas and Arizona.
Chris Urmson: Launching driverless operations from Fort Worth to El Paso, and soon the Phoenix extension, required us to validate behavior against dust storms, which are prevalent in some parts of Texas and Arizona. These fast-moving storms can quickly reduce highway visibility. If such conditions are present when the Aurora Driver-powered trucks are on the road, the Aurora Driver is designed to slow at speed, and if significant perception degradation is detected, autonomously execute the safest behavior, pulling over or exiting the highway when possible. This advanced capability is powered by our multimodal sensor suite, including lidar, camera, and radar.
Speaker #2: These fast moving storms can quickly reduce highway visibility if such conditions are present . When the Aurora driver power trucks are on the road , the Aurora driver is designed to slow its speed and , if significant perception degradation is detected autonomously , execute the safest behavior , pulling over or exiting the highway .
Speaker #2: When possible . This advanced capability is powered by our multimodal sensor suite , including LiDAR , camera and radar . As you can see on page ten of the presentation , in a dust storm on the Fort Worth to El Paso Lane , just outside of Midland , Texas , our perception system leveraged radar and our proprietary First light LiDAR , which were able to see through the dense dust at twice the range of cameras alone .
Chris Urmson: As you can see on page 10 of the presentation, in a dust storm on the Fort Worth to El Paso lane just outside of Midland, Texas, our perception system leveraged radar and our proprietary FirstLight FMCW lidar, which were able to see through the dense dust at twice the range of cameras alone. This provided the crucial data needed to make safe decisions long before visibility was completely compromised. These advanced capabilities will also benefit our upcoming Phoenix lane and other routes where similar weather events occur. We also continue to make progress validating driverless operations in rain and heavy wind conditions, which will also be part of our January 2026 software release. This will support high availability potential for Aurora Driver-powered trucks across the Sunbelt, a meaningful component of the value proposition.
Speaker #2: This provided the crucial data needed to make safe decisions long before visibility was completely compromised . These advanced capabilities will also benefit our upcoming Phoenix Lane and other routes where similar weather events occur .
Speaker #2: We also continue to make progress , validating driverless operations in rain and heavy wind conditions , which will also be part of our January 2026 software release .
Speaker #2: This will support high availability potential for Aurora driver powered trucks across the Sun Belt , a meaningful component of the value proposition , along with expanding the Aurora driver's operating domain , we've also validated additional trailer types , including those with super single tires and increased our driverless fleet .
Chris Urmson: Along with expanding the Aurora Driver's operating domain, we've also validated additional trailer types, including those with super single tires, and increased our driverless fleet. These expansions have contributed to a material acceleration of our driverless mileage, with the Aurora Driver earlier this month surpassing 100,000 driverless miles on public roads. That's double the cumulative driverless miles we achieved just five weeks prior in early September. We now have five driverless trucks regularly scheduled between Dallas and Houston and from Fort Worth to El Paso. To provide a window into this progress, we're continuing to showcase the Aurora Driver in action during this initial phase of our operations via Aurora Driver Live. You can access the live stream via the link on page four of our presentation or the live tab on our YouTube channel at Aurora Driver.
Speaker #2: These expansions have contributed to a material acceleration of our driverless mileage, with the Aurora driver surpassing 100,000 driverless miles on public roads earlier this month.
Speaker #2: That's double the cumulative driverless miles we achieved just five weeks prior in early September . We now have five driverless trucks regularly scheduled between Dallas and Houston and from Fort Worth to El Paso to provide a window into this progress , we're continuing to showcase the Aurora drive driver in action during this initial phase of our operations via Aurora Driver Live , you can access the live stream via the link on page four of our presentation or the live tab on our YouTube channel at Aurora driver , you can see our driverless trucks traversing the route between Dallas and Houston and now Fort Worth Paso , demonstrating the safety , reliability and growing maturity of the Aurora driver .
Chris Urmson: You can see our driverless trucks traversing the route between Dallas and Houston and now Fort Worth to El Paso, demonstrating the safety, reliability, and growing maturity of the Aurora Driver. In addition to the opportunity to see our technology live on the road, we've received positive feedback from customers and investors about our willingness to provide this level of transparency. It's a strong signal we stand behind what we're building. With over 6,000 hours of watch time to date, this special series offers industry-leading transparency into autonomous driving performance and the future of freight. Our driverless mileage growth is poised to further accelerate as additional customers integrate the Aurora Driver into their operations to capitalize on its exceptional value proposition.
Speaker #2: In addition to the opportunity to see our technology live on the road , we've received positive feedback from customers and investors about our willingness to provide this level of transparency .
Speaker #2: It's a strong signal that we stand behind what we're building. With over 6,000 hours of watch time to date, this special series offers industry-leading transparency into autonomous driving performance and the future of freight.
Speaker #2: Our drivers mileage growth is poised to further accelerate as additional customers integrate the Aurora driver into their operations to capitalize on its exceptional value proposition .
Speaker #2: We firmly believe the Aurora driver will fundamentally redefine the freight ecosystem with its potential to set new standards for safety, efficiency, and sustainability, thereby driving both revenue growth and margin expansion for our customers.
Chris Urmson: We firmly believe the Aurora Driver will fundamentally redefine the freight ecosystem with its potential to set new standards for safety, efficiency, and sustainability, thereby driving both revenue growth and margin expansion for our customers. A member of Werner's safety team and one of their most seasoned drivers recently came down to Texas to assess the Aurora Driver's performance. Their reactions spoke volumes about the Aurora Driver's core advantages: superior perception, unwavering focus, and the ability to safely navigate long, monotonous lanes, which are particularly difficult to staff and have hours of service constraints for traditional drivers. I'm inspired when I hear industry veterans affirm the transformational role our technology will play in the freight industry. You can hear firsthand from the Werner representatives in the video on page five of our presentation.
Speaker #2: A member of Werner's safety team and one of their most seasoned drivers recently came down to Texas to assess the Aurora driver's performance.
Speaker #2: There , reactions spoke volumes about the Aurora driver's core advantages , superior perception , unwavering focus , and the ability to safely navigate long , monotonous lanes , which are particularly difficult to staff and have hours of service constraints for traditional drivers .
Speaker #2: I'm inspired when I hear industry veterans affirm the transformational role our technology will play in the freight industry . You can hear firsthand from the Werner representatives in the video on page five of our presentation .
Speaker #2: With our Fort Worth to El Paso driverless launch , we've expanded driverless operations for Hersheypark , one of our earliest adopters and valued partners , and added two additional carriers to our growing driverless customer cohort .
Chris Urmson: With our Fort Worth to El Paso driverless launch, we've expanded driverless operations for Hirschbach, one of our earliest adopters and valued partners, and added two additional carriers to our growing driverless customer cohort. Launching driverlessly on this lane is a major inflection point on our journey with customers, and the expansion of our driverless cohort validates our technology, rigorous safety approach, and the value we deliver. Now that we've proven the promise of the Aurora Driver and are rapidly increasing its value for customers, we're expanding our sales funnel to include mid-market customers who offer shorter approval cycles. To efficiently target this new segment, we recently announced a strategic partnership with McLeod Software, a premier provider of transportation management solutions for over 1,200 carriers and private fleets. This partnership will deliver seamless integration for McLeod customers, which we expect to accelerate new customer adoption of the Aurora Driver.
Speaker #2: Launching driverless Lee on this lane is a major inflection point on our journey with customers , and the expansion of our driverless cohort validates our technology , rigorous safety approach , and the value we deliver .
Speaker #2: Now that we've proven the promise of the Aurora driver and our rapidly increasing its value for customers , we're expanding our sales funnel to include mid-market customers who offer shorter approval cycles to efficiently target this new segment .
Speaker #2: We recently announced a strategic partnership with McLeod software , a premier provider of transportation management solutions for over 1200 carriers and private fleets .
Speaker #2: This partnership will deliver seamless integration from a cloud customers , which we expect to accelerate new customer adoption of the Aurora driver . Just one month after announcing the partnership , we executed an agreement with McLeod , customer Russell Transport for driverless hauls on the Fort Worth to El Paso Lane .
