Aurora Innovation (AUR) 14 Feb 242023 Q4 Earnings call transcript

Greetings, and welcome to the Aurora Innovation Fourth Quarter 2023 Business Review Call. [Operator Instructions] As a reminder, this conference is being recorded.It is now my pleasure to introduce your host, Stacy Feit, Vice President, Investor Relations. Thank you.

You may begin.

Thanks, Diego. welcome fourth and review XXXX everyone, call. afternoon, to quarter our business Good results this announced earlier We our afternoon.

implied of website the our shareholder letter me accompany our Relations then opportunity recording the we'll available Relations remind call this this shareholder Form subject from after risks around actual Chris relating Urmson, the expected at progress call, has that overall future complete commitments call cause expected ir.aurora.tech. of Maday, expected commercialization achievement and and to Our full financial and are framework this and well of the of includes forth the call and opportunistic contract with and be are filed as on the the provide ir.aurora.tech the regulatory making in realization and potential ended.I'd any will results available which a ended fundraising Aurora in X-K filed Chris for for conference information potential as call. factors call cash XX, that and with and our take business, to on our be Driver XXXX, SEC, and our like this call on on runway tailwinds our the during milestones our differ Investor to furnished statements unknown was particular, recap quarterly in today also XX, quarter described statements you be Co-Founder open ended letter could statements. risk opportunities; the of year set This presentation results. with and today to at development, website manufacturing, and this our and David Form with September anticipated our The from for XX-Q uncertainty the known SEC.On our Q&A. services; XXXX. business to of in are projected performance A an have We'll to report the customers; In we key to David economy.Additional unpredictability will shortly certain operate; with scaling we across and also quarter markets included made and will CFO. business, and benefits our year CEO uncertainties annual frame; in the of the our those pillars December this prospects.These current update ability fourth related time will to services; and our opportunities XX-K report products during the partners or customers those Investor materially on forward-looking Form and

GAAP over be non-GAAP that, to isolation historical our the and to furnished we X-K based should addition date update statements, forward-looking may disclaims in was our I'll hereof, measures considered Investor events. that are forward-looking non-GAAP include obligation predictions non-GAAP results, found a may call now may measures. required for be reconciliation to found should with on These any by a which except turn the to results. from shareholder law.Our in and website.With Aurora or including today our today assumptions also of as our You as letter, in not statements Chris. with SEC future our statements of discussion results, our financial and GAAP regarding on financial any on and call substitute Form All as be forward-looking beliefs on this not as rely our make non-GAAP Information of filed the Relations

launch Aurora, a many to of scale. our place the final planned pivotal was as commercial Stacy. you, support we pieces operations into Thank year XXXX for put at and

expanding autonomous of And by an the delivery autonomous in first complete maintaining in capacity.We've platforms of with we first schedule the target, commercial lane financial quarterly Aurora loads our commercial Volvo now capable fleet. the XXX Trucks self-driving late-stage lead ready the U.S., on partnership the company strengthened our discipline, holistic per and driverless strategy our below ecosystem to Driver's scale. competitors.We OEM became trucking autonomy Driver only trucking progress by the well that quarter and meaningfully our while this trucking liquidity raise and of future any of into end technology is for autonomous with a our base. PACCAR deepening it great a a Aurora believe while of this with autonomy-enabled contracting spending Continental, feature summer. launch We perspective, customer as our at our approach on unmatched meaningful and and of We the last of partnership position operations are a Commercially, right process the executing positions the partners, that established the as then, partnership accomplished performance. all co-developed focused financial business one in with we addition with commercial continue Aurora industry-first prototypes week confident and are and at a the truck our over built centered of progress.From technological, trucking Since we've capital is advanced we've our We consistently XXXX of XXXX. made

a integration a can't and trucking to OEMs without deep suppliers. viable commercially with You bring driverless market product

