TuSimple (TSPH) 4 May 222022 Q1 Earnings call transcript

Good day, and welcome to the TuSimple First Quarter 2022 Earnings Conference Call. All participants are 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. to Investor conference Relations like Amerman, to now of Head for would turn over the Ryan I TuSimple. Mr. Amerman, please go ahead.

Good call. and and take are Xiaodi and Thank quarter financial and Chief Executive highlights, Ashley. afternoon, will Pat to Hou; welcome questions. you, Dillon. Officer, our Officer, XXXX Xiaodi earnings will Co-Founder review With then TuSimple's today Pat we Financial us and Chief and first the operating

will a a website. later be TuSimple's recorded. call letter of As Relations This our being available and on of replay Investor reminder, is the today this shareholders' page call

If These press in events SEC way, releases, may due forward-looking statements Risk to our only Please to differ statements now. letter, call you results variety factors. this the subject object forward-looking actual are contain in please filings that disconnect our and that and shareholder from materially uncertainties. sections any Please or and TuSimple of and of are titled earnings note refer a to predictions Factors. release risks

will presented for a call measures, of disclaimer not to will non-GAAP with the measures measures over the in accordance comparable Safe shareholder our principles. Xiaodi? which accepted including Xiaodi to and financial also accounting discuss prepared generally Harbor Please turn the to GAAP financial are more refer We details, to letter now in non-GAAP the I non-GAAP reconciliation begin. measures.

technology It a share achievements we're And Investor within here long-term us the plans. week recent firsthand, on earnings partnership our to and our to ASN individuals more drive in opportunity commercialization will host AV organization. quarter from agreements experience of to in will you at for welcome call. believe Day our on of some we'll we many value details talented next and Hello, share and many first with industry-leading Ryan. very our you, our of that the be our investment community for great update Today, Tucson. to And Thank you excited exciting you. technology our

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mission the our efficiency, safety, footprint. and game. Our change to will is improve believe our technology We reduce increase carbon

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we commercialization will world's towards trucking technology company, Driver updates refine provide continue capacity the and our to first as As such advancements Out MRC. on and only critical

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intellectual our of and patent the safety in technology. highlighting to issued technology the proprietary scales, industry our expected our the issued broadest our this in enhance costs. mapping of AV the XX of to more improve operations has help the and patent to continue industry, new benefits We leadership down one and in operational value were efficiency our patents will is safety quarter globally. continues magnify Patents portfolio property XXX, reduce us count As and collaborative path, quarter, in TuSimple bringing importantly, the total grow. the

Now, I'd like to partnership first development to about talk X world's Navistar semi-truck. the build production joint Level

our on course of a over materials This and Over production progress the two significant our base. Navistar with months and to last includes utilize critical our technology of over Navistar, trucks for production amount discussions but our both the Out advance as including have trucks we is retrofitted deep of to This the significant also and negotiations the our on near-term hardware plan. operations. supply six the knowledge years, we our work of fuel last Driver expand made the refining advancing with progress advancements

also be and the in jointly our semi-truck as of Cobito will of that is a facility. the an in manufacturing important Mexico are to announce conviction world-class prepare milestone production Navistar's We have this program. partners manufactured that at and reduction signal we pleased This is we

for production of unprecedented in of timeline XXXX, delay, with Navistar have generations that has highlighted, timeline technology industry to developed delayed the our in years us XXXX. the the truck set truck market. have others targeted trial believe will more lead our and Even initial commercialize retrofitted driving our this fully-integrated the the and be we production In the timeline our been to have to to will scale vehicles successive with We program, the trucks. has trucks, hundreds the two commercial and we efficiency XXXX. into with continue supply-based This we in global we purpose-built XX ramping of parallel refined first production last prototypes to operations also have challenges. we from As in advanced

As of our capacity thousands fully we groundbreaking off our enable made will truck production adoption announcements place autonomous to some of Year-to-date, trucks AFM, AV our our trucking to freight of able network the bring the and scaling market. important be coming onto to efficient thousands technology. we've that tens starts will line,

and for We By two Ryder. -- expanded will service First, to ecosystem Laredo, access terminal two maintenance Ryder, points internal This customers, manner, infrastructure in AFN bundled is commercialization. we step a terminals important our added in an to over to quickly, Texas. XX Driver Out provide capital-efficient our non-stop Houston in operations AFN our partnering terminal add Texas. and prepare support next we're the with of expansion to our months. This able with providing the for

support Second, Enterprise Assistance our Driver integration with Roadside AFN. on to Out operations that our we announced an Werner

