Aurora Innovation, Inc.

Greetings, and welcome to the Aurora Fourth Quarter 2025 Business Review Conference Calling Webcast. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. You may be placed in the question queue at any time by pressing star 1 on your telephone keypad, and we ask that you please ask one question, one follow-up, then return to the queue. As a reminder, this conference is being recorded. If anyone should require operator assistance, please press star 0. It's now my pleasure to turn the call over to Stacey Fite, Vice President, Investor Relations. Please go ahead, Stacey.

Thanks, Kevin. Good afternoon, everyone, and welcome to our fourth 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 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 fourth 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'll 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, 2024, and other documents filed at the SEC, as well as the current uncertainty and unpredictability in our business, markets, and economy. Additional information will also be set forth in our annual report on Form 10-K for the year ended December 31st, 2025. 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'll now turn the call over to Chris.

Thank you, Stacey. 2025 was a defining year for Aurora and the future of logistics, marked by our launch of the first driverless commercial trucking operations on U.S. public roads. In just a few quarters, we proved the promise of our technology and further extended our first mover advantage. What began as steady progress is accelerated into compelling growth. In January, the Aurora driver passed 250,000 driverless miles, nearly triple the cumulative miles achieved through early October. We've expanded the driverless capabilities and will nearly triple our current addressable market to over 3.6 billion vehicle miles traveled. with the opening of seven additional driverless lanes. Crucially, we achieved this acceleration while maintaining 100% on-time performance and a perfect driverless safety record with zero Aurora Driver attributed collisions. The Aurora Driver is now capable of driverless operations in inclement weather, including rain, fog, and heavy wind. We also started supervised autonomous freight delivery to support multiple customer sites. With our latest software release, we believe the Aurora driver is now sufficiently generalized for us to begin expanding across the Sun Belt in 2026. The launch of our second generation hardware kit on a new fleet of trucks expected in the next few months will enable driverless operations without a partner requested observer. This new fleet will support our objective to exit 2026 with more than 200 driverless trucks in operation as we prepare for industrialized scaling in 2027 and beyond. We expect this expansion to drive a multifold increase in revenue in 2026 with an exit rate that will generate significant financial momentum heading into 2027. We're seizing the opportunity to fundamentally improve safety and restructure the economics of one of the most critical industries in the world. We see a near future in which tens of thousands of Aurora driver-powered trucks deliver freight across the U.S. and ultimately globally. With our latest software release, we unlocked a critical expansion of our operating domain with the validation of driverless operations in multiple forms of inclement weather, including rain, fog, and heavy wind. During 2025, inclement weather of all types constrained our driverless operations in Texas roughly 40% of the time. Our latest software release drives a step change in potential availability and utilization across the Sun Belt, a core component of our value proposition. As planned, our latest software release also expands driverless operations to multiple lanes, including El Paso to Fort Worth and bidirectional travel between El Paso and Phoenix. The resulting thousand mile multi-state lane between Fort Worth and Phoenix far exceeds hours of service limitations for a traditional driver, thereby enabling superhuman asset utilization for our customers. With the additional driverless capabilities unlocked in our latest software release, We believe the Aurora driver is now sufficiently generalized for us to begin expanding across the Sunbelt in 2026, aligned with customer demand. This is a massive growth lever for Aurora. We leveraged this generalized ability to launch supervised autonomy operations this month on the bidirectional lanes between Dallas and Laredo and are targeting driverless validation this quarter. This 400 plus mile route expands the Aurora driver's operational domain through the San Antonio Austin, and Waco metros. This route is the nation's largest international trade gateway and a critical freight artery between the US and Mexico. Executing this expansion near simultaneously with Phoenix demonstrates our ability to rapidly open new lanes. This validates our core thesis that the Aurora driver can scale rapidly. Lane expansion requires two core components. First, the driving skills to operate safely in an expanding operating domain, and second, the mapping necessary to traverse the U.S. highway system and the surface streets to reach customers' facilities. Aurora Driver now has generalizable skills, and we've made meaningful progress automating the creation of new content for the Aurora Atlas, our proprietary high-definition math technology that enhances the safety and computational efficiency of the Aurora Driver. By leveraging our verifiable AI systems, our cloud-based algorithms are able to generate semantic components of the Aurora Atlas from collected data, automatically building portions of the map with little or no human