Prepared remarks
Greetings, and welcome to the Aurora Second Quarter 2026 Business Review Call. As a reminder, this conference is being recorded. It is now my pleasure to introduce Stacy Feit, Vice President, Investor Relations. You may now begin.
Thanks, Paul. Good afternoon, everyone, and welcome to our second quarter 2026 business review call. We announced our results earlier this afternoon. Our shareholder letter and a presentation to accompany this call are available on our Investor Relations website at ir.aurora.tech. The shareholder letter was also furnished with our Form 8-K filed today with the SEC. On the call with me today are Chris Urmson, Co-Founder and CEO; and David Maday, CFO. Chris will provide an update on the progress we've made across the key pillars of our business, and David will recap our second quarter financial results. We'll then open up the call to Q&A. A recording of this conference call will be available on our Investor Relations website at ir.aurora.tech shortly after this call has ended. I'd like to take this opportunity to remind you that during the call, we will be making forward-looking statements. These statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed, projected or implied during this call. In particular, those described in our risk factors included in our annual report on Form 10-K for the year ended December 31, 2025, and other documents filed with the SEC as well as the current uncertainty and unpredictability in our business, the markets and economy. Additional information will also be set forth in our quarterly report on Form 10-Q for the quarter ended June 30, 2026. You should not rely on our forward-looking statements as predictions of future events. All forward-looking statements that we make on this call are based on assumptions and beliefs as of the date hereof, and Aurora disclaims any obligation to update any forward-looking statements, except as required by law. Our discussion today may include non-GAAP financial measures. These non-GAAP measures should be considered in addition to and not as a substitute for or in isolation from our GAAP results. Information regarding our non-GAAP financial results, including a reconciliation of our historical GAAP to non-GAAP results, may be found in our shareholder letter, which was furnished with our Form 8-K filed today with the SEC and may also be found on our Investor Relations website. Our discussion today may also include reference to forward-looking free cash flow, a non-GAAP financial measure. To the extent that this forward-looking financial measure is provided, it's presented on a non-GAAP basis without a reconciliation due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation. With that, I will now turn the call over to Chris.
Thanks, Stacy. The second quarter represented a meaningful leap forward in our path to scale, anchored by a number of customer wins. To capitalize on this growing demand, we've launched our new fleet of driverless trucks based on the International LT series without a person behind the wheel. Last week, we debuted Aurora Driver 2, the combination of our new software, second-generation commercial hardware and this new truck platform. If you didn't get a chance to join the live stream, check out the video on Page 4 of the slide deck. This milestone officially moves Aurora into the start of our commercial scaling phase. Backed by this momentum, we are fully allocated to exit the year with 200 driverless trucks in operation and are in negotiations with a number of Driver-as-a-Service business customers for 2027 and beyond. Our commercial momentum continues to accelerate after a strong start to the year, driven by a powerful customer flywheel effect. We recently executed Transportation as a Service agreements with two customers that aim to grow their networks with Aurora Driver-powered trucks, starting in Laredo, Texas, where near-shoring is driving unprecedented freight volume. Charger Logistics will utilize the Aurora Driver to add capacity on its network and drive higher utilization starting on the Dallas-Laredo route, one of the busiest corridors in Texas. Value Truck will initially focus on boosting route density between two key corridors, Dallas-Laredo and Fort Worth-Phoenix. In addition, we expanded our operations with Volvo Autonomous Solutions with their launch of commercial freight service powered by the Aurora Driver for industry leaders, DSV and AVI-SPL. Proving the value of our technology across complex networks and diverse applications lays the groundwork for widespread market adoption. Every new customer acts as a pipeline multiplier. As the broader logistics industry prepares to adopt autonomy, we're streamlining our customer onboarding cycle. This velocity is a powerful testament to the pent-up demand for a solution that helps address systemic industry bottlenecks. While expanding our commercial relationships, the Aurora Driver completed nearly 440,000 driverless miles since launch through the end of June, maintaining a 100% on-time performance record and zero Aurora Driver-attributed collisions. With additional trucks entering service weekly, we expect driverless miles to accelerate meaningfully moving forward. Our scaling plan for this new fleet prioritizes driverless delivery to and from customer facilities to further strengthen the Aurora Driver's value proposition. Our work with Detmar Logistics in West Texas illustrates this