As the truck expedited anyone not. required. or whether What's when critical, is Driver Out breakdowns assistance understands, is industry however, service happen in

will AFN over repair support Werner to call Werner on to support. financial have and with announcement service of service guidance. access of that, network This means choice facilities, will authorized gives I our and extensive our providers, to centers. XX/X the our results discuss turn carriers Our an dealers With their including enterprise Pat and offering AFN

never Thank technology truck of reservation at new Loadsmith XXX We're a trucks. company industry. reservation as in to innovative higher. from been we that trucks Loadsmith, under with added fleet logistics including Beginning this and validation you, XXX bringing leading X,XXX and with service see the this and program, a brings total partners are of end reservations our attractiveness AV as excited our capacity a quarter from the an like interest we the Xiaodi. one has our fact reservation working the of larger quarter, platform. to third-party a our to This just technology The be

continue make high build We our commitment standards Out towards with on partners to As the Driver work we those a Out and our for runs, Driver technology ready operationalizing implementing hold initial of capable success of financial to reservations. the missions alongside are that AV for freight reservation. only customer we

Now, for year-over-year quarter, a XXX% slight revenue the of quarter. our million quarter-over-quarter. results financial $X to We an reported first in of shifting and increase increase gears the

flat as are higher offset We per leased The operations. growth revenue mile trucks and new was truck revenue growth. relatively flat our testing prioritized and driving owned have our count mile flat fleet by relatively our rate for quarter-over-quarter kept revenue

as we the trucks trailers, and we increase present does some with year environment of XXXX revenue pricing to to freight fleet size to and the our price and such closely utilization. course modestly While expect headwinds We over our competitively customers. watched improve drivers, the continue adding

$XX bonus by including in fourth last period to of primarily of year quarter, expense $XX $XX declined accruals. $XX one-time million Moving The R&D million We the in of due quarter million a R&D XXXX total to on same million quarter-over-quarter, true-up in compares spent and 'XX. X% This SBC. the the expenses. to

and We of million $XX essentially including flat million We of invest smartly commercialization year million in also fastidiously a manage accruals. $XX benefiting to same one-time continue quarter $XX This our the fourth spending true-up SBC. the world-leading spent from to period, bonus 'XX, of versus during technology. period on in our to the SG&A last compares XXXX

a of from loss was last the and to of first in million operations million $XXX XXXX quarter loss million the same $XX operations period from last Our $XXX in quarter. year compared

$XX Our the negative related $XX last same adjusted last EBITDA million, which $XX was million purchase We and quarter equipment and property to first million in during compares negative the facility million the the investment. in equipment to quarter. invested purchases quarter, negative primarily in $X of year and period

of bonuses made end liabilities. included quick XXXX full-year and three versus billion, of cash which the quarter of performance The XXXX $X also similar the is next million update change annual decline the guidance. to A not a the the our balance equipment a burn our $X.XX acquisitions quarter are of cash quarters. repeat There of ended included on with no XXXX. We We million and property payout $XXX that guidance. is in in in other to approximately of expected items,

our of want for announcement to we regarding some potential context. businesses, given exploration the our Asia-Pacific-focused transactions provide However, do

loss of to EBITDA XX% be businesses. to related our expect Asia-Pacific-focused our approximately We XXXX adjusted

it We revenue contribution expecting material I'll a few are remarks. to XXXX. now not these any during last businesses back from hand Xiaodi for

we've The developed Pat. best-in-class. technology you, is Thank

and for be phase of in is be Out to this purpose-built full clearer, a company becoming We're through continue production am I which towards of excited our our progress make year to path efficiency we expect to operations, we XXXX, expand development. commercialization next amazing to honored which and our on work trucks. Our Driver leading

to you you I that, of in investments we to have Q&A forward more ready session. meeting have start share look details week the made. many with next will to Tucson. and the highlighting With we're We

Thank you. [Operator Instructions].