Chris Urmson: Just one month after announcing the partnership, we executed an agreement with McLeod customer Russell Transport for driverless hauls on the Fort Worth to El Paso lane. In parallel, we continue to advance our second and third-generation commercial hardware programs, as well as our vehicle programs that underpin our path to scale and self-funding. Designed to deliver customer value for 1 million miles, we expect our second-generation commercial kit to drive a 50%+ reduction in our hardware costs. We're also seeing some meaningful performance gains, particularly with the next generation of our proprietary long-range FMCW lidar. FirstLight is now detecting objects at 1,000 meters away, which is double the distance of our current generation, as well as the closest FMCW lidar competitor. For a truck traveling at highway speeds, this equates to more than 34 seconds of planning horizon.
Speaker #2: In parallel , we continue to advance our second and third generation commercial hardware programs , as well as our vehicle programs that underpin our path to scale and self-funding , designed to deliver customer value for 1 million miles .
Speaker #2: We expect our second generation commercial kit to drive a 50% plus reduction in our hardware costs , and we're also seeing some meaningful performance gains , particularly with the next generation of our proprietary long range fmcw LiDAR .
Speaker #2: First Light is now detecting objects at 1,000 meters away, which is double the distance of our current generation, as well as the closest FMCW LiDAR competitor for our truck traveling at highway speeds.
Speaker #2: This equates to more than 34 seconds of planning horizon . This will further enhance the Aurora driver's performance and set a new standard for safety in the industry .
Chris Urmson: This will further enhance the Aurora Driver's performance and set a new standard for safety in the industry. We plan to increase driverless operations without a partner-requested observer in the second quarter of 2026 with a new fleet of trucks equipped with this second-generation commercial hardware kit. This fleet will be based on the International LT Series truck, with Aurora performing all necessary upfit required for driverless operations. These trucks will undergo rigorous testing and validation, just like any platform we would take to driverless operation. This third truck fleet fortifies our near-term capacity plan and will support our target exit 2026 with hundreds of driverless trucks in operation.
Speaker #2: We plan to increase driverless operations without a partner, with an expected rollout in the second quarter of 2026. This will involve a new fleet of trucks equipped with our second-generation commercial hardware kit. This fleet will be based on the International LT series truck, with Aurora performing all necessary upfits required for driverless operations.
Speaker #2: These trucks will undergo rigorous testing and validation , just like any platform we would take to driverless operation . This third truck fleet fortifies our near-term capacity plan and will support our target exit 2026 .
Speaker #2: With hundreds of driverless trucks and operation . While this program is underway , we achieved an industry first partnership manufacturing milestone with Volvo as they began line integration of the second generation Aurora driver commercial hardware kit into the Volvo Vnl autonomous on the pilot line at their new River Valley , Virginia .
Chris Urmson: While this program is underway, we achieved an industry-first partnership manufacturing milestone with Volvo Trucks as they began line-side integration of the second-generation Aurora Driver commercial hardware kit into the Volvo VNL Autonomous on the pilot line at their New River Valley, Virginia manufacturing facility. Once Volvo Trucks completes validation of the vehicle-level firmware necessary for driverless operations, we will integrate these trucks into our driverless fleet. In addition, PACCAR continues to advance the prototype testing of their scalable autonomy-enabled truck platform at their facilities. Looking further ahead, we continue to progress our third-generation commercial hardware kit that we believe will unlock scale on the order of tens of thousands of trucks. In September, Continental completed the spin-off of their automotive business, Omovio. I had the honor to keynote their supplier day, which highlighted our flagship program, which has a planned start of production in 2027.
Speaker #2: Manufacturing facility . Once Volvo completes validation of the vehicle level firmware necessary for driverless operations , we will integrate these trucks into our driverless fleet .
Speaker #2: In addition , Pacar continues to advance the prototype testing of their scalable autonomy enabled truck platform at their facilities . Looking further ahead , we continue to progress our third generation commercial hardware kit that we believe will unlock scale on the order of tens of thousands of trucks in September , continental completed the spin off of their automotive business , Amoveo .
Speaker #2: I had the honor to keynote their supplier Day , which highlighted our flagship program , which has a planned start of production in 2027 .
Speaker #2: We're excited to see Amoveo continue to make significant manufacturing investments here in the U.S. to support the scaling of the Aurora Driver. Earlier this month, they announced a $110 million investment to significantly expand their New Braunfels, Texas manufacturing facility, where the Aurora Driver Hardware Kit will be produced.
Chris Urmson: We're excited to see Omovio continue to make significant manufacturing investments here in the U.S. to support the scaling of the Aurora Driver. Earlier this month, they announced a $110 million investment to significantly expand their new Bronx Falls, Texas, manufacturing facility where the Aurora Driver hardware kit will be produced. The project, which includes a 65,000 square foot addition and a state-of-the-art automated warehouse, is expected to create new, well-paying jobs in the coming years. The expansion will more than double the existing production floor space and is expected to be fully operational by August 2027. We've now received and begun testing computer samples from Omovio, which include NVIDIA's DriveThor system on a chip. Complete prototypes of this hardware kit are on track for delivery by the end of the year to begin engineering validation testing.
Speaker #2: The project , which includes a 65,000 square foot addition and a state of the art automated warehouse , is expected to create new , well-paying jobs in the coming years .
Speaker #2: The expansion will more than double the existing production floor space and is expected to fully to be fully operational by August 2027 . We've now received and begun testing computer samples from Amoveo , which include Nvidia's Drive , Thor system on a chip .
Speaker #2: Complete prototypes of this hardware kit are on track for delivery by the end of the year . To begin engineering validation testing . As we accelerate our path to deployment at scale , favorable regulatory momentum continues to build across the US .
Chris Urmson: As we accelerate our path to deployment at scale, favorable regulatory momentum continues to build across the U.S. Earlier this month, we received approval from the U.S. Department of Transportation to begin using cab-mounted warning beacons as an alternative to reflective triangles. The cab-mounted flashing lights indicate when a vehicle is stopped on the side of the road to warn other road users, which is similar to systems used by emergency and construction vehicles and is a step forward for road safety. On the legislative front, the America Drives Act, a landmark bill to establish a federal framework specifically for self-driving trucks, continues to gain traction with co-sponsorship from U.S. Representative Jay Obernati of California. In closing, we've made unprecedented progress since commercial launch and continue to be the only company with driverless trucks on public roads in the U.S.
Speaker #2: Earlier this month , we received approval from the US Department of Transportation to begin using CAD mounted warning beacons as an alternative to reflective triangles .
Speaker #2: The cab mounted flashing lights indicate when a vehicle is stopped on the side of the road to warn other road users , which is similar to systems used by emergency and construction vehicles , and is a step forward for road safety and on the legislative front , the America Drives Act , a landmark bill to establish a federal framework specifically for self-driving trucks , continues to gain traction with co-sponsors sponsorship from US Representative Jay Obernolte of California .
Speaker #2: In closing , we've made unprecedented progress since commercial launch and continue to be the only company with driverless trucks on public roads in the US .
Speaker #2: We've proven that the technology works and are now channeling our momentum to support lasting customer value and our path to scale insights from our real world driverless miles reinforce .
Chris Urmson: We've proven that the technology works and are now channeling our momentum to support lasting customer value and our path to scale. Insights from our real-world driverless miles reinforce there are no shortcuts to safety, trust, and scale in autonomous trucking. Our strategic investments have built powerful flywheels that are now accelerating, driving us forward with increasing efficiency. Our industry-leading technology, coupled with a world-class ecosystem of partners, customers, and shareholders, uniquely positions Aurora Innovation to set the standard for autonomous trucking. Thank you for your partnership as we continue to build the future of transportation. With that, I'll now pass it over to Dave, who will review our financial results.
Speaker #2: There are no shortcuts to safety , trust and scale in autonomous trucking . Our strategic investments have built powerful flywheels that are now accelerating , driving us forward with increasing efficiency .