versatility. We have deployed driverless operations without a person behind the wheel between their facility in Midland, Texas and Capital Sand's mining site in Monahans, Texas along I-20. To support this deployment, we validated a frac sand trailer with minimal integration work, demonstrating the modularity and adaptability of the Aurora Driver. To enable nationwide driverless trucking and ensure seamless end-to-end service for our customers, we recently began supervised testing of way station navigation and on-route fueling. While robotaxis will require extensive infrastructure build-out, the freight ecosystem's established service networks and turnkey truck stop footprint makes trucking a plug-and-play market for autonomous technology. Leveraging this infrastructure, we're now piloting third-party fueling and scaling at truck stops. In these pilots, truck stop staff fuel the truck as the Aurora Driver navigates in and out of the fuel island. Looking ahead, truck stop personnel will utilize automated arrival notifications to efficiently secure, fuel and release Aurora Driver-powered trucks, enabling continuous long-haul travel. To support customer demand that is accelerating, we continue to advance our hardware and autonomy-enabled truck programs. The launch of our new fleet of driverless trucks also marks the initial commercial deployment of our second-generation commercial hardware kit. Engineered for 1 million miles of operation, this kit is designed to significantly increase uptime and reliability. It also delivers substantial performance gains, including a more efficient computer and an extended 1-kilometer range for FirstLight, our proprietary long-range FMCW LiDAR. This long-range capability provides the Aurora Driver with more than 34 seconds of reaction time at highway speeds, setting a new superhuman standard for safety. Crucially, we expect this kit to drive a 50% plus reduction in Aurora Driver hardware costs, a key lever supporting our breakeven gross margin target. We expect to have 20 to 25 driverless trucks in operation by the end of the third quarter. To support our scaling plan, our upfitter Roush has commenced manufacturing at a dedicated facility for Aurora. We've already received the initial builds and expect Roush to ramp to an annual run rate of 1,000 trucks in October. Concurrently, our ecosystem for series production is on a clear trajectory to hit its stride. At Volvo Group's 2026 Capital Markets Day, the company announced plans for Volvo Autonomous Solutions to begin driverless operations on the Volvo VNL autonomous in the first quarter of 2027. These trucks will be driven by the Aurora Driver. They expect to exit 2027 with more than 300 driverless trucks, paving the way for industrial scaling in 2028. We're seeing broad enthusiasm and engagement around the industry with Volvo projecting $3 billion in autonomous revenue within five years. The industrialization of autonomous freight is definitively at an inflection point. Volvo has already completed several Aurora Driver-powered trucks on their pilot line ahead of the first quarter 2027 driverless launch. Looking further ahead, we've also built Volvo development trucks equipped with components of our third-generation commercial hardware kit manufactured by AUMOVIO. Our partnership with AUMOVIO is intended to support tens of thousands of trucks. We look forward to testing these systems in the coming quarters ahead of AUMOVIO's planned start of production in the second half of 2027. In parallel, PACCAR and Aurora are jointly defining the path to a scalable launch of our third-generation commercial hardware kit integrated with PACCAR's future autonomy-enabled platform on their assembly lines. We designed our strategy to enable our asset-light commercial model to be deployed across the leading truck platforms, giving us unmatched flexibility to meet diverse fleet preferences as autonomous trucking scales. Our commercial readiness is matched by a highly supportive regulatory landscape. California recently joined the majority of other states in the U.S. to permit the deployment of driverless trucks. Last month, I had the privilege of representing our industry before the California Assembly Transportation Committee. This engagement provided an opportunity to share key learnings from our safe driverless operations, outline our thoughtful approach to regional expansion and foster shared confidence in the future of autonomous freight in the state. We have submitted our application to begin the required driver testing in California. At the federal level, we're seeing historic momentum toward a unified national framework. In May, the U.S. House Transportation Infrastructure Committee passed the BUILD America 250 Act, 62-2, a truly bipartisan surface transportation reauthorization bill. This bill features a dedicated framework for the nationwide deployment of autonomous trucks that would help harmonize the current patchwork of state laws and addresses operational updates that Aurora has long championed. For example, the legislation would explicitly permit the use of cab-mounted warning beacons instead of manually placed warning devices when a commercial motor vehicle is stopped. We continue to engage closely with lawmakers to advance this critical legislation into law and secure American leadership in the global autonomous transportation race. Improving road safety is an important component of that global leadership and