Your line with from of Shanker Ravi first the question Stanley. Morgan comes

Thank timeline. you, for everyone. and thanks the good and on the afternoon Navistar Xiaodi, update the relationship new

expect us of happens on of what XXXX, now can 'XX end in what the Just by XXXX? so that and level I you you before, end give said kind think some you 'XX? commercial happens implementation of understand, had the step-by-step what we in 'XX by you in expect of what

agreed plan we cannot XXXX. it. XXXX are we control is truck you. thank only of item-by-item that ready the material Navistar that But Ravi. and need lot that -- is And shortage But -- the thing still the going that that company now, the into the building The the needed autonomous for have materials. on we we're this go that for we up be even things out on delay, items the believe to that, by is our building about by to build coming Yes, in truck. prototype finalizing real we supply on have this the are the world with things and a

give -- XXXX. maybe about is happening your on little question it's a to And bit just in Pat, what Ravi,

thing these that programs are parallel. in to important remember running is The

which improve tied commercialization is continue doing we're not the improve. hardware, and production expect the with what So the of terms to The retrofitted the the of in we will we the trucks. reliability to of continue quality trucks, fidelity to to hardware,

trucks integrated that, about prototypes So truck, of milestones his parallel on next be we end laid and targeting making really steady we'll in the to the we're progress Xiaodi into Investor In that be XXXX. retrofitted in week's will XXXX. the and in into will Day, in remarks the road talk XXXX, fully the are starting production vehicles in around commercialization, regular more XXXX at and using the production which and those XX prepared out specific initially

one both first which map the the first sequentially, Thank flat happened. itself. just Got as time for think an and follow-up, That's it. driven important total you clarification. miles Pat. that quarter looks on like maybe It And I were that's your

issues elaborate the into any run you why Kind COVID that or can just on of -- was operational So guys you case? did something?

It's you, good Ravi. Thank Sure. question. a

So I mapping, we development. have for think phases different of

mapping, we on and in of to the we to The has route were the the don't can where criteria the as mapping as mapping, focusing that map operating we quickly, of is the I the that's phase the to And previously about functionality mapping first demonstrate on, finite do many because focus latency new not of But one the we hauling operate. achieved. phase, given need world network, what we're we And you also on the been to entire number have more goal and the for situation mentioned also of where trucks the map collaborative success the do freight we and of miles -- the only mapping. to and not that come that to the cheaply need U.S. accuracy the expand of additional mapping.

you. Thank Great.

Citi. Wetherbee Your next question from of Chris comes

partnership, going spring you to be afternoon Union Pacific start out This the just Good the thanks. that here. we Hey, mentioned in Chris. on rolling Elan If could guys. with is for was

interesting there? that's if are out the curious from as coming now? if And that final of loans happening mile some Just result are a moves there

Union we So Pacific aiming hauling typical Union in were for a like initially, Driver at for a the a trailer, Out Pacific trailer fashion. collaboration,

expand new for it the intermodal an Therefore, operation plan sorry, is we which time ODD container the a Driver integrated the to the is the go this -- original as these commence with quarter trailer, our realized aspect set we'll their a our real be is Pacific we plan. really, that haul much Therefore, support to more the with can real much Pacific. of real line intermodal Union of to And Pacific, be intermodal of of the expansion modify business. model container, tighter Union to for able a if year container. -- ride new intermodal we'll And will of with real have the third operations we like with Out for the container transportation. smaller more that, be into collaboration we which instead Union model daily achievement and However, real significant the their we deeper be

you and there Okay. Got in I it. will guess, then do Driver Texas, presumably, or of continue to those upfits, XXXX so want routes in will doing be be that terms to those And prototype Out routes.

the some there? imagine trucks Are on that to XXXX, be then the per per those add significant cost So going on And mile prototype you And help in to more trucks? out reduce will cost more you for there mile. that. what's I going happening to so guess there's be reductions

migrating operate aspects. -- to domain Out several lane from from lane to are sorry, migrating in in going day, one lanes is Out operational we Driver Driver that and to by Texas in more Out Number Texas. are one our design in Arizona night Driver There one Texas

You design we in that, furthermore, are going our initial more And roles are and going operational multiple the Out. change to of By the doing cost. product-matured to the addition two see, we're a hardware. some version those have to already of hardware Driver in reduce domain expansion, to we operational that,

vehicle. have We leading

We in have I would years. and all chase this plan remove the do say, two of ban, we to a have following,

It's Pat.

