管理層發言
Good day, everyone, and welcome to today’s Aurora First Quarter 2025 Business Review Call. At this time all participants are in a listen-only mode. Please note this call is being recorded. It is now my pleasure to turn the call over to Ms. Stacy Feit, VP of Investor Relations.
Thanks, Shana. Good afternoon, everyone, and welcome to our first quarter 2025 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; David Maday, CFO; and Sterling Anderson, Co-Founder and CPO. Chris will provide an update on the progress we have made across the key pillars of our business, and David will recap our first quarter financial results. We will then open 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 concludes. I’d like to take this opportunity to remind you that during the call, we will be making forward-looking statements.
This includes statements relating to our future financial and operating performance, our financial outlook and guidance, our ability to reduce costs, the safety benefits of our technology and products, the achievement of certain milestones and the realization of the potential benefits of the development, manufacturing, scaling and commercialization of the Aurora driver and related services, including relationships and anticipated benefits with partners and customers, the potential impact of our product on the freight industry and economy, and our expected market share. These statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those projected or implied during this call. In particular, those described in our risk factors, including in our Annual Report on Form 10-K for the year ended 12/31/2024 filed with the SEC, as well as the current uncertainty and unpredictability in our business, the markets and the economy.
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, which should be considered in addition to and not as a substitute for our GAAP results.
Thanks, Stacy. Well, I’m immensely proud to share that after years of uncompromising commitment to safety, rigorous engineering and disciplined execution at Aurora, driverless trucks are now operating commercially. Autonomous freight is no longer just a vision; it’s a reality, powered by the Aurora driver. I’ve been extremely fortunate to be a part of many groundbreaking moments in my career, but riding in the backseat of our first driverless trip, witnessing the Aurora driver perform perfectly, is by far the highlight of my career. Seeing it operate daily, weather permitting, and delivering value to our customers is so rewarding. This milestone is just the starting point for an incredible commercial journey with many more defining moments to come. It’s impossible to put into words how excited I am and the whole team is to charge forward from here and deploy this technology to make a huge impact and build an amazing business.
I’m fired up for the next decade at Aurora, which I’m convinced is going to be something very special. We’ve shown the technology is real, and our focus now turns to proving its promise, increasing the value of our product for our customers, and ultimately becoming an essential partner in the freight industry. Along the way, we’ll underpin our customer adoption strategy with the focus and fiscal stewardship that will enable us to build a sustainable and scalable business to realize our mission to deliver the benefits of self-driving technology safely, quickly, and broadly. Our path to delivering long-term value is built on a foundation of safety. To commence driverless operations, we needed to close the safety case for our Dallas to Houston launch lane. Our safety case framework is a rigorous evidence-based approach to confirming that our autonomous vehicles are acceptably safe to operate on public roads.
We were the first in the industry to develop and publicly share a safety case framework for autonomous trucking. Safety cases have now been widely adopted by other autonomous vehicle developers, and we’ve continued to lead the way with transparency as the only company quantifying our progress through the ARM, which is a weighted measure of completeness across all claims of the safety case for our launch lane. With the closure of the remaining software and vehicle claims last month, ARM reached 100%. This means we have validated and approved our verifiable AI for driverless operations together with our launch trucks. These trucks are equipped with our first-generation commercial hardware and redundant systems including braking, steering, and power that enables safe operation without a human driver. We’ve built our safety case to support rapid capability and lane expansion with just incremental validation needed for future development to scale our business.
Aligned with our commitment to transparency, we published our driverless safety report. The report details when, where, why, and how the Aurora driver operates safely, including risk management, redundancies, cybersecurity, remote assistance, and more. As we expand commercial operations, we remain committed to setting the standard for safe autonomous trucking. Consistent with our collaborative approach with regulators, elected officials, and first responders, we proactively provide regular updates and confidentially brief federal and state officials, as well as local law enforcement, on our plans for driverless operations. These engagements demonstrate our belief that safety and transparency go hand in hand. By maintaining open lines of communication, we foster trust that not only supports our initial operations but also lays the groundwork for long-term scale deployment across the country.