core to the Aurora Driver's value proposition. To show you what this looks like in practice, I'd like to share a recent example that powerfully underscores our safety advantage. Earlier this month, one of our trucks was traveling on a frontage road in Fort Worth during a development mission. It was in manual mode, meaning the Aurora Driver system was not engaged in autonomy. The truck was being driven by one of our most experienced vehicle operators with over 2 million miles of Class 8 driving experience and a spotless safety record. The Aurora truck was proceeding into an intersection on a green light, which had been green for more than 25 seconds. Unfortunately, another vehicle entered the intersection against the red light and collided with our truck. Thankfully, no serious injuries were reported by either party. However, our truck and the other vehicles sustained significant damage. While the autonomy system was not engaged, through a combination of log review and simulation, we were able to confirm the Aurora Driver perceived the red light runner nearly 6 seconds prior to the collision and would have slowed to avoid the collision even despite having the right of way with the green light. Events like this motivate our team to keep doing this incredibly important work. Last year, we began operating the first driverless Class 8 trucks on U.S. public roads. As we continue to scale driverless operations, our commitment to safety and transparency remains a core cultural tenet and key differentiator. Now we're entering our commercial scaling phase with Aurora Driver 2. We're already fully allocated to exit the year with 200 driverless trucks. We've earned third-party validation for our safety case, and we've advanced the industrial partnerships to deliver at the scale this opportunity demands. As our fleet grows week by week, we're positioning Aurora to power a meaningful share of the $1 trillion U.S. logistics industry. I'm incredibly proud of the discipline our team has shown in executing our vision responsibly, establishing deep credibility and cultivating an ecosystem of partners, customers, regulators and investors who share our conviction in the future we're building. With that, I'll now pass it over to Dave, who will review our financial results.
Thanks, Chris. Let's review our financial results for which we have provided a summary on Page 6 of the slide deck for reference. Second quarter 2026 revenue totaled $2 million across driverless and vehicle operator supervised commercial loads. The Aurora Driver achieved another record number of commercial miles driven during the quarter. Second quarter operating loss, including stock-based compensation, totaled $266 million. Excluding stock-based compensation of $60 million, R&D totaled $164 million, SG&A was $37 million and cost of revenue was $7 million. We used approximately $225 million in operating cash during the second quarter of 2026, and capital expenditures totaled $31 million. Excluding $63 million in cash bonus payments, which were funded through our at-the-market program, our cash spend was within our externally communicated quarterly average target. During the quarter, we issued 30 million shares of Class A common stock through our at-the-market program for net proceeds of $215 million. Using a portion of these proceeds as planned to fund the referenced cash bonus payments as well as the tax liability associated with the vesting of employee restricted stock units, we increased our liquidity by $126 million. In turn, we ended the quarter with a very strong balance sheet, including nearly $1.2 billion in cash and short-term investments. We continue to expect 2026 revenue of $14 million to $16 million, up 400% year-over-year at the midpoint. Revenue will be back-end loaded with the fourth quarter projected to contribute over half of full year revenue as we scale driverless operations following the launch of our new fleet. We anticipate exiting the year with more than 200 driverless trucks in operation, which translates to an approximately $80 million revenue run rate for our Transportation-as-a-Service business. This establishes a powerful foundation for 2027 when we expect the core Driver-as-a-Service business model to commence. To support our scaling plan, we continue to expect quarterly cash use of approximately $190 million to $220 million on average in 2026. This includes approximately $150 million in anticipated full year capital expenditures, primarily attributed to our capacity plan. The focused execution driving Aurora's 2026 transition continued in the second quarter. We are making the strategic investments necessary to bring Aurora Driver 2 to large-scale industrial deployment. With every truck on the road, we are driving a safer, more efficient era for logistics. With that, we will now open the call to Q&A.
Questions and answers
Our first question is from George Gianarikas with Canaccord Genuity.
Maybe to start, you clearly have several strong tailwinds at your back. You have a proven technology that's ready to scale, macro pressures like tightening freight capacity, rising fuel costs. So given the positive commercial momentum you've been announcing and recent industry announcements like the one from TFI yesterday around expanding its autonomous operations, what specific catalysts do you think will drive the next real inflection point in commercial adoption? And if I may ask, are you directly involved with TFI?