XXXX. vehicles. purpose-built prototypes close be mentioned those retrofits targeted to this pretty And with to couple year a on detail the maybe expansion operating at give do at the lot Driver make doesn't we One, be of Day stock in or sure just off get we'll that confused. Navistar to for a trucks that will start things. nomenclature Out Navistar I'll we've two, intent The So Investor our more the the upfits just truck, of next add that year and -- next week. line The to rolling expect production we

for doing typical as yet, well would including specified used phase. revenue of in purpose, as expect but runs haven't all you pre-production likely be they testing that We dual will the a

what helps then So next year, year, sort into and clear hopefully, up 'XX happen that the cadence of this 'XX. of will and

That's helpful. guys. Thanks

from next comes Levy Your with Dan Credit question Suisse.

to the taking Hi, Thank back good asked metrics. you go questions earlier evening. on want I the to questions. for the

too growth I quarter, and be basis. that going the think XX% we're of look into quarterly a you cumulative as can miles to progression set read the It I in read into especially I of quarterly the was the all should the your figuring but these more on how sense where lumpiness how maybe in road think decelerated. focusing metrics opposed you're at in first give a quarter-over-quarter narrowing to a wider commercialization as from some doing But and look out serious seemingly down recognize of routes to we you're XX% these quarter. routes? that, we shouldn't us fourth and much of remodels, work on there's there number

I think story. are miles of the part the actual only

as miles we simulation kinds example, a reflect For simulated not lot in miles. the have and all really well, do of of does

For in All rest example, recommendation look into the have it. kind into answer only is think -- miles my I progressing. we really tells simulation. of I'll And of you don't that. And hardware Pat validations so story, the this the part are loop let too much of

into point operations is specific math this a I with on functionalities. Dan, into are just typically truck doing Testing test that trucks very this count. mean, adding very it, The testing specific are relatively around a to are new Yes. largely flat going running operations. we we're too, that test one the

the it's to the the Xiaodi quarters. over miles fairly And -- additions have made, output that miles of technology. overall number on grow in an the accomplish objectives to cumulative trying of last really steady to just confluence couple this that sake the whole not trying progression to So It's from road point about the the been road we're of a developing different the of cumulative for a metric.

process just Pacific the us and Maybe you operations concurrently it us days? regions? possible still refresh six Got the focus autonomous in stands? to know you about purely think U.S. update on China, then these business. I on that trucking your makes it. whether But you and just resources follow-up broadly, And well. Thank where you're allocating give can an maybe can focus question, between want have to how to the And you the you think out for you. I in Thanks. Asia the press weeks release And exploratory second ago on you just on on the it's develop just about Europe U.S.? more Or whether how as the both sense regional put

first, is let thing answer U.S. in this are whole is we we U.S.-centric think possible company's autonomy, definitely terms U.S., Pat to have I best And because focus, the the commercialize the purpose. regional that. in policy I'll and to That company. The of the fundraising, first

Yes.

and when press think release from as refresher, put Dan, a just we I the -- out. the

beneficial are think capital that we and preliminary it's deal or share a do It's behind Asia-Pacific-focused detail of rationale to opportunity value In a and early First minimal really to businesses. just exploring lot that relatively other with likely describe it for an ascribed yet. price of businesses Asia-Pacific-focused that we intrinsic arbitrage to all, emphasize is potential transaction market so We have be stage, stock But participants participants, our there that process. also great potentially Asia-Pacific-focused something is us. seeing there I'd to we've today. Asia-Pacific-focused our our pools market value value seen discussions our businesses, a would of in level a that of don't at could our see businesses is a the financial subsidiary

around clear National no thing all other perspective, out financial is don't CFIUS note potentially is this our value Security a explore a to So so for but type our be taking action to looking us CFIUS is, just to of say reflected company. today. financial material we're just And or think that terms from share we And want we our think it a particular commitment we any of businesses did there with our path release that the I'd not we again, -- do transaction, our us required with worthwhile Agreement is that. making it's to to is action I in any Asia-Pacific-focused purely any put press that important the is think for one particular unlock of process. for perspective, price it's preliminary value CFIUS. to from unlock

this, the updates As we certainly appropriate market go to make through we have as through more process. we'll as we that move

And you're needs just a of need clear, spurred to This financial purely be U.S.? here none because because being additional by see this in in the opportunity, capital is not you is a for additional capital?