Speaker #2: Our industry leading technology , coupled with a world class ecosystem of partners , customers and shareholders , uniquely positions Aurora to set the standard for autonomous trucking .
Speaker #2: Thank you for your partnership . As we continue to build the future of transportation . With that , I'll now pass it over to Dave , who will review our financial results .
Speaker #3: Thank you . Chris . Let's discuss our financial results , for which we have provided a summary on page 17 of the slide deck .
David Maday: Thank you, Chris. Let's discuss our financial results, for which we have provided a summary on page 17 of the slide deck for reference. Third quarter 2025 revenue totaled $1 million across driverless and vehicle operator-supervised commercial loads for Hirschbach, Uber Freight, Werner, FedEx, Schneider, and Volvo Trucks, among others. The Aurora Driver achieved another record number of commercial miles driven during the quarter, which drove a 12% sequential increase in revenue from the second quarter. Third quarter operating losses, including stock-based compensation, totaled $222 million. Excluding stock-based compensation of $51 million, R&D totaled $138 million, SG&A was $28 million, and the cost of revenue was $6 million. We used approximately $149 million in operating cash during the third quarter, and capital expenditures totaled $8 million. This cash spend was meaningfully below our externally communicated target, reflecting continued strong fiscal discipline.
Speaker #3: For reference . Third quarter 2025 revenue totaled $1 million across driverless and vehicle operator supervised commercial loads for Uber Freight , Werner , Fedex , Schneider and Volvo .
Speaker #3: Hersheypark , Autonomous Solutions , among others . The Aurora driver achieved another record number of commercial miles driven during the quarter , which drove a 12% sequential increase in revenue from the second quarter .
Speaker #3: Third quarter operating losses , including stock based Comp , totaled $222 million . Excluding stock based Comp of $51 million . R&D totaled $138 million .
Speaker #3: G&A was $28 million , and the cost of revenue was $6 million . We used approximately $149 million in operating cash during the third quarter , and capital expenditures totaled $8 million .
Speaker #3: This cash spend was meaningfully below our externally communicated target , reflecting continued strong fiscal discipline . We expect cash use of 175 to $185 million during the fourth quarter of 2025 .
David Maday: We expect cash use of $175 to $185 million during the fourth quarter of 2025. During the third quarter, we issued 80 million shares of Class A common stock through our at-the-market program for net proceeds of $460 million. We used $21 million of the net proceeds to fund the tax liability associated with the vesting of our employees' restricted stock units during the third quarter. In turn, we ended the third quarter with a very strong balance sheet, including increased liquidity of $1.6 billion in cash and short-term and long-term investments. We expect this liquidity to fund our operations into the second half of 2027. We will be providing 2026 financial objectives in the fourth quarter 2025 business review in February.
Speaker #3: During the third quarter, we issued 80 million shares of Class A common stock through our at-the-market program for net proceeds of $460 million.
Speaker #3: We use $21 million of the net proceeds to fund the tax liability associated with the vesting of our employees , restricted stock units during the third quarter .
Speaker #3: In turn , we ended the third quarter with a very strong balance sheet , including increased liquidity of $1.6 billion in cash and short term and long term investments .
Speaker #3: We expect this . We expect this liquidity to fund our operations into the second half of 2027 . We will be providing 2026 financial objectives in the fourth quarter 2025 .
Speaker #3: Business review in February for the remainder of the year. We will continue to focus on expanding driverless operations and advancing our program to support our 2026 scaling objectives to accelerate our first-mover advantage and reinforce our leadership position.
David Maday: For the remainder of the year, we will continue to focus on expanding driverless operations and advancing our program to support our 2026 scaling objectives to accelerate our first-mover advantage to reinforce our leadership position. With that, we'll now open the call to Q&A.
Speaker #3: With that , we'll now open the call to Q&A .
Speaker #4: Thank you . We will now be conducting a question and answer session . If you would like to ask a question , please press star one on your telephone keypad .
Operator: Thank you. We will now 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 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions. Thank you. Our next question comes from the line of George Gianarikas with Canaccord Genuity. Please proceed.
Speaker #4: A confirmation tone will indicate your line is in the question queue . You may press star two . If you would like to remove your question from the queue for participants using speaker equipment , it may be necessary to pick up your handset before pressing the star keys .
Speaker #4: One moment please , while we pull for questions . Thank you . Our next question comes from the line of George Enriquez with Canaccord Genuity .
Speaker #4: Please proceed .
Speaker #5: Hi everyone . Thank you for taking my questions . Maybe first I'd like to ask if you could sort of give us form and shape to your plans from moving from a terminal to endpoint to endpoint shipments .
[Analyst 1]: Hi, everyone. Thank you for taking up questions. Maybe first, I'd like to ask if you could sort of give us form and shape to your plans for moving from terminal to endpoint to endpoint shipments. Thank you.
Speaker #5: Thank you .
Speaker #6: For .
Speaker #2: Yeah , thanks , George . Great to take questions from you . I think one of the misconceptions that we hear is that this is kind of a big deal .
Chris Urmson: Yeah. Thanks, George. Great to take a question from you. I think one of the misconceptions that we hear is that this is kind of a big deal. It really isn't. Today, for example, when we're operating, getting to our Houston terminal, we drive for about five miles through various industrial park surface streets to get to our terminal. We have a system that's capable and able to deliver this. It works well. For us, it's just a matter of timing and sequencing when the volumes are sufficient that it's relevant for our customers. We intend to be rolling that out to customers through the next year. Dave?
Speaker #2: And it really isn't . So today , for example , when we're operating getting to our Houston terminal , we drive for about five miles through various industrial parks , surface streets to get to our terminal .
Speaker #2: So we have a system that's capable and able to deliver this . You know , it works well . So for us , it's just a matter of timing and sequencing .
Speaker #2: When the volumes are sufficient , that it's relevant for our customers . And so we intend to be rolling that out to customers through the next year .
Speaker #2: Dave .
Speaker #3: Yeah . And I would say maybe two other things . One of them is on the misconception piece . Right . Like if you think about endpoints , customer endpoints , roughly 80% of those endpoints are within a five mile range from a highway .
David Maday: Yeah. I would say maybe two other things. One of them is on the misconception piece, right? If you think about endpoints, customer endpoints, roughly 80% of those endpoints are within a five-mile range from a highway. This is not a difficult technical challenge at all. I think the other thing, it's important to point out that we started out, and everything kind of relates to our technology rollout and our crawl-walk-run, right? We started out operating a small fleet of trucks that we're continuing to build up. It's important to understand that we need to be able to drive in all weather conditions, right? We already opened up nighttime earlier. We're expanding lanes, but we also want to be able to operate in rain and heavy wind.
Speaker #3: So this is not a difficult technical challenge at all . I think the other thing it's important to point out that we started out and everything kind of relates to our our technology rollout and our crawl , walk , run , right ?
Speaker #3: So we started out operating a small fleet of trucks that we're continuing to build up , but it's important to understand that we need to be able to drive in all weather conditions .
Speaker #3: Right . We already opened up nighttime earlier . We're expanding lanes , but we also want to be able to operate in rain and heavy wind .
Speaker #3: And when we're able to operate in all of these conditions, then when we go to customer endpoints, we're able to operate a larger number of vehicles between their specific endpoints.
David Maday: When we're able to operate in all these conditions, then when we go to customer endpoints, we're able to operate a larger number of vehicles between their specific endpoints. The one thing that's really important is to make sure that we've got a really robust product that is operating between the endpoints. I would say that this is a very deliberate plan that we're executing upon.
Speaker #3: So the one thing that's really important is to make sure that we've got a really robust product that is operating between the endpoints.
Speaker #3: So I would say that this is a very deliberate plan that we're executing upon. Yeah.
