Aurora Innovation (AUR) 15 Feb 232022 Q4 Earnings call transcript

Greetings and welcome to the Aurora Innovation Fourth Quarter 2022 Business Review Call. [Operator Instructions]

I will now turn the conference over to our host, Stacy Feit, Vice President, Investor Relations. Thank you.

You may begin.

Diego. you, Thank and XXXX everyone, our quarter fourth Good review welcome call. full-year business and afternoon, to We results announced our earlier this afternoon.

Our accompany this the SEC. Investor a our Form presentation available furnished today was and ir.aurora.tech. our with filed letter at Relations shareholder on website with shareholder also X-K call letter are The to

an progress Richard On today -- me today made with the Chris Tame, key our me and CFO. Urmson, pillars the fourth results. Chris business, will Co-Founder on and are update will across the and provide call full-year financial we've recap CEO; the and on quarter call of with our Richard

at the will this call ir.aurora.tech We open call will call Q&A. has ended. this be A then our recording on conference website shortly of available after to Relations Investor

Aurora to take These forward-looking making during our runway and opportunities of certain the to will prospects. and remind milestones pilot to achievement cash with opportunity statements. expected we call Driver potential Aurora this the customers, you around this Horizon partners and and I'd that be the include of anticipated expected overall related of business, statements on like commercialization development and our performance timeframe future

risks subject factors with XXXX, our included projected as economy. report the SEC on the XX, in differ in and are and and ended described filed November the uncertainty results risk markets, business, unpredictability quarterly X, our Form our and this those for in implied that as to statements call. current actual XX-Q on September the XXXX, well known during quarter materially could cause These or uncertainties those unknown to from In particular,

date we statements by of based and as Aurora the any forward-looking our forward-looking as law. to statements All You and obligation except disclaims call are on should not as this on any forward-looking statements of future beliefs update predictions hereof make events. assumptions on rely that required

our in Information our considered measures. not a These addition including isolation results. non-GAAP results substitute as be financial non-GAAP the be in shareholder Our GAAP found our of for may measures with furnished letter, X-K regarding should may today SEC historical financial non-GAAP reconciliation Investor non-GAAP in Relations results include be GAAP with and found or to our discussion which filed today a on also website. our to and our from Form was may

the With call will over Chris. turn that, now to I

Stacy. Thanks,

Aurora critical furthered fourth in release, complete with our service. our system these we our remarkable as public to made end the quarter Driver, the quarter Fourth marked of XXXX. of puts the We company in Aurora commercialization progress first first quarter and and full our feature self-driving year that subscription by time goals achieve autonomous building trucking track on Aurora our which Horizon, Driver toward a believe of milestone Beta us we X.X

As I team, our the of we're regularly end tell reaching the beginning.

looking the safety milestones end the significant technology to to with as refining we closing incredible We enthusiasm case prepare are Aurora our validating of XXXX. next ahead phase as toward Driver the and by work we enter

to on continued XXXX. of the we've progress OEM strengthen platforms our our with autonomy-enabled also made At we've partners by end operations our the support same time, launch commercial to and planned truck steady

safe follow always and road many critical I'm experienced courteous of vehicles of predictably to do commitment detect engines, law fire This response update to the proper and Driver. new self-driving continuing Aurora vehicle vehicles we the vehicles being rules driver. that ambulances, or enforcement Driver customary like quarter, and X.X product behave by to emergency as you is emergency During Aurora to fourth appropriately Beta updates have so the respond sure released our quarterly not advance a introduced deliver capabilities

according coming knows alerts include to When of command guidance the if to it truck When ahead via an a on it change lanes the behind roadway vehicle the in or center Driver vehicle Aurora to down or emergency Texas additional Driver Beacon perceives stop ahead laws. to for necessary. specialists off shoulder our the an active or Aurora detects slow emergency Aurora

on Page X the Video Aurora an power when an Dallas Houston traveling deck Driver from is the it In at slide encounters emergency. to truck

personnel You by can on engine lane around to change shoulder. and police Driver see partially stopped on original vehicles, an execute encroaching here, Aurora a and followed truck's fire is ambulance, a the maneuver lane emergency the that

established capability. shoulder FMS that end-to-end Beta or route is as year. from it pausing mission-critical for re-enter resuming the ability we a this the traffic X.X call introduced Aurora last of Driver operations and while we Fault on the System Completing also building Management to the flow on