I provide premature Well, could would like. impact it's resources in our transaction premature think, do and at the cash of exactly course, us that the fund a some what have benefit with a from I is an this, pool to I would, that. come separate what runway to mean, lever our capital, and exactly Dan, the bring one on level. our opportunities Asia-Pacific-focused we probably that would Certainly, to be It that on But the a of sheet. look on investment parent -- could know needs of businesses company potential and where around it burn speculate could additional could balance certainly, think it's there

Great. Thank you.

next with JPMorgan. Ossenbeck Brian comes Your from question

the for taking good question. Hey, afternoon. Thanks

your I you you the to So be understanding own into they own on of that maybe can your if it just of maybe going are to helpful part whether I with partnership connect trucks just PMS get have there? or others? of plan something a separate? would How not with think XXX bit then when and have you process, outline to Loadsmith or this just wanted you're where is capacity. what of that kind better terms you do with partnership a And bigger picture little Loadsmith, in the

I'll answer Pat that question. let

Brian. Hi,

So pretty I those a that would in obviously, know company the that's space. been say from it Loadsmith, innovative for

there, adhering that think complementary of they do autonomous that's that they're that's network. in where operation, capacity existing a way those partnership It to vehicles, with coming into the various that's the a with trucking here, new replace general know philosophy. to but not really, oversight system. a marketplace out the is technology. that shippers, Loadsmith form have, of to all system We freight certainly are the that And multiple. carriers, lot vehicles are and as is a I as of capacity in different one The are partners to and but I think to an to using is And provide you also complex is purpose the process. noted, a others track while that we oversight communicate support autonomous with our seeing

the as So system share into easier it to that over details of the makes Loadsmith, about well. being partnership the the And operations tie able certainly we well. our has we to further like us their plug someone oversight as into systems capacity to this quarters for Loadsmith coming reserved as more expect get along in

sense. makes That Thanks. Okay.

maturity you of more with some still you in, still OEM us facing the that bring up maybe Out the what areas touching and to and it. and with just especially you've now feel can any like testing supply the now You the you're Just you beyond obvious Driver Are of chain the there redundancy need the the on one through are invest maybe where program? kind on to right of challenges speed above trucks? of gone

Yes, sure.

think I details. the is in in the devil word, one

give of and items is would found gap view And for domain the and was in to the the what the sufficient an our past, the in we So is have try in ready. controller ready, And crack identify just be biggest actually purpose. the the to you system. what understand none the suppliers to of units you contact computing to controller, here in domain lay example, system down not thousands materials the one-by-one shell of the

to So ourselves. have we it build

So year, building the we and controller that's TuSimple. partnership Nvidia why we're with earlier domain our announced by this

but in is holding could that apart some we so by and braking. as attitude of terms LiDAR things racing soon full new, are like from their there towards timeline, this by having every all manufactured this. earlier as And we production that, other bridging everyone redundant deliver but speed TuSimple. towards Of possible. our single TuSimple, gap is And things course, designed as not redundant in And see try basic, all an -- steering, industry know, the is we're to happen

Appreciate Okay. you. Thank your time.

question with Vernon David next comes Your from Bernstein.

everyone. afternoon good Hi,

what it's the flat. into for as more R&D to So at Is that read Texas resourcing, And through towards headcount, relatively that is resources operations and into commercialization? going path you looking move a there we to to the right is the question change XQ not expanding it XQ headcount, you that? that year, like things of are -- accelerate kind need into to on

one can to you women a is born thing think child month. in one have I XX that

wanted to it the of takes. and a there And accelerating of growing because I So do is see. time are our that steady we'll tell same our goal. in -- time, going And also acceleration development going development, growth, it we is research in do what the to always terms expenditure the be is take not feel going very anything. a on we the capital not we But exponentially that to you future, so we efficient number that of waste that's growth and talent certainly what talent at wanted be to one

Okay.

end will of be plan the as those to we numbers the through go grow then So 'XX?

Hey it's Pat. David, Yes.

we financial deceleration the figures. see at heads XXXX. you've say modest both also looked in just and this a it's significant the and translates -- growth and investment. spending seen first would in pretty our the the quarter we I growth, significant So metrics that headcount headcount headcount Yes, to some around were as that the obviously into saw in expect do added in growth. a where XXXX, We bit on and you little we

hit So going allow we're going but think hit pretty think an that see you'll spending. next some won't balancing I to in be be And our headcount make I those and smart ROI the to it growth, milestones. months. our say won't monitoring are invest obviously, aggressive be level spending. to essentially, will from We're deceleration, on would milestones, flat, XX we'll our sacrifice we at But a and non-compensation ability perspective to we our XX the we our closely really sure to to us for very how people, which invest

right, anything a stock is? Are for you comp, stock-based where we pressure be stock. guys you Are kind trying to going up just about just maybe little for being created to thinking right chew there's in And All need as just about because some that. a to maybe follow-up. retention? the bit now of Are to do on of planning get then headcount whether you quick worried of around employees thanks performance the the a sense to I'm key have stuff? given some

amount of a common I meaningful a keep the in incentive lower it. And stock-based way giving price, also Yes, with keep to principle pretty think companies, talent. We top the us. course, all wanted the to to is of is similar stock stock like a applies relatively best