assistance. This drastically accelerates the production of Atlas content, and we expect the pace of map expansion to continue to increase as we further optimize automation in our cloud mapping software. This mapping improvement enables us to efficiently support driverless deployment directly between customer endpoints at scale. and we've now begun supervised autonomous operations to support multiple customer facilities. Starting with Hirschbach, we're setting up endpoint operations in the Laredo to support Driscoll's. We're also running along I-20 for Detmar between their facility in Midland, Texas, and Capital Sands mining sites, as well as for one of the leading carriers in the U.S. from their Phoenix facility. With all of its capabilities, the Aurora driver offers unmatched value propositions. It can navigate the complexities of diverse road types, maintaining 24-7 operating schedules while providing endurance far beyond hours of service limits and deliver directly to customer endpoints. Our execution in 2026 will further reinforce this leadership position while showcasing the Aurora driver's inherent scalability to support the transition to a driver-as-a-service business model. We've already committed our capacity through the third quarter of 2026 and we'll finalize contracts for the fourth quarter once we confirm our year-end truck supply. As we turn to drivers of service in 2027 and beyond, customer interest already supports a pipeline of thousands of trucks. We're continuing to expand with our current travelers customers and recently announced a new opportunistic agreement with Detmar Logistics, a leading provider of dry bulk and frax end solutions. Detmar selected Aurora to support the growth of their business given we are the only company with driverless Class A commercial trucking operations on public highways and roads in the U.S. This customer agreement demonstrates the flexibility of the Aurora driver to deliver value in a multitude of use cases, enabling us to meet customers where they are to support their growth and efficiency. In 2026, Aurora driver-powered trucks will continuously haul for Axan for over 20 hours a day across a 60-mile route with 80% of the miles on I-20. This will enable Detmar to achieve nearly 24-7 superhuman asset utilization and effectively double their capacity to move sand for one of the world's largest multinational oil and gas companies. Supervised autonomous operations have begun, and Halls for Detmar will transition to driverless when we deploy our second fleet of driverless trucks, expected in the second quarter of 2026. With a successful deployment, we expect this customer relationship to meaningfully expand in 2027 and beyond with the transition to our DAS model. Our vehicle agnostic technology enables a multi-OEM strategy to provide truck supply for our growing customer base. This approach is anchored in our foundational partnerships with Volvo and PACCAR. Our partnership with Volvo recently entered the industrialization phase. The first group of Volvo V&L autonomous trucks equipped with the Aurora driver have come off the pilot line at their new River Valley, Virginia manufacturing facility following line-side integration of our second-generation commercial hardware kit. This milestone establishes the manufacturing foundation necessary to produce autonomous trucks at large commercial scale. Take a look at the video on page 13 of our presentation to learn more about the work the Aurora and Volvo teams are doing together, as well as to get a firsthand look at this line-side integration in action. Once Volvo completes validation of the vehicle-level firmware necessary for driverless operations, We will integrate these trucks into our driverless fleet. We're also advancing our new program based on the international LT truck. These trucks, targeted to launch in the second quarter of 2026, fortify our near-term capacity and will enable driverless operations without a partner requested observer. We're currently track testing our second generation hardware kit in preparation for on-road driverless operations. And we also recently selected Roush as the upfitter to leverage their manufacturing footprint which we are initially equipping to produce 20 trucks per week later this year. Looking further ahead, we continue to make great progress on our third-generation commercial hardware kit with Amovio, which is intended to supply tens of thousands of trucks. We welcome Amovio's recent selection of Amazon Web Services as their preferred cloud provider to support their development of an industrialized fallback system for the Aurora driver. Amazon Web Services has been a longstanding infrastructure partner of Aurora. As we execute our disciplined crawl, walk, run strategy, we are decisively advancing into the walk phase of operations while positioning to run by the end of the year. Just as the last two years brought robotaxis into the mainstream, we expect 2026 to mark the inflection point where the market recognizes that self-driving trucks have arrived and are quickly becoming a permanent fixture in our transportation landscape. If you're in the Sunbelt in 2026, you won't just read about the Aurora driver, you'll see it every day. This represents more than a technological achievement. It is the dawn of a superhuman future for freight. With the Aurora driver, we're deploying a system that sees in every direction simultaneously, operates with stamina that never stops the clock, and makes life-saving decisions in milliseconds without ever getting distracted. The era of superhuman logistics arrived, and Aurora's driving. With that, I'm going to hand it over to Dave, who will review our financial results.