We’re proud to have the support of Texas Governor Greg Abbott, who shared that he believes the Aurora driver will further spur economic growth and job creation in Texas. At the same time, California Governor Gavin Newsom’s administration recently released a draft regulatory framework for autonomous trucking, officially launching the rule-making process in the state. This marks a meaningful step forward on the path to safe and broad deployment of this transformative technology. We’re further encouraged by the recent release of the National Highway Traffic Safety Administration’s new automated vehicle framework, which aligns with Aurora’s safety-first innovation-driven approach. We believe this framework’s three guiding principles—prioritizing safety, unleashing innovation, and enabling commercial deployment—closely mirror our safely, quickly, and broadly approach and provide a foundation to harmonize today’s patchwork of state-level regulations and accelerate the safe rollout of autonomous vehicles nationwide.
We’re encouraged to see bipartisan support at both the state and federal levels, which underscores a growing recognition of the safety and economic benefits autonomous trucking can bring to the United States. Aurora remains committed to working collaboratively with our federal and state policymakers and regulators to realize this shared vision. In addition to our confidence in the safety of the Aurora driver, we’ve also seen strong on-road performance through our 100% API metric. During the first quarter, 95% of loads running our production release software for launch had a 100% API, exceeding our commercial launch target of 90%. In the video on page eight of our presentation, you can see firsthand some of the powerful on-road performance underlying this metric. This is the Aurora driver, a solution with superhuman capabilities that we believe will redefine logistics and mobility. On April 27, Aurora driver-powered trucks began regular driverless operations and are making commercial deliveries for Uber Freight and Hirschbach between Dallas and Houston.
The Aurora driver has completed over 4,000 driverless miles already, starting to prove the promise of our groundbreaking technology. To put that in perspective, that’s longer than the entire distance across the United States from coast to coast. We’ve included a hyperlapse video of our first driverless trip on page three of the presentation. You'll see the Aurora driver navigating a series of challenging scenarios, including interactions with unusually aggressive drivers, one of whom we’ve nicknamed the 'Maserati' in light of the extraordinary lengths these photographers went to in pursuit of footage from our driverless launch. The Aurora driver also expertly handles very heavy traffic, decelerating smoothly from its standard cruising speed of 65 miles per hour to nearly a full stop and negotiating a long-standing complex construction zone that frequently changes week to week, with lane shifts and repainted lines being a common occurrence.
We’re thrilled to show the world that this technology is real. It’s delivering value for customers in Texas and we’re excited to share the road ahead with all of you. We’ve already expanded to two driverless trucks scheduled daily and we anticipate operating tens of trucks by the end of 2025. As we’ve discussed, we’re deliberately starting with a crawl, walk, run approach as our early efforts will be focused on exercising the full product suite to ensure a seamless product experience for our customers that clearly demonstrates its value and continues to build trust with all of our stakeholders. We expect additional customers to begin driverless operations in the coming months. The Aurora driver addresses major challenges the freight industry faces including the structural driver shortage, persistently high turnover, and asset underutilization. We offer a solution that provides a scalable stable driver supply, which we expect will nearly double truck utilization and supplement traditional drivers.
Importantly, the Aurora driver never loses focus, prioritizing safety in every mile and can deliver an immediate fuel economy benefit greater than 10% with a potential of more than 30%. Our customers are not just adopting a new technology; they’re gaining early access to a transformative solution that will redefine the movement of goods. By enhancing safety, mitigating labor constraints, and improving fuel efficiency, the Aurora driver creates value not only for our customers but also for the public through safer roads, cleaner transportation, and faster, more cost-effective freight. This should ultimately drive down costs for consumers. Today, the Aurora driver is validated for driverless operations on one of the most significant freight corridors in the country during the daytime with clear weather conditions on the two most common types of trailers: 53-foot drive-ins and refrigerated trailers.
Our Dallas to Houston launch lane represents a compelling commercial opportunity and a critical first step to prove the promise of our technology. Building on this foundation, we expect to further expand our commercial lanes with driverless operations between Fort Worth and El Paso and further extensions to Phoenix in the second half of 2025. Self-driving trucks have the potential to cut single driver transit time in half on this route. This is a powerful use case that demonstrates how expanding driverless operations to lanes that exceed hours of service limitations for traditional truck drivers will unlock significant value for our freight customers. Also in the second half of 2025, we plan to expand our operating domain to meaningfully increase the utilization of our self-driving trucks by validating night driving and operation in adverse weather conditions including rain and heavy wind.