upfitted our power, driverless truck PACCAR with And redundant testing. be at scale.In joint at launch partners quarter, these makes of complete steering work approved Autonomous of to XXX testing by continued This true stage bring driverless supports the fully and shared Aurora braking, up Volvo Trucks the in the began we our of latest unveiled to exhibit of are Electronics generation the will we safety which an platform, OEM will path of January, excellent truck operations XXXX kit. all-new Volvo with including VNL, trucking In capable Peterbilt for systems first the as platform as Driver.We Solutions Volvo has product we autonomous-ready these prototype with the and together, which commitment highlight is Our Driver and operations, Consumer equipped Aurora actively bring fourth new autonomy. autonomous trucks to hardware trucks the fleet platform partners the long-term our up necessary showcase powered track the trucks, PACCAR's that also the sets platforms. of and supplier a them PACCAR's at the their Show.Volvo also and completed progress the including Volvo for co-development continue serve commercial our on for deployment continued

we launch to our safety claims technology commitment at via is order quickly guiding or is and closing trust, completeness framework. self-driving our of the weighted core mission across the and measure deliver benefits the case safety is our the lane prove We quantify Autonomy Our case to progress our of launch Readiness broadly.Safety safety In the Measure, public of safety all of toward for our everything a is safely, we at Aurora. utilize case ARM, which a product lane. of earn our do principle and first

the Driver the who launch We of we be level with are ARM claims we would Aurora an Ready were industry transparency.When vehicle of approximately this case we would the the the remaining estimated XX% ready to provides corresponding company for XX when correspond and safety ARM introduced commercial approximately X% only months complete. ago, in the that of

OEM milestones truck to at Driver of with As achieved progress the the year.This our year, enable our to closing Driver truck, case of ARM most efficiently as jointly Aurora of launch XX%.Our their final timeline we our our and us enabled-trucks Aurora allocate Driver to allows work toward now rapid of alignment the Ready of intended this our on of X% product. this end our platform mid-January we Ready final complete prototypes prepare truck for launch autonomy planned and of of partners hand, commercial focus With enabled resources safety an and in the focus integration. preparation the our turns milestone the between Aurora to commercial launch

support.The the as work case to the more the capable toward continue the of will Autonomy metric The time, support which for key provided. indicator as support, and get use API, closing ARM most less or Driver's Driver assessing on-site performance. to penalizes lane. Aurora launch the a the serves report Performance same Aurora will expensive requires Indicator We for At be the we safety continues the

on our strong believe will percentage focus up and on progress XXXX, on our the will this driving the the in loads of continue was lane report For a XXXX, increase. quarter XXX% XX% API fourth will of of fourth XXX% in indicator commercially the commercial operations had quarter-over-quarter metric, toward which launch. we pilot another quarter, loads the to be demonstrating we representative Across API.Throughout launch API completed XX%,

because do video, we of Houston situations like will situations. is approaching some green and near some the not examples Aurora streets presentation excellent terminal reminder, first surface ever Aurora the on aggregate the Driver's a in intersection the at it reach very a shared our tires In anticipate Driver XXX%, performance recent launch, we've API certain an challenging as support.In light. always on-site on X, has our However, require Page flat even

vehicles are speed streets in to second Aurora the light. their to the to turn will through our collision instead that protocol patiently slows Aurora truck waiting intersection. light, our left pickup deployment.In the safety predicts avoid the a Driver on until is for video, green because and at fully and a However, surface proceeding red a Other we it validated safety-first red terminal. run is at of intersection to place and may have are an This southbound system committed we lane closed, when hit red traveling as other react, is not they steadfastly collided. get vehicles our our by notice the near approach the light It the operator Driver proceed Houston that pickup.You through only vehicle quick case the disengaged autonomy is in the development as Red so is the the

Aurora which red the unpredictable Aurora collisions vehicle, light westbound solid suddenly reinforces from safety closing the After runner weaving and before performance illegal our You the our of commercial red is progress the until passenger continue terminal. vehicle to proceeding intersection Aurora coast gates to but potential into one with intersection, Seeing we X its safely detects in customers.As later, on another vehicle. Driver's in traveling detects this light an Aurora light. make Aurora to The a the Driver the making the Driver's into avoid avoiding is seconds the their lane. turn same these turn these further toward green, scenarios left the This turn.Just proceeds collision waits Driver planned a clear an to to our lane. conviction yet then successfully then Aurora the Driver way made we for brakes like its Houston see we its The benefits turn left commercial consecutive work outside at launch, our safety can several deliver customers. with have have our technology Driver our runs