Thanks, George. As you know, we're not going to comment about potential partnerships or customers until we're able to do that and aligned with them and so forth. So no comment there. In terms of catalysts for demand, I think it's just a continued building of trust and credibility. We've seen with each step forward of the technology and each step forward with customer adoption, we get this flywheel effect where the engagement we have with our commercial team just continues to grow and grow. I expect that as we put more and more of these second-generation trucks on the road and we continue to build the volume, success begets success.
And maybe as a follow-up regarding the unit economics and the scaling roadmap. How confident are you that you can achieve your projected hardware cost downs given what's happening from an inflationary perspective? And maybe on the hardware maintenance front, specifically on your proprietary LiDAR, how resilient is the stack against real-world steel degradation? Should the units require service or replacement? How does that cost curve look like for maintaining your in-house components at scale?
Yes. So we continue to have confidence in our ability to achieve the targets we have for the cost of the hardware kit and the maintenance support of that hardware kit to meet our long-term economic objectives. We are rigorous in testing these systems to achieve the durability we intend. We've been testing these units for months already, and we'll continue to test them so we can continue to build confidence. We've already begun some of the reliability testing for the third-generation hardware components. This work is in flight and gives us a lot of confidence on what we can expect going forward with the fleet. David, do you want to add anything?
Yes. I think in terms of confidence in the economics generally, we're already building our second-generation kit. So we have costs for the ones we're producing today and estimates for those we'll be producing next year; we have a pretty good handle on that. Certainly, there are some headwinds from costs, but these kits are also designed and expected to last 1 million miles. So some minor increases in component costs, when you look at it on a unit economic basis for gross profit per mile, are not materially going to impact our gross margin projections.
Our next question is from Ravi Shanker with Morgan Stanley.
Chris, you said that in the release that you are in negotiations with a number of customers for the DaaS business model for '27 and beyond. Can you just unpack that a little bit more and maybe give us a glimpse into what momentum of negotiations have been like, especially after the first few commercial agreements that you've announced in the last few months?
Yes. Enthusiastic, I guess, would be the right way to frame it. We announced a few months ago the MOU with Hirschbach, and we continue to progress that deal forward. That will create the framework for the rest of the partnerships in the space. We have clarity on the core elements and we'll continue to move that forward. Customers want to own these assets. They want to see the benefit from it, and we're excited to get them to them.
Yes. The other thing I'd say, Ravi, is that for every customer that we sign up with a Transportation-as-a-Service agreement, it is with the intent to then move into the Driver-as-a-Service in the following year. In terms of active negotiations, we are working with a couple of folks to ensure that the agreements we want to apply broadly work for everybody. That's why we're actively working with multiple parties. The intent is, if you're a Transportation-as-a-Service customer today, we would expect that you'll start to add Driver-as-a-Service in 2027.
Understood. And maybe as a follow-up, again, to the comment that Volvo is projecting $3 billion in autonomous revenue in five years. Not to make you answer for Volvo, but I'm assuming if they're putting out a revenue target, they have done some fairly detailed math on what they think the truck is going to cost and how they share the economics and such. I'm wondering if they've shared any of that with you and if you can share with us.
We can't share Volvo's model, but I can say we have a clear understanding of the economic arrangement between Aurora and Volvo, and we're excited for that. We're excited to see them continue to grow their customer cohort, and we look forward to supporting them and helping them build their business.
Our next question is from Andres Sheppard with Cantor Fitzgerald.
Congratulations on the quarter and on getting Gen 2 out, very exciting. Wondering if you can maybe help us quantify the current fleet size, how many Gen 1 versus Gen 2 trucks are in operation today? As we think about your target for Q3, how should we think about that unit mix? And similarly, as we scale to the more than 200 trucks by year-end, how should we be thinking about that unit mix going forward?
Great question. Today, we have on the order of 25 trucks operating, and a handful of them are the new International trucks. We expect to grow that to 20 to 25 International trucks by the end of this quarter. By the end of the year, as we said, we expect a couple of hundred trucks operating. You can expect the vast majority, if not all, of that fleet by the end of the year will be either International or Volvo. We're excited to see those come online. We'll start to phase out the Peterbilt trucks with an eye to reintroducing Peterbilt trucks with third-generation hardware in the future.
