Aurora Innovation, Inc.

Greetings. Welcome to the Aurora Second Quarter 2022 Business Review Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Richard Tame, Chief Financial Officer. Thank you. You may begin.

Thank you, Alex. Good afternoon, everyone, and welcome to our second quarter 2022 business review call. I am introducing the call today as Stacey is under the weather. 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 is Chris Urmson, co-founder and CEO. Chris will provide an update on the progress we have made across the key pillars of our business, and I will recap our second 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 has ended. I'd like to take this opportunity to remind you During the call, we will be making forward-looking statements. This includes statements relating to the achievement of certain milestones around the development and commercialization of the Aurora driver on our anticipated timeframe, the timing of availability of autonomy-enabled truck platforms, the expected performance of our business, and potential opportunities with partners and pilot customers, expected cash runway, and overall future prospects. 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 included in our quarterly report on Form 10-Q for the quarter ended March 31, 2022, filed with the SEC on May 12, 2022, as well as the current uncertainty and unpredictability in our business, the markets, and 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, 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. With that, I will now turn the call over to Chris.

Thank you, Richard. We're pleased to report a strong second quarter. We made critical technological progress toward commercial deployment across multiple fronts. We achieved a significant milestone with the launch and successful demonstration of our fault management system. And we introduced a suite of new driving capabilities in our Beta 3.0 release that improved the Aurora's drivers' performance on service streets, ramps, highways, and construction zones. We also expanded our commercial operations with FedEx, launched new pilots with Werner and Schneider, and made significant progress with our OEM partners on their respective driverless platforms. It is through this progress that we see a clear path to a driverless future. As we move closer to the launch of our first commercial product, we recognize the value in providing a more tangible way to measure our progress. In our shareholder letter that we published this afternoon, And also on page three in the slide deck, we introduced our roadmap for the commercial launch of our autonomous trucking product, Aurora Horizon. Our roadmap outlines progress we have made this year and the work that remains between now and our planned commercial launch. It encompasses the key components and dependencies of our business, the Aurora driver, operations, and the vehicle platforms. Let me walk through some of the significant milestones highlighted on the roadmap For the balance of 2022 and the first quarter of 2023, our technical development work will focus on releasing the remaining capabilities that we expect the Aurora driver will require to drive commercial loads on our launch lanes. We expect the Aurora driver to be feature complete by the end of the first quarter of 2023. Feature complete means we will have implemented all of the capabilities necessary for launch and will have removed all policy interventions. As a reminder, we define a policy intervention as an action our operators take to preemptively disengage the Aurora driver when we know it is not yet capable of confidently navigating a particular scenario. Throughout development and once the Aurora driver is feature complete, we expect to continue validation and compiling the evidence for the safety case for our commercial launch. When the Aurora driver is feature complete and as we work towards commercial readiness for the Aurora driver by the end of 2023, We expect to begin sharing a quantified measure of the Aurora driver's autonomy performance quarterly to show our progress towards this critical milestone. We look forward to outlining this autonomy performance framework at our upcoming Analyst and Investor Day in September. Earlier this year, we committed to demonstrating our fault management system during the third quarter. Our FMS is designed to actively monitor the health of the vehicle, including the self-driving software, sensors, and onboard computer. When it detects an issue, the SMS will intervene, navigating the vehicle to a safe stopping location where the issue can be addressed. We achieved this milestone earlier than expected and demonstrated on Aurora driver-powered trucks operating at highway speeds. This speaks to the incredible work of our team, who defined, implemented, and validated over a thousand requirements to achieve this milestone, while also making rapid advances across a range of other technological areas critical for commercial deployment. We have included a video of the demonstration on page four in the slide deck. Engineers injected artificial faults representing sensor damage. The system detected these faults, assessed their severity, and responded by activating the autonomous vehicle's hazard lights, reducing its speed, and safely pulling over to the side of the road. As with other elements of the Aurora driver, the fault management system was developed and extensively tested first in simulation, enabling safer and more rapid implementation in the real world. As we move toward commercial