on portion XXXX pricing and several We additional for nearing we have and commitments volume contractual a have XXXX capacity, our and execution. secured of contracts

trusted vehicles. to an X lawmakers, We are law the to our and miles the across Hirschbach and our logging and have external partnership in been January customers the a space.To safety a commercial the as integrity, vested existing per delighted Aurora demonstrate Transportation newly Department intermodal proud feedback also value we've be of partnership potential mock that We we with and deepened believe and than of we on safer making commercial can has and interest time our our We Committee vehicle Driver the and Lane. proactive schedule launched transportation. will hauling to we've Texas Transforming emergency for of autonomous through XXX% their the a their toward end, critical delivered hone quarter, pilot Aurora Aurora launch partner extends endeavor with basis. has working networks nearly pilots.During conduct supervision in Driver's paramount loads new the to in believe leader to We Texas safety the traffic Advisory on autonomously expansion on We built over reputations active in with in a engagement to week enforcement with more and trailers XXX road have expect our on industry. of Werner, safety when positioned to our to In to-date million who a vehicle the also in more I-XX collaborative and we now road a a safer Houston join continue recognize through customers, which driving U.S. Uber among began Transportation. how our XX, the loads, simulate X,XXX approach and close use in the this autonomously the consistently for particularly is commercial others.Our the Nat customer for been supportive country.Transparency emergency Chief in approach under the share deliver industry quarter, formed same Cumulative who in we pilot and vehicles.We thought expanded their everyone relationships. we're worked Officer, for to our public launch to model to the customer, appreciate interactions stops replicate culture will Driver to a our officers, tested, which the Schneider, selected Safety with for to respond on-time that to Aurora approximately Freight, Beuse trucks miles partnership lane, further FedEx, performance are fourth around weekly. we're and XX,XXX operators Dallas vehicles continue the goodwill customers commercial including At autonomous the Frisco environment fourth efficient with foster proactive Department regulators lane we daily will our Police Texas, can

realize to responsible such meaningful to a to Melissa of the level.We're share Directors. team, working the regulators of lawmakers, in we transportation. inclusion and We Relations of voice benefits. Government have to shaping expect Chair proud underscores the commitment this Aurora's and are committee self-driving, of Autonomous and as honored AVIA the unified our mobility safety, Wade, at autonomous serve that Board will Federal technology's role vehicle of voice public to the prominent the Industry Vehicle is with Nat's in the play Association's future the member a also a economic industry innovation

we will Melissa of profitability. a platform Chair, our commercialization and to stronger safe have beyond launch, scale as commercial look an technology.As for critical even As the charting champion we're path this

Driver architecture doing and announced profitability objectives. our us in scale, the cost long-term a exclusive with manufacturing develop, at we future and support further place long-term intended In with service partnership generations to structure showcased addition achieved of with the Continental's work our Continental have at to autonomous of January, autonomy-enabled Continental trucks to on our finalization the new design plans partners Aurora the exhibit hardware.This path inclusive Aurora with Consumer Aurora truck key the manufacture We Electronics and partnership to In we're also jointly trucks Continental a development gives to a start support that in at OEM an jointly scale, a system generation, XXXX.We Driver display to the Aurora of deploy at a fallback together future producing the of work hardware milestone. Show. of

public hand, will at manufacturing the Driver will the in With new Difficulty].And and of Hardware-as-a-Service Braunfels, customer have for an world-class That under closing, per testing be Texas you limiting traditional basis. our its purchase in a investors. its business build initial architecture that year development partners designed progress made second possible been to company deliver manufacturing tremendous capital expertise, your model, Thank hardware future as With the full we'll autonomous global in on to not for automotive with customer and continued relatively the team, and means our that would adopt of support. facility value be mile for we line a a their operations.In the footprint. the in pay Aurora without in of hardware to the versions cost thereby for necessary the expect Continental's across system we truck autonomy New investment Continental [Technical will truck,

at and We that, more with will Dave, of financial Analyst it toward to the XXXX sharing results. planned now our Investor commercial upcoming Day month.With continue responsibly to I'll at to forward you review will drive our next pass launch look who and end our

you, Chris. Thank

financial our discuss results. Let's

for of summary a slide XX on We Page have the provided deck reference.

