TuSimple (TSPH) 10 Feb 222021 Q4 Earnings call transcript

Good day, and welcome to TuSimple Fourth Quarter 2021 Earnings Conference Call. All participants are now in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. Keep in mind that this call is being recorded, and there will be a replay available at ir.tusimple.com, following this call. I would now like to turn the conference over to James Mann, Head of Investor Relations for TuSimple. Mr. ahead. go please Mann,

Officer afternoon, then call. welcome TuSimple’s With Officer and Chief Chief Good will and quarter the take review President our questions. XXXX Executive operating Financial and Lu, earnings us highlights Cheng Dillon. everyone, you. Cheng to Pat and and financial fourth and Pat we’ll Thank today are

Investor As being available later be this call a reminder will is TuSimple’s call shareholder on letter Relations our and recorded. This a replay of website. today

the way, please letter, are any Generally non-GAAP and begin. risk factors. reconciliation of now. shareholder due Note this accordance If all materially SEC shareholder in to you forward-looking refer statements more only Please risks disconnect a that Principles. of TuSimple’s Please may discuss over prepared results differ I to our subject filings. We’ll details GAAP will to call letter also the to to from measures. press call in a Harbor statements detailed object to financial and measures uncertainties. turn not factors Cheng? in the in now These to and comparable Accepted including our Accounting measures are actual variety presented the release predictions or Safe which Cheng disclaimer with that for future contain forward-looking are non-GAAP non-GAAP events refer financial and

quarter earnings Thank you, James. and Hello, call. everyone, fourth our to welcome

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driving during Driver-Out along autonomous are driver means required cases capabilities Third, which proves, has most that importantly, was edge our to operations all mitigate is the operations. at and And feature Driver-Out we routes. zero system the or all contain able true safely moment. commercial for one complete,

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of brands, OEM partner to continue of with helping and our We have us Navistar develop insight Navistar in us to critical a with we Scania. program. trucks strong relationship very a providing is retrofitted is including Driver-Out They TRATON were the supporting components. and with as safety develop and case our our every step way, Group us critical suppliers

forward as We’re we scale keep with excited our Navistar operations. Driver-Out moving to

For requires program progress components as supplier our process have production setting base and tremendous a the Navistar, selection as supply U.S. strategy additional with clear maturity. where well a for truck we made

a we critical scale maturity, is mean third-party autonomous components and aftermarket sold customers because As supplier components to certification, not require that do technology go This rather require grade through hardware but to automotive support a support any we breakthroughs, had trucks process to of type reminder, warranties. when production. advanced can say have

the We will push level continue development to for be component schedules. to proactive with supply the base

also We timeline. to and with TRATON work and Europe, In concluded Scania. continuously our Navistar continue successfully production our pilot to with pressure program process have phase X we test

domain developing is and incorporates the powerful TuSimple’s controller address January, autonomous the a ADC of in a on to and freight kilometers and European we chip ADC. partnership. critical maturity. main believe XX,XXX next this most or driving all Sweden’s over driving we and and NVIDIA that conducted its NVIDIA’s partner where operations our autonomous our kind efforts autonomous first the hardware work design system longtime computing is decisions generation along are ADC next made. We our significant to systems of started This on have of together, are a orient proprietary solution proprietary have is processing announced corridor. edge supply of Europe autonomous software. base phase We We

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happy CFIUS I’ll and and that, on results the to come our to significant stages Next, I’m believe I’ll with turn that With that outcome. financial to a made satisfactory guidance. we CFIUS. in will to an the discuss process progress share We the call Pat we’re final we’ve give over update of process. the believe,

freights. at this who two X,XXX under brings Cheng. trucks new trucks. This trucking we reservation you, quarter today. two added coming XXX end reservation quarter, brings combined reservations we reservation as our partners, from large This just X,XXX our quarter of reservations end, to with reserved new the total After total trucks. to added Thank XXX Beginning truck program, our

we’re a our implement Importantly, our players, reservation is diverse book fleets major networks. technology composed group and their of to eager of logistics into

a make reservations. reservation. financial commitment high with our and capable only demand for for quality We speaks that broad partners, high We ready hold standards technology work to implementing of the partners AV additions technology. continue reservation to our the those continued alongside such DHL to The base are of as

reported and our million for XXXX, quarter-over-quarter. increase in which last threefold to increase represents which fourth We gears increased year-over-year. $X.X the financial year represents shifting Now quarter. revenue roughly threefold million XX% a the versus results of quarter, for reported the period full same We nearly a revenue year, in also $X.X

our While XXXX, by growth of we received primarily new driven was the asset semi-trucks for increasing year towards end utilization. the revenue

sales in spent same to This as We into we $XX to are X% year. to in expense $XX financial items a in year. R&D of SG&A by R&D This the statement of quarter-over-quarter, million The including repeated SBC. line. period presentation the million QX SG&A combine last on including SBC. single expenses. certain We to period, last in spent total $XX changed the million not and compares compares Please discrete $XX that the same $XX Moving in have million declined million our QX. and quarter, on $XX million marketing G&A note during period

fourth $XXX And was the quarter loss of $XXX XXXX. operations from our net full XX was loss net year from Our in operations million XX. for million

period negative million on EBITDA million, adjusted last $XX in the which the fourth same quarter Our compares to year. $XX was negative

on loss EBITDA adjusted in invested the during full $X.X year to quarter cash primarily capitalized negative and $X to development. and balance execute XXXX, We of sustained with our our through over reflects equipment quarter the million. roadmap The equipment $XXX in ended the loss very our a well XXXX. investment the related investment. was For of our property We commercial technology purchase We and adjusted remain EBITDA billion. purchases million facility