Thank you, Chris. Now let's review our financial results, for which we have provided a summary on page 16 of the slide deck for reference. Fourth quarter 2025 revenue totaled $1 million across driverless and vehicle operator supervised commercial loads for Hirschbach, Uber Freight, Warner, FedEx, Schneider, and Volvo Autonomous Solutions, among others. The Aurora driver achieved another record number of commercial miles driven during the quarter. which drove a 25% sequential increase in revenue from the third quarter. We recognize revenue of $3 million in fiscal year 2025. Total year adjusted revenue inclusive of pilot revenue earned in the first quarter of 2025 before we began recognizing revenue with our commercial launch in the second quarter of 2025 was $4 million. Fourth quarter operating loss, including stock-based comp, totaled $238 million. Excluding stock-based comp of $48 million, R&D totaled $155 million, SG&A was $30 million, and the cost of revenue was $6 million. We used approximately $146 million and $581 million respectively and operating cash during the fourth quarter and fiscal 2025. Capital expenditures totaled $8 million and $31 million, respectively, during the fourth quarter and fiscal 2025. This cash spend was meaningfully below our externally communicated target, reflecting continued strong fiscal discipline. We ended the year with a very strong balance sheet, including a liquidity of nearly $1.5 billion in cash and short-term and long-term investments. During the fourth quarter, we generated net proceeds of $15 million from the issuance of Class A common stock through our at-the-market program, which we used to fund the tax liability associated with vesting of employee restricted stock units during the quarter. In 2026, we expect revenue of $14 to $16 million, up 400% year over year at the midpoint. Revenue will be back and loaded, with the fourth quarter projected to contribute over half of full year revenue as we scale driverless operations without a partner-requested observer following the launch of our new fleet. We anticipate exiting the year with more than 200 driverless trucks in operation. which translates to approximately $80 million in revenue on a run rate basis for our transportation as a service business in which we own and operate the trucks. This establishes a powerful foundation for 2027 when we expect the DAS model to commence. We expect our second generation commercial kit to drive a 50% plus reduction in our hardware costs. With this and other planned cost reductions, we are targeting breakeven gross margin on a run rate basis exiting 2026. To support our 2026 scaling plan, we expect quarterly cash use of approximately $190 to $220 million on average. We believe we have sufficient liquidity to achieve positive free cash flow in 2028. We plan to utilize the ATM to fund our ongoing RSU tax liabilities and cash bonus payments through 2027. We also expect to strategically leverage the ATM and or other mechanisms to solidify our balance sheet with an appropriate minimum cash balance to support our longer term operations. Building on the momentum of our landmark commercial launch, we are now focused on the execution and strategic investments necessary to scale. As we roll out our second generation commercial hardware kit, on our new truck fleet and accelerate driverless operations, we will further extend our leadership position in autonomous trucking, which we believe will deliver sustained long-term value for our shareholders. With that, we'll now open the call to Q&A.

Thank you. And I'll be conducting a question and answer session. If you'd like to be placed into question queue, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to move your question from the queue. And as a reminder, we ask that you please ask one question, one follow-up, then return to the queue. Once again, that's star one to be placed in the question queue. Our first question today is coming in from Ravi Shankar from Morgan Stanley. Your line is now live.