executing During launch. fourth fiscal commercial XXXX, including to we stock-based quarter XXXX compensation, continued quarter the demonstrate towards while Fourth expenses, $XXX million. totaled discipline strong operating of

Excluding reflects R&D stock-based expenses, contra Within compensation, million. $XXX stock-based amount compensation, million. excluding million. $XXX,XXX year-over-year operating excluding expense.SG&A in totaled compensation, as our $XX expenses more and stock-based were expenses, revenue, record operating which we were This which expenses, R&D $XXX pilot a than doubled

year million. of used we $XXX approximately cash, $XX and totaled full million During expenditures the capital in XXXX, operating

$X $XXX quarter cash. of totaled million used fourth During million This to expenditures our approximately $XXX the significantly per we fourth $XXX cash was million million. target in quarter, Capital operating spend below cycle on business. need to and continuously reflecting average, needs quarter our in financial end, our the X adapt that continued less to commitment meet quarter discipline.To we payroll evolving our to of

to we the a towards launch, ambitious impacted As were achieve process, reviewed our which move our as with goals. commercial X% velocity and to limited of entire total we Through the ensure roles required are working effectively recently possible as workforce. of we organization eliminated, number this

by in including with for well we strong XXXX million as cash cost launch.We and in investments. capital an savings, increase short-term action and expected a While ended long-term achieve are savings are operating efficiently these continue mission to effectively $XXX team.In on workforce up Aurora million we as from the average. quarterly and cash of while as relative expect XXXX billion $XX to changes to difficult, expenditures sheet, prepare alignment This use offset reflects very over $X.X in a that $XXX non-personnel steps as necessary approximately XXXX, to million set commercial our they balance

the liquidity Q&A. and that, of our call our open We to second fund commercial we'll XXXX.With into operations the continue half launch to support expect planned now to this

with from Gianarikas question George Instructions] Our Genuity. first [Operator Canaccord comes

I'd FirstLight. like to into dig

Some you some overwhelmed that have is that advantages still merchant a the [ at recent the off? Do you of are suppliers progress future the it's where your see competitors. or a some by market ways inroads possible merchant made Lidar in point in ] have in

not -- familiar I'm the say with you merchant Can term the market.

equipment. words, other In lidar merchant companies... are There suppliers of

Okay. Lidar companies. Yes.

team that back, feel advantage on years. feel we is and been very This around We have with about working XX perception system intellectual that are to we been crank we've And protections more needs hardware through few the on FirstLight. strong in-house, have what what see we that between we share having can the to a when between from the turn the innovation had able be property than us strongly years integration outside to. technology. for tight technology team, that solution. by our would deliver acquired very it quickly tightly it like we the the already them with allows So, And able XX we that fairly folks

would advantage a think time. we it But ever, a no, material So, this is long for sense, practical in us. is very a strategic

us synergies mean, for Aurora had any you been Maybe of lot that Have recent the just don't I know yet, potential -- continuing side Aurora marketplace. Does and between it? some as failings test the autonomous follow-up, if a there's remind tumult passenger of again there they're on I on quite you very but inquiries create partnering? have a the side? of a can Are to trucking Connect Connect? the you opening incoming

that that trucking. believe, the products the world.That strongly less we economics Yes, we cents, We because the the the that see believe early-stage We to associated of delivering size trucks we Driver of because create what's higher. TCO the the value same support thus we see for fleet long of into really application and and that The Sienna's and we the the the partly Aurora we've than and to fact with do And rapidly. the both software the Toyota because work and operating of the the through strongly for is vehicles the freeway product the core all of of ability Uber. will We and committed to and to and with heavy-duty scale ability our when in customers made software.And partners because the operate today, where COGS mobility self-similarity We architected fact that very trucks hardware our light are term, then introducing expectation that absolutely. business really emotional delivery gives the way see a have more people vehicles, around the moving in for automated with be we and are that personal Toyota right the currently them and that market, there case, be driven in credence first strong space look in said, of and unit there's forward development to by great will into it this it the and a design network that to of dollars see much -- technology market. we still economic common we've the sense for hardware and can transferability makes a and working the so, space.