Chris Urmson: Thank you. Maybe as a follow-up in two parts. In your press release, you say that you want to deploy hundreds of trucks next year. That feels like a little bit of an acceleration. Is that true? The second part of the question is, is that being enabled by your partnership with International, which I think is new? Did you have a partnership with International before this? Thank you. Yeah. This is, I think, in line with what we've been saying. For a while now, we've been saying we want to get 10 plus tens of trucks this year, and we want to get hundreds next year. I think it's us aiming to accomplish what we set out to do. In terms of with International, this is a new relationship. We are purchasing trucks from International, and we're doing the upfit ourselves.
Speaker #5: Thank you . And maybe as a follow up in two parts . So in your press release you say that you want to deploy hundreds of trucks next year .
Speaker #5: That feels like a little bit of an acceleration . Is that true ? And the second part of the question is , is that being enabled by your partnership with international , which I think is new , did you have a partnership with international before this ?
Speaker #5: Thank you .
Speaker #2: Yeah . So this is I think , in line with what we've been saying for for a while now . We've been saying we want to get ten plus tens of trucks this year , and we want to get hundreds next year .
Speaker #2: And so I think it's about aiming to accomplish what we set out to do in terms of international relations. This is a new relationship.
Speaker #2: So we are purchasing trucks from International, and we're doing the upfit ourselves. We continue to work with Volvo and Paccar, and we are excited about the plan moving forward with them.
Chris Urmson: We continue to work with Volvo Trucks and PACCAR and continue to be excited about the plan forward with them. This is a way for us to take timing into our own hands, ensure that we can deliver this, and support and fortify our volumes for next year as a response to the customer interest that we're seeing today.
Speaker #2: But this is a way for us to take timing into our own hands. Ensure that we can deliver this and support and fortify our volumes for next year.
Speaker #2: As a response to , you know , the customer interest that we're seeing today .
Speaker #5: Thank you .
David Maday: Thank you.
Speaker #4: Thank you . Our next question comes from the line of Ravi Shanker with Morgan Stanley . Please proceed .
Operator: Thank you. Our next question comes from the line of Ravi Shankar with Morgan Stanley. Please proceed.
Speaker #7: Great . Thanks , everyone . If I can just continue the discussion on international . Just wanted to confirm . So are you just buying the trucks off a lot and kind of rolling that out as a third fleet ?
[Analyst 2]: Great. Thanks. What's up, everyone? If I can just continue the line of discussion on International, I just wanted to confirm, are you just buying the trucks off a lot and kind of rolling that out as a third fleet, or is this an actual OEM relationship like you have with PACCAR and Volvo Trucks? In which case, is there a time to commercial launch of that as well?
Speaker #7: Or is this an actual OEM relationship like you have with PACCAR and Volvo? In which case, kind of, is there a timeline to commercial launch of that as well?
Speaker #3: No . Hey , Robbie , it's Dave . So we are buying stock trucks . We're not actually buying necessarily off the lot .
Chris Urmson: Hey, Ravi, it's Dave. We are buying stock trucks. We're not actually buying them necessarily off the lot. We are ordering them through International, but there is no co-development partnership associated with those. It's important to understand that we've got a tremendous experience in how to integrate the Aurora Driver into platforms. We've done it on like roughly eight platforms. We understand all the necessary capabilities to launch a safe product. In this particular case, we've got two partnerships with co-developments already. We felt this was a great opportunity for us to continue to meet customer demand and work and offer the Aurora Driver on a third platform. To answer the second half of your question, Ravi, we expect to have the International truck on the road driverless in Q2 of 2026. We're excited to add that to our growing fleet.
Speaker #3: We are ordering them through international . But there is no co-development partnership associated with those . So it's important to understand that we've got tremendous experience in how to integrate the Aurora driver into platforms .
Speaker #3: We've done it on roughly eight platforms , so we understand all the necessary capabilities to launch a safe product . And in this particular case , we've got two partnerships with co-development already .
Speaker #3: We felt this was a great opportunity for us to continue to meet customer demand and work to offer the Aurora driver on a third platform.
Speaker #2: And and answer the second half of your question . Ravi , we expect to have the international truck on the road , driverless in Q2 of 26 .
Speaker #2: So we're we're excited to add that to our growing fleet .
Speaker #7: Understood . That's helpful . And maybe as a follow up , as you guys get closer to launching Gen two and Specking , the Gen three hardware , when do you get a sense of the the bill of materials and the cost of the system involved ?
[Analyst 2]: Understood. That's helpful. Maybe as a follow-up, as you guys get closer to launching Gen 2 and speccing the Gen 3 hardware, when do you get a sense of the bill of materials and the cost of the system involved? Maybe also, when do you expect to have conversations with your OEM partners and maybe launch actual pricing of the truck and the system for your customers? Thank you.
Speaker #7: And maybe also, when do you expect to have conversations with OEM partners and possibly launch actual pricing of the truck and the system for your customers?
Speaker #7: Thank you .
Speaker #2: Yeah. So I think on the bill of materials for the Aurora driver, we have very good insight into that today.
Chris Urmson: Yeah. I think on the bill of materials for the Aurora Driver, we have very good insight into that today. We track it as part of our development process. We know what that bill of materials and cost is. It's important to understand, again, that as we look at that cost, that doesn't get borne upfront as part of the purchase of a truck. That is paid through the subscription that customers will pay for the Aurora Driver, this driver as a service model. We factor that into the cost and into the revenue stream and profitability of the business going forward.
Speaker #2: We track it as part of our development process . We know what that bill of material and cost is . And it's important to understand again that that as we look at that cost , that doesn't get borne upfront as part of the purchase of a truck that is paid through the subscription that customers will pay for the Aurora driver , this driver , as a service model , and we factored that into the cost and into the the revenue stream and profitability of the business going forward .
Speaker #7: Very helpful . Thanks , guys .
[Analyst 2]: Really helpful. Thanks, guys.
Speaker #2: Thanks , Ravi .
Chris Urmson: Thanks, Ravi.
Speaker #4: Thank you . Our next question comes from the line of Colin Rusch with Oppenheimer . Please proceed .
Operator: Thank you. Our next question comes from the line of Colin Rusch with Oppenheimer. Please proceed.
Speaker #8: Thanks so much , guys . You know , you've talked a lot about the simulation expertise that you have . Can you talk a little bit about any sort of acceleration that you're seeing or any sort of transitions that that may see hiccups as you as you move to the new hardware ?
[Analyst 3]: Thanks so much, guys. You've talked a lot about the simulation expertise that you have. Can you talk a little bit about any sort of acceleration that you're seeing or any sort of transitions that may see hiccups as you move to the new hardware?
Speaker #2: Yeah . Well , first , yes , we think simulation is an important tool . It's something we've invested in and appreciate . You recognizing that .
Chris Urmson: Yes, we think simulation is an important tool. It's something we've invested in. I appreciate you recognizing that. No, we don't really see any hiccups. One of the things that I think a lot of folks don't really understand is that the automated driving system is a complicated, difficult thing to build. The tools and process and rigor you have to put in place to have conviction that the thing is safe to put out on the road and operate at 70 miles an hour down the freeway is at least as hard, if not harder. As we've been building our processes for validation and release, we've designed them with an eye towards this needs to scale. This needs to allow us to accelerate our release process over time and meet the needs for that second-generation, third-generation hardware. It's kind of moving along as we'd hoped.
Speaker #2: No , we don't really see any any hiccups . Like one of the things that we that I think a lot of folks don't really understand is that the automated driving system is a complicated , difficult thing to build .
Speaker #2: But the tools and process and rigor you have to put in place to have conviction that the thing is safe to put out in the road and operate at 70 miles an hour down the freeway is at least as hard , if not harder .
Speaker #2: And so, as we've been building our processes for validation and release, we've designed them with an eye toward the need to scale.
Speaker #2: This needs to allow us to accelerate our release process over time and meet the needs for that generation, second generation, and third generation hardware.
Speaker #2: And so it's kind of moving along as we'd hoped . So yeah , I hope that I'm not sure if I answered your question , but we're feeling pretty good about this .
Chris Urmson: I'm not sure if I answered your question, but we're feeling pretty good about this.