Hi, this is Nancy on for Ravi. Thanks for taking my question. Thank you so much for all the 2026 guidance, but it would be helpful to kind of square away the end of year chart guidance with the revenue expectations? Is there something that I should be thinking about with utilization there, or is that ramp up to over 200 really reserved for the near end of 2026?

Yeah, when we think about the guidance, again, we believe that we're going to have an outstanding position in the second half, but we are launching the fleet in the second quarter, and so there's going to be a sequential growth associated with that. So, Our revenue is going to be back and loaded really to the third and predominantly the fourth quarters. But we do expect to be operating more than 200 trucks at the end of the year. And we would expect that to translate to roughly $80 million in revenue that's leading into 2027.

Okay, got it. Thank you. And then Be also helpful to hear a bit more on your expected timeline within 2027 for the start of serial commercial production.

Yeah, it's a good question, Nancy. I think serial production is kind of it's going to mean different things to different people. I expect we would describe it more along the ways of how are we continuing to grow the driverless miles that we're operating and the revenue. We will be building upon our fleet of trucks that we launch this year, the international-based trucks, where we're going to have over 200, and you're going to get steady growth, and that's going to accelerate into 2027. In addition, we expect that we'll be adding on other platforms. Those OEMs haven't announced their final timing, but we expect that in 2027 we'll start to see incremental volume appear from that. Serial production is really mostly from how you would describe serial production. I think once we bring in our third-generation hardware kit with the Immovio, we then have the ability to start building tens of thousands of trucks, and that's kind of the trigger for more of a serial production that you would think of in the automotive industry.

Thank you. Next question today is coming from Andres Shepard from Cancer Fish Show. Your line is now live.

Hey, guys. Good afternoon. Thanks so much for taking our question, and congrats on all the great progress and all that guidance. Very, very helpful. Chris, David, maybe just a quick question on the target for the more than 200 trucks by year end. Hoping to get maybe a bit more color there if possible. That should probably correlate with the revenue ramp-up, so most of it back-loaded, maybe most of it Q4. And then how are you thinking about kind of piloted versus fully driverless? Just to be clear, are these going to be eventually fully driverless, or how are you thinking about the pilot or the observer there? Thank you.

Yeah. So when we talk about that fleet of 200-plus trucks, that is no observer, driverless, you know, no one behind the wheel, right? That's exactly where we're heading, and that's really a critical enabler of scaling. Okay. We have the trucks on order. We expect to see them delivered. And, you know, we've put in place a partnership with Roush to assemble and upfit these. So we're very excited about that. As Dave said, Q2 is when we expect the first of these to hit the road. And then we kick in the manufacturing kind of to scale this in Q3 at full rate, where we expect to be producing 20 trucks a week.

Yeah, and just one other thing. It's important to mention, like, So we talk about driverless. The miles that we report to you, these are driverless miles. We do have a ride observer who does not operate and does not have the responsibility to operate the vehicle. This is merely removing the requested partner ride observer requirement. So in future, you'll see the operations the same as before. We just won't have a ride observer, and that's an element for us to scale our business.

It's going to be a hell of a year. Looking forward to it. That's super helpful. Really appreciate the color there. Maybe one quick one for us. A number that resonated with us is the 50% improvement in the driver hardware cost of the new gen. Can you maybe help us understand that a bit better? Is that a result of the scale and the volume, but also some synergies on the cost side? Just hoping you can maybe give us a bit more granular either. Thank you.

Yeah, there's a collection of things. So the first-generation hardware, as we said in the past, we built in-house. We tested it thoroughly. We did all of the work necessary to have conviction and safety of it. But in parallel with that, we were working to produce a moderate-scale industrialized product as well, and that's the second-generation hardware. There we've been able to take another cut at the design for manufacturability. the design for cost, and we've taken material cost out of that kit. Part of that comes from computation, where we've saved some expenditure there as well. And then, of course, advancements in things like our first light LIDAR, where, again, we've been able to take a design for manufacturability and design for cost view to that, which was appropriate. What's even more exciting is as that third-generation hardware kit comes out with Amovio, there's another whole level of that that, again, comes with their experience in designing cost-effective parts for the automotive industry and their ability to tap into even larger-scale supply chains, which further drives down the cost of this. So, you know, it's – like I said, 26 is going to be a hell of a year, and 27 is going to be spectacular.

