Aurora Innovation, Inc.

Greetings and welcome to the Aurora Third Quarter 2024 Business Review Call. At this time, all participants are in a listen-only mode. A question and answer session will follow a formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Stacey Feit, Vice President of Investor Relations. Thank you, Stacey. You may begin.

Thanks, Paul. Good afternoon, everyone, and welcome to our third quarter 2024 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 8K filed today with the SEC. On the call with me today are Chris Urmson, co-founder and CEO, and David Madej, CFO. Chris will provide an update on the progress we have made across the key pillars of our business, and David will recap our third 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 that during the call, we will be making forward-looking statements. This includes statements relating to the benefits of integrating artificial intelligence into our products, the safety benefits of our technology and product, the achievement of certain milestones around and realization of the potential benefits of the development, manufacturing, scaling, and commercialization of your world driver and related services, including relationships and anticipated benefits with partners and customers, and on the timeframe we expect or at all, the market opportunity, the expected future market size, our product's compatibility with those of partners and customers, our expected market share, the efficiency of our validation process, our remote assistance efficiency for driverless operations, and profitability of our products and services, regulatory tailwinds and framework in which we operate, 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 annual report on Form 10-K for the year ended December 31st 2023, filed at the FCC as amended, as well as current uncertainty and unpredictability in our business, the markets, and economy. Additional information will also be set forth on our quarterly report on Form 10-Q for the quarter ended September 30th, 2024. 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 just claims 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 8K filed today with the SEC, and may also be found on our Investor Relations website. With that, I'll now turn the call over to Chris.

Thank you, Stacey. Today, we stand on the brink of a new era in mobility and logistics that will bring a safer, more efficient, and more accessible future for everyone. With commercial launch now within sight, we are closer than ever to unlocking the benefits of the Aurora driver for our customers and the motoring public. We're excited that the broader industry shares our vision. Enthusiasm for our technology continues to build among many of the industry's most respected carriers. This sentiment was particularly evident at our recent partner summit and is further underscored in our commercial contracting progress. With another launch customer signed, our expected launch capacity is now fully contracted, and we are in the final stages of contracting our remaining second half capacity to match our anticipated supply. Importantly, with the support of many of Wall Street's largest institutional investors, we completed another successful capital raise in August, adding nearly half a billion dollars to our balance sheet. This incremental capital extends our runway well into 2026, and we expect it to fund the initial phases of our scaling strategy. As we progress towards commercial launch, we continue to lead the industry with our commitment to safety and autonomy performance transparency. To begin driverless operations, we must close our safety gates for the Dallas to Houston launch lane. Our safety case framework is a comprehensive, evidence-based approach to confirming that our self-driving vehicles are acceptably safe to operate on public roads. We quantify our progress toward closing our Dallas to Houston launch lane safety case through the Autonomy Readiness Measure, or ARM, which is a weighted measure of completeness across all claims of the safety case for our launch lane. We remain the only company in the industry that has provided this level of transparency. As of the end of October, ARM was 97%. With our most recent software release, we have validated a majority of highway driving. We're now primarily focused on final behavior refinement and validation for components of surface streets that we sequence later in our work plan, some rarer construction elements, and closing a small number of vehicle claims specifically related to redundant systems. Validation of the Aurora driver's perception system is virtually complete with over 400 modes validated and just six remaining. The perception capabilities are truly outstanding, not just in everyday conditions, but also in just about any condition the world throws at it. On page five of our presentation, we've shared a collection of challenging scenarios that, while rare, do occur. In one case, the Aurora driver detects a motorcycle speeding down the road at an astonishing 150 miles per hour. In another, it spots someone lying under a car on the freeway from over 150 meters away. The railroad driver also skillfully tracks a work convoy blocking multiple lanes. And in one of the most unpredictable and dangerous scenarios, it detects a jaywalking pedestrian suddenly emerging from behind trees on a dark, rainy night when visibility on the highway is very limited. Each of these situations poses extreme danger, whether due to a small high-speed actor, low-profile individuals that a human driver would likely not notice, in-motion work crews, or poor visibility and erratic pedestrian movement. Yet in every case, the Aurora driver calmly perceives the scenario. These perception capabilities enable the Aurora driver to navigate the complex environments it encounters. In the video on page six of the presentation, you can see the Aurora driver's superhuman perception capabilities on the road. The Aurora driver is navigating heavy traffic on I-45 just outside of Houston and