XXXX, In to year guidance. XXXX year full $XX million our provide to full Now revenue $X expect million. we of

Triangle automating up area resources As and the on our to autonomous a mentioned, are dense Cheng This we our of means own operations. prioritizing resources significant fleet portion our in scale using routes Texas of focusing Driver-Out trucks. our

less to fleet operated We human AFM partner adding capacity year. trucks will our this or be focused on

from operations not during revenue We XXXX. our contribution meaningful expect also do China

million in We expect Driver-Out The as year and $XXX includes EBITDA announced scaling of to XXXX development our reflecting adjusted to loss a commercialization. as technology well our million, costs NVIDIA, negative $XXX ADC full guidance operations. recently continued investment with related

We $XXX shareholders. strong compensation investment expense of philosophy for a alignment expect year between in and $XXX employees to our stock-based of the our million, and reflecting million team,

expect We of property year. $XX for purchases to of equipment million full million and $XX the

on with to few remarks. last to hand expect the year approximately cash We balance sheet. now end a it million I’ll the back Cheng $XXX in for

investors critical be year, our goals in earn year was company started that all major Thank TuSimple. as we’re IPO amazing we knew say to Driver-Out. journey, trust you, XXXX Pat. the we the for achieved was of public a first beginning of and the of the to the we it including start proud year to going of our At

As also entering development. Year, New entered our we a a phase we’re new of

pathway commercialization clear. Our to is

expect the with first-to-market driver a scale lower commercially and continue We operations, autonomous driving solution. to to costs operational be viable to

to look we’ve We’re accomplished that, With in New ready the XXXX session. forward of and Year. to the we Q&A proud we’re all start

[Operator the Stanley. of Shanker from Our you. line Ravi Instructions] question of Morgan comes Thank first

is line Your open.

progress Thank good but us you your track you milestones of meaningless right kind are afternoon XXXX Cheng, was with you’ve guidance in just how the where But of IPO XXXX. given the Driver-Out. through obviously I’m big year of is Obviously, you, now. for stage kind the guidance, we your wondering can everyone. given a with development

or would Driver-Out terms use particular runs we of to So great? anything can in that milestones be in plan, mapped of number miles your progress specific track or to

question, it guidance operations is, what is during as give great But, do I especially the earlier, what that mentioned freight Ravi. the Driver-Out line is detailed coming a think Analysts and scale commercialization about dense to milestone routes. in in a to Day. we operations, or finish the way that means expect commercialization? I dense we That’s Driver-Out And Well, can on quarters, more continuous think

ultimately, to the more or be clear provide we Triangle, IXX of to for Texas a of lower cost human importantly, and how carrier So mile lower and That’s line per service the than benefit sight that has of a operations driver. shippers customers.

think mentioned that a goal. of commercialization And us starting that point, much metrics so, Driver-Out the so but I wouldn’t about or getting sort also closer as show we really from KPIs, to milestones that

So that’s time. we’ll you, you additional intend we’ll to show over routes show per cost to Driver-Out to mile an and nighttime going of from driving scale Well, driving. operations how the instance, for daytime

talked course, of about. today, have So that safety do we some we precautions

cost will As things, the we remove come those down.

come As features, our will we optimize usage, data optimize costs down.

from in And there you check-off a and a level, show So things can path today Driver-Out lay we to But can those high more clear commercialization. we out that intend easy into one-by-one way. we a understand path, to we much there’s are things on you. to at importantly, that show where that very are do is more really

think what number So to now, bit of to much for because path we answers hopefully to to frame of are really trying a think but mean? far I that is disengagements little give like as, where And to before, what has know, this where question we’re in instance, and we’re that we come. the does if to that How go only numbers really where better, down, your commercialization? or think laying you and today. what a you more because And of we even do it that But how we miles go. is need better does, commercialization our a saying terms problem way industry we’re are I that

you’ve kind surprises any were can anything. does if you either of a kind were hardware way incremental successful Thank have any change just the from manageable the in the with that specific a of runs up, runs? or make Great, kind And surprises there or seven you or three and of and like a that your changed learnings of runs, share sense. seven learnings any nasty But sounds as these you. Driver-Out maybe your of driver or runs do us it no seven lot from any follow clearly,

Yes, I path clear really set but mean, have call there’s are lot commercialization. I the of mean, I them improvements optimization, I next the wouldn’t And mentioned, built developments, of a to lot from of we in. learnings runs. have surprises, do. a to we’re as we going A that them

that here over quarters. from the milestones on, there achieve So coming clear to intend are these we

I of previous And feel confident, operations program. to huge and part we now Driver-Out guidance gave this, us and felt was we think operations. really to a team, permanent we was, credit that our biggest sort our the but the of pilot make actually a takeaway we would this confident our so for even scale team, technology to be intend one-to-two more month

I really for development positive So that that’s is something very a think TuSimple.

you. Thank

question Our comes from Ossenbeck of Brian JP next Morgan.