Yes, changes I not any charge. we're think we'll making stock-based compensation the to keep --

cash retention price whether always particular in it, Board dynamic, and and something we're attractive the I work and the technologies think the with element needs to had the to mission much strategically that companies. that tool our environment, stock-based will XXXX. our investing certainly, is we groundbreaking a stock-based recruiting but compensation it's and of figures. one change retention really this always to are has it that And so we've us, and of but compensation and company something the deal competing of But a it's talent. be larger making on been ability sure to the the for of compensation also been continues on with, focused that market Regardless stock Directors inclusive we're retaining around certainly specific be top guidance no programs, has competitive regular of

thank you right, guys. All

comes Your Piper Potter with Alex Sandler. from next question

thanks Great, much guys. very

right I wondering, that it's a figures this now know like was I which Chase aren't vans mile quantify have you So lot will it these don't the maybe because with I this that apples-to-apples that what perfectly know and so costs make things per to you're achieving autonomous maybe your versus cost they confidence be that numbers trajectory extent terms associated of downward to in that, mode. give for us of that real-world sort in are you right give per on all of you of several mile for sort when cost years now But from runs in you metric? correct if there that pure you're that you're the of can any possible

analysis you you very think detailed Day. very maybe can a feeling will I give in Tucson Analyst we our some give next of in week I for And overall here, Yes, level top it.

That go I that of overlooked lot cost is is driver the system are by people cost. think commercialization, autonomy for to of inevitable that there of autonomy, true, that for is of all-in a way the maintenance part and of we significant removing goal. a the the the have the and from the and us the that driver, profits really But lot all is cost. misconception get people part of a reach that we're until you feeling

the those just was look I Okay, ask that to wanted partnership some great. question next mentioning. NVIDIA related forward We'll I to second to you the getting about were guess numbers of that week.

I disclosed know, -- months with had begin to tracking more so how far? or ago there the has progressing relationship or everything give Just pace the been Is with. milestones can it when less Any in and don't you development envisioned? the line know what relationship any several regarding you Thanks. originally of was update about, the I you

to you multiyear that the of in wanted very stage just I Yes, early still remind a we're development.

in this be very is very have to done lot we any decision. so but to more TuSimple, and you And has of on have be we're pocket looks collaboration market And because substitute you a going that that actually to the we're good, we so the find can't far, things -- so has and can't that everything be of position wise this happy track. by anything the more developed path -- our in or fulfilled, find

Okay, great. Thanks guys.

Your from next George Gianarikas question comes Baird. with

for my questions. guys, Thanks Hey afternoon. taking good

on ask mapping, some and detail I'd competitors? how could to to you a additional relative your First, about any of that's collaborative differentiated offering share like

of course. Yes,

but phase, efficiency as entering one fleet. very of realized we think mapping the we're and not safety perception to -- collaborative entering are technology we're system aspect is the be the the a from grand developed phase, technology. entire as by, that facilitating think motion information. under be vehicle other this of should the autonomy capability the I one formula the like I is really should the And first of we developed vehicle, with this and advanced better additional a single sharing believe phase the planning operating safety the And phase from safety, is we

and solved clarify an Navistar really redundant right relationship it saying timeline you're of and And it. to has industry's based to with braking point the and you. that technical the Got issues Thank a bit around steering some the or been Is questions commercial to assessment? earlier just like multitude sounds chain, supply that shifted fair a that on little a or -- haven't or issues yet. deployment

still that the reached and I them. we a but and that steering most gaps, to we Yes this. on But by or build looking there many Navistar are bridging think by are ourselves. actually certain cannot help on Navistar great in both very LIDAR having of we, the unsurmountable redundant ourselves. world gaps we the control. in many, We And ourselves existed were like cannot things ourselves, is partner collaboration sides, good previously Really, are