detects a motorcycle 100 meters behind, illegally lane splitting through a narrow space between trucks. The Aurora driver quickly identifies the motorcycle as what we refer to in the self-driving industry, a vulnerable road user, and adjusts, creating as much space as possible. Unlike a human driver, who would likely focus on the vehicle directly ahead and not anticipate this behavior from behind, the Aurora driver has 360 degree awareness and can respond proactively to mitigate danger. Similarly, in the video on page seven of our presentation, we see the Aurora driver traveling through Huntsville, Texas on a dark night at speed. From 230 meters away, it detects a person attempting to run across the highway and immediately takes action, slowing down while lane changing away from the pedestrian's path to create additional safe space. Once it is safely passed, the Aurora driver merges back into its preferred travel lane, successfully navigating this complex, very high risk scenario with precision and care. With further confidence in the Aurora driver's performance, we are transitioning to single vehicle operator for some of our commercial loads as we approach driverless operations. This operating mode also provides the discipline to fully implement our remote assistance capabilities and supports our analysis for remote assistance efficiency for driverless operations. Based on our current modeling, we expect to be able to operate at least 10 trucks per remote assistance specialist by the end of 2025, which is a meaningful threshold that supports our path to achieving positive gross profit. We expect to continue increasing this ratio throughout 2026 and beyond. Another key metric we use to assess the Aurora driver's performance and commercial readiness is the autonomy performance indicator, or API. The indicator penalizes the use of onsite support, which will be the most expensive support provided to enable the Aurora driver. We are focused on driving up the percentage of commercial loads that did not require any form of onsite support, which we refer to as 100% API loads. As a reminder, we do not anticipate that aggregate API will ever reach 100%, even at launch, because certain situations will always require onsite support. However, we believe the percentage of 100% API loads is a strong indicator of our progress toward commercial launch, and we expect this metric to reach approximately 90% by commercial launch. During the third quarter, 80% of the commercial loads on the Dallas to Houston launch lane had 100% API. which is five percentage points higher than last quarter and consistent with the performance we saw in the June stable software release. To supplement our internal ARM and API metrics, during the third quarter, we invited leading authorities in commercial driver's license training and evaluation, JJ Keller and Roadmaster, to assess the Aurora driver's proficiency. They evaluated our system as they would assess a traditional truck driver and found the Aurora driver performed exceptionally well meeting or surpassing the standards expected of a professional driver. We feel good about our progress and are confident in our ability to close the safety case for driverless operations on our launch lane. With additional visibility on the time needed to complete the aforementioned remaining validation, we now expect to launch commercially in April 2025. While this is modestly later than we had intended, this timing remains within the margin of error we have anticipated and conveyed throughout 2024. With our intention to introduce the Aurora driver with a crawl, walk, run approach, this shift to our timeline will have a negligible financial impact and does not affect our scaling efforts on our path to self-funding. During launch, we expect to deploy up to 10 driverless trucks in commercial operations, starting with one driverless truck and transitioning the balance to driverless. We are deliberately starting this way as our early efforts will be focused on exercising the full product suite to ensure a seamless product launch while demonstrating the value proposition for our customers and continuing to build trust with all of our stakeholders. In the second half of 2025, our focus will be expanding our product capabilities, adding new lanes, and increasing capacity to tens of trucks by the end of 2025. To ready our customers for driverless operations, in September, we hosted our annual Partner Summit, where we were joined by more than 20 of the nation's largest and most sophisticated carriers, In aggregate, these businesses operate well over 100,000 Class 8 trucks. We brought these customers together with industry safety experts, regulators, first responders, and law enforcement for collaborative conversations on driverless operations. We also announced and soft-launched our Partner Success Program, in which customers have the opportunity to more deeply evaluate and assess the Aurora driver's performance as a final step to move forward with driverless operations. The enthusiasm was palpable. Some of participants on average rated the ride experience 4.7 out of five across a set of 20 criteria. While all eyes are first on the Dallas to Houston launch lane, our customers have also been keenly interested in when the Aurora driver will begin to operate beyond Texas. We regularly gather feedback from many of the industry's leading carriers regarding where the Aurora driver can add the most value. At the summit, we announced that in 2025, we plan to extend our Fort Worth to El Paso lane on which we are autonomously hauling loads daily to Phoenix, one of our customers' most frequently requested lanes. The Fort Worth to Phoenix lane spans over 1,000 miles and takes at least 15 hours to complete, making it particularly compelling for autonomy since the Aurora driver isn't subject to hours of service limitations and can operate nearly 24-7. We expect to begin commercial pilots for customers between Fort Worth and Phoenix in the first half of 2025 with the intent to go driverless on that