Your is line open.

Good commercialization, that then up Cheng, scale for to the now. basically questions. on afternoon. and you’re Thanks follow ready path just said to to you taking that,

difference broader make between endgame that kind anything be maybe on out am in left scale? certain what just of in certain tested and needs near But understand and were? further it of the it now to putting just the was scaling feel like, working the Driver-Out wrong, aside, context as that here like we really wanted you’re understood I scaling to sure in at ODDs there is the you’re and correct and the sounds just it handled So, able me before were areas, demonstrations to into sounds term. least So you if figured like technically that to really you want

clearly There’s we what and Yes. No ultimately get has how is to scaling is there. critical. commercialization one able which commercialization, to been articulate

So we let’s tell planted well, its industry of service, the go give you that where we a so But right. freight to flagpole how can And and we back you does very reliability the to lot cost uptime, of kind really, of mean commercialize. In of does metrics. Robbie, what it are? level

be continuous have truck. able or And have mile we operated human a pathway trucks, use would the have to routes. show that’s operations to we have with to cost Otherwise, we high why analogy. our to than So lower have a them on in per this carriers autonomous density shippers

say we is, question of when demonstrate So, to we from the left it route. all what develop Driver-Out be we operations that do define able capabilities feature scaling, what going are about feature complete to a your repeatably, and a believe that we back And we to commercial on have terminal-terminal complete. operating means technically, is to vehicle

commercial they’re same. most at the quite you If look routes,

And over, can I truck handle so, do into vehicle. for when you to instance, is take driver emergency if our run mean, lane going able we emergency who’s to operations, right, lanes vehicles,

I XXX miles emergency XX vehicles. lane those runs, Driver-Out think in our of

able to to be -- Your truck to be defensive to has hear driving and able drivers. non-compliant have

built those we features And in. additional so are

is cases mitigate, or we’re So counter that can really to mitigate a able today on edge gives what comfort complete, we also I being are think the route. all contain we feature able to

capital, We takes are show in hurdles. And remarks. to a to of we these We progression that we it but we’ll can standpoint, your don’t believe when takes can of it we sort any engineering show from mentioned that you things and see prepared So is as manpower, developments. from fixed is systematically, But technical able these that we technology work, step-by-step. you. be show significant you that scaling, linear that say more already earlier that as

the think, the process. there’s Just if as contribution here, going too guess They really operations you that outcome a share at much something you are anything a least. I it timing? much And of acceptable mentioned I your in mentioned follow else, maybe is China behind and up, can to terms too on didn’t have give of, detail CFIUS XXXX, what And it. in then

where on you. that So maybe going the on that just or an if has see anything strategy how changed you forward? Thank stands, operation update

for CFIUS, But the On we cannot we stages. final to reiterate, this time. satisfactory TuSimple. is to to belief unfortunately just want say our outcome a come that lot, we’ll near And at we’re a

when of and have So file share, the cannot details. X-K we’ll able to to we course, do, unfortunately, we but talk more, we’ll around be

year. sort In that of we a just said as do China our terms meaningful level That China, this has We’ve still permit-by-permit four do sound, given is we is isn’t believe in risk, lane-by-lane. not for China that autonomous see strategy sound. mean having regulatory pure our China China strategy always Pat mentioned, revenue doesn’t trucking today, that contribution of

near it’s best which term have the what commercialize simple. and China, in seaport, Shanghai We we believe to project is too deepwater in the

We’re and resources sure our shareholders. testing make optimizing and always we have to value ROI the our pressure to highest

it So our today, the time, after we that’s largest very China to same the US fast. upside freight will we be first take have that commercialized. all, ensure in growing world off. mean, second I to does market shareholders, want is But once

you Cheng. thank Alright,

Thank you.

Gill question comes from & next of Needham Company. Our Rajvindra

Your open. line is

great on program thanks. And Yes, the technology. a validation of the that’s congratulations Driver-Out

million. to of wanted year little fiscal just $XX about $X bit million XXXX to talk a guidance the So

on you’re if could programs to capacity focusing a that that prioritizing you instead bit Driver-Out mentioned resources partnership little your for kind those elaborate AFN. further You on of Wondering of what the revenue the $X program. million that decision are context, together to drivers within going to million from Driver-Out you. XX? X from $XX Thank And prioritize growth to about thinking

Rajvindra. Thanks

and maintain think commercial going technology with are we customers who are, then the around to implement operations, when conditions. about our revenue technology really our strategic develop long-term. our our it’s supporting first, real also partnerships development in long-term And what world what to the freight over So goals