Thank you. Next question is coming from Colin Rush from Oppenheimer. Your line is now live.

Thanks so much. You know, with some of the incremental functionality that you guys are talking about here, can you talk a little bit about the inbound interest you're getting from incremental customers and how quickly you're able to move them through a sales process to get them on board here?

Yeah, I'd look at Detmar as a prime example of this. So we've talked for a long time about the value to customers of long hauls and being able to drive utilization of the assets up. Frankly, it didn't really occur to us to think about a situation like Detmar where the truck is not actually going that far. It's a 60-mile-each-way trip. But asset utilization is absolutely critical to their business. I guess they saw our launch, saw the announcement, came out and reached out to us. And they came to us because we're the only people who can do what they need, be able to drive both on the surface roads, go to their mine site, and drive on the freeway. And so, you know, that's an example of us being able to take this generalizable capability we have and then respond to customer demand. We continue to see other examples of folks who are excited about what this can mean for their business, and we'll share more as we move along here.

Great. And then in terms of some of the incremental functionality that you're talking about this year, I guess I'm trying to get a sense of cycle time with some of the learning processes. You guys have obviously done a great job with the simulation technology and validating things online, but I'm curious about how we can track the cadence of incremental operating domains and environments from a weather perspective. Throughout the year, it looks like we've got a pretty clear line of sight in the charts that you're providing, but just want to see how we should track that on a go-forward basis.

So I think what's exciting is we're near the end of the point where you're probably going to care about that. As I talked about, there's these two – elements to expanding where the vehicle operates. The first is having the generalizable set of skills that allow you to operate there. And the second is actually rolling out the map so that the vehicle has that extra kind of knowledge and prior understanding of what to expect where it's driving. On the first part of that, we are most of the way there to having all of the capabilities that you might imagine needing. And any new lane gets less and less likely to, you know, diminishing to the minimus kind of things that we have to learn and add to the capabilities of the driver. So, you know, as we pointed out, you know, going from operating between Fort Worth and Phoenix and operating between Dallas and Laredo, very, very light lift. And we expect an even lighter lift as we open up new lanes as well. On the mapping front, this is a place where, you know, the approaches we've taken with AI are to be able to detect and understand the road structure, to be able to gather data and then feed that back to the mothership are playing a huge difference because we can take that online system, run it offline, verify, validate it, and then create the road data product. At this point, the vast majority of the miles that we generate are automatically generated. So we expect that to accelerate. What's really going to be driving the rate at which we expand over the next year is going to be the customer demand, right? Because we can be responsive, This decision of which lane to open next goes from being a strategic, oh, my gosh, let's ponder this for months, to, okay, let's go now and serve that customer as quickly as possible. And then, you know, we'll just continue on the development side. It'll just be continuing to chip away at the places where we see incremental value for customers and increasing the uptime and availability of the vehicle.

Thank you. As a reminder, that's star one to be placed into question queue. Our next question is coming from Chris Pierce from Needham & Company. Your line is now live.

Hey, good afternoon. You guys, positive free cash flow in 2028. I believe you first mentioned that at the annual stay in 24. But I'm sorry if I missed it, but I don't see anything about revenues or gross margin guidance in 28. I guess I just. How should investors read into that as maybe things are, the revenue ramp is flatter, but maybe you have more OpEx leverage as you lean into AI around mapping, or I guess just how should we put the pieces together there?