Speaker #8: Okay . Yeah , I'll follow up offline . You know , the second one is really around customer comfort with with with the technology .
[Analyst 3]: Okay. I'll follow up offline. The second one is really around customer comfort with the technology. Now that you're accumulating a fair amount of experience on the road without the driver, how quickly are customers getting comfortable with taking a safety driver out of the cab and thinking about actually starting to deploy with you guys out of the gate without a driver?
Speaker #8: You know, now that you're accumulating a fair amount of experience on the road without the driver, how quickly are customers getting comfortable with taking a safety driver out of the cab?
Speaker #8: You know , and thinking about actually starting to deploy with you guys , you know , out of the gate without a driver ?
Speaker #2: Yeah, I think that it's dangerous to characterize all customers in one bucket. And so there's obviously a spectrum of them.
Chris Urmson: Yeah. I think that, one, it's dangerous to characterize all customers in one bucket. There's obviously a spectrum of them. What we're seeing is enthusiasm, right? The conversation has moved from, "Hey, maybe this will happen," to, "Oh, it's happening. I can see why this will benefit my business. I would like to have access to that." We mentioned Russell Transport. That's a customer that just signed up with us and signed up with us on day one to operate driverlessly. We expect that to be the flavor of many of the customer relationships that we're going to put in place going forward.
Speaker #2: But what we're seeing is enthusiasm , right ? The that the conversation has moved from , hey , maybe this will happen to oh it's happening .
Speaker #2: I can see why this will benefit my business . I would like to have access to that . And so , you know , we mentioned Russell Transport .
Speaker #2: That's a customer that just signed up with us and signed up with us on day one to operate driverless . And we expect that to be the flavor of of many of the , the customer relationships that we're going to put in place , going forward .
Speaker #8: Thanks so much , guys .
[Analyst 3]: Thanks so much, guys.
Speaker #2: Thank you .
Chris Urmson: Thank you.
Speaker #4: Thank you. Our next question comes from the line of Andrej Shepherd with Cantor Fitzgerald. Please proceed.
Operator: Thank you. Our next question comes from the line of Andres Sheppard with Cantor Fitzgerald. Please proceed.
Speaker #9: Hey guys . Good afternoon . Thank you so much for taking our questions . And congrats on all the great progress . I think some of our questions have been asked , but Chris , I'm hoping maybe if you can help us , maybe give us some granularity as to how we should think about the truck deployments for Q4 and maybe early next year .
David Maday: Hey, guys. Good afternoon. Thank you so much for taking our questions and congrats on all the great progress. I think some of our questions have been asked, but Chris, I'm hoping maybe if you can help us maybe give us some granularity as to how we should think about truck deployments for Q4 and maybe early next year. You have five in operational as of now. To get to more than 10, presumably, that means deploying six additional trucks before year-end. How should we think about Q4 deployments and maybe ASPs? Any granularity you might be able to give us there? I know we'll get more color on Q4 for next year, but any helpful there?
Speaker #9: You know , to I guess so you have five and operational as of now . So to get to more than ten , presumably that means deploying six additional trucks before year end .
Speaker #9: So , I mean , how should we think about Q4 deployments and maybe ASPs ? Any granularity you might be able to give us there ?
Speaker #9: I know we'll get more color on Q4 for next year , but any helpful ?
Speaker #2: Yeah, yeah. So we expect to have ten trucks operating in the driver's seat at the end of this year. We'll ramp them up through the course of Q4.
Chris Urmson: Yeah. Yeah. We expect to get to 10 trucks operating driverlessly at the end of this year. We'll ramp them through the course of Q4. You're probably sick of us saying crawl-walk-run, but we very much believe that. We want to make sure that customers are comfortable, regulators are comfortable, that we're building out at a rate that really enables us to do something useful in the world. For us right now, it's a balance between increasing driverless operation and utilizing the fleet that we have to advance capability to deliver that value to customers. We're putting time into, of course, the lane expansion work and into weather so that as those trucks begin operating driverlessly, you're maximizing the utility for the customers.
Speaker #2: You know , we we really like you're probably sick of us saying crawl , walk , run . But we very much believe that , you know , we we want to make sure that customers are comfortable .
Speaker #2: Regulators are comfortable that we're building out at a rate that really enables us to do something useful in the world for us right now. It's a balance between increasing driverless operation and utilizing the fleet that we have to advance capability to deliver that value to customers.
Speaker #2: And so , you know , we're putting time into , of course , the lane expansion work and and into leather so that as those trucks begin operating driverless , they're maximizing the utility for the customers .
Speaker #9: Got it . Okay . That's helpful . And I guess as a maybe a quick follow up . So in your presentation in the timeline slide , you talk about having positive gross profit by end of 26 or early 27 .
David Maday: Got it. Okay. That's helpful. I guess as a maybe a quick follow-up, in your presentation, in the timeline slide, you talk about having positive gross profit by end of 2026 or early 2027. How should we think about that? Is there a certain number of trucks in operation that you think you'd need to get to that point, or is there a better way to think about kind of that ramp-up? Thanks.
Speaker #9: How should we think about that ? Is there a certain number of trucks and operation that you think you'd need to to get to that point , or is there a better way to think about kind of that ramp up ?
Speaker #9: Thanks .
Speaker #3: Yeah, so it's a little bit of a truck volume. It's a little bit of a continuation of our capabilities that we're focusing on today.
Chris Urmson: Yeah. It's a little bit of truck volume, and it's a little bit of continuing our capabilities that we're focusing on today. There are what we try to describe as four key enablers. The first one is to launch our second-generation commercial hardware kit. We are well on our way to that, and that will be launched with the introduction of our new fleet of trucks in Q2. We're really excited about that. I think there's an element of continued progress on remote assistance. We've said before, remote assistance is not operating the vehicles, but they are supporting the vehicles if there's any need for support, like detecting different signs and things like that that we want to clear. We're well on our path towards that where we think we're going to be able to have one person operating and supporting multiple vehicles.
Speaker #3: So there's what we try to describe . As four key enablers . The first one is to launch our second generation hardware kit .
Speaker #3: We are well on our way to that, and that will be launched with the introduction of our new fleet of trucks in April.
Speaker #3: So we're really excited . Q2 Q2 . Sorry . And we're really excited about that . I think there's an element of continued progress on remote assistance , and we've said before , again , remote assistance , they're not operating the vehicles , but they are supporting the vehicles .
Speaker #3: If there's any need for support like , you know , detecting different signs and things like that , that we want to clear .
Speaker #3: We're well on our path towards that, where we think we're going to be able to have one person operating and supporting multiple vehicles.
Speaker #3: We're going from few to many . And so we think that path is pretty clear . There's an element of , you know , what type of support do we need on site if we're able if there's let's say we have a tire blowout or something like that , we're pretty confident that that still needs a little bit of work to prove out .
Chris Urmson: We're going from few to many, and we think that path is pretty clear. There's an element of what type of support we need on-site if we're able, if there's a, let's say, we have a tire blowout or something like that. We're pretty confident in that. That still needs a little bit of work to prove out, but we think that there's a pretty clear path to that. Those are the big items that we talk about. The last one is obviously you need a sufficient scale because we do have some structural cost elements, whether we operate at our terminals or our insurance costs, etc., where just purely the mileage accumulation is really important. I think when we originally talked about gross profit positive, we had established a target for ourselves. This was back in 2024.
Speaker #3: But we think that there's a pretty clear path to that . Those are the big items that we talk about . And then the last one is obviously you need a sufficient scale because we do have some , you know , some structural cost elements , whether we operate at our terminals or our insurance costs , etc.
Speaker #3: , we're just purely the mileage accumulation is really important . So again , I think when we originally talked about gross profit positive , we we had established a target for ourselves .
Speaker #3: This was back in 24 by the by the end of 26 , we launched a little bit later for commercial launch . So we expect that may flow into 27 early 27 .