Driver-Out our of whenever be actually AV us driver whenever that’s This the around well. and operations, there what’s around as But the pull customers to to as advantageous, our us, time they to that wheel. safety well ROI to focusing that more have really of right, we told some so. we to is is continuing utilization said, hauling scaling freight our you the trucks function the is Where see XX guide to highest us is want important truly as on from are the behind what able in have it’s of levers where trying So the they human kind and strategically operated or sure opposed operations operations really as it. those AV making to drive validated using scale do it’s can This components the miles of we them the value, manual today. do different they those the more the AV efficient our with in us for them. be getting both own think for haul of a trucks more want of the miles be as we retain focus priority of customers manual we’re our or freight. where is participate technology. that freight. X that add to We to capital technology a to freight million of that a AV trucks. flexibility operations And And most commercial time have number and at as and The million lot And midpoint, AV partner versus either bigger strategic for focus, to will, them a we operations, want to more more have

trucks of here. the end did the add more year we So, at

of are letter, You’ll those XXX in the commercial XX about US half we of see and those are trucks, approximately globally, trucks have in dedicated to roughly operation. our

count with So had challenging conditions utilization the around related and where the taken have have we’re to of those more increasing off COVID and pandemic we’ve restriction. time trucks adding some hiring market to to outages trucks, drivers more the notwithstanding who dealing of due some drivers of

how you that X of a to little blocks from So around building bit XX. we go the gives

helpful. you’ve in Cheng, when for two dedicated, commercializing you’re guys and over getting trucks. that Driver-Out kind time you be thinking the dollar you’re trucks, curious proof in of up, for of are that years will scale to that’s help number to of next of December? accelerate you commercialization? Will and the reinforce either transition focus what that mentioned to completed kind that? the year What wondering your two am the Yes, can potentially How that to on when you’re point it? thinking year Texas programs that you’re this I billion expanding that, kind to to elsewhere, now three very how gap really the and and and about drive kind when And the you’re fully to that, see it kind the of these follow you prior programs kind during route there. or makes about it to intend going technology. bridging and major of about Driver-Out commercialize Hopefully validate process my and IPO thinking complete I’m sense.

Yes. No. Good question.

and we on hit it having of trucks, it And was again, main commercialization, did want serious from production trucks many continue we’re confidence autonomous a we how we completion freight that to Driver-Out are to forward a you believe commercialization Well, you, Are after And to you’re selling how that’s did we we’re trucks put is commercialization, is ultimately with production, need shippers. to to series provide production certification continue we’ll that onto be something service first get do ability going services the Traton, trucks network, Scania. parts, something kind ready. definitions despite you third-party? And we XXs define We that’s because again, to timeline, safe. more the of not not to this our that’s XXXXs. this us, that requires ready you more can because warranty And to felt commercialized? that partners Navistar, we For market commercialization integrated of reliable yet. is, there’s having truly

at level, really a changed all. So at high hasn’t it very

show what months. commercialize the you and to anything and over forward, you more will roadmap we’ll put you now think giving coming believe detail able actually next to more and about to the I give years, be we’re detail we continue the we commercialize over two

please So tuned. stay

squeeze If I in one Got could question. it. just more

proprietary What that? feel with the differentiates a approaches And of rationale custom can with that self developed the or and processor? your NVIDIA, do Can on of chip that Thanks. own their you run your you to closely mentioned ADC how market? You with you rationale driving hand-in-hand that working other kind NVIDIA. the SOC discuss was for making technologies versus working software technology other sure NVIDIA

we’re Maybe use to some examples that situations Sure. or facing.

So, that amount look the in a product power available path or today of our has ADC a there’s the market, readily computational of clear not system we that even requires.

and of with design of right operate us integrated driver And that have being of virtual a the we have benefits application so, that’s that one NVIDIA, to the software computational layer. enough can working allows volume our number power vertically to the has

ensure take to chips have The all on ADC. that inputs is system. and software ADC our can the also hardware, support autonomous not driving just sensor other in We and our their but ADC software that

And one being long Those instance, are if we those? is taking ability have built tier skill, make, system? supplier, goal so are for requirements, you designs change course, than time. now are by, X rather you’re small this What a their our what that have will everyone, to requirements take with from does a fit the of that have to

not meet our ATC to comes of that or autonomous also can software. uncertainty, when requirements lot this And and whether component driving or of market a creates ADC delays so this the

possible. to we production was needed felt geared have soon we And ADC this think really as for So those is we take. I that that towards that a as ensuring reasons step series it

you. Thank

Suisse. comes question Dan Levy from next of Our Credit

open. is line Your

Good the evening. for you Thank questions. taking

the gets your reach view Pat, IPO commercialization capital on required capital you to the for, I pilot I a much to to different requirements this could has us changed carry cost you just or in a enough you are commercialization? And work comment to previously what First, intense outlay up, next if capital Maybe give you couple that. the you any this XXXX, from continue made ask maybe just flavor is you unpack want how expected? to the over the as can just years. that more Driver-Out just proceeds the think