refresher, quick a vehicle the adverse actively health and events. mitigate Driver the to FMS Aurora the of monitor is As and any designed

ability So the to once traffic now such something re-enter been an resolved. of the for if flow necessary pull to the to the has as the Aurora issue system now weather deems off shoulder the Driver also it has extreme event,

can see over back then Aurora has on to and deck. video you a for with situation specialist addressing FMS You the the our Aurora center Beacon, shoulder. to command executes been can then an merge return shoulder. if this the accelerate end-to-end wait The Driver's X slide example from After begin which then the capability command triggered see pull the traffic the of specialists Aurora the from Page Driver in you of the communication a Aurora on and opportunity initiates Driver successfully into safe to the

vehicle operating Lastly, in updates highway. an the while the as of about one talked we've construction previous on autonomous is challenges biggest faces

road that blockages set. situations require and New create road capability patterns, specific varying changing a signs, traffic

from include most tuck is of a current to barriers, or the deviate common road. need which faced completely the for partially due the construction situations driving of shoulder to the lane the One on may

built With the released the on lanes we've barriers. address that scenarios introducing navigate Beta ability capabilities previously temporary construction X.X release, to with

to on current to encounter outside around skills able time. the The for loads handle the of equips Driver Driver the necessary addition of shoulder commercial Aurora Aurora construction the period even is an obstacles extended partially customers. extended it for the more nudge while may scenarios of also these with hauling capabilities our We driving including distance that the lane

with video is X Aurora recognizes barriers. been Page on to life. from of construction The and Fort Driver cones Worth has first encounters you traveling then scene. with Driver come see slide El the lane when capabilities can deck, complex jersey created, The and the these Aurora In it that cones a to Paso

proceeds end cones X.X building on its towards are itself the extra and the in Aurora of extra since the our this utilizing by buffer enabled which it construction needs encroaching shoulder the Beta to Driver the The the partially at give work continues achieve confidently zone The previous driving release our to milestone, through lane. we XXXX. updates quarter at the feature-complete on expect first advancing of we Aurora space

and Houston. policy route. of Dallas our is begin Aurora focus launch implemented share next launch stage complete preparing Dallas to capabilities indicate to this first Driver's we feature all for the is Once the have the the Aurora plan lane that to for we excited Driver to to this Houston I'm will As shift all to for on the that removed necessary the commercialization, interventions lane of that we

close Driver to we validation Aurora the and end releases a Following the completing then safety beta to case of plan phase this subsequent Aurora without the the of refining board for on to final Driver's necessary by through the XXXX. person enter the step, operate performance

is this Ready. of Aurora completion call The we the milestone Driver

intervene how to a support to of the capability. is vehicle particular operator improvement needs by One ways often continuous we measure a

be can A our debris great common and ability highways. also example this of handle which on dangerous is road is to

As introduced road detection approximately in the chart incremental September, XX% you that can we in debris. operator Page due see slide X through to of we achieved in deck to refinement decline capability vehicle on road our interventions debris the an

are to our simultaneously we to steps commercial the well toward launch, scalable advance longer-term maturing software, our hardware Driver Aurora While kit. taking hardware support continue as as our we

the The of technology FirstLight existing design our the the photonics or our prototype proprietary our Lidar a has photonics exceeding our demonstrated compatibility of performance for During by demonstrated we meeting with performance architecture our quarter, silicon prototype chip. the using of Lidar in-house Lidar. silicon fourth

cables fragile a integrated each and key of optic fiber-less is size ability fully a with Lidar. FirstLight into towards to fingernail complex step silicon within the -- chips consolidate assemblies complex The fiber

our Our silicon photonics cost and a scale. to targets are reliability longer-term for designed at FirstLight path clear to create

Driver the allows schedule. to target already while share for week Turning Horizon, well that our of per our us segment. happy the continue development ahead have Aurora and increase offset cost to in operations. customers XX of of runs In to fourth we their to to commercially usage quarter, validation per of exceeded a loads to we autonomously XX first I'm and Aurora loads our which further representative leverage to critical our achieved pilot the operating commercial Customers haul week help