Yeah. Hey, Chris. Great question. Appreciate it. So I think there's a couple of things. When we did the guidance back in the analyst day, we had some expectations about where we thought we were going to be for a free cashflow positive. and actually those expectations overall still look remarkably similar in terms of kind of the revenue projections and our gross margin projections over time. What we have been able to do is really look at our spending, and, you know, over the last year and a half, two years, we've consistently been a little bit under what we've actually guided to in terms of total cash burn, and that's given us confidence to say that, with the money that we raised this past year, which has been remarkable. We've had tremendous support from investors. We ended the year, again, with roughly $1.5 billion in liquidity. And if we look at our model and kind of look at the long-term out, we believe that is sufficient to get us to free cash flow positive. Again, we'll utilize the ATM for our tax liabilities and for potential bonus payments that would be made in cash. And we'll obviously want to have some sort of minimum balance on a go forward basis like any good prudent company would. But like the cash necessary to get us to there, we felt like we have sufficient cash in hand to be able to do that. And we felt that was appropriate to describe. We aren't going to guide beyond 26 on some of the other spending items right now. But I think we will end up having another analyst investor day this year and we'll probably provide an outlook into the future beyond 26 where we can talk about some of those longer-term targets.

Okay, perfect. Thank you for that. And then I guess you hear about this momentum of Waymo and Tesla momentum or not, but I guess this is the first time you guys have talked about capacity and being sold out through X amount of time and going forward. Are you hearing new, like are customers getting enthusiastic about autonomy again? Or is this something that you already knew this since the first time you're sharing this sort of supply versus demand imbalance in the near term with investors?

Yeah, let me take a shot and then maybe Chris can add into this. I think customer interest has been strong for years. Customer demand has continued to increase as people have gotten to experience the products. And we had always said, our first driverless customers, we were going to have to earn that right to get to that higher level of demand signal. I think that was one element. So I think the demand has continued to kind of lead the way in the customer interest, and it helps guide where we want to go. As an example, the reason we're going to Laredo is there's really strong customer interest to be able to do that. And with our generalized AI approach right now, it doesn't take a tremendous amount of effort to take advantage of that next lane. And so Our customer demand is really driving where we're going to be going next. I think one of the things that we've been a little bit apprehensive of overstating, and this is lessons learned relative to other AV companies, is we really wanted to have solidified a firm plan relative to our truck supply to be able to be confident in the contracted amounts of volume that we were going to deliver for customers. It's, you know, there's a difference between interest and truly contracted demand. We felt like this was a good time that we could give you guys the confidence that we not only have a ton of interest, but we really have contracted demand. That is predicated on the fact that we have confidence in the exact timing of the, well, the roughly exact timing of the availability of the trucks that we're going to have in the market.

Just to add a couple things to Dave's point, I think if you go to any truck company and you say, we're going to make your trucks safer, more efficient and increase their utilization, everyone's going to say yes. And what's happened over the last, you know, since April of last year is we've been able to go from the academic conversation of wouldn't it be nice if to, hey, it's here, we've got it, come see it, come touch it, come experience it. And I think that's moved the kind of the academic interest into the practical interest. And as Dave said, we've tried to be consistent in you know, not over-hyping things. And in the past, we've seen competitors talk about numbers of commitments and sales that felt more smoke and mirrors than real. And so we've tried very hard to be just direct and honest with, like, no, these are real actual contracts and commitments that we have. And that's why we feel confident at this point starting to share a little more of those numbers.

Thank you. As a reminder, that's star one to be placed into question Q. And we ask you to ask one question, one follow-up, then return to the queue. That's star one to be placed into question Q. Our next question is coming from Leanne Hayden from Canaccord Genuity. Your line is now live.

Good evening, everyone. Thanks so much for taking my questions. To the extent that you're able to comment, curious how you expect the observer list launch on international trucks in the next few months to impact OEM partners. specifically in terms of comfortability around removing the safety observer or launching immediately without an observer?

Yeah, I think that continued demonstration of the product on the road and continued demand and engagement from customers will only supercharge what is already a really positive and enthusiastic engagement that we have with these OEM partners. So, yeah, there's nothing like seeing and nothing like experiencing it real. And so, yeah, I don't foresee any problems moving forward with this.