Good question, Dan.

capital our we’ve from deployment no the plan for material what is I years. on think next saying there three deviation been

are the capital that have very our So, sheet balance on we get of with our feel feel we very commercialization efficiency the plan. ability XXXX on base our we in And have to have, we today. and we through capitalized sheet fortunate the that to balance capital kind fully confident where to

your not capital So you in a constraint for is commercialization? path to

have No, the should and get were interpret confident you sheet today from we us to commercialization full in on development on but speed the I think balance efficient, will mean, that being our are proceeding XXXX. very very we focused we technology of remarks commercialization through I the that ahead and capital

his then, I’d could going route extrapolate that’s extrapolate you give commercialization? you on I said we a to a details commercialization. that showing feature technologically Tucson you said follow it. like could commercialization plays are and can complete ready that but future on where is know I specifically more would maybe this you’re flavor. future, us know, items between some it’s would for already in into for What what it, a but us it’s continuous, the unpack, remaining like to that you cost? the focus need commercialization to we be vehicle you give that us show to questions Got some to complete flavor what from And to route the Thank that more like which of Driver-Out, to this, maybe lower you just on one if ultimately you route today hey, would you. need up give to that on could of prior and Phoenix

question. great Yes,

is, shippers cost. and commercialization its for the uptime of So service level

can for hauled moves the for So, gets will most. freight instance, daytime, that’s But that can hauling demonstrate nighttime we and we only although level quite service, demonstrate so where something is next. nighttime at freight be or

We of sort of also have continuous hardware. need function operations. to And a hardened that’s more a

So, optimization of as better well the as hardware, operations.

to turnaround ability And increase same the operations, we have of number as is, night. So that Driver-Out demonstrated those. we the do the back-to-back the time of runs to course, on

place. feature of these that there put terms In in are we we cost, safety technically are complete, precautions

instance, vehicle, that if can one become all a trucks vehicles mean, survey trucks we for each XX turn of route, those I you other. survey So vehicle, XX on survey have

a away, naturally remove vehicle, to system. our we to we something chase and show quarters. that had you that can go that’s part centralized We next So oversight of the as coming over have will that

the again, in works that’s not that’s now, but something achieve. technically that cannot So we

along you if expanding design domain. think operational So the the of scaling, framework

new nighttime, daytime, So routes, comes down uptime, also and everything cost because then to cost.

truck, of If than that is that lower a operational human mile B, is A to And can driven a non-scalable then with associated basis these a clear that. that items. real it product. sight point items, to per operational becomes you be can get these have service, cost And point from real line on a

So let think with that’s today, optimizing scalable in doing when features the items. it. it technology, some more, these But me comes about away of to the and

optimized They’ll significant route. are in trucking trucks dense other. this a the one each the way, a because revenue, survey update on vehicles automated more one is for have and Like for a And that actually routes can route fleet that especially route can a becomes truly more route, we generate them. faster, this friend. We fine, put becomes of and densities our commercial alone maps

And allows commercialize. so us that really to

Thank you.

next of Potter Alex Sandler. from Piper comes Our question

Your line open. is

Great, hardware two have questions. thanks related guys,

understand benefits the I feel can controller? I that more things just take, other than the I And with in that So Are you’re off you that devote integration supply guess, Or on where to strategic guess farm time more the can’t Or areas I in-house everything is rationale and chain? the one, you and specifically, regard the shelf bottlenecks designs? you regarding with think, energy the buy else of hardware you partnership or seeing need speed-to-market can out? that first like other to to less just any the pace, NVIDIA. there vertical and

It’s question. Good primarily controller.

For plenty towards between towards, LIDAR other and line that many startups working LIDAR companies towards solutions. building ready mean, sensors actually I are and suppliers capitalized tier many, well either instance, components, LIDAR. a sight, problem. that for Like of working clear now there’s do working production we or see of ones. They’re

GPS components that roadmap on good that something easy. braking about about steering pretty iteration feel it’s clear solution. that. Even that of the units, we when next So something and just there’s large those of production that. we readily not though components, generation are coming then are and available hasn’t a terms in It’s And working and generation today, Cameras are feel tier out. been new not on a that’s radars, ones hardware. And a the in of good It’s developed before.

those So, things. pretty about we generally feel good

I just So word something to think quite to has and summarize, solution, compute only something this that’s yes, in. unique the need to driving this also because sits the layer we TuSimple because just is level powerful made application tailor

important. we So really, that most [Indiscernible] one the feel that’s main is

and gen next is to other very you last Great, bill of set how of you and these for guess that long ultimate then, coming can send timing question before the finalization in think it into And this play platform stone I compute the a about, talking all over that it’ll lot be helpful. that on, versions available, But will Navistar? we’re timing. know do that the materials. just components of I design

gave What continuing mean, set was evaluate I the supply we’ll of to XXXX. in we we’re that to spring materials bill base. look guidance the

process. And so production our that’s part of

components definitely we’ll the things more puts think, away now onus to in have right details coming software. one I working with think on two more is, take I And, month. actually the non-production ready

than otherwise. might also work doing to more more actually we’re need So development we than