As we look further ahead, our OEM and Tier one partnerships are unmatched in the industry and we believe position Aurora as the only company capable of deploying autonomous trucking at scale. While this commercial launch represents the most significant milestone in Aurora’s history thus far, much of our team has remained focused on what comes next. We continue to make great progress with our partners on purpose-built self-driving platforms designed for high-volume production. On the hardware front, our teams are continuing to work on our second and third generation commercial hardware kits to support our scaling and profitability ambitions. Our second generation kit brings exciting performance gains, and we expect it to drive a significant reduction in our hardware costs, which is a critical milestone on our path to self-funding. We’ve started to receive B samples for testing from our contract manufacturer Fabrinet.
We also continue to make great progress with Continental on our third generation commercial hardware kit that we believe will unlock true scale on the order of tens of thousands of trucks. As you can tell, it’s an incredibly exciting time to be at Aurora and this enthusiasm extends beyond our team. We’re fortunate to have John Donahoe joining our Board of Directors pending shareholder approval at the upcoming annual meeting. John has led iconic companies through periods of transformation and growth as CEO of Nike, ServiceNow, and eBay. Earlier in his career, he served as President and CEO of Bain and Company, where he helped guide some of the world’s most respected companies through strategic inflection points. His deep expertise at the intersection of technology and customer experience will be invaluable as we move into the commercial phase of our business. With our achievement of commercial launch and transition to this next phase, Sterling Anderson, our Co-Founder and Chief Product Officer, has made the decision to leave Aurora at the end of May to pursue an exciting external opportunity in a senior leadership role at an iconic global company.
Co-founding this company with Sterling and Drew has been one of the most rewarding experiences of my life, and I’m immensely grateful for every step we’ve taken together. From the earliest days of whiteboard sketches to shaping our product into what it is today and forging some of the most impactful partnerships, Sterling has been instrumental in putting Aurora on a trajectory of tremendous growth. Beyond the milestones and achievements, it’s Sterling’s passion, creativity, and sheer grit that leave the most lasting impact on all of us. As he begins his next chapter, I know he’ll continue to break new boundaries and do amazing things. With that, I’ll turn it over to Sterling to share a few words.
Thanks, Chris. After eight phenomenal years working with Chris, Drew, and the rest of Aurora's remarkable team, I’m embarking on a new adventure. Leaving Aurora is one of the most difficult decisions I’ve ever made, especially given the exciting stage Aurora is at. But it’s precisely what gave me the confidence that now is the right time. Aurora has reached a critical inflection point. The product strategy is firmly established, the technology is on the road, the teams are in place to scale it and the momentum we’ve created in the industry is palpable. Watching the Aurora driver evolve from a bold idea to a commercial reality has been nothing short of awe-inspiring. From our first truck demo to where we are today, it’s been a remarkable ride, and I’m so proud of what we’ve built together. More than anything, I’ve loved working alongside our brilliant and relentlessly driven team. I’m profoundly grateful to our investors who have believed in what we’re building and supported Aurora every step of the way.
We founded Aurora with the mission to deliver the benefits of self-driving technology safely, quickly, and broadly. Aurora and its mission will always remain dear to my heart, and I know Chris and this incredible team will continue to build something enduring. As Aurora transitions into a new commercial chapter, I’ll remain a proud co-founder and a significant shareholder. While I leave from the sidelines, I’ll be cheering loudly for everything that’s yet to come on Aurora’s commercial journey. Now back to Chris.
Thanks, Sterling. In closing, there have been countless pivotal moments along our journey, and now we can officially say we did it. We set out with an audacious goal to bring safe self-driving trucking to life, and that vision has become reality. We’ve developed and validated world-changing technology, formed industry-leading partnerships, and earned the trust of our customers who move America’s freight while collaborating with government and safety leaders. And importantly, we’ve executed with integrity at every step. None of this would have been possible without the belief and dedication of our team, partners, and investors. This launch milestone marks the beginning of our commercial chapter and is also a powerful reflection of what makes Aurora the industry leader: the ability to imagine the future and deliver it. Thank you for being with us on this journey. With that, I’ll now pass it over to Dave who will review our financial results.
Thank you, Chris. It’s truly an exciting time in our young history, and our continued focus to demonstrate strong meaningful financial results remains critically important. Let’s discuss our quarterly financial results for which we have provided a summary on Page 14 of the slide deck for reference. During the first quarter of 2025, we continued to demonstrate strong fiscal discipline. First quarter 2025 operating expenses, including stock-based compensation, totaled $211 million. Excluding stock-based compensation, operating expenses totaled $177 million. Within operating expenses, our R&D expenses, excluding stock-based compensation, totaled $153 million. This figure includes $871,000 in pilot revenue, which was up 22% quarter-over-quarter and 54% year-over-year. In the first quarter, this was recorded as a contra R&D expense. Coinciding with the launch of the Aurora driver in April, we have begun recognizing revenue, which will be reflected on our income statement when we report second quarter results.