Chris Urmson: By the end of 2026, we launched a little bit later for commercial launch, so we expect that may flow into 2027, early 2027. We still feel confident that that's a good target, but we're not putting any formal guidance out yet for 2026 profitability. Just to add on what Dave was saying, right now, like take for example the Aurora Driver hardware kit. There, we just look at the BOM cost and we see roughly half the price of what our current system is. Then you add to that the increased durability so you can amortize that over a longer distance or a longer amount of driving. That's a big mover, and we see that coming online in 2026 or in Q2 2026.
Speaker #3: But we still feel confident that that's a good target . But we're not putting any formal guidance out yet . For 26 , profitability .
Speaker #3: .
Speaker #2: And just to add on , Dave was saying , right , like take for example , the the Aurora driver hardware kit there we , we , you know , we just look at the the Bom cost and we see a , you know , roughly half the price of what our current system is .
Speaker #2: And then you add to that the increased durability, so you can amortize that over a longer distance or a longer amount of driving.
Speaker #2: You know that's a big mover . And we see that coming online in 26 or in Q2 26 .
Speaker #9: Understood . Thanks , Chris . Thanks , David . Very helpful . Appreciate it . We'll pass it on .
David Maday: Understood. Thanks, Chris. Thanks, David. Very helpful. Appreciate it. We'll pass it on.
Speaker #2: Thank you .
Chris Urmson: Thank you.
Speaker #4: Thank you . All right . Thank you . Our next question comes from the line of Chris Pearce with Needham and Company . Please proceed .
Operator: Thank you. All right. Thank you. Our next question comes from the line of Chris Pierce with Needham & Company. Please proceed.
Speaker #8: Hey good afternoon .
[Analyst 4]: Hey, good afternoon, everyone. If we just go back to the International truck announcement, I just want to understand, will customers be able to buy International trucks that you upfit, or is this just something you're doing to sort of pull forward or accumulate more proof points with the Aurora Driver technology?
Speaker #5: Everyone . If we just go back to the international truck announcement , I just want to understand what customers be able to buy international trucks that you upfit or is this just something you're doing to sort of pull forward or accumulate more proof points with the Aurora driver technology ?
Speaker #2: So as you know , today we're operating in this , what we call transportation as a service mode , where we're operating trucks for our customers .
Chris Urmson: As you know, today we're operating in this, what we call transportation as a service mode, where we're operating trucks for our customers. Initially, we expect that's how this will operate. We'll own these trucks. They'll be out there revenue generating, generating value for customers. Maybe at some point in the future, we consider that, but initially, this is going to be trucks we own and operate and get paid for.
Speaker #2: And initially , we expect that to how this will operate . So we'll own these these trucks . They'll be out there revenue revenue generating , generating value for customers .
Speaker #2: You know, maybe at some point in the future we consider that. But initially, this is going to be trucks we own and operate and get paid for.
Speaker #5: And should we think about if it goes well, is this something where, you know, you've talked about launching with other OEM partners in the past?
[Analyst 4]: Should we think about if it goes well, is this something where, you know, you've talked about launching with other OEM partners in the past, do you see, but International has a public autonomous partner already. Do you see a world where OEMs have multiple autonomous platforms and the end user, the truck fleet, chooses which one they want based on metrics or price, or how do you kind of see the market shaking out?
Speaker #5: Do you believe international has a public autonomous partner already? Do you see a world where OEMs have multiple autonomous platforms and, in the end, the end user, the truck fleet, chooses which one they want based on metrics or price?
Speaker #5: Or how do you kind of see the market shaking out ?
Speaker #2: Yeah , we've made no secret that we intend to have the Aurora driver available on all OEM platforms , and , you know , we we love the opportunity to compete .
Chris Urmson: We've made no secret that we intend to have the Aurora Driver available on all OEM platforms. We love the opportunity to compete. We think the Aurora Driver is going to be the best product in the market. We would love to have, you know, and hope to have a long-term relationship here.
Speaker #2: We think the Aurora driver is going to be the best product in the market . And so yeah , we would love to have , you know , and hope to have a long term relationship here .
Speaker #5: Okay . And just lastly , for me not to sort of put you on the spot , I'm not sure how many headlines you're watching during the day , but there were some headlines from the media all across mobility today with OEM partners , toll partners , and in the with international in the trucking space .
[Analyst 4]: Okay. Lastly for me, not to sort of put you on the spot, I'm not sure how many headlines you're watching during the day, but there were some headlines from NVIDIA all across mobility today with OEM partners, EV tool partners, and with International in the trucking space. What's the right way to sort of frame this announcement if you saw it versus your relationship with NVIDIA? I just want to kind of understand what is new, not new, kind of how we should think about that broadly, if that's something you can speak to.
Speaker #5: What's the right way to sort of frame this announcement ? If you saw it versus your relationship with Nvidia ? I just want to kind of understand what is new , not new .
Speaker #5: Kind of how we should think about that broadly. If that's something you can speak to.
Speaker #2: Yeah , we've obviously been working with Nvidia and on the the third generation Aurora Commercial Hardware Kit for some time now . I think we announced it back in January .
Chris Urmson: Yeah. We've obviously been working with NVIDIA and Continental on the third-generation Aurora commercial hardware kit for some time now. I think we announced it back in January, maybe. It's great to see others recognizing the opportunity to use this technology. We think it's great hardware, and you know, we'll just continue to build our business. Yeah. NVIDIA makes good products, so I'm not surprised others are using them.
Speaker #2: Maybe . So great to see others recognizing the opportunity to use this technology . We think it's great hardware . And , you know , we'll just continue to build our business .
Speaker #2: Yeah, Nvidia makes good products, so I'm not surprised others are using them.
Speaker #5: Okay. Thanks for the time.
[Analyst 4]: Okay, thanks for the time.
Speaker #2: Thank you .
Chris Urmson: Thank you.
Speaker #4: Thank you. Our next question comes from the line of David Vernon with Bernstein. Please proceed.
Operator: Thank you. Our next question comes from the line of David Vernon with Bernstein. Please proceed.
Speaker #10: Hey good afternoon and thanks for putting me in here . So first question for you on the equipment side , you mentioned in the presentation that the second generation should be getting you a 50% reduction in the hardware costs .
David Maday: Hey, good afternoon, and thanks for fitting me in here. First question for you on the equipment side. You mentioned in the presentation that the second-generation should be getting a 50% reduction in the hardware costs. Is there a scale number to think about that you need to hit to get to that level? With this equipment, what's the actual lifecycle of this stuff? How often are you envisioning that you're going to need to kind of be upgrading the hardware on a truck, or is it going to last a truck?
Speaker #10: Is there a scale number to think about that you need to hit to get to that level ? And then with this equipment like what's what's the actual life cycle of this stuff ?
Speaker #10: Like how often do you need? Are you envisioning you're going to need to kind of be upgrading the hardware on a truck, or is it going to?
Speaker #10: Last a truck ?
Speaker #2: Yeah . So , so as we talk about the the price point of the build material savings , that's across this production run of 1000 plus units .
Chris Urmson: Yeah. As we talk about the price point of the bill of materials savings, that's across this production run of 1,000 plus units, right? As we talked about in the past, we have the vehicles we have today with our first-generation hardware, and we knew we could build that in tens and not more. That's why we have the second-generation commercial hardware kit where our contract manufacturing partner, Fabrinet, is producing those. That gets us to 1,000 plus. Of course, the truly large automotive scale comes in with the Continental partnership, and that's when we can get to tens of thousands of units. This fits kind of the bridge between tens and tens of thousands. The price numbers are across that 1,000 plus scale, and we have commitments and alignment on that. In terms of the lifecycle, we expect this hardware to be lasting a million miles.
Speaker #2: Right . And as we talked about in the past , we you know , we have the , the vehicles we have today with our first generation hardware .
Speaker #2: We knew we could build that in tens and not bore. And that's why we have the second-generation hardware where our contract manufacturing partner is producing those.
Speaker #2: And that gets us to over 1,000. And then, of course, the truly large automotive scale comes in with the automobile partnership.
Speaker #2: And that's when we can get to tens of thousands of units. So this fits kind of the bridge between tens and tens of thousands.