Wonderful. Very helpful. And just a quick follow-up to that. You kind of alluded to there just at the end. So now that the Gen 2 has launched, will Gen 1 trucks just be phased out completely or upgraded? And how does the 50% improvement in hardware cost reduction on Gen 2 change your path to profitability?
We do expect to phase the Gen 1 trucks out. They've served an important purpose in demonstrating the technology and building early customer traction and have been a tremendous learning test bed for us. We're excited to get onto the Gen 2 platform with all the benefits that come with it and the ability to scale for customers. In terms of the 50% cost reduction, we've spoken about how second-generation partners allow us to reach unit economic profitability. We expect that to continue to play out as we improve execution, drive operational efficiencies and improve the system. Ultimately, the third-generation hardware will take another step function in hardware cost, which will allow us to drive toward the ultimate margins we anticipate in the business.
Excellent. Congrats again. We'll pass it on.
Thank you. Appreciate it.
Our next question is from Chris Pierce with Needham & Company.
This year, year-to-date, you've had a lot of customer announcements. I guess I just want to understand, how are customers thinking about why are they moving forward? Is it to add capacity and win share? Is it to better utilize their assets? Or is it about lowering per hour driver costs? How would you bucket those?
I'd say it's much more the first two. Every one of our customers puts safety first and then talks about the importance of their people and their drivers and how this technology complements them. We expect it to allow them to expand their business and increase utilization of their assets and allow their people to focus on where they add the most value, where they can be the face of the company to customers. We're excited to see this help customers grow and become more profitable.
And on that, is it fair to say they see a situation where they can outgrow their peers or win share by moving faster? Is that the right way to think about it?
I think you'll have to ask them, but this technology is so impactful—improving safety, fuel economy and asset utilization—that if you're not using it in the next five years, you likely won't be competitive in long haul. We're excited for that.
Okay. Perfect. And then just one last one. In the letter, you talked about streamlining customer onboarding. Can you give an example of a gating factor that was up and has come down on your side and why you chose to highlight this?
We're seeing conversations move more quickly. Part of that is the visible experience and credibility we've built by operating driverless trucks for some time. Part of it is us being smarter, understanding more about what's involved in integrating with a customer's business and taking lessons learned to meet customers where they are today. It's experience you don't get without actually operating the fleet and serving customers.
I'd add that because we've reached a point in autonomy performance and generalizability, our ability to take a customer request and react quickly has improved dramatically. We have more trucks and more people to support them and the autonomy systems, so we can react to customer requests much faster. When we first started, we were on Dallas to Houston; expanding to other routes once we were comfortable used to take weeks. Our ability to move faster is a key element.
I'd add one last point: last year you couldn't have met supply for customers between the limitation of first-generation hardware and integration work. At this point, we've unlocked the ability to scale. It's easier to have conversations with customers when we have clarity on how and when we can serve them. We have others in line for questions here still.
Paul, are you able to open the line to the next question?
We apologize for folks waiting in line. Hopefully the operator will come back here and connect us.
Our next question is from Ryan Sigdahl with Craig-Hallum Capital Group.
Chris, curious on Volvo, how are you thinking about Aurora's place in the AV ecosystem longer term as OEMs like Volvo build out their own TaaS businesses? Do you care who you're selling to, whether it's an OEM running their own fleet or direct to fleet customers under a DaaS model? And Dave, if you're willing, comment on the financial implications of OEMs TaaS versus fleet DaaS from an economics standpoint to Aurora.
We think about our relationship with Volvo in two dimensions: integration with the OEM platform and support and engagement with Volvo Autonomous Solutions and their business. We have a close relationship because of the broader platform work, and we look at Volvo Autonomous Solutions as a Driver-as-a-Service customer to us. We're excited for them to serve customers and build their business, and we'll continue to work with them that way.
Relative to the financial differences, whether we're doing Aurora Driver for freight selling TaaS or DaaS or working with Volvo Autonomous Solutions, we have gross margin targets to run the business. We look at the cost structure to support each business and the necessary margins. Inputs and costs differ slightly, so they are not exactly the same, but we look at each independently and then add them up to match our overall projections.