to we're They able gates, about technical need automotive delayed because So are about this are another kind physical But the waiting pretty to technologies. engineering of thing all do -- that's I why for development the be innovation. to be that to the types is integrated a not really in lot grid time mature yes. level other system. that things of into not of of breakthrough time, go anything to And these these of see waiting just it's through launch different any really

you. Thank

of with comes Adam Your next from Bank question America. Czakanski

Thanks for for Hoexter. Adam Hi, questions. taking my Czakanski Ken

the Following milestones time targeting? impacts are on Any major dollar up you line safety, fuel to from partnership, And that successful gained to been there have you implementation? be a able can efficiency is Werner any here? quantify

quite analysis that. a analysis, quite have actually we Yes, bit of into a of bit in-depth

We that. see Tucson you in a week to of give next disclosure full you will

what pipeline, talk can't million a All broaden And looks about essentially? wait. like from different then player on strategy so I and you just reservation added right. maybe pipeline this that does your players can here? with can the you quarter, view on partnership target the go-to-market the Loadsmith your And $XXX

into operations not principal make with initially their We the be would assets that a Yes, that it. may say seen it's we've freight throughout Pat. understand they incorporate having models. part folks trucking associate we've from their folks and I Certainly, how ecosystem a really -- seen like can mean I in focus. semi-truck to robust as you of appetite reservations AV

technology broad the freight about and really thinking quite people are box think I proliferates. ecosystem So outside the as will applications of look what the are like this

types So with the probably indication been commercial momentum never the of have it's think has stronger. one having, discussions the I we're base and breadth that of we of that the

very we our two-way a to it's existing The And that on goals a operations excited to near-term are work our sure freight deploy partners want technology, is say having partners we're our partners, not to making commitment and last and just being obligations and piece would only work but disciplined, new So gratified I reservation with that bring partners. can together. we're to and to fulfill that to really for that this around committed the such partner too. financial we testing that are commitment aligned resources the our making with

anything trying reservation reservation very, be about the we're anything grow number opposed as itself. to disciplined just So doing very grow to to reservation, just to partners the

thank it, Got you.

from comes question next Your with Colin Oppenheimer. Rusch

guys. much so Thanks

the you of and really or of money cycles really spots learning pulling some and some could you and that blind system get be unforeseen where improve, of into what the this pacing data to good or integration where might secondarily, you're of next out question need so about is far? about cycles So As there of pretty layer strengths data, system the kind the system, talk far? and about mapping you the about in so you and cadence feel

you Can question? the didn't there's noise. clearly. first hear think I some I repeat

learning the system pace and in seeing that you're weaknesses secondarily, and then system? that integration the cycle getting seeing into strengths the How asking data integration. Okay. And Yes, the some related the the I I'm is you're to incremental about mean, that is system? mapping fast What in where what integrated? of and

pretty will be the is cloud-based then several Yes, On that. a hand, a closure partial things. minutes, our road, in the of the aware number basically to data one vehicle example, technical. all will one of lane truck be so for there are transmitted saw and of police method of center This having

then verification So first this a broadcasting. then and like human automatic and process, process is

in the So we that have second learned the this we number map. this from the of for is sharing different types that all maps. of aggregated lesson minutes is And that real-time aggregated map,

actually or the road, step -- the of hours. most also of we thing, not matter, truck not the they're map example, -- every when have after that's one the but the maintaining And But you also important are we whole -- to the I For several validating driving the purpose map. first high in urgent, update earlier, for bay on only as back mapping order but go -- to is to most serves the accuracy. that's has takes updated goal latency of the they and as that, truck the realized reduce the being using is as to the us. And map, that that early if said urgent

to So effort of minutes. mapping response an basically this hours from our reducing is

powerful. That's

just Now so Thanks time. in the I'll much. take lieu rest of offline,

Markets. from next Fowler question comes with Todd Capital KeyBanc Your

next on and kind of ramp evening. your to now thanks of Great, fleet, and good curious over of model are can There's and improving comments pull a some right see just utilization up you I'm you couple can quarters? couple quickly the utilization levers the utilization about in kind improve been the what made how of of

to hauling strategic partners. to We of We're the our order The focus the of we playbook the to we pulling wherever do think traditional Todd, we that technology for progress utilization And assets Yes, in weighed with some would trying constraints possible we've customers -- on the were autonomous than able But the say, think do up the headwinds I of it. part had path as are different during levers of some COVID, the the the are early were so to perspective on we -- be the growth development, truckload utilization for to just some in carrier. see freight can. and I continue of modest wherever of I for the utilization. that mode out have be a pretty to and as happy quarter. That from part of being with possible. able trying efficient to rest we with some we certainly, first a and utilization drivers for we're what some typical year. see some