As a reminder, this will include driverless revenue, as well as continued pilot revenue. During the first quarter, SG&A expenses excluding stock-based compensation totaled $24 million. We used approximately $142 million in operating cash during the first quarter. Capital expenditures totaled $8 million. This cash spend was meaningfully below our externally communicated target, reflecting our continued commitment to fiscal prudence. For the remainder of 2025, we continue to expect quarterly cash use of $175 million to $185 million on average. This reflects an increase in capital expenditures and the continued development of our new hardware programs as we prepare to scale our business. We ended the first quarter with a very strong balance sheet, including nearly $1.2 billion in cash and short-term investments. This includes $68 million in net proceeds from the issuance of 10 million shares of Class A common stock through our at-the-market program during the first quarter.
With this additional capital, as well as efficiencies we have found in the business and cash preservation decisions that we have made, we now expect this liquidity to fund our operations into the fourth quarter of 2026. As the only autonomous trucking company operating a driverless commercial product and with the partnership ecosystem in place to scale this technology, we have refreshed our near-term capital strategy to ensure a level of financial flexibility that maintains both our technology and commercial lead. In addition to our core growth initiatives, we will continue to evaluate opportunities to further advance our competitive position and de-risk certain elements of our business. Taking these factors into account, we now expect to raise $650 million to $850 million prior to achieving positive free cash flow, which is anticipated in 2028. We intend to remain opportunistic in our approach to future fundraising, and we have various avenues available, including our at-the-market program.
We will continue to maintain a disciplined financial strategy, balancing prudent cost management with growth investments to strengthen our multiyear structural lead and support our path to self-funding. With that, we will now open the call to Q&A.
分析師問答
Certainly. Our first question comes from the line of George Gianarikas with Canaccord Genuity. You may proceed.
Hi, everyone. Thank you for taking my question, and congratulations on the first runs. So my question is—there continues to be a pretty robust conversation in the market around how advancements in AI and outsourced methods to reach simulated miles have accelerated the path for competitors in autonomy, whether it’s trucking or robotaxi. What do you think these competitors may not appreciate about the complexity of bringing an autonomous solution to market, regardless of improvements in AI or the marketplace?
Hi. I’m sorry. Operator, I think we’re hearing you over the top here. George, you still there? Just started to hear the operator over the top there at the end. Thanks for the question, George, and sorry for the delay in getting to it. Yes, I appreciate we’re really excited about having trucks on the road, right? I think people have been talking about this for a long time. And I can tell you, it’s just incredible that every day these are out there, and they’re just doing it. We’ve now got two of them doing it on a daily basis. I think that you’re right that there’s at times a bit of naivety around how hard it is to actually deliver a real safe product—the core software is obviously critically important. We’re doing some very exciting, interesting, and innovative things there. But that’s only one part of the story. The ecosystem, whether it’s the fact that we’re partnered with companies that manufacture half the trucks sold in the U.S. market, and we’re working with them already on how do we line-side this technology so that it can come out of the factory for their customers.
That’s a multiyear engagement that even if a competitor were to start today, they would be years behind us. Taking the hardware that we have in our first generation, industrializing that into our second, and then building and industrializing that further into the scale hardware is again a multiyear endeavor where we’ve been working with Continental for two years now on the pipeline to launch that in 2027. And so again, our competitors have to actually build that relationship and then start executing it. We just don’t see anyone who seems to be making progress in that direction. So we spend a lot of time talking about the cool technology part of this, but the process to validate and convince ourselves that the product is truly safe and robust to put on the road—that I think is an underappreciated bit of secret sauce that we have at Aurora. It’s one of the things we’ve been investing heavily in over the last year and a half.
I liken this to the advantage I see SpaceX having over Boeing in the launch business. One of the key elements of their advantage is they can validate their flight software in a week rather than a year, and they’ve done that through automated testing. That gives them way more shots on goal than the opposition, and we’ve taken a very similar strategy to how we validate our software here at Aurora so that we can do that rapidly, iterate, respond to customer needs, and advance our product on the road. Again, years before we see other people even having a product on the road, so we see a structural advantage that we’re only going to accelerate away from. So thanks for the question, George.