launch, our fault management architecture will advance to recognize and respond to additional safety issues while on the road. I experienced this system in action firsthand in June when I joined our vehicle operators during testing just outside of Fort Worth. It was a thrilling moment that demonstrated the maturity of the Aurora driver. This is the foundational capability for removing vehicle operators and a meaningful step towards satisfying the fail-safe core claim of our safety case and ultimately delivering a safe, commercially ready driver. During the second quarter, we also released Aurora Driver Beta 3.0, continuing our commitment to deliver quarterly technical updates that advance the Aurora Driver. This update debuted capabilities to enable end-to-end autonomous operation between Aurora's terminals and shows how the Aurora Driver can safely navigate increasingly complex and critical situations that are necessary for the deployment of our commercial trucking product. We've included a few videos in the slide deck to bring some of these capabilities to life. On page six, after exiting our El Paso terminal, you can watch the Aurora driver making an unprotected right turn onto the westbound frontage road and proceeding to execute a Texas U-turn to merge onto I-10 eastbound to Fort Worth. Additionally, the Aurora driver can now handle long downhill grades using engine braking to avoid excessive wear and the danger that comes from overheating brake pads. In the video on page 7 of the slide deck, you can see the Aurora driver on the Fort Worth to El Paso route descending Ranger Hill on I-20 for 3 miles at a 3.5% downgrade. Without engine braking, this hill cooks brake pads, reducing their life dramatically. Now the Aurora driver autonomously applies engine brakes, increasing safety for all drivers on the road. And on page 8 of the slide deck, the Aurora driver is on the highway and plans to change lanes as indicated by the green path. but another vehicle has aggressively cut into the lane. I'm sure we've all had similar experiences where we've had to make split-second decisions about how to adjust our driving. Here, the Aurora driver recognizes that another vehicle is now occupying the space and safely returns to its lane, ultimately executing the lane change once it can safely do so. The National Highway Transportation Traffic Safety Administration data shows that 9% of all accidents occur during lane changing and merging on highways. Given this relative frequency, we've continued to refine the logic by which the Aurora driver reasons about and negotiates lane changes with other actors. During the third quarter, we plan to launch capabilities that include identifying and responding to debris and navigating even more complex construction zones, including the detection of lane markings that have shifted. These advancements put us on the path for the Aurora driver to be feature complete by the end of the first quarter of 2023, and commercially ready by the end of 2023. While we are bringing new capabilities online, we are simultaneously improving our performance on existing capabilities. As you can see in the chart on our shareholder letter, over the course of the second quarter, we drove a significant improvement in required vehicle operator interventions for localization issues on the Fort Worth to El Paso lane, with no intervention seen in the final weeks of the quarter. This improvement stands from advancements in our HD mapping system, the Aurora Atlas, and the Aurora Driver that enabled our vehicles to better adapt between using lane markings and geometric data to precisely position themselves. These developments make the Aurora Driver's performance more robust in construction zones and highway segments with few distinct road features, such as signs and off-ramps, as well as long stretches of rapidly growing vegetation. All of these conditions are common on rural routes like Fort Worth to El Paso. Now, turning to our pilots, during the second quarter, we doubled our commercial miles driven across our pilots and lanes and also saw improved autonomy performance when compared to the first quarter, further demonstrating our progress towards the commercial launch of the Aurora driver. One of the most tangible ways to measure our performance and progress is the feedback we receive from our customers themselves. Given our strong performance since the launch of our pilot with FedEx, we further expanded our collaboration with them earlier this year, growing our pilot to include the 600-mile Fort Worth to El Paso lane. We're currently autonomously hauling FedEx loads under the supervision of vehicle operators daily between Dallas and Houston and weekly between Fort Worth and El Paso. Demonstrating our autonomous technology through this pilot is one key aspect. Equally as important is that we are operating this pilot in a commercially representative manner. This means FedEx expects these vehicles to perform to its exacting requirements for scheduling, drop and hook trailer operations, and on-time delivery. We're pleased to report that across each dimension, our pilot fleet has delivered. To date, this pilot has allowed both Aurora and FedEx to refine our operations and prepare for future growth. We are proud of our performance since the launch of the pilot. Through the second quarter, we have delivered over 335 loads, driving over 80,000 cumulative miles, with 100% on-time performance and with no cancellations. With each trip, the Aurora driver is providing thousands of FedEx customers with packages