AUR

It is now my pleasure to introduce Stacy Feit, Vice President of Investor Relations. Please go ahead.

Thanks, Paul. Good afternoon, everyone, welcome to our first quarter 2026 business review call. We announced our results earlier this afternoon. Our shareholder letter and a presentation to accompany this call are available on our investor relations website at ir.aurora.tech. The shareholder letter was also furnished with our Form 8-K filed today with the SEC. On the call with me today are Chris Urmson, Co-founder and CEO, David Maday, CFO. Chris will provide an update on the progress we have made across the key pillars of our business, 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 has ended. I'd like to take this opportunity to remind you that during the call, we will be making forward-looking statements.

These statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed, projected, or implied during this call. In particular, those described in our risk factors included in our annual report on Form 10-K for the year ended 31st December 2025, and other documents filed with the SEC, as well as the current uncertainty and unpredictability in our business, the markets and economy. Additional information will also be set forth in our quarterly report on Form 10-Q for the quarter ended 31st March 2026. You should not rely on our forward-looking statements as predictions of future events. All forward-looking statements that we make on this call are based on assumptions and beliefs as of the date hereof, 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 is 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.

Thanks, Stacy. 2026 is the year Aurora begins to scale. Our strategic investments are fueling the momentum necessary to accelerate our growth and extend our lead in the autonomous trucking market. The start of this year has been a period of disciplined transition, a deliberate buildup before the inflection. Drawing on our deep experience safely integrating the Aurora Driver across multiple platforms, we're on the cusp of launching our second generation commercial hardware kit on a new fleet of driverless trucks. This program positions us to exit the year with over 200 driverless trucks in operation across the Sun Belt and supports our broader scaling ambitions in 2027 and beyond. In preparation for this imminent launch, our forthcoming software release and commercial hardware kit are engineered specifically to deliver the reliability required as we scale our fleet. This progress is driving significant commercial momentum.

In addition to the Transportation as a Service commitments we already have in place with Hirschbach, we announced last week that they have selected Aurora to scale their autonomous fleet with intent to own and operate 500 trucks through our Driver-as-a-Service business model. We expect to finalize the definitive agreement, which represents a potential multi-year revenue stream in the hundreds of millions of dollars later this year, with truck delivery slated to begin in 2027. As we prepare to scale, we're seeing continued regulatory momentum with landmark progress at the state level. California has reached a watershed moment, joining the vast majority of states in enabling autonomous trucking. We now project a serviceable addressable market of 60 billion vehicle miles traveled by 2028. Excitingly, California supports a seamless coast-to-coast operating environment.

With the Aurora Driver now sufficiently generalized for us to begin scaling across the Sun Belt aligned with customer demand, we strategically focused our resources on three key initiatives, expanding our driverless network, finalizing our latest software release, and validating our 2nd generation commercial hardware kits. These efforts serve as the critical final steps in preparing for the imminent launch of our new driverless truck fleet, transitioning Aurora from a phase of localized operations to one of wide-scale industrial deployment. Our expansion is progressing at an accelerated pace, with our network now encompassing 12 distinct routes. At the end of March, we validated driverless operations on the bi-directional route between Dallas and Laredo within just six weeks of initiating supervised autonomous runs. Building on this momentum, we also opened new bi-directional routes between Dallas and Oklahoma City.

In collaboration with Volvo Autonomous Solutions, we have started supervised autonomous deliveries on this route for one of their key customers. We've expanded our driverless cohort to seven customers, including transitioning commercial loads with McLane to driverless operations. Our forthcoming software release further increases the Aurora Driver's reliability in preparation for scaling, including validation of driverless operations in more severe rain, as well as the full spectrum of complex construction scenarios on our highway routes. To complement these advancements, we are augmenting our driverless network to support real-time dynamic rerouting, providing the operational agility required for high-volume commercial service. We're also in the process of validating our second generation commercial hardware kit on multiple truck platforms through rigorous on-road track and lab testing to prepare for our planned second quarter launch and are seeing impressive performance.