Cumulative to with delivered date Werner, XXX,XXX pilot loads and Schneider, Uber we operators XX% driving for XX, miles on-time including have X,XXX Freight. under the performance customers supervision February FedEx, of through autonomously our vehicle

and complete their power end-to-end commercial-ready Additionally, integrated a experience Driver define them easily see into a be to can our terminals trucks partners networks. offer flow allowing how Aurora

downtime. maintain a help Ryder quarter, the fourth an strategic at Dallas maintenance This our inspections, put terminal Ryder program. ground onsite also provide to in fleet the announced collaboration on we In with and technicians pilot will minimize to trailers

higher unlock bring collaboration, to for is pilot operations to this Through scale. goal at reduce added utilization to autonomous maintenance position costs and our and customers our Aurora Horizon further value

the engagement, and local into human We were of Through continue development passenger to of had XXXX optimizing to work testing of self-driving law state in Pennsylvania, was signed permitted addition started November one law to and and which driver. quarter unlocking continuous self-driving operate as drive enforcement, shape an deployment few to In for regulators, our vehicles, helped momentum without the operations, vehicles with a positive closely not exciting commercialization. we elected for last we legislation that driverless officials, trucks. states communities

Our recently and and we commitment launched designed in open to partnership the is industry. Associates to expect program to the vehicle and jobs, College. unique the door substantial to the autonomous creating Commonwealth we Engineering underscored program is local the Robotics in Technology a This by Degree Pittsburgh communities support with Autonomous be is

program, have great it seen several the replicate are working and in institutions the across country. interest with We to

California in in are trucks seeing we toward we state. the permitting by progress continued are the autonomous of deployment Additionally, encouraged

Following held workshop AV summer, last around regulations Governor discuss the the to to vehicles. autonomous by modifying industry Newsom heavy-duty month the last open letter submitted a state

trustworthiness. and our can paper, outlines proficiency, It centering as our be and to December, found Safety the safety review you report, pillars Further, continuous released approach we of Self-Assessment encourage commitment updated safety Voluntary I XXXX website. which or our part VSSA, five improvement, safety Aurora's an to on resilience, transparency around failsafe, in

the our of for XXXX proud is platform Consumer with of Show worked designed autonomous by PACCAR development In the Peterbilt with with commercial we Volvo truck XXX to have January. PACCAR and Safety their core were our at quarter, OEM at PACCAR important Trucks. to booth collaboration at work fourth the our scalability build of partners the their specifically we truck a and prototype in Aurora showcased Driver equipped Electronics in joint an

Aurora Additionally, with hardware Management and excited VNL in October. we were Trucking Conference Association American at to Exhibition Volvo showcased the prototype have a Driver

Autonomous control achieve We operations. steering, driverless reliability featuring the VNL and to systems safe continue with Solutions braking, Volvo for on interfaces, autonomous development needed an power enhanced

autonomous and toward Volvo We're customers a to partnership our VAS always Solutions that opportunities announced the is Driver. scale Uber by In the OEM the the autonomous possible vehicles. find progress solutions develop drive fourth work Freight's with together quarter, autonomous and to Aurora Autonomous pleased Freight strategic which Volvo's transportation work we're partners joint of see of transport and and commercialization network, Uber on involves planned the with made deployment doing to solution

over progress platforms. made of key the operations Horizon, partnerships In expanded, We've built, elements last and year. while the I'd strengthened reiterate to maturing the truck the Aurora and closing, like key Aurora Driver has Aurora

we to on identified on against to objectives continued have roadmap early commercialization successfully every or quarter. the time our We execute

talent top help attract make We us achieve hires our to have to upcoming milestones. strategic and continued

and and recently share Fisher than new Dallas that company who will support Ossa years we more experience with existing to of launch. commercial strengthen as our more help to will brings Ossa appointed our I'm in partners us President our be scale further leadership we relationships further our XX across pleased efficiencies Aurora unlock business. to for as industry-leading based and prepare help

he People We team. welcome Operations, teams has also industries lead experience to strong culture the the joined Chris tech I'm in thrilled Chris extensive brings Barrett and and fostering and leadership medical spanning high-performing

honored also in XXXX, leading and Property Intellectual companies Technology innovation one of XXX its were Global The report. be in future by the Earlier we to February, Top momentum of named LexisNexis Science as the