Maybe just ask one follow-up. I’m going to put Dave a little bit on the spot here. I know it’s very early, but based on what you’re seeing right now, you at your Analyst Day gave some guidance out to 2028. Is that still something we could use in terms of thinking about the financial profile of the firm over the next few years?
Yes. If you think about what we said in our Analyst Day in 2024, I think everything that we talked about is still generally correct. Obviously, we were a little delayed in when we thought we were going to start to launch by a couple of months. But there’s a shift to the right. We’re not reaffirming any numbers today, but directionally, the financial ambitions that we talked about before are intact. With the latest estimate that we provided today of $650 million, that’s still a confident number for the capital that we think we will raise prior to achieving positive free cash flow.
Thank you. Our next question is coming from the line of Ravi Shankar with Morgan Stanley. You may proceed.
Good afternoon, guys, and again congratulations on this pretty incredible achievement. Would love to get any color on the customer and industry feedback you’ve received since the launch. Are people paying attention to this? Is your phone ringing off the hook admitting that phones don’t have hooks anymore?
Agreed. Yes. Thanks, Ravi. I think we have heard near universal enthusiasm and excitement from our partners, the ecosystem we’ve built, and our customers. It’s galvanizing, right? We’ve been talking about this, and the industry has been talking about this for a while. Our partners have had confidence in us, but there’s a difference between having belief and confidence and actually seeing it on the road. We’re seeing that really crystalize conversations with folks. Our customers seem incredibly excited about it.
I would add, if you talk to our Head of Business Development since the launch, I’d say the proverbial phone has been ringing a little bit off the hook. There is a lot of interest in this, and demonstrating and showing that has been a cornerstone of how we’ve approached this. We’re really excited about it. There is a ton of excitement in our customer base to learn more.
Great. And maybe as a quick follow-up, it’s great to see the expansion already to two trucks. How do you determine the next steps of expansion from here? How do you go from the two to ten to tens? Because you’re already at an autonomous readiness indicator of 100%. What are the gating catalysts that determine that? And have you decided what metrics you’re going to share with us on a quarterly basis?
Well, I can take the first half of that, and I’ll hand it to Dave for the second half. We’re really looking at our operational execution, right? The product today is limited in a number of ways. It operates in clear weather during the daytime, and we’ve shared our roadmap through the rest of the year to basically unlock those capabilities. No one’s really run commercial trucks before, so we’re getting feedback from our operation team on the limitations of that. These limitations are what bounds our ability to scale. It’s about exercising this and being able to scale it confidently with experience under our belt.
Yes. Relative to the metrics, just a couple of things: our focus for the rest of 2025 is really on proving the promise of the technology and increasing the value of the product for our customers, ultimately becoming essential for the industry. There were a couple of metrics that we used before in terms of ARM and API. We’ll retire those; those were development metrics. We think we’ve passed that stage in how we think about the world. We expect to provide regular updates on our driverless miles, which we talked about today. We plan to measure ourselves based on revenue, which we said before we expect to be in the mid-single digits throughout 2025.
Very helpful. Thanks, guys.
Thanks, Ravi.
Thank you. Our next question is coming from the line of Andres Sheppard with Cantor Fitzgerald.
Hey everyone. Good afternoon. Congratulations on the quarter. Thanks for taking our questions, and congratulations on commercialization. Very exciting and incredible times. Kudos to the team. I know how hard you’ve all been working for it and how long you’ve been at it. So congrats there. Just first question, going back to the crawl versus walk approach, you touched on this a little bit in your prepared remarks, but wondering if you can elaborate a bit on your vision for this year as you ramp up the intensive trucks. What kind of progress should we be looking at, and how should we think about that quarterly progress throughout the year?
Yes. As Dave said, really this year is about us taking going from technology that didn’t exist to iterating and demonstrating the expansibility of that, increasing value for customers. So we’ve shared our roadmap for the year, which is going to be about expanding where the driver can operate and increasing the availability of the driver, which will make it more valuable for our customers. By the end of the year, we expect to be operating on multiple lanes, in versioning operations both day and night, and in rain and increased wind conditions. This, at that point, as we continue to build the operational model muscle, as we continue to get customers more exposure to the product, is really what sets us up for scale and growth in 2026.