On the Gen 2 international truck launch, in the video you posted last week, you could see at least a dozen trucks in the background, implying visibility to the 20 to 25 guided for Q3. Is that a reasonable inference, or is there a reason some of those wouldn't be used for commercial operations? Second, with Roush on track for 1,000 unit annual capacity by October implying 250 trucks a quarter, why wouldn't you exit the year with more than 200 commercial trucks on the road?
We have really good visibility to support the 200 by year-end. There's a ramp-up when you stand up a new manufacturing line, and we expect that to ramp in Q4 to full velocity. We also understand there may be challenges along the path, so we provide what we think is reasonable guidance on where we expect it to net out.
If we can build more, we'll take advantage of stronger customer demand. For right now, this is a good plan and appropriate target. Regarding the trucks seen in videos, we have development trucks as well as first- and second-generation trucks out there. The important thing is we have a handful of International trucks already operating driverless on multiple routes and two customer endpoints. By the end of the quarter, we expect 20 to 25. That will be the highest number of dedicated commercial trucks we've had and we'll build upon that. We're excited as this is something we've known was coming and now we can confidently see the future and growth in truck supply.
For us internally, we've been investing heavily to get to this point and be able to start seeing these things come off the line and get used. It's going to be a blast.
Our next question is from Colin Rusch with Oppenheimer.
Can you talk a little bit about what you're seeing from Roush from a takt time perspective in terms of production and validation that gives you some comfort around scaling up to 1,000 trucks a year?
Roush has pedigree and experience finishing OEM vehicles at scale. Part of the reason we selected them is their competence. We're still early in the ramp, but they're familiar with the work. We engage with them frequently and have a high degree of confidence it will come together.
Takt time is somewhat relevant, but this is a dedicated facility with dedicated stations that moves like an assembly line instead of one person building the entire truck, so it will be highly efficient. We look at the number of stations and the number of trucks we can build per week and try to match that to the supply of Aurora Driver hardware kits we will have coming forward.
You guys are focused on the trucking market, but given the sophistication of the platform and learning cycles, are you starting to evolve thinking about serving other markets and potentially other applications as separate growth drivers?
We believe the Aurora Driver and the capabilities we've built will travel to other applications. Right now, the trucking market offers precision and opportunity for us to grow and succeed. We are starting to think about where else to apply this and the right timing to invest. But we must execute with excellence in trucking first, and that remains our priority.
Our next question is from Scott Group with Wolfe Research.
It's Cole on for Scott. Can you size roughly how many trucks carriers intend to put onto their balance sheets in 2027 following some of your customer negotiations around the DaaS model?
I don't think there's much more we can share than what we've already said. With the MOU in place with Hirschbach, they're expecting to put 500 tractors into their fleet over '27 and '28. We'll share more as we can.
Okay. And on the OEM side, do you think OEM appetite to scale autonomous is keeping up with your targets? What's the risk you'll have to switch to a more Transportation-as-a-Service dominated model going forward?
Those are different questions. Can OEMs keep up? I believe in market forces: if customers see the benefits, it will encourage OEMs to produce vehicles to meet demand. The more we demonstrate value, the more enthusiasm customers will generate with OEM partners. Regarding pivoting to TaaS, not from where we see today. Our approach is to focus on building autonomy systems while partnering with companies that are great at their roles. We prefer to support companies like Werner, Hirschbach or Schneider and help them build and grow their business so Aurora can stay focused on our core competency.
Our next question is from Michael Latimore with Northland Capital Markets.
In terms of launching new routes, can you discuss the time to launch a new route? Do you expect that to continue to shrink? Can you quantify where it is now versus where it would be optimally?
We're focused on where customers want us to operate, and that will drive route expansion. There's a lot of excitement with routes out of Laredo given nearshoring, and we're excited to support customers there. The cost and time to build new routes will continue to decrease; we don't see it as a major cost driver for the business. You'll see us pick up more routes as demand drives it through the back half of the year and beyond.
How many routes do you expect to have by year-end?
We've shared that we expect to be expanding into the Sunbelt through year-end. We haven't been specific about the number of routes.
On the Detmar program, any expansion opportunities from where you are now?
As we prove value and demonstrate support, that will drive increased demand. We're excited to be started with them and operating driverlessly between their relevant endpoints, and we'll update you as we continue to build that relationship.