Speaker #2: And so , you know , the price numbers are across that thousand plus scale . And we have commitments in alignment on that in terms of the lifecycle .
Speaker #2: We expect this hardware to be lasting a million miles . You know , that aligns well with the kind of useful first ownership for many of these trucks .
Chris Urmson: That aligns well with the kind of useful first ownership for many of these trucks and meets our objectives for the profitability and financials here.
Speaker #2: And , you know , meets our objectives for the profitability and financials here .
Speaker #10: Okay . Thanks . That's helpful . And then , and then Dave , my second question would be for you on on your sort of illustrative end to end case study , looking on page 16 of your presentation there for Fort Worth to Phoenix .
David Maday: Okay. Thanks. That's helpful. Dave, my second question would be for you on your sort of illustrative end-to-end case study looking on page 16 of your presentation there for Fort Worth to Phoenix. If I have my metrics right, I'm pretty sure a fully loaded Class A tractor can go 1,000 to 1,200 miles on a full tank of gas. With a driverless system, couldn't this truck make the trip in a day as opposed to the two to three that a normal trucker would quote for the day? If that's right, then you know why sell it at $2.05 a mile?
Speaker #10: If I'm , if I'm have my metrics right , I'm pretty sure a fully loaded class A tractor can can go 1000 to 1200 miles on a full tank of gas with a driverless system .
Speaker #10: Couldn't this couldn't this truck make the trip in a day as opposed to the 2 to 3 that a normal trucker would , would , would , would , would quote from .
Speaker #10: And if that's right , then you know why , why , why sell it at 2 or 5 a mile ?
Speaker #3: Yeah , I think it's a well , a couple of things . Number one , yes , we can drive the same distance , you know , for fuel economy , we're actually probably slightly better for fuel economy .
Chris Urmson: I think it's in a, a couple of things. Number one, yes, we can drive the same distance, you know, for fuel economy. We're actually probably slightly better for fuel economy. We're averaging about 15% better than the traditional human driver. We can go all that distance, and our intent is to go in a single day. I think the 205 is also illustrative for us because each lane is going to be a little bit different in terms of its pricing environment and the customers. For us, we've always said that in the transportation as a service element, which is this is the illustrative kind of example, and then there's the driver as a service example. In each of these particular examples, transportation as a service, we're kind of pricing like the rest of the market.
Speaker #3: We're we're averaging about 15% better than the traditional human driver . We can go all that distance . And our intent is to go in a single day .
Speaker #3: I think the 205 is also illustrative for us , because each lane is going to be a little bit different in terms of its pricing , environment and and the customers .
Speaker #3: And so for us , we've always said that in the transportation as a service element , which is this is illustrative kind of example .
Speaker #3: And then there's the drivers of service example. In each of these particular examples, transportation and service, we're kind of pricing like the rest of the market.
Speaker #3: And for the drivers of service, we've got the 65% to 85% range. But we'll get more specific on pricing when we get a little bit further along.
Chris Urmson: For the driver as a service, we've got the 65% to 85% range, but we'll get more specific on pricing when we get a little bit further along.
Speaker #1: David . But can I just jump in here for one second ? I think just because Dave doesn't have the slide in front of him , the revenue per mile that we have there , that's not necessarily to Aurora , right ?
Operator: David, just to.
David Maday: But.
Operator: Can I just jump in here for one sec? I think just because Dave doesn't have the slide in front of him, the revenue per mile that we have there, that's not necessarily to Aurora, right? This is an end-to-end in a driver as a service business model. That is an industry rate. That's DAT-sourced, right? We're using that cost. Basically, that's what a carrier would be paid to haul those loads on that lane based on industry data. We're showing how much more revenue and margin we can drive for the customer based on a driver as a service model in which they are paying us the driver fee. We can absolutely walk through the math offline, but I just wanted to clarify that one piece.
Speaker #1: So this is an end to end in a in a driver as a service business model . That is an industry rate . That's dat sourced , right .
Speaker #1: So we're using that cost basically—that's what a carrier would be paid to haul those loads on that lane, based on industry data.
Speaker #1: And then we're showing how much more revenue and margin we can drive for the customer based on a driver service model in which they are paying us the driver fee.
Speaker #1: So we can actually walk through the math offline . But I just wanted to clarify that one .
Speaker #2: Piece . And I do think , though , your point , as there is an opportunity potentially for premium pricing here because of the speed at which you can move these goods .
Chris Urmson: I do think, though, your point is there is an opportunity potentially for premium pricing here because of the speed at which you can move these goods. You know we're still exploring when and if that's an appropriate lever to pull.
Speaker #2: But , you know , we're we're still exploring when and if that's an appropriate lever to pull . Yep .
Speaker #10: Okay . And but is the is the software subject to any hours of service or . No . And then I'll let you go .
David Maday: Is the software subject to any hours of service or no? I'll let you go. Sorry.
Speaker #2: Sorry . No it's not . No the software is not subject to hours of service . Because if you just think about the reason for the hours of service limitation , it's because the person gets tired , right ?
Chris Urmson: No, it's not. No, the software is not subject to hours of service. Because you know if you just think about the reason for the hours of service limitation, it's because a person gets tired, right? Our software has that superhuman ability to not get tired.
Speaker #2: Our software is that superhuman ability to not get tired .
Speaker #10: Superhuman rates. Thank you.
David Maday: Superhuman rate. Thank you.
Speaker #2: Thank you very much. I appreciate it.
Chris Urmson: Thank you very much. Appreciate it.
Speaker #4: Thank you. Our next question comes from the line of Mark Delaney with Goldman Sachs. Please proceed.
Operator: Thank you. Our next question comes from the line of Mark Delaney with Goldman Sachs. Please proceed.
Speaker #11: Yes . Good afternoon . Thank you very much for taking my questions . First , I was hoping to better understand some of the progress the company has been making with Volvo .
[Analyst 3]: Yes. Good afternoon. Thank you very much for taking my questions. First, I was hoping to better understand some of the progress the company has been making with Volvo Trucks. I think at the last earnings call, you spoke about hoping to have 20 trucks from them by the end of the year. Where do you stand with that? If I understood the press release today, you also are working to integrate it line-side. If you could share some timeframes for that as well. A couple of different parts to Volvo Trucks timelines and progress, please.
Speaker #11: I think in the last earnings call, you spoke about hoping to have 20 trucks from them by the end of the year.
Speaker #11: Where do you stand with that? And if I understood the press release today, you are also working to integrate at line side.
Speaker #11: So if you could share some timeframes for that as well . So , so so a couple of different parts to Volvo timelines and progress please .
Speaker #3: Yeah, I hey Mark, can you just hit the first part again just to make sure I got it correct.
David Maday: Yeah. Hey, Mark, can you just hit the first part again to make sure I got it correct?
Speaker #11: I thought you were planning to take some trucks from Volvo Autonomous Solutions. If I was remembering correctly, where did you stand with those and getting those validated?
[Analyst 3]: I thought you were planning to take some trucks from Volvo Trucks, if I was remembering correctly. Where did you stand with those and getting those validated? I think you also talked today about doing some line-side integration. I was hoping to also understand when that may materialize.
Speaker #11: And then I think you also talked today about doing some line-side integration or something. I also understand when that may materialize.
Speaker #3: Yeah . Okay . So I just want to make sure that I got the the 20 part right . So yeah , for Volvo Autonomous Solutions , what we had said and we had said this last time as well that we are starting to get there .
David Maday: Yeah. Okay. I just want to make sure that I got the 20 part right. For Volvo Autonomous Solutions, what we had said, and we had said this last time as well, is that we are starting to get their second set, and now we're actually in the process of building kind of their third set of trucks. They're called like B sample and C sample. They're development trucks that have all the representative hardware. As Chris mentioned, there's still some updates associated with the firmware and the software that need to be done to have them fully validated for driverless operations on their truck platform. We're in the midst of deploying those trucks, and we use them in terms of delivering commercial loads to support Volvo Autonomous Solutions' business, as well as development testing and integrating them into our second-generation commercial hardware kit.