that were autonomously transported. We're excited to have been invited by FedEx to their Investor Day earlier this summer to share how we are integrating the Aurora driver with their network, and you can get a flavor for the operational elements of this partnership in a video that FedEx developed, which we have included on page 10 in the slide deck. We continue to see broad demand to apply our technology. This week, we are launching our fourth pilot. Aurora-powered trucks will autonomously haul freight under the supervision of vehicle operators for Schneider National, one of the industry's largest multimodal transportation providers. We'll begin with weekly hauls on our Dallas to Houston lane, and we expect to increase that frequency as our relationship expands. We look forward to working with Schneider to understand how best to incorporate autonomous trucks into its fleet with the goal to improve efficiencies and address the growing demand to move goods. We believe the sheer breadth and diversity of our customer pilot programs, including FedEx, the largest less than truckload freight carrier in the United States, Werner, a top five full truckload carrier, Schneider, one of the largest multimodal carriers, and Uber Freight, a significant freight broker, is a testament to both our industry-leading technology and operational excellence. These programs set us apart in the autonomous freight space. Through strong execution on our pilot programs, we are continuing to build trust and credibility in the industry. We believe the strength of these relationships positions us for an effective driverless commercial launch when our technology is efficiently mature to meet our rigorous safety standards and the requisite truck platforms are ready. On that front, we continue to make significant progress with both PACCAR and Volvo trucks in the preparation of scalable, autonomy-enabled truck platforms. Working in close partnership, our teams have defined product requirements, aligned on detailed technical requirements, selected and awarded key component suppliers, designed key interfaces between the Aurora driver and the vehicle platform, and built initial prototypes. As strong as the collaboration progress has been, these programs are not immune to the industry challenges we continue to see. Taking into account current supply chain constraints, We now expect the delivery of scalable, autonomy-able truck platforms in the first half of 2024. While this program timing is later than we had originally expected, we see the recent awarding of key supplier contracts as a major point of scheduled risk reduction in these programs. With the delivery of the truck platforms, we expect to be able to complete final validation of the integration of the Aurora driver with the truck platform in preparation for release of a scalable trucking product by the end of 2024. Turning to the regulatory landscape, as we work closely with our vehicle partners toward delivering our product, we also continue to engage with policymakers on their support for safe deployment and development of self-driving technology, and ultimately, how together we can make our roads safer and transportation systems more efficient. This past quarter, we continue to build legislative and regulatory support in California and Pennsylvania. We work with others in our industry to encourage regulation to permit deployment of autonomous trucks in California. And we joined others in the industry in advancing legislation in Pennsylvania that would facilitate fully autonomous operation in the state. Additionally, as we set the foundation for our future expansion, I'm pleased to share that the state of Arizona has granted Aurora's request to test and operate in their state. And we have submitted notification of our intent to operate in New Mexico. From a regulatory perspective, this now allows Aurora to commercially deploy our self-driving technology in Texas, New Mexico, and Arizona when we're ready to do so, bringing us one step closer to deploying on one of the busiest freight corridors in the country from Dallas to San Diego. Finally, I'm immensely proud of our safety culture at Aurora. We finished the second quarter celebrating National Safety Month, an opportunity to reinforce, recognize, and reflect on our safety practices while also giving the team an opportunity to hear from safety experts outside of Aurora. At Aurora, we put an emphasis on developing and implementing safety best practices to ensure our employees are empowered and have multiple outlets to raise safety concerns without fear of retaliation. We review and address this feedback to continuously improve our technology, policies, and internal practices. And I'm proud to share that during the second quarter, we reviewed and closed 100% of safety concerns raised within the quarter. Everyone at Aurora, from our vehicle operators to myself, plays a role in safety by speaking up if something doesn't meet Aurora standards. In closing, remaining laser-focused on our plan and executing on what we can control is imperative in the current environment. Our first priority, and where we are focusing our capital, is the commercialization of Aurora Horizon. We expect disciplined focus and prioritization to help extend our cash runway to mid-2024. We can't wait to show the world what the Aurora Driver can do as we advance our mission to deliver the benefits of self-driving technology safely, quickly, and promptly. I will now pass it over to Richard, who will review our financial results. Thank you, Chris.