it. Got

follow-up, just Okay. as the And case -- there's the there you assuming think is Pat, a that That helps. comment I was the CapEx. to no made guidance that no with that I'm change the metrics,

if I to CapEx then no Thanks. would spending just a you great. And pretty what on was change you're be XQ, remind up so confirm, light us to CapEx -- from spending could going be this the to CapEx? year? you're to going CapEx be wanted That here what in dollars However, just

around But the our change Out guidance. we to up CapEx make see investments over we to quarters, Yes, first CapEx. relatively some no the expect Texas in to spend was quarter in the as Driver to the ramp do light compared start the coming Obviously, particularly operations.

fairly talked about some investing more ride the expand about land locations where Texas talking we on usual terminal be corporate in be be So like some will think be have. things incremental well. improvements as invest that parcels there where locations That's of we'll the operations. we is as of other the facilities We'll of will this. And then the and significant. office type that to support I CapEx Out there but locations, Driver We space and one

Got it, thanks for the time.

Research. Wolfe with Group Scott from comes question next Your

here? rationale stay they're Hey, thanks. this, from but mapped are on if can and Good go to going afternoon the you I just miles flat, why flat through missed why guys. again Apologize

be have is not right? year XXXx trucks supported hauling like year, or because XXx Yes, finite have freight, do about, goal number conscious we the we we how route not that And we route. route, of this we for that to or current It's on this AFN. our and by And okay, we quickly of map have we to routes. on our in AFN next is and future a this can utilize freight more to a corporate that plan this that, prove map

to on further. and amount hand, our lower total things need of natural same But technology prove the the is we the side, other are the the functionalities that not do to as latency focus. on flat mapping, So result need we mileage more a anything

you the game. metric that's but being think for see So miles I miles this not can flattened, why only the is

to could In add the show we And able autonomous Scott, miles was a us, network XXXX, run and on certainly that think efficiently. aim could to and it's we Pat. I'll to do across I for that. just strategic expand able more and that our that being be Sunbelt we XXXX showed

it's about For autonomy. full XXXX and the XXXX, as the we try and of penetration expand Out Out Driver the and network into density Texas, more much Driver of

we're in adding Arizona new the the Xiaodi was Driver routes the next with be being focused go about routes What throughout route able talking to add in new perspective, to able from ways able of a be just year really earlier. ODD operation Out expand is the for we're on and two. doing Southeast that that what single to from or So autonomous to fit on really focused over doesn't

starting operations. expanding for penetration really not Driver on reach the expand Out where two, AFN or is. we At focus to the the some us. density next will really that's the a really But and We're it's focused of again Out so year major operations. the Driver And for our point, and our of focus start the

Okay.

this don't the on you that the think so decade an of ramp? And impact revenue middle part has

without can always and problem. need, map routes easily we a if No, new we

see And here? and of also Do SG&A about should increases in sort level and we the out? secondly, do we from year? was of then rest think count SG&A they further head just in flat. headcount How Or the headcount the

general one hand, be we we're not be very we in cautious hand, exponential see you new I will on Definitely, in other now. not Because And given -- do hiring a to the capital down right the team. the efficient steady but but people growth and have technology of economic think situation -- hiring. slowing we increase, on

of by get that the see year? count Where head would to the like you to end

that, see We're modest not providing year, throughout you around but any some specific the I guidance will Scott. think growth

saw of essentially we slower modest being So doubling, is But you'll flat what be is, had I pace the much a it restructuring be a relative notice It to XXXX quarter think growth. see in won't that. expansion will you XXXX. which during charge the two. And will you a of headcount some

is as as a young -- Some technology ours. design expect, a by we working company this you that's would like on with of

we better developing We to have technology. way done optimize some workforce about the that restructuring go the

impact is also partially the where quarter. this So you quarter-over-quarter that flat headcount of the saw

you thank Okay, time. guys. the Appreciate

Thanks, Scott.

now Q&A over for to session. This concludes the speakers will remarks. the it closing I turn

dialog. At to forward adjourn look and Thank we'll you, we continuing our point, everyone, for call, the this joining our call.

Thank Goodbye. you, everyone.

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