This was is the company recognized our and path Aurora's measure the to Aurora of distinction in quality strength, to is validates commercial of three global we which independent an technology just property strongest which AV companies in we report, particularly self-driving belief technological and intellectual of the notable as only and this industry. one inclusion that external support our patent have innovation expect one portfolios, launch. momentum, automotive

the will be XXXX by for launch Case Aurora Texas business excited quarter our pivotal closing first We're lane year the as by been and reaching in showcase share in year the the the on complete of to end macroeconomic Driver focus I've launch to incredible be conditions, end been. making for a than of all for coming optimistic we milestones XXXX. the incredibly Safety feature work about commercial our for expect has years I'm most we state business what that the the of during Aurora. and our progress ever our the progress Despite our of reach to and preparing

that, who review Richard will to With pass it results. over financial now will I our

Chris. you, Thank

been of payments we our million $X recognized to agreement total During have development Toyota collaboration all collaboration in revenue in date Cumulative remaining recognized framework the cash with work the $XX fourth now agreement all under recognized our XXXX, the for XXXX. quarter $XXX of we for under million and have million received. development a

believe with service work launch and eventual ride-hailing subscription to Connect, Toyota of Aurora of we will efforts the While a continue our the Horizon, spring commercialization allow long-lead other our us is priority first Aurora market. for

net value contribute the $X.X Aurora non-cash fourth non-cash a $XXX our triggering our to of no in acquired. billion There carrier carrying has the to the goodwill. businesses total know quarter, the expect to During of our to million reduction change declined brought market This our for capitalization below value how assets commercialization. goodwill we XXXX. We in is in outlook them reduction

in respectively. of XXXX compensation the Including totaled and in stock-based million $XXX $XX and value in carrying and quarter fourth $X.X the XXXX goodwill quarter and fourth operating billion million million reduction $XXX expenses of the

$XXX non-cash stock-based million. these expenses, million Excluding fourth quarter expenses, $XX totaled quarter were operating operating in million. Within excluding expenses compensation expenses R&D fourth $XXX

million. cash million. in compensation million million stock-based $XX expenses, expenses compensation compensation XXXX excluding $XXX $XX $XXX R&D million stock-based expenses million. XXXX stock-based SG&A totaled excluding were excluding $XXX $X in SG&A million. operating XXXX in expenses the totaled were $XXX

Turning the to operating during used $XXX flow, we in cash quarter. cash fourth million

million, During used million fourth expenditures and fiscal in a reflects Capital $X the totaled XXXX. Toyota to in $XXX we agreement. $XX related quarter the XXXX, $XXX which million million inflow fiscal

to continue actions through to cash our continue Aurora with the roadmap. and we into We Taking savings us Horizon strong XXXX, sheet, our a to year expect $X.X balance on enabling investments. ended fund account short-term cost including billion in avoidance cost Aurora and mid-XXXX, to took very cash in we execute

to the With Q&A. that, call now we'll open

Our D.A. Tom Please from with Davidson. comes question. first state your question [Operator White Instructions]

for due Hi, road since is our you And reason? be taking notable work us? to either this macro developments is provide pressures Tom. on Swanson map Wyatt Thanks progress one to behind any on then do any reach aspects tracking the forces, questions. Any bit of your partners their milestones end? you might that of a the guys or last on platform happening updated or My inflationary there other schedule OEM detail as more it the relates for first

more done confidential we're of making how can there's to and shared with that examples think about limit I unfortunately that Sure. them couple that. little much on if is and shared on vehicle those talk to this We've the relationship about given development We path on a with progress can Happy nature programs know on a progress the much we I that are with Volvo, the we prototype I PACCAR to don't with. say that say commercial the a scale. about that also there about obviously of of bit

regards still year as to to well. next set launch the we're complete we've I in on milestone achieve year time, further feature at the end roadmap, ready of this and looking out are and to track Aurora achieve this think commercial hit to we Driver At the that for believe

Understood.

you you. managing reductions your can bit XXXX for thank and of off headcount Okay, been a you're And has year. time are just and your last follow-up. of then about Kind you laying what thinking of this this talk in then, were people a headcount And to maybe labor curious inflation contemplated there about tech companies guys maybe expense any costs bunch your how outlook? parts relative for your We've year seen a other headcount recently, rising expectations base? how levels

the able from what that. they right? early last were think we face So in on the year, economic changing that got had the cold to I see water all we been, conditions were

we that And operating. our went strategically at and we're us the how back and for change revisited time growth, so, plans to led

lower allowed anticipated, to over expect us think time has we to again than is, we've moving modest We've we sequential this the what work trucking at on the have light we a well. the which programs and more of keeping that coming that vehicle year, about served on course, year. taken from headcount growth limit talked those to development of headcount programs, growth product stance the focusing first would long development us fact and a parallel It's our on a primarily while continue of last working the lead

kind of period that has our slower that and What XXXX headcount our over measures AV competitors. substantially -- means this this broadly approach tech grown our certainly very to time proactive than even early in with that along before and

the feel sheets we put to some we're practice, of we very costs, add place more position to Richard, in you there. do in strong our that? so with And and want balance a manage to combination the strong color

think, we're Aurora Yes, kind think staffed you're I progress to and we believe make commercialization. against continue the right, of no, Horizon Chris, appropriately now I get think I to roadmap

us I it's where headcount think you'll strategically to continue add necessary. very see