Wonderful. That’s super helpful. Really appreciate that. And maybe just as a quick follow-up, David, as we fast-forward to 2027, and I’m aware we’re not guiding anything there yet. But just conceptually and fundamentally, could you remind us how much of a dramatic improvement in the economics you expect to experience in 2027 through the high-scale manufacturing with Continental, particularly regarding CapEx, gross margins, and anything else you can share?
Hey, thanks, and appreciate your continued support here. That’s a lot to unpack, but let me take a shot. I would refer everybody to the Analyst Day before to guide ourselves toward this. We’re not reaffirming any of this yet, but there are significant enablers that we expect will allow us to achieve high gross margins in the 2027 timeframe. That hasn’t changed at all. Our capital allocation needs haven’t changed at all as we shift to a driver-as-a-service business in the future. We expect in 2027 to have our third-generation hardware kit being manufactured by our Continental partnership, delivering those line-side. We expect to be in the tens of thousands of trucks starting from a run rate perspective in the ’27 timeframe. We think we have all the enablers in place to be able to deliver high gross margins and drive meaningful value for our customers.
Fantastic. Thank you so much, and congratulations again. I’ll pass it on.
Thank you.
Thank you. We will take our next question from Chris McNally with Evercore. You may proceed.
Thanks, Steve. Congratulations again, long time coming. Two questions: one AI for Chris and one scaling question for Dave. Chris, maybe we can talk about what improvements in your hybrid AI approach are next. The three-year roadmap is super helpful. Is it fair to say that the heavy focus here is increased ODD and the weather areas you’ve been highlighting? From an AI perspective, are the recent advances in end-to-end and foundational models going to help achieve that progress or is it more hardware than software?
Yes, it’s a great question, and thank you. We continue to be super excited about getting this on the road and starting to serve customers with it. On the AI front, we have been—this is one of the misnomers in the industry. Many of the advances that you’re seeing in large language models and across the industry have engaged with the Aurora driver and have been part of our development. When we think about night and weather, our trucks are actually operating in these conditions on a daily basis already. There’s a matter of validation to ensure that performance and resolve minor issues. We’re going to continue to evolve the Aurora driver, moving through our future generations of hardware; effort will be needed, but there’s no fundamental change in the way we have to develop anything. We're actually in a strong position to begin with.
That’s excellent. Just quickly to follow up on Uber Freight. It seems like they’re a great partner. It sounds like there are many potential customers within that ecosystem. Maybe we could talk about the ramp roadmap. It’s more of a framework that I’m curious about. Is the idea to sort of take on 10 or 20 new customers over X number of years and get each to tens of vehicles, or is there a benefit of scale to getting one to five customers at a very large amount, more than tens of vehicles to get to hundreds that you want in the fleet over the next two years?
I think it’s a bit mixed. Density within a lane for a carrier is something that both the carriers look at and we think about. Some of our carrier partners have a lot of traffic and would like to supplement it with autonomous trucking to enable more consistent flow on a lane, pick up new business, etc. There are some customers that don’t have a great driver supply on a specific lane that would like to use autonomous trucks to enter new markets. Every one of them will be a little unique. Generally, the larger carriers that we talk to think in larger numbers, so while five trucks are interesting, they won’t materially change their business. The benefit of the Uber Freight relationship is to help reach that middle market group you’ve mentioned; we can leverage that, create dedicated shipping lanes where we match autonomous trucking capabilities with specific lane shipping needs. Uber Freight has a network of carriers that are in this 10 to 25 fleet range, so we think that will be our focus in the long term. Obviously, it’s better for us and a little simpler to start with the larger numbers, but our goal is to ensure the technology helps transform the industry for all players, not just the large ones.
Excellent. And sort of a combo of Uber Freight market and maybe direct to some of the larger carriers. Thanks again so much, team.
Thank you.
Thank you. Our next question comes from the line of Colin Rusch with Oppenheimer. You may proceed.
Thanks so much, guys. As you look at expanding routes, can you talk about how critical the simulation technology is in terms of being able to get into some of those new routes a little bit faster than some of your peers?