Yeah, maybe let me just add one additional thing on here. I think each OEM and their path with us is a little bit different. Volvo, whether we had launched this international fleet or not launched this international fleet, we have a plan with them. They're executing towards that plan and what makes them feel comfortable. You know, we have a path with PACCAR. They were a little bit uncomfortable because they have prototype parts on their base components. And so, you know, that's why we had the ride observer to begin with. And they wanted to have comfort with the fact that they've fully validated their process. With the international fleet, we are producing a truck that's a base truck that has all the required redundancies. at a very sufficient level. So these are not prototype parts. These are fully validated parts that we validated with the rest of our system. And so each of them is a little bit different and nuanced. And, you know, hopefully this is going to continue to build momentum overall that, you know, for the market and everybody's excitement about having an opportunity to deploy trucks that operate driverlessly.

Got it. Yeah, that totally makes sense. I'll just ask one more quick one. Curious whether or not Aurora trucks kind of came to interact with any sort of winter weather conditions in Texas as a result of the recent storm fern, and if so, how it performed.

We certainly did some development operations in the conditions, but those would be run with a safety operator in the vehicle because that's out of scope for the current driverless capability. What I'll tell you is that the conditions in Texas were bad enough that everybody was off the road. for the majority of the time.

Thank you. Next question is coming from Mark Delaney from Goldman Sachs for Lines Now Live.

Yes, good afternoon. Thank you very much for taking the questions. Nice to see the expanded operating domain, both with respect to the lanes as well as the extended weather conditions. First question was on how you see the composition of the trucks evolving this year and for the incremental trucks to get to the 200 in total. Do you expect some of that to come from Volvo given the progress you spoke about with VNL or will the incremental truck volumes this year effectively come all from that international relationship?

Yeah, I guess I can't share Volvo's launch timeline. You know, that's one of the things that we leave with our OEM partners. What I can tell you is we are extremely confident in the supply of vehicles we have to achieve that 200-plus objective by the end of the year.

Okay. I understood. And then my other question was on the 2027 outlook and lines and integration. I'm hoping to get more details on where you stand and if you think there may be some risk of delay. And I ask you, I think in order to do that line set integration next year, you would need the truck OEMs to have redundant platforms ready. You need a Movio to be prepared to integrate on site, and then the third gen hardware kit needs to be available. So I know a lot of things you're working on and the partners are working on. So if you can speak a bit more on where you stand on those various things and your visibility into achieving that 2027 plan, that would be helpful. Thank you.

Yeah.

Well, let's just take Volvo as a concrete example. Part of the reason why we're so excited about the first trucks coming off of the pilot line with Volvo is that's a critical step in both Aurora and Volvo understanding how to do this integration and really paves the way for that line side production. When it comes to Amovio, the third generation hardware in Amovio, that's really one thing. And that partnership is spectacular. We continue to have an amazing working relationship with them. We've talked in the past about how that deal and that partnership has aligned incentives near perfectly, and we're seeing that play out in reality. And both Aurora and Immovio are committed to achieving our starter production of that in 2027, so we're very excited for that. And then, of course, we augment the line-side installation with our OEM partners with the infrastructure we're putting in place with Roush to allow us to to upfit and even scale up the production we're talking about this year to be able to produce significant volumes on the international LP platform as well. So, like I said, 2027 is going to be a heck of a lot of fun.

Thank you. Our next question today is from Itay Micheli from TD Cowan & Company. Your line is now live.

Great, thanks. Hi, everybody. I just wanted to go back to the customer interest into 2027 with a pipeline of thousands of trucks. Hopefully you could talk a bit more about that. And how much visibility do you have in terms of the number of lanes you might need to support that level of demand?

Yeah, so maybe I'll take a start, Ed, Dave, and I'll hand it to you. So in terms of the lane side of this, we model this and we look at the southern U.S. freight corridor. that we're talking about being operating on by the end of this year, we think that can absorb an immense amount of traffic and will still be a very small fraction of the vehicle fleet that's out there today. And, of course, we won't be static in 2027 with that. Given that ability and accelerated ability to build map content and the generalized nature of the Aurora driver, unlocking new lanes is not going to be a complicated activity for us. It'll just be a course of action, operational exercise that we do relatively rapidly. And so, you know, I'm not really worried about the, I guess not really is understating it. Sorry, that's my Canadian coming through. I am not worried about our ability to roll out new lanes in 27 and to be able to kind of absorb that volume. But Dave, do you want to?