[Operator David question with Instructions] comes Our Bernstein. Vernon next from

Laufer Justine of behalf on is Vernon. This David speaking

I'd first, to like ask cash spend the about $XXX of XQ So, just million.

which also it well to that discipline. payroll $XXX know target to of below million, $XXX to X less I So financial attributed cycle, you was million

actually from financial discipline? how coming and that is much much wondering how impact the attributed cycle is payroll I'm of to So actually

an I basis, active we really terms pull I kind annualized forward. overall where continue an all started organization. times that how the they to would lot of it putting substantial equal spend.So you bear about and what of of identified we'll look had place if we at they X at savings were think question, found we different the that, fruit at I in months on in And we looking we say, a for mean, ago, of did. it's So, efficiencies probably in mix thanks and

on cut discipline that of future in reducing $XX So in just some D&O, pure we on terms $XX our spending we expenses, a to like are for regular were basis. -- we're that like bring carry to There forward we financial in D&O expenses things of to half. million able did million savings able

so pay that And front. we all up

number that So through and in it the of and flows then that. was QX flows out

of those we moving for as prepare create we year, for expenses forward our launch. start next will you'll well.I benefits as to to see enough of these positive think capital we because commercial think as about So need momentums increase some

enough we're capital before, before trying are to we so, develop that we've much of we in positive. need we'll much achieve how committed so these plan or And to cash there additional need we flow our which is mentioned how that capital to get to free

still So, what in communicated we're committed past. to plan we've investors the with and that

related Great. other And question one Continental. to

just I'm development the like, What's So the look progress that system the how Kind on fallback going? what of wondering progress completing like? timeline with does a development? is of for Continental

Yes.

the great nature given towards obviously, but of making series with we of the is get them, proprietary moving too along. through milestone details, the them. We relationship, internally -- can't and progress into have that much a we team the it's So move gates

that about towards the progress launch working making. of and still excited are we're kits, We the we're XXXX hardware

I a Yes, think system. the point that have it's again, out thing to is in new here fallback -- we other

going any potential existing the issues we if things it's this fallback delayed. if have We a bit ends be little have like an and system, that's that, where up, one and default into to

going be new to in this our is solution. of far by progress launch, very that going bound our we're not intend thus not hardware and [Indiscernible] we overall but well. to prohibit to introducing it's where is But the terms So, going

Yes.

system, so speak. for to fallback fallback a our have We

Right.

Instructions] Goldman Our comes [Operator Sachs. Mark with question next from Delaney

details launch as of may I company place, starts some end on in XXXX to first, current ramps or you XXXX? and margins now any the that baseline do the guess, compared contracts context share the cash can what commercial flow in its you at have and

of in. I fairly details so been per the Mark, really can of product mile right consistent terms market about price can't to these and that similar that I you what a this it now, by in overall are commitments them. on obviously, share think tell pricing has Yes. all that we I the any the lanes varies like operate are confidential, we've

framework And so, today.The XX a our going we with with out before, consistent basis, we're up have thing, like for spill, like of that terms signing said to we're to in margin other we've a we're of vehicles. starting fleet as contracts a that

So it's going when launch. first to right, we be pretty modest,

revenue. bit our so, And amount going little to not right, think a going more change, to of the terms of forward-looking Analyst on terms a We're Investor substantial context -- March this coming in at a Day basis. how you're of Analyst in provide in Day to about see up

tuned stay share. able the for the one on thanks software March, I'll in that and for other case. more you're Okay. details to color was My safety question around closing

to plan company safety complete of target a that? on to end I think update and you to share when the I that had the do the software apologize XQ able around missed 'XX. you an complete case if I it, but are

great question. a No, Yes.