Designed for 1 million miles of operation and with enhanced sensor cleaning capabilities, this kit meaningfully increases the Aurora Driver's reliability. It also brings exciting performance gains, including a more efficient computer and an extended 1 Km range for FirstLight, our proprietary long-range FMCW lidar. This is double the range of the closest FMCW lidar competitor and can give the Aurora Driver more than 34 seconds to react when at highway speeds, setting a new superhuman standard for safety. Importantly, we expect this kit to drive a 50-plus % reduction in Aurora Driver hardware costs, a key lever supporting our break-even gross margin target. While advancing on these fronts, in April, the Aurora Driver surpassed 370,000 driverless miles with a 100% on-time performance and zero Aurora Driver-attributed collisions. Notably, this growth was driven by a very strong utilization with a leaner active fleet.

For example, the driverless trucks we are operating for Werner are already averaging 4,000+ miles per week, which translates to an annual run rate of 225,000+ miles per truck. With the performance we're seeing, we expect Aurora Driver-powered trucks will be capable of more than doubling utilization and in turn, revenue per truck for our customers. Expanding driverless delivery to and from customers' facilities will further strengthen the Aurora Driver's value proposition. We're continuing to ready Hirschbach, Detmer, and Werner for endpoint operations, including in-yard autonomous operations at their facilities. We currently expect to generate a majority of our 2026 revenue through operations between customer facilities, reflecting our continued focus on increasing commercial value. To ensure seamless end-to-end service, we recently began supervised testing of way station navigation and on-route fueling at truck stops.

Navigating these environments requires many of the same advanced surface street capabilities we have already refined. For example, on the Seven Mile, the Aurora Driver navigates to and from the highway in Houston. The video on page eight of our presentation demonstrates the Aurora Driver's proficiency in these complex low-speed settings. To meet customer demand and support our path to scale, we've established a robust hardware and vehicle platform roadmap. We're closing in on the 2Q launch of our second generation commercial hardware kit on a new fleet of trucks based on the International LT series that will enable driverless operations without an observer. With this program, we have strong line of sight to achieving our 2026 scaling goals. We expect this to establish a powerful foundation for 2027, where we plan to launch our Driver-as-a-Service business model.

Looking ahead to 2027, we've made exciting progress on our 3rd generation commercial hardware kit that will be manufactured by Aumovio. Together, we started testing initial units. Our engineering team is also working with Aumovio and NVIDIA to develop a first-of-its-kind Super Thor compute configuration, an architecture that integrates two NVIDIA DRIVE Thor SoCs into a unified platform optimized to power the Aurora Driver at scale. This approach demonstrates our three way collaboration is setting the standard for industrializing autonomous technology. In March, Aumovio broke ground on the expansion of their New Braunfels, Texas facility, where they will produce our 3rd generation hardware kit intended to supply tens of thousands of trucks. Construction of the plant's expansion is expected to be completed in the 1st quarter of 2027, with start of production for the hardware kits on track to begin in the 2nd half of 2027.

Volvo plans to build hundreds of the Volvo VNL autonomous trucks in 2027 and has already completed several Aurora Driver-powered trucks on their pilot line. For the program based on the International LT truck, our upfitter Roush will begin scaled production later this year. We're initially establishing the capacity to produce 1,000 trucks per year with potential to increase that capacity. Concurrently, PACCAR and Aurora are jointly defining the path to scale, scalable launch on the third generation Aurora Driver commercial hardware kit integrated with PACCAR's future autonomy-enabled platform. All of this work is forging the industrial engine that extends our leadership position and supports commercial deployment at significant scale. At Aurora, we're building a safer, stronger, and more resilient freight ecosystem with our technology for the people who power it.