Yeah, I think there's a couple of things that we're really kind of demonstrating. And these are true in 26, not even in 27. it's our ability to go where the customer wants us to go and add lanes and add the lanes at where they are high volume and they generate value for a customer. So it's not just the lanes, but it's going to customer endpoints. We're doing both of those things right now, right? We've just added the Dallas to Laredo. That's a new thing we haven't talked about before, and we're going to have it rolling out yet this quarter yet. So Again, I think our ability to go to where customers want is the key enabler to actually deploy thousands of trucks. Now, thousands of trucks, if you just look at some of the lane routes that we've showed before, which we have no concerns over being able to drive in all those areas, those represent 50 to 60 billion vehicle miles traveled. So to deploy thousands of trucks in a market size that big with the sheer volume of trucks that are out there, and the, and the mileage of this driven, um, feels very attainable to us. The reason why we have such conviction in this is that some of our customers, both, uh, our, our existing customers and even new customers, when they talk, uh, about interest in deploying autonomy, um, they're talking about large quantities of volume. So like some customers, um, have huge fleets, big package delivery, uh, and you know, for them, unless we can do. thousands of trucks, it's not worthwhile for them, right? Because it just ends up being just such a small percentage of the thing. So when we're able to deliver more trucks, the customer demand for those larger customers that want to deploy at higher volume just become more evident for them. So we're really excited about where we're headed, and we think we have the building blocks in place to get there.

Terrific. Very helpful. As a quick follow-up, I'm just curious, on the second-generation commercial hardware kit on the new fleet with International, how locked in are the costs at this stage? How should we think about the ramp and ultimately leading to what can go right and wrong and the target to a break-even gross margin by the end of the year?

Maybe to start with the first part of this, at this point, we well understand the cost. Yeah, there is some exposure to variation in tariffs, let's go with, depending on the policy of the current administration, that obviously we can't predict. But beyond that, you know, we're locked and loaded there. And, you know, between the engagement we have with Fabrinet and the process and work we've been running through with them, and now the committed partnership we have with Roush and the facilities we're turning online there, you know, that part we understand the cost structure. The rest of the cost structure is really about the remote support and recovery rates that are associated with this. And those we feel good about the glide path we're on to achieving the rates that we need to reach gross margin.

Yeah, and just maybe one additional thing, and Chris did a great job, and just talking about the hardware kit for a second. Like there's three elements of the hardware kit. from a financial perspective that you think about between the first gen and the second gen. It's the BOM, it's the scale, and it's the expertise. So if I look at it, we have done remarkably well in the BOM where we've designed lower-cost solutions. We've reduced the mass of the compute, as an example. We've made incredible improvements on first light. So we've designed, we did engineering challenges to design that. Scale, we have the hardware kits today that can operate roughly about 300,000 miles. These hardware kits are going to last to a million miles. So you just get the benefit of them lasting longer, which reduces your per mile cost. And then the manufacturing expertise, we're going to somebody that knows how to build in high volumes with Fabrinet, in higher volumes, whereas we're just not set up that way. We're more of kind of a prototype build. In terms of the confidence in that, we have contracted with suppliers all the part costs already. The FX exposure, we've taken a conservative approach and used the latest assumptions for the two biggest areas, which are China and Thailand. I think we've built in the right elements to be confident in that. Again, I think with the remote assist and the onsite support, we're going to be able to demonstrate that very well once we have sufficient number of trucks on operating on the roads where we can actually start to report out some of those numbers.

Thank you. We've reached the end of our question and answer session. And ladies and gentlemen, that does conclude today's teleconference and webcast. You may disconnect your lines at this time and have a wonderful day. We thank you for your participation today.