Our next question is from Itay Michaeli with TD Cowen and Company.
First, on Aurora Driver 2, can you talk about the degree of performance improvement in the new generation, given hardware and software upgrades, and whether that improvement comes in safety or expanded ODD coverage?
It drives both a reduction in cost and important performance and ODD expansion capabilities. We wouldn't have put anything on the road that we didn't believe was safe. The extra range with the FirstLight LiDAR allows us to react sooner, particularly at night, which is a big advantage. Conditions in which we can operate continue to expand, which better serves our customers.
As a follow-up, what's your latest thinking on remote assistance and on-site support costs over the next 12 to 18 months based on recent experience? And how do you think about insurance costs and how those are treated in your latest customer agreements?
On both remote assist and on-site support, we continue to see positive trends in deployment and how that translates to the rate at which we need assistance. Ultimately, that will drive down the cost of delivering the Aurora Driver, and we're on track to deliver a product that will meet our business objectives.
Because we are the DOT holder today for our Transportation-as-a-Service business, we carry the insurance for all our trucks. We have good rates on a per-truck basis because of the safety performance of the system. While limited in track record, we have an impressive track record to leverage and will expand upon that. When we shift to Driver-as-a-Service, there are opportunities for both sides: coverage associated with the Aurora Driver itself and for customers increased confidence and reduced incidents and safety coverage. It's a win-win.
Our next question is from Mark Delaney with Goldman Sachs.
You talked about exiting the year with 200-plus driverless trucks and transitioning to DaaS next year. How should we think about your ability and willingness to add trucks beyond that into '27 and beyond, and how might that impact your cash use per quarter targets for '26 going into '27?
In 2027, it will be a transition year where we move from primarily TaaS to primarily DaaS over the course of the year. We may add more trucks in 2026 under TaaS. As we look at that, we generate more revenue but expect lower margin with TaaS versus DaaS.
We haven't provided guidance for 2027 cash use and capex, but we have projections. We will add additional TaaS units into 2027; it's not an instantaneous switch to DaaS on January 1. It's a customer-by-customer transition, and we have that built into our liquidity forecasts. We've shared before we'd be willing to support up to 500 test trucks if needed. I don't think it will be that many, but we have flexibility in our modeling and financing to support demand.
How are you thinking about adding other functions like more weather conditions and hauling different trailer types? Can you provide color on progress given you plan expansions based on customer demand?
We continue to expand the conditions the truck can operate in. Right now, it has a fairly broad operating environment. One of the things we'll look to add toward the end of this year is operation in light snow and cold weather, which will be an important enabler. We support a broad set of trailers already, and as we add customers we'll address the trailers needed to support growth. Adding a trailer isn't a big deal; we go through a deliberate process to ensure it works safely, but it's not a material amount of effort.
Our next question is from David Vernon with Bernstein Research.
This is Justine Laufer speaking on behalf of David Vernon. First, it looks like the number of driverless trucks expected by year-end has gone from 'more than 200' mentioned last quarter to '200' this quarter's presentation. Has something changed with build rates or deals that shifted that outlook down slightly?
Justine, I wouldn't read too much into that. We're fully allocated to 200 and have flexibility to go higher. If we needed to get to 201, 202 or 205, that's not a concern. We're matching supply with customer demand. We will actually have more trucks built than that, but we also need development trucks and trucks for backfill during scheduled maintenance. So I wouldn't read too much into the wording.
Got it. And can you help us get a sense of the economic impact of these commercial deals you're announcing? When you announce new deals like Hirschbach or Value Truck, how should investors frame the revenue impact and the difference between TaaS versus DaaS deals?
TaaS deals have a higher per-mile revenue outlook because it's the full service—roughly in the $2-plus range—whereas DaaS is targeting $0.85-plus. There's a substantial difference in revenue between TaaS and DaaS, but also a substantial difference on the cost side and margin side. For guidance, we're fully allocated to 200 trucks. Two hundred trucks at the end of the year equals roughly an $80 million revenue run rate. So by the end of the year, before adding trucks in 2027, we would have roughly an $80 million revenue run rate, which is hyper growth from where we started the year.
Thank you. We have reached the end of our question-and-answer session. This does conclude today's conference call. We thank you again for your participation. You may disconnect your lines at this time.