To back this vision, we recently announced Aurora Works, our commitment to invest in workforce development by establishing educational partnerships and technical training for emerging roles in autonomous trucking. We're at the center of a new era of logistics that improves road safety, fuels economic growth, and creates new high-skilled American jobs. Autonomous freight represents a step change for what is possible in global logistics. The Aurora Driver moves the industry beyond traditional constraints toward a world of continuous high utilization delivery. With a clear roadmap, deep partnerships, and an accelerating industrial engine, we are well positioned to lead this evolution. The future of freight is on the road and Aurora is setting the pace. With that, I'll now pass 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 15 of the slide deck for reference. First quarter 2026 revenue totaled $1 million across driverless and vehicle operator supervised commercial loads. Despite leveraging our shared fleet for continued development of new routes and validation of our second generation commercial hardware kit, the Aurora Driver achieved another record number of commercial miles during the quarter, which drove a 10% sequential increase in revenue from the fourth quarter of 2025. First quarter operating loss, including stock-based compensation, totaled $244 million. Excluding stock-based compensation of $46 million, R&D totaled $159 million, SG&A was $34 million, and cost of revenue was $6 million.

We used approximately $159 million in operating cash during the first quarter of 2026, and capital expenditures totaled $25 million. As planned, this cash spend was below our externally communicated quarterly average target. We expect the second quarter cash spend to be above the target range due to the timing of our cash bonus payout, which as we discussed last quarter, we plan to fund with our at-the-market program. We ended the quarter with a very strong balance sheet, including liquidity of nearly $1.3 billion in cash and short-term and long-term investments. During the first quarter, we generated net proceeds of $14 million from the issuance of Class A common stock through our at-the-market program, which we use to fund the tax liability associated with vesting of employee restricted stock units during the quarter.

We continue to expect 2026 revenue of $14 million-$16 million, up 400% year-over-year at the midpoint. Revenue will be back-end loaded, with the fourth quarter projected to contribute over half of full year revenue as we scale driverless operations following the launch of our new fleet. We anticipate exiting the year with more than 200 driverless trucks in operation, which translates to approximately $80 million in revenue on a run rate basis for our Transportation as a Service business. This establishes a powerful foundation for 2027 when we expect the core Driver-as-a-Service model to commence. To support our scaling plan, we continue to expect quarterly cash use of approximately $190 million-$220 million on average throughout 2026.

This includes approximately $150 million in anticipated full year CapEx, primarily attributed to our capacity plan. We continue to expect 2026 to represent peak capital spend and CapEx declining significantly in 2027 as we transition to our Driver-as-a-Service model and Hardware as a Service structure with Aumovio. Our first quarter performance reflects the focused execution and disciplined transition that will define Aurora in 2026. We continue to balance prudent resource management with the strategic investments needed to support large scale industrial deployment. With that, we will now open the call to Q&A.

Our first question is from George Gianarikas with Canaccord Genuity.

Hey, everyone. Thank you for taking my questions. So maybe first, you know, in light of the growing commercial momentum that you're seeing, have you seen any meaningful acceleration and inbound interest from prospective fleet partners? Also, as you're beginning to scale, how are you navigating price discovery? Has there been any resistance from customers regarding the per mile rate, or is the value currently offsetting any cost concerns? Thank you.

Yeah. Thanks, George. Appreciate you. Appreciate the question. We continue to have really exciting conversations with various customers. You know, we've talked in the past about each time we kind of check off progress, we see it become more real in the eyes of customers, and that leads to an increase in the conversations we have. We've got an exciting funnel, and we'll share more as we can as we get through that. I don't think we can talk specifically about pricing on this. Obviously, there's a lot of competitive elements around that, but we have very, you know, fruitful conversations with folks. You know, of course, they wanna pay nothing for it, and we'd like to charge them more for it. You know, every one of those conversations is, of course, a negotiation.

I don't know, Dave, if you'd add more.

Yeah, I think the customers themselves have been giving us really good and direct feedback. At the end of the day, the value proposition that we're discussing has still resonated quite well. You're gonna argue a little bit about the fringes.