route later in the year. With the promise of how the Aurora driver can benefit not just operations between Dallas and Houston, but also their network more broadly, Schneider recently executed their contract for 2025 volume and joins our commercial launch cohort. As we prepare for commercial launch, we continue to autonomously haul freight for all our pilot customers, including FedEx, Werner, Schneider, Hirschbach, Uber Freight, and others. We are scheduling nearly 160 commercial loads per week, or more than double the commercial volume we were executing a year ago. Cumulative to date, we've autonomously delivered, under the supervision of vehicle operators, more than 8,200 loads, driving over 2.2 million commercial miles with nearly 100% on-time performance for our pilot customers. As our customers gain confidence through hands-on experience, we're also seeing growing optimism around autonomous technology from state governments, including a request from the California DMV for informal public input on draft regulatory language regarding the testing and deployment of autonomous trucks. While preliminary, we view this as an encouraging step toward a process that would explicitly allow deployment of self-driving trucks in the state. To demonstrate the safety benefits the Aurora driver would bring to California's roadways, which tragically see more than 400 fatal collisions involving trucks each year, we examined data from 14 fatal crashes on I-5 in Sacramento County that occurred between 2018 and 2022. We recreated these collisions in simulation to understand how the Aurora driver would have acted if placed in these situations. Our analysis found that the Aurora driver would not have caused any of the fatal collisions. We included one of these simulations on page 14 of the presentation. In the original incident on I-5, a three-way collision occurred due to a wrong-way driver on the highway. We created a variation of the original incident by simulating in simulation by placing the Aurora driver in the position of avoiding the wrong-way driver while accounting for a passenger vehicle alongside it in the adjacent lane. In the simulated scenario, a proprietary long-range first light LIDAR recognizes the wrong-way driver far in advance and enables the Aurora driver to safely complete a contested lane change to move out of the way, preventing the collision. More than 5,000 fatal crashes involving large trucks occur on our nation's highways annually. We applaud the California DMV for undertaking the robust stakeholder driven process as it considers the development of a regulatory framework that would enable the safe deployment of autonomous trucks in California to fully realize the safety and economic benefits of this technology. We submitted public comments which were due to the DMV earlier this month and we look forward to continuing our work to help move these regulations forward. In the meantime, Under existing law and regulation, autonomous trucks can be deployed today in the vast majority of states in the US. All of the work we're doing to launch driverless operations in Texas is supporting the development of our playbook for rapid lane expansion to capitalize on the significant autonomous trucking opportunity. Last month, McKinsey and Company projected that the US will have the fastest autonomous truck adoption rate globally, with autonomous heavy duty trucks accounting for 13% of trucks on the road in 2035. Given the self-similarity of the U.S. Interstate Highway System and the power of our verifiable AI technology, we expect the Aurora driver to capture a considerable share of this opportunity. We anticipate the Aurora driver's capabilities to transfer across lanes, with the opening of new lanes requiring limited development just for incremental features. In fact, our team recently completed bidirectional mapping of the El Paso to Phoenix route, 450 miles each way in just two weeks. The Aurora driver navigated a vast majority of the lane autonomously in its first round trip. Autonomy software capabilities transferred seamlessly to the Phoenix lane as we anticipated with vehicle operator inventions for the inland border patrol station and some complex construction. We also expect the efficiency of our validation process to support more expeditious safety case closure for future lanes as the subsequent turns of the crank will naturally be faster. These factors give us the confidence in our plan to rapidly expand driverless operations to the Fort Worth to El Paso lane, and then further to Phoenix before unlocking additional lanes across the Sunbelt. To commercialize autonomous trucking across these lanes at scale, deep integration with OEMs on scalable, autonomy-able truck platforms is needed. We continue to make good progress with our OEM partners on our vehicle programs. During the third quarter, we integrated several new Aurora Driver-equipped Volvo V&L autonomous trucks into our fleet, and they're now operating in autonomy on the road alongside our PACCAR Peterbilt 579 trucks. Our exclusive partnership with Continental is designed to support scaling of the Aurora Driver hardware for high-volume lineside installation at our OEMs. This month, Aurora and Continental reached another partnership milestone. We finalized the detailed system and component level architecture and hardware selections for the scalable hardware-as-a-service generation of the Aurora driver. Our teams are preparing to start initial testing in the first half of 2025, as we continue to progress towards the start of production planned for 2027. At Aurora, we're driven by a mission to deliver the benefits of self-driving technology safely, quickly, and broadly. That mission has led us to now, where the Aurora driver is on the cusp of making self-driving trucks the new standard for safety, efficiency, and sustainability in the logistics industry. Tremendous opportunity lies ahead, and we're working tirelessly to capitalize on it. With that, I'll now pass it over to Dave, who will review our financial results.