So here, think easier from harder. not the path I should get

number the of point as taking maturity, then, this we’re to address ADC not using course, proof one. is address that’s think excuse, we’re that, but point points. really of not two steps the we’re where And steps this number one it, supply taking making, we’re to proactively I chain being

Spak Our Joseph Capital from Markets. RBC comes next of

guess near-term basically guidance and trucks. term. everyone. at the Thanks, guidance, the mean, adding at. The run mentioned, rate on I But I on revenue currently longer plan you you’re one it’s XXXX one you

I like those think in only you said, half the maybe you but it running. sounds of US, have XX are

NVIDIA. up year? worse XX%, And the current but could you of rate. you additional engineers, And I running talk And I you’re and for XX% us it’s next you maybe what by end sort that loss, about some be trucks the about run on bit help know hiring help bit a little the heard expect cost you than down us breaking could the year? EBITDA of investment the So to little a that of maybe the with with

Yes, sure.

quarterly on rate throughout to increase continue will course a the of we So, basis see revenue the run XXXX.

operation some and are including are will trucks, up-fitted service mentioned quarter. into to in, trucks for start that be being the that more commercial of the generate we’ve coming those So every which AV, placed revenue

XXXX. we the One of that ramp is to half course there’s over the in base throughout of steady the year a to to continue we is cash where of for impact a did our So And of XXXX as just XXXX. team. our add we made our throughout reminder compensation really full was team. cost a respect around play couple see With things some EBITDA loss, the revenue significantly year hiring a at here.

the continue impact to this the new team hires. effect year those some of hires full laughing We’ll year. starting add of to you’re So see a of to

then like and through the can expanding absolute commercialization operations selectively the that as have to because to those year hires think of of the the project, probably where as add think when we And efforts the growth, we’ll than hit hiring to year. more probably Driver-Out team. where just number about rate we we mass, a to the add was will I XXXX significant the mentioned, you well the around items XXXX, and was that ADC scale be concentrating you need critical so the for our continue for

and the what process you that you really us ability quicker here? understand map of have means? how like story automating that ready Thank of commercialization. more made for the be robust Are mean, and of quicker you get enhancements without so team to to maps you does technology I letter help update you. that getting mention mapping too the you In and I routes can getting the the some that Or scale as and than sort guess, prior? play technical, into

do our to instantaneously that we’re the that travels able a every is almost new very of a going mapping that the is the our I already. faster, that is send and although on to time where think behind. that’s extent maps, one new map the think routes to where trucks the about same so of any truck you update when Really if Yes, route, updates following it going, particular route to lot the element updating about technology mapping a is we technology some quickly, of there’s map

or as you So map our updates vehicle year, survey having this mentioned, a zone, that was removing can truck element construction some up mentioned next which previously and drive route. or Cheng comes it, the any of be that that the if mapped quicker we behind so road, is pop update other changed, there earlier, or push route to as from the operations to efficiently going is we’re that the

some several to where that’s critical about getting technology investments our heard So quarters making for terms scalable commercialization. And our starting the of this us to and a making piece it’s scalable. more really off you’ve of and really operations And the and to in critical Driver-Out pay it’s of now talk mapping.

you. Thank

Our of next Oppenheimer. question Colin comes Rusch from

Your open. line is

Can about terms of workflow progress your in are existing some or potentially that replacing the you integrating there? of logistics talk and solutions out

specific? more little a be bit you Could

with programs I guys are you get that of just integrating sense along be, to and you want you’re still of functionality I’m around, around your not into, it’s the Yes. to how at, the the have system vehicles, process? move some just And integrated solutions fleets far that of having going workflow. but commercialization, with existing you’re logistics already existing in with towards that looking imagine these hardware, as a the these of really kind clients,

That’s good question.

efficient always more and I integrates think we’ve to solution them. that we’re that. Ultimately, supply chain, holistic said partners first the make our it we’re for at developing TuSimple, into anywhere

not everybody better process. collecting process. a best because TMS the a have just today, That of And, providing really, we integration system that logistic into but partners solution, why truck logistics their starting provide can is their end-to-end reservation they ultimately, it’s is go, our is to for that’s So integration customers. end-to-end where wants because solution count,

more now you autonomous If miles XXX,XXX we UPS. on of with reflect that over miles, XXXX, than have driven actually

So getting service. into integrating again, their chain with supply we’ll be and their deep

haul for Pacific. Union We’re starting to freight

or traditional We Now we and great integrate have railroad improve their service? on how truckload do expand partners with help carriers. the

have of We DHL. course, partners, UPS and parcel with

partners, also that’s really in trucks, to highest I our our creates strategic questions, with today. for to working them. of we’re is think resources absolutely go terms these answer can So, ensuring see doing integrate And we to your And comers. late ROI what the more that’s deeper of we that where a have with entry barrier with that them, to

the And planning is starting and if some things to runs, get for you’re sense second bringing market this going accelerated see you’re out to early it days, solve, of the I’m cycle organization? to question the but the helpful. if that needs for learning to still super significance is for the early and have but of also of just to just your how that starting you, it but learning it’s wondering pace that really the Obviously, us, Driver-Out the the cycles then, laid a testing cycles. you’re of That’s for of you’re around learning and cadence those