Ossa think People. President SVP I and as new higher-end to alluded Fisher Chris of

to we're excited see kind when see them, They we're it's of this doing. headcount good that to level yes, but modest in expect work excited certainly company sign to most. They and you'll we cost as the see be at can talent and do attract they're can continued around a well. and things headed would growth So like have what cost-saving significant happen, you at where we're internally onboard measures. avoidance and see of to We've can

things, lot of the we sheet, we've ended the fund small, us that more and just $X.X So this we gives to year will continue very that capital with some mid-XXXX. there's a that in of the done through some the to confidence have substantial balance billion the that

Great, thank you.

Thank you.

next [Operator your question from state David Please Instructions] comes questions. Vernon Bernstein. Your with

for good guys. time. the Thanks taking afternoon, Hi,

going give XXX So. rate kind on of gets of adjusted you exit Richard, guidance, year. not I know that next EBITDA but you're the to to middle

You footprint guys little expanding we we sort is R&D replace actually to modest through as increase or going to headcount attrition a of have bit mentioned the actually be just get a XXXX? of that are

on solid we not there, there's today. mission, from would think Yes, is we feel again like and really we great say achieve significant that market talent attrition, a and headcount do out I very think the growth we have primarily but to we but what project I us can talent of if the very people like replace help be that modest would for I base then think

questions to Okay. a you. Chris, And then of couple

an as and of significance can is that just some can time, something of turn to about the sort help kind terms the think the from you us does understand cost that's in the a silicon-based to layman assuming have LiDAR standpoint? us what system benefit of reliability investment over maintenance I'm of that going that costs, upfront could you into we of First help

same electrical using, optical you view, with type electronics a moving capacitors, It as amount from instead absolutely. massive of instead see the one Yes, The significant technology discrete think of having into just those of and and we and approach components. circuit, equivalent of it's but an from whatnot of benefit a it's of labor think from components. cost components resistors, is point components of can this this is, integrated that in I the we're and

get Labor wafer. effectively on in components assembling and at them costing those we can print to dozens and them of fab a a

whole makes ROC, I of the places, economics get each So dramatically components because dramatically fragile reliable They're of integrated think you're fiber to of links of to there's between them. to having LiDAR's these better. that lot not pieces more that these risk for going little instead unit forward are able going be to right, a

the So this investments scale business. of begin to one we see we as as strategic the

delivering you costs, Aurora largest certainly is the biggest at If and structure new two of early Driver, the the cost. reducing in is the on cost take hardware that, and the largest within the can we that look the this that pieces are the the LiDAR and cost steps hardware computer of of one part of

magnitude understand? unit of a And from like me is help fraction the there cost a of economics LiDAR can the existing that you a would become like standpoint

reduction. can you fraction meaningful as that, that a think Yes, of

So probably I that It's magnitude. know in of don't an if ballpark. it's quite order

If just squeeze that extra I here. appreciate one last one color. could in I

of are today? sense progressing XX, the equipment on about rate for how's You operating reliability the mentioned maybe from a cost we of Can maintenance, where per Are we sort turnaround of mile, are year of sort were a exit up and sort ago give loads where XX that times? to a getting us the the you're of the the week. the to thinking you trucks, guys you

vehicle, components our process. the the Yes, on side, engineering on a maintenance the rigorous runs team so reliability reliability of the

maturing performance the see shaken can very up so and look through failure and have here We we systems of drive we is the that we nicely. bake that components

structure cost now. guidance this at providing the point We on directly aren't

much your time. so Thanks for Okay.

Pleasure. Thank you.

you. Thank

that, there conclude are no ladies at And questions we call. And you. with further time. conference and this today's gentlemen, Thank

time. for your your may You this you participation. all disconnect at lines Thank