Speaker #3: Second set. And now we're actually in the process of building kind of their third set of trucks. And so they're called B Sample and C Sample.
Speaker #3: So, their development trucks, which have all the representative hardware, are in place. But as Chris mentioned, there are still some updates associated with the firmware and the software that need to be done to have them fully validated for driverless operations on their truck platform.
Speaker #3: And we're in the midst of deploying those trucks , and we use them in terms of delivering commercial loads to support Volvo Autonomous Solutions business .
Speaker #3: As well as development , testing and integrating them into our second generation hardware . What Chris referenced , even , even today , is that we've actually have our first line side integration of the Aurora driver kit being line side installed at an assembly plant at their new River valley assembly plant .
David Maday: What Chris referenced even today is that we actually have our first line-side integration of the Aurora Driver kit being line-side installed at an assembly plant at their New River Valley assembly plant. That's really a look into the future because remember, one of the things that we're really excited about with the PACCAR and Volvo partnerships is the ability to build at scale. One of the key components of really building at high scale, high volume, is the ability to line-side install like it was any other part that was being assembled onto the vehicle. We're making progress on both of those fronts.
Speaker #3: And so that's really a look into the future , because remember , one of the things that we're really excited about with the Paccar and Volvo partnerships is the ability to build at scale .
Speaker #3: And one of the key components of really building at high scale, high volume is the ability to line-side install like it was any other part that was being assembled onto the vehicle.
Speaker #3: And so we're making progress on both of those fronts.
Speaker #11: Very helpful, David. And just the timeframe to be done with the testing and validation with Volvo. Do you have an estimate you can share?
[Analyst 3]: Very helpful, David. Just the timeframe to be done with the testing and validation with Volvo Trucks, do you have an estimate you could share?
Speaker #3: Yeah . Again , same as always . We're going to try not to talk about our customers and our partners timing . We let them do that .
Chris Urmson: Yeah, again, same as always, we're going to try not to talk about our customers and our partners' timing. We let them do that, but we're making tremendous progress. We're starting line-side integration, so things are advancing really well for us.
Speaker #3: But we're making tremendous progress . And again we're starting line side integration . So things are advancing really well for us .
Speaker #11: Okay . And then just my last question was just on on the news with with international maybe just talk a little bit more about how that how that's evolved and how that supports your driver out timeframes that you were describing in your prepared remarks .
[Analyst 3]: Okay. My last question was just on the news with International. Maybe just talk a little bit more around how that's evolved and how that supports your driver route timeframes that you were describing in your prepared remarks. Thank you.
Speaker #11: Thank you .
Speaker #3: Yeah . So I think with international also super excited . And you know , we've had a lot of , you know , the interest and the customer demand on the Aurora driver is really been strong .
Chris Urmson: Yeah. I think with International, also super excited. You know we've had a lot of, you know, the interest and the customer demand on the Aurora Driver has really been strong, and we continue to make great progress technically. We want to be able to kind of fulfill that promise of being able to deploy these trucks across the Sunbelt and working off of International trucks where we upfit stock trucks from International and being able to install the Aurora Driver on those and deploy those driverlessly without an observer in the second quarter of 2026 is a great opportunity for us to meet demand and kind of fill that volume potential and continue to demonstrate our leadership position. Our focus is really on continuing to build the momentum across the board.
Speaker #3: And we continue to make great progress . Progress technically . And we want to be able to kind of fulfill that promise of being able to deploy these trucks across the Sunbelt and working off of international trucks where we upfit stock trucks from international and being able to install the Aurora driver on those and deploy those driverless without an observer in the second quarter of 2026 is a great opportunity for us to meet demand and kind of fill that volume potential and continue to demonstrate our leadership position .
Speaker #3: So our focus is really on continuing to build the momentum across the board.
Speaker #11: Thank you .
David Maday: Thank you.
Speaker #4: Thank you. Our last question comes from the line of Mike Galli with TD Cowen. Please proceed.
Operator: Thank you. Our last question comes from the line of Dave Michele with TD Cowen. Please proceed.
Speaker #12: Great . Thanks . Good afternoon everybody . Just two questions on the product roadmap . First , Chris , you mentioned kind of solving for some of the dust storms .
[Analyst 2]: Great. Thanks. Good afternoon, everybody. Just two questions on the product roadmap. First question, you mentioned kind of solving for some of the dust storms. I'm curious, as you solved for that, how much of that was kind of done by the lidar, your lidar versus radar? Secondly, I guess a slight delay in the rain and heavy wind update. Just maybe talk a little bit about that. Was that just tied to maybe having to solve for the dust storms first? That pushed it out a little bit. Anything you could share there would be helpful.
Speaker #12: I'm curious, as you solve for that, how much of that was kind of done by the leader? Your leader versus radar.
Speaker #12: And secondly, I guess a slight delay in the rain and heavy wind update—just maybe talk a little bit about that.
Speaker #12: Was that just tied to maybe having to solve for the dust storms first, and that pushed it out a little bit? Anything you could share there would be helpful.
Speaker #2: Yeah . So on the how do we deal with the the dust storm part of this there , as we said for a long time , we see real value in having a complementary set of sensors .
Chris Urmson: Yeah. On the how do we deal with the dust storm part of this, as we said for a long time, we see real value in having a complementary set of sensors. They have different strengths and weaknesses. There isn't like we just use lidar or we just use radar. We build a model, a perception model, an AI model that's taking data from those different sources and producing the best possible outcome from it. We lean into the special properties that come along with FirstLight, our FMCW lidar. Of course, radar, given its relatively longer wavelengths, is less impacted by dust. Between the two of them, we do a really nice job of seeing what's on the road in front of us. In terms of the rain push-out, we look at this as just not a thing, right?
Speaker #2: They have different strengths and weaknesses . And so there isn't like we just use lidar or we just use radar . We build a model .
Speaker #2: You know , a perception model , an AI model that's taking data from those different sources and producing the best possible outcome from it .
Speaker #2: And so , you know , we we lean into the special properties that come along with First light , our fmcw lidar , and of course , radar .
Speaker #2: Given its relatively longer wavelengths , is less impacted by dust . And so between the two of them , we do a really nice job of seeing what's on the road in front of us in terms of the the rain push , this is like we look at this as just not a thing , right ?
Speaker #2: Whether it's the end of December or the kind of the beginning of January , we just like to report things with integrity and we realized it was going to come out in the release a couple of weeks later than we had originally said .
Chris Urmson: Whether it's the end of December or the beginning of January, we just like to report things with integrity. We realized it was going to come out in the release a couple of weeks later than we had originally said. We just value transparency, figured we'd share that.
Speaker #2: So we just value transparency. Figured we'd share that.
Speaker #3: Yeah . And it's also important to point out that we also pulled ahead , you know , the El Paso . Lane quite a bit .
David Maday: Yeah, it's also important to point out that we also pulled ahead the Fort Worth to El Paso lane quite a bit.
Speaker #3: We're going to continue to drive towards moving really quickly on this . And and Chris reminded me earlier today , you know , we are going to give people a little bit of a breather during the holidays .
Chris Urmson: Exactly.
David Maday: We're going to continue to drive towards moving really quickly on this. As Chris reminded me even earlier today, you know, we are going to give people a little bit of a breather during the holidays.
Speaker #3: Yeah .
[Analyst 2]: Yeah, that's all very helpful. Thank you.
Speaker #12: Yeah . That's all very helpful . Thank you .
Speaker #2: Thanks . Yeah . Dave Dave has to remind me not to beat myself and the team on the the the the week or two here .
Chris Urmson: Thanks. Yeah, Dave has to remind me not to beat myself and the team on the week or two here, given that we pulled the other thing forward.
Speaker #2: Given that we pulled the other thing forward.
Speaker #4: Thank you . At this time , this concludes today's teleconference . You may disconnect your lines at this time . Thank you for your participation .
Operator: Thank you. At this time, this concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.