Yeah growing cost of drivers is undeniable, the indirect costs associated with it. You know, fuel costs are really high right now. We're providing a 15% reduction on that. That translates to real dollars, right? That's roughly $0.15-$0.16 per mile in today's, you know, marketplace. The value proposition does resonate quite well and, you know, we're confident that we're gonna be able to grow the business and achieve our profit objectives.

Thank you. Maybe as a follow-up, you know, given your recent autonomous hauls, are you encountering any technical bottlenecks as you transition from pilot to more of a consistent operational cadence? How have your engineering teams mitigated any constraints that have been out there on the system? Thank you.

Yeah. There's nothing that we're seeing that's particularly surprising. It's stuff that's been in our roadmap for a while. You know, we're continuing to prove that this new release that is gonna land with second generation hardware really is about making sure that we have a robust platform that's reliable and meets customer needs. You know, increasing the amount of rain we can handle, dealing with more complicated construction that we need to deal with on freeways. That's the kind of thing that's gonna set us up to be able to scale really well.

Thanks.

Thank you.

Our next question is from Scott Group with Wolfe Research.

Hey, thanks. Afternoon, guys. Couple things. Relative to the target of 200 trucks by the end of the year, how many are in operation today? Separately on the Hirschbach MOU, just hoping for a little bit more color, like what needs to happen to convert this from an MOU to a committed contract? Do you have any color on, like, how many of those 500 trucks you expect to deliver in 2027, and how long do you think it takes to get to the full 500?

Yeah. On the 200 trucks, when we talk about 200 trucks, we're talking about driverless trucks operating by the end of the year. Today, we're running about a handful of them. Of the vehicles that will make up those 200 trucks that are operating driverlessly, I think we own 25 of them now, and they're in various stages of upfit and preparation. That's kind of where we stand on getting to those 200 trucks over the course of the year. You know, we're doing work in Q2 to prepare Roush Performance to scale, and they'll really start scaling, getting towards that 20 trucks per week production rate in Q3. With Hirschbach Motor Lines, I don't know there's a whole lot we can share there.

We're really excited about, they've been one of our longest term partners and customers. You know, to George's question earlier about the value customers see, you don't get a company like Hirschbach signing up for an MOU unless they see real opportunity for it to complement the drivers they have in their fleet today. It's a 500 truck deal over 2027 and 2028 is our expectation. We expect it to turn into hundreds of millions of miles and hundreds of millions of dollars of revenue, so, and we expect to get to closure on that this year.

Yeah. Hey, Scott, one other thing on the, one other thing on the 200 trucks, just so there's no confusion. We already have, you know, commitment and order slots for the, for the entire 200 trucks.

Yeah.

There is no question about the truck availability. It's just when we bring them in to start the upfit process and we build out our capacity plan.

Okay, great. Last couple things. David, I think you talked about last quarter, if you get to the $80 million run rate of revenue, that'll be gross profit breakeven. Is that still the case? On the California front, when do you expect to start operations there?

Well, relative to the gross profit break even, that is still our target for sure. The $80 million is one element of that. There are some things that we need to do on the cost side of that equation, which are equally as important, which is part of our plan. We're still targeting it. It's not, you know, formal guidance, but we are targeting it, and we are gonna be working really hard to be able to achieve that target. I'll let Chris talk a little bit about California.

California, first, we're really excited that California's taken a step forward with this. We've been in conversation with them literally for years, and we're just excited to see them kinda put out the regulations and give us certainty on how we can start to build our business there. We don't have set time for when we'll begin operating in California. We have to go through the permitting process with them to do that, but the team is already working on that and we'll share more when we can.

All right. Appreciate the time, guys. Thank you.

Thank you.

Our next question is from Ravi Shanker with Morgan Stanley.