Yes.

mean, is the on of we roadmap do endpoint? continuous It’s a think operations nice you one terms not are show linear that number to object are important significance getting keep So end? sort do miles where end? driven is all today. of happened But now we is again, of share And to And can Driver-Out was number to are for not you demo. significant with And today I you something Where’s the any that of go metrics. marker that’s Driver-Out. where Driver-Out something know the that and you, we things, XX is think I company to other route. needs this commercialization. what to the you that I think what have hit the when I autonomous because and word, us shiny And commercialization. that of no we relative can metrics trucks of how in is what driving Driver-Out that’s once from that a route saying a you And can relative these

So one six us I think to mean, in took it I operations on company to as driver significance too get a terms route. is, years of

of mean, So capacity to automate and shorter, if now, free the to we’re do? cycle is freight, enable and we deliver lanes the trying time trying development to ultimately, scale shippers. course, gets shorter We’re what I it our more

be, at that, faster those as cycle six per being I So you operational expand you can we’re cost show that things show confidence, more as is we all we the scale. design we basis lanes than you commercialization we domain, show can definitely that will reasonable that give years. should that But, a we automate and closer development mile down. to come mean, shorter, as

you. Thank

question comes George of from next Our Baird. Gianarikas

Your line is open.

the development? prepared X,XXX as linear, R&D is on on just in explain that Can working the NVIDIA the over But incremental Good couple of are team your working next years? evening, personnel? XX% sequential on everyone. and hired people I over R&D R&D in code roadmap mentioned of incrementally, have you guess, remarks call what development you problems your you that when the increase is sort the what you are and

engineering lot to, very still, is still back it there’s to still answer. a But of I think mean, long I back this work. goes this a goes there’s

the that route vehicle hauling take, remove, on to update, we’re makes it to route automating. have other. mapping Triangle operations, have Texas do in that that to the than can There’s a same for work as whole one survey engineering to we so as trucks you optimize then route you features, that’s more to in more truck, a updates Driver-Out more safer to for each which life If do the start every actually new a they become Triangle. And Texas routes, to freight, have do from daytime completed

and hardware we’re testing terms there’s So them there’s the and still those Traton components. working in with a vehicles with doing ton on suppliers, side requirements, of work, partnerships Navistar. work of work different production and of with of course, There’s our and that

off, closer going should can that closer at are people How and you to steps where relative you to whole when today, we significant, the So get say moving again I one look commercialization. to we And because is that these that Driver-Out of required confidence are that from here, more to commercialization to the confidence back confidence And the how we on. where to get do and think what the really, commercialization? again, linear, show people go do closer you of operations. give think it’s significance as commercialization. that’s Driver-Out this But can And list we we’re goal. industry, you that really I check

How patents, in issued those the And good outlining quarter, industry? your done guys growth. core relative competitive total your your it. of one more Got to on job other have you advantage to patents long-term a and your every sequential companies the

autonomous be It’s mean, this is going that’s And driving. I critical. not something to new to

telecom, telephone, cell I electric phones, of sort patents bill, you own. mobile do roll up you have mobile, get companies infringement, where patent that the point for you certain patent have and more off mean, sold a vehicles, across look of you If being they you cores, to maturity, have

shows in you advantage not it three So of will definitely up is advantage. be a years, forward, But something five it huge today that TuSimple. competitive terms for our years, fast

you. Thank

of Fowler KeyBanc Capital. comes question Todd next from Our

Your open. line is

and thanks evening. Great, good

these to there that the do orders was success seen wanted that this like the at you’ve of you Driver-Out and think but runs reservations early of the be this can I a ask in had? you’ve maybe that level nice you Cheng, it to year. that on post that’s speak point? can a a I seems interest know of reflection lumpy, So bit the couple came that And Driver-Out

Driver-Out is interesting now have, to you Yes, I start thinking about is of now what can absolutely. a point also mean, the we people do Thomas it’s are for commercialization. where significant, industry. trucks Because real It’s proof because

in that historically players have trucking. are You

business. you Now have your trucking, potentially that players [indiscernible] leverage expand can get to into

is a carriers creates the a those shortage among dynamic supply also and of I shippers. think little the is different competitive all I mean, getting driver and There’s of lastly, types chain of now, significantly course, bit So worse. this

You’re costs costs seeing really going higher, rising seeing labor you’re fast. fuel

think to even I but interest are interest, seeing I confluence factors leading more those there, mean, certainly always interest So of we’re now.