Yes. Regarding our simulation technology, it’s a critical part of how we approach validation. Just trying to drive a bunch of miles won’t get you there; we need to have conviction that we understand the conditions that the vehicle will operate in and that it will respond safely to them. We’ve talked in the past about our approach to simulation, and we categorize it where there’s stuff that we can instantly obtain from driving for a few hours on the road. There are things we've experienced over the 3 million miles we’ve driven that we can amplify for rare elements. Thankfully, we also have seen numerous bad things happen on the road, which provides valuable data for our simulation capabilities and gives us confidence on how the vehicles will respond.
That’s super helpful. Given you’ve discussed driver expense and insurance rising, but also noting extreme labor productivity moves, as you think about the pricing model on a medium- to long-term basis, how quickly can you begin pushing forward some incremental price, or is that a consideration yet?
Yes. It’s a bit premature to think about that yet. We have to focus on delivering on the technology promise again. I think pricing will work itself out; we’ll deliver substantial value and are confident in achieving it, while providing high margins for ourselves. Our focus on safety is paramount, but we’ve got many aspects of value to deliver. We talk about fuel efficiency, which can yield immediate benefits to our partners, as well as reduced insurance costs, and improved asset utilization and operational flexibility. We think there’s an opportunity to transform pricing across the industry, make it safer, and create tremendous value for all.
What I’d add to what Dave said is, you’re astute to observe this will be a premium product and create significant value for customers. We’ll navigate pricing based on how much we're trying to expand and grow our market share versus optimizing for price. This will be an exciting part of our journey in the next decade.
Great. Thanks so much, guys.
Thank you. Our next question comes from the line of Chris Pierce with Needham. You may proceed.
Hey, good afternoon. Could you guys give us some detail on mapping? It’s become a hot-button topic related to the incremental validation you talked about on new lanes. I want to get a sense of others talking about mapping being less important; you guys lean into maps, similar to what Waymo does as well. I’d love to hear your view.
The intuition I’d give you to start is, if you think about driving around your neighborhood versus hopping into a major city you don't visit often, you feel much more confident driving in familiar surroundings. Maps allow the truck to understand its surroundings better. If done poorly, it’s complicated and hard. If done well, it becomes a strategic advantage. We’re demonstrating that we can provide updates to our map in hours. This flexibility and foreknowledge that a map provides is beneficial. We believe in leveraging both hardware and software effectively.
Thank you for that. We’ve talked about fuel efficiency a couple of times. Can you quantify how much longer these trucks can drive in terms of miles or how far they can go before service or before they need to be turned over?
The short answer is that we approach each trip differently. We actively manage the trucks' serviceability and their uptime. We do regular inspections every time we send them out. It’s important. We’re constantly monitoring performance indicators to maximize reliability. While the usage pattern will be similar as with human drivers, our drivers maintain more consistent operation, leading to less wear and tear. So we will have to provide more data to prove this out, but we’re confident that how we drive and inspect is advantageous for service reliability.
Thank you for the detail. I appreciate it.
Thank you. Our next question comes from the line of Mark Delaney with Goldman Sachs.
Yes. Good afternoon. Thank you for taking my questions and a big congratulations to the entire team. I know this is something you all have worked on for many, many years. It’s wonderful to see and I wish you the best in your next endeavors.
Thank you, Mark.
David, can you expand on what’s leading to the higher level of capital raise you now expect? Is any of that due to an expectation that gross margins might be lower or OpEx needs might be higher than you previously thought? Or is this just about having more flexibility to potentially grow faster and provide an extra cushion on the balance sheet?
So no, it is not indicative of deterioration in gross margins. There’s always a bit of pressure in terms of our hardware kit costs relative to how tariffs shake out. We’re aware of that, but we don’t see that as the issue.
If I think about some of the fundamental drivers, like first let’s start with we have $1.2 billion in cash. We’ve been able to consistently extend our ability to use that money for longer. We expect to be able to fund through 2026. Our quarterly burn rate has been well below what we’ve expected. The last thorough analysis we did about how much capital we need to achieve free cash flow positive was in 2023. Looking at where we are today, we are the only autonomous company out there operating a driverless product. We want to have flexibility to enhance our technical and commercial lead. Also, we launched a couple of months later than expected, leading to our needs shifting further down the line.
That all makes sense. Thank you. My other question was about the number of miles your trucks can do. The roadmap in your presentation today shows that you expect to expand the types of weather and lighting conditions your trucks can operate in by the end of the year. What would that mean in terms of how many miles on an annualized basis those trucks can do exiting the year, and how does that compare to how many miles the trucks can do currently?