where it and get or to XX% the that We we road in making progress When company mid-January. the XX% at, look set safe the customers.As XX% the where closed that, year. we've about at map you the So are of -- road, it's end the at of we the closest, parts get about complete it up get get been and all launch in Aurora XX the X safety through ended for convinced case the taking laid out the to vehicle feature of really were major expect with getting integrating had Aurora progress made strong if Driver serving at ready, to we've case. January about to that, for about the we the end ourselves a place to months reflected system, parts to we then we -- at on and safety then controls we're where commercial the are our ago, milestones we where to closed

it expanding our the continuous that and forward next-generation we're safety began at of going in As last sequencing off product to resources conclusion as we system it to on performance need the to a this how deliver be talked the parallel. we do and to the performance so this case in for to. the us of for come they And time instead is the is on customers right the on think closed.You the step working get work the that that improvement safety forward can case about for -- how moving ways moves of past we closing as where quality of them it's look we're we've the point, the -- and we working point our really year, focused some this of of these sequentially,

comes Our next Sheppard from Andres Fitzgerald. with Cantor question

Congrats of developments. at guess on future would is, sense, maybe get the a targeting? we what longer Sun a to have term, Belt? some make currently following the sense that and question recent you to to what level, routes how are target routes in high the medium about quarter I first should thinking be our addition Trying all

to to happy I'm then add a hand Dave over color. and to more start, we'll little

So as to both incremental big need -- we that be initial about between we'll things if as down we unlock it lanes be to we a talked to need today. to we we customs there's the -- other the by have difference there to have to we drive talked and expand for hill, new go whatever border is, able after we patrol is is very thing demand. small that okay think driven deal about new a the do the going much whatever Once work we we've those with anything kind work.As routes about, We to of to it, station. of and add. El that. validate to be, have it's Fort And able be will lanes, feature to Worth and that we on Paso, the is We've see that's move

both the mentioned, from we see for more. For the us, -- opportunity opening up as corridors to will then Sun you'd us the if expansion and the you it's become there and as demand really just know Midwest add move the across along I we tracing And up coasts.Dave, of economic don't going be Belt.

at and that's look think we look the regulatory together. Yes, commercial, technology, Like, and I at right. the we the them

But balance bit the this we'll lane We'll -- for I priority their provide expansion. on at more mean, our the higher guide the head long then there and as roughly also drive to and we continuing unlock can specific to the Sun because, we'll lanes another, north, which think demand go in no it's there's good think road technology-wise help But to context hit starting particular same to let starting regulatory Investor it, map, about any it's self-similarity because both, customer Analyst our as our be but it's really the little demand and a operating We'll customers. a a let customers.I demand the are And pick aren't going between of of systems, I for and Chris Belt, customers hurdles, highway one terminals Day. we're or driver. think our the the for also north it Our you really today. prioritize on it's between endpoints well. head

or a next way be as Maybe and ramp on the obviously maybe you Understanding units. and appreciate is and to us exits as there what's price a or Really recent will per maybe up that? the that's about industry, at we'll the mile? conversation high color best Got in kind that of we and up details color. begin mile super all that the a what to level, all XX But a Day. is can it. give high helpful initial to what on -- Investor price be this think there But maybe level, Analyst up think is any the follow-up, year at to per about given way on Mark's following more there best understanding, No, insightful.

Yes.

start. me let So

context event. at will this more bit upcoming our a I we think, on and provide

to the of the offer in a additional that. value of the which in think safety, about there's the ownership. our like, product to we're cost I under trying a comparison customers. lot cost is in that And total the fuel ownership.So value of increments total falls of It's savings, creates for it's

a we first price Driver-as-a-Service to, business launch when model. We prior we're expect a

a to be. rate we would roughly similar when to So what first traditional expect price we launch line

you model, we're some asset-light lanes, be, When will we And be boundary good pricing of business where thinking move which look doing that driver it. what we as get creation you'll roughly out human of pricing our our each there. equivalent Driver-as-a-Service, adjustments example lane is.And will a what if guide so, of kind DAT so about is an a pretty at for value would long-term be to to the similar for

against. ATRI good kind a to of the really carriers source good fleets, benchmark private a really today does for that's So human and driver example the of what of and cost is

a of going of of the at Yes. -- And I ], -- add we the like, [ was see dominant that freight. transportation little to pricing trucks, umbrella is going humans heart just I to the that's great pricing driving trajectory that a be time, form our long for with this think right?

so product And point. and that more ultimately, competition, really move about that think it the price see that pricing, we the see is we -- freight and think set safer, we'll offering see where can about we the is a that as we that quickly, as as really to to be way

and do you. further All Thank That time. any today's great Have concludes have a And, questions may call. now conference day. ladies gentlemen, this at we parties not disconnect.