color XXXX want Pat, just I throughout guess sense. the And really for Yes. around I makes year, my not of if I’m throughout up, potential you XXXX. what share the cadence And follow That I’m to any certainly of sure is start guess, to we EBITDA an about would Thanks. as as run the would pretty as the it losses Or exit your even we consistent curious rate with guidance? we that kind exit with narrow your year? EBITDA expectation

critical increase folks, deceleration will being you’ll be, I on commercialization. more percentage indicative final modest meaningful the the being XXXX we I base selective increase towards Yes, But the stages That’s see the XXXX, some with consistent this in now mass next we the over labor in team, forward on and the hitting because second a of grow. XXXX. will are a we fact pushing of losses. you’ll that’ll and see big But loss. to think to fill progress They few get that you’ll that and out of do towards think, derivative as we the years see year EBITDA specific what continue think quarters through continue to hiring I development hire will as a spots losses these is a drives EBITDA the in

you. Thank

comes Please question of of Bank next from Hoexter America. go ahead. Our Ken

last trucks, Cheng are about the to fleet you for? them and But scale putting on globally. look the Just up mean, of should Are sounds Pat, And delays. we still understand you’ve you having the scaling want the now? Can stands commercial afternoon. online? the driver where the talk should good size you we mentioned though you to What Hi, the Navistar talked I toward all XXX and it seats? filled scaling expect got in number development? like that about ramp. Can Driver-Out talk you you congrats quarter, about trucks come

That’s technology have that freight what probably would U.S. important. say half are this fleet to which fill commercially. other XX:XX dedicated the start the are will which of within hauling our the increase, that in we’ll announced they commercially, is trucks on think, Pacific we is increase, that penetration capacity. technology I development, capacity, But able so customers brake autonomy want continuing entirely to Partnership, I our demanding to so freight basis. what is development Union them a really they Driver-Out and between roughly is spring commercial split do the around and participate Driver-Out testing autonomous is increasingly, our in being more which that can hauling including the freight operations continuing penetration to for

more of see this ramp the the And year. So throughout revenue coming the part in trucks the year. of cadence first the online that’ll up you’ll over show of course

terms in on is a can trucks to the getting relation timing that arrive? there that, And physical of you delay the should last the year equipment, update

Yes, the trucks have have arrived, roughly arrived. XX plus new trucks that

going AV are right to the up-fit those through for fitted of get equipment. process now Some

both service for into placed commercial operations. being are and testing Some

drivers is challenging. to starting that So see relief, hiring still we’re

ecosystem, from drivers to, the we’ve sure be in as think that bringing and making challenging, but we I able to be able been all this extremely to of think successful continues trucks I labor are our for further makes tight our a in long-term. but near-term seated. market, But which it it are us, over technology certainly obviously the is just difficult the for need underscores the on

you. Thank

Our Research. of Scott Group comes next Wolfe question from

line open. Your is

missed I Is a if Driver-Out for route this this. new plan route evening, year? or guys. a I different any Thanks, good apologize there

coming more the Scott, that we is we But to details. that something guidance haven’t month. expect shared exact in get

per truck, of ago your about bigger year miles just think so, assumptions evolved trucks, you optimistic a about XXXX different a number if from or per talk when have about Where XXXX? think less then if getting how And about you you mile? rate about you you Are picture, XXXX? are fine. optimistic want And I year, That’s to getting have more that?

I looks rate betting higher. I predict going per are mean, trends it’s Yes, think like going down. future, And directionally, mile can’t but the the

our number of the to XXXXs said, order of to trucks XXs terms XXXXs. OEM we trucks integrated in partners have get in with of we that to production, series and as think is I have

We of to our One maturity, strategy. that. the is feel taking and active we we’re base more last more that risks confident over have address about despite identified steps year course, of

So production have more if think that’s as on naturally started wouldn’t something you we I that have forward we continue this runs that to pressure call, test course. program our the putting commercialization. mentioned timeline. in we are And as no, I updates Well, will mean, anything good, earlier

feel have I be that the autonomous even terms confident XXXX, a to That’s year in routes. more something dense actually able today, a freight for service ago. on customers think to we compared of actually in continuous more,

Thank you.

line open. Company, your & Cowen of Osborne Jeff from comes question next Our is

evening. Great, some question. can’t that good touch you things changing control. had on if you the one just I of curious I could was

things on be Any talking but any be insurance. the You’ve great developments on of in done you should that partnership, aware call a particular, can on update liberty new and the hear? great would the to control, about the we mutual job regulatory side

No.

side, think material a change regulation. I Nothing, changes. hasn’t to signal On the there in been regulatory

worse for continue state is especially and think and have given getting the federal I been from chain shortage actually, today, rhetoric I the worse. positive how trucking, messaging governments supply think Thomas by driver

supply chain is and Today cost. technology team we is in we we have, that to I feel zero scaling that continuously expanding works. could this Driver-Out mean we we not a think the more really, given to it we’re not hey, speaking, that think doesn’t have, have, like, maybe the it given we No, and where not that And ago, And do tech optimizing means our I in this things There’s fact that work. works, control. we ODD do stock. I about something now a capital maybe development, commercialization are the generally to need the that partners control. year is the through obviously, are one,

it. you. Got Thank

call. conference you you. does today’s for conclude Thank This Thank participating.

You may now disconnect.