If we’re conducting our operations, we typically operate during the daytime. For example, if you take off in the morning to do a round trip, that’s roughly 400 miles, typically over an eight-hour period; depending on the season, we might vary between 400 to 600 miles. After unlocking nighttime capabilities, we anticipate being able to double that utilization. If we can validate night driving, that allows us to expand operational hours effectively from approximately eight to sixteen hours per day. That’s a significant opportunity, and we want to optimize on how we drive asset efficiency.
Thank you.
Thank you. We will take our next question from the line of Itay Michaeli with TD Cowen.
Great. Thanks. Hi everybody and congrats on the achievement. Just two follow-ups for me. First, could you walk us through the steps you typically take when you expand a lane? And of those steps, how should we think about go-forward acceleration in lane expansion once you go through your first few expansions over the next year or so?
Yes. I think each successive lane will become easier. Today, we completed the majority of the driving task. As we unlock new lanes, there are some additional things we’ll need to handle that aren’t currently validated. One big example is customs and border patrol stations. Currently, we drive through those but haven’t validated for them yet. We expect the process for unlocking new lanes to accelerate rapidly, as the freeway system is designed to be uniform and consistent. It’s taken us eight years to get to our first lane, but by the end of the year, we expect to have four, and then from there, it should accelerate even faster.
That's very helpful. As a quick follow-up, the shareholder letter mentioned some exciting performance gains in the second generation kit. Could you elaborate on that and to what extent those gains might help you expand into further operational design domains (ODDs)?
Yes. For that system, we expect to see incrementally farther than we can today. The First Light LiDAR that our technology is developing is best-in-class and will continue to improve, allowing us to react more effectively to hazards on the roadway. The goal is to drive down overall economic costs as we initially industrialize and then take large steps with Continental’s third-generation hardware, which will also enhance our capability to scale.
One element mentioned in the presentation is the scaling aspect. We’ve built a small number of first-generation kits to demonstrate our launch. This next generation drives down costs and improves reliability while also allowing us to scale to meet the demand in markets like the lower U.S.
That’s very helpful. Thank you.
Thank you. We will take our next question from Scott Group with Wolfe Research.
Hey, guys. This is Cole on for Scott Group. I know you’re operating your fleet right now, and it’s good to hear there’s a lot of enthusiasm from partners post-launch. But at this point, are there any firm commitments from carriers looking to utilize the Aurora driver with their fleets, particularly once the new Fabrinet and Continental hardware goes into place? Alternatively, are there indications about how quickly some larger carriers want to scale your technology post-launch?
Our model has been to continue our own fleet operation for some time, which we view as very important for two reasons: one, to address quick operational insights into the challenges faced while deploying new technology and one, to ensure we provide a great experience and value proposition to customers before transitioning it to them for remote support. We have commitments for us to operate trucks for customers and positive indications from larger customers. However, as Dave mentioned earlier, larger customers typically don’t engage for five trucks; they prefer larger numbers that provide concrete value. So that will develop alongside our second and third-generation hardware.
With our pilot partners, there’s always been an aligned mission regarding the goal of autonomous trucking. Every partner, except for Uber Freight, has the intention to buy trucks equipped with our Aurora driver and scale the AV platform. Our task is to demonstrate the technology promise while getting the necessary hardware in line.
That’s helpful. Have you been approached by Daimler or Navistar to start conversations about new partnerships, and are there any thoughts about consolidating the carrier market once the technology scales?
We have ongoing conversations across the industry and would be thrilled to partner with every OEM. That’s our aspiration: to ensure that any customer who needs access to your driver can use it on whichever vehicles they prefer. We are eager to see those conversations bear fruit.
Thanks. If I could squeeze in one last question, I know you’re on your first hardware generation, but as you transition to your Fabrinet and Continental generations, can you talk through the execution risk, or how transferable the software is as you integrate with the new hardware?
Yes. We have a strategy for how we’re evolving from our current hardware to Fabrinet’s second-generation hardware to Continental's. We’ve had these work streams in flight for quite some time. This is not a sudden realization—we’ve been executing this strategy. Of course, there’s execution risk, but it’s very manageable. We have a clear plan to ensure a smooth transition.
Thanks, Cole, so much. We’re out of time. We appreciate everyone’s questions, and for anyone we didn't get into the queue, feel free to follow up and we can take it offline.
Thank you. This does conclude today’s program. Thank you for your participation. You may disconnect at any time.