Great. Thanks. Afternoon, everyone. Chris, you said in your letter that you and PACCAR are jointly defining the path to scalable launch on their assembly lines. Do you have an understanding? If so, can you tell us kind of what this path looks like from a catalyst or a timing standpoint?

Yeah. I can't share timing, of course. What I can share is that we're aligning around the third generation platform or a hardware kit from Aurora that we're working with Aumovio on. We've shared in the past that we expect that to come into production in the back half of 2027. You know, we continue to have conversations with PACCAR. We continue to work with them closely and look forward to offering customers who'd like to have the Aurora Driver on a Peterbilt that option.

Okay. Understood. Maybe kind of on a different topic, obviously, truck rates appear to be going up quite meaningfully, and there are some who think we may be on the cusp of a generational upcycle here. Are you seeing any increased interest from customers or carriers who may be concerned about a driver shortage? Is this an opportunity for you to maybe revise your pricing strategy, or are you just selling this as, "Hey, there's more savings for your customers if they switch to autonomous in the next few years?

Yeah. I'll say that, first, I'm not savvy enough to predict exactly what will happen with the market here, but, you know, it does feel like there's a lot of factors that are contributing to what will be increased freight rates going forward. You know, we're really focused on delivering value to our customers. We ultimately expect to get paid for that value, if we're contributing more value, we'd ultimately expect to be compensated for that. Right now, we're focused on making sure that the folks who've been with us as partners and customers and, you know, get an opportunity to benefit from that and build their business. Yeah. Dave, anything that you'd add?

No, I think that's right. I will say that the interest has been picking up a lot over the last six months, frankly. The number of inbounds that we're getting has been just increasing dramatically, Ravi. We're very excited about that. Part of it is just we're out there, and people can see and experience it more than they've ever have before. Part of it is the market is starting to have some positive signs that feel like they're more sustainable, and that has people more interested in thinking about their long term. I think from the pricing side, the one thing that I would say is, we believe that the pricing at that $0.85 plus kind of range will enable us to be very successful, and it will support broad scaled adoption for our customers.

I think we look at it not so much as how would we maximize that next quarter, and I think about it as how will we, you know, build a plan for the next several years. We wanna make sure that we have as equally as much of that long-term focus and support for customer adoption as we can.

Very good. Thank you, Chris and David.

Thank you.

Our next question is from Chris Pierce with Needham & Company.

Hey, good afternoon. I just wanna, you know, if you guys could shed some light. You talked about Hirschbach. You know, what are they seeing? Are they seeing something different in terms of absolute number of miles driven, or is it just a unique decision on their end that sort of has them pull the trigger to move from a trial to a truck order? I guess, do you have other partners that you've been working with over time that have similar miles, and it just sort of comes down to a unique decision on their end? I just kinda wanna get a sense of what helped them over the, you know, get over the edge there.

Yeah. I think first it's important to recognize that there's a distribution of customers, right? There's gonna be folks who are first movers, and there's gonna be others who are fast followers. You know, we've, you know, Hirschbach has had a lot of experience with us. The leadership team there, we've been able to build trust with over time. You know, we're excited for them to pull the trigger. We do expect others will follow. You know, we'll just continue to demonstrate value. You know, frankly, right now, we're pretty supply constrained. We look forward to unlocking that supply over the course of this year and certainly in 2027 as we bring the Aumovio hardware kit online.

The other thing that I would add on Hirschbach, they have been with us for quite some time, and they don't look at this just as a business decision. They are really looking at this as like, the, in their words, the quality of life investment for their people.

Yeah.

Right? This is to help support their people and get them to the routes and the working environment that will improve their quality of life while we handle the, quote-unquote, "the less," you know, "desirable," the longer haul routes that keep you away very far. They've been very forward leaning on thinking about their drivers' long-term quality of life. I think that's something that's very important to them. Certainly, they care a lot about their drivers.

Yeah.

Okay. Just one for Dave. In your, you know, from the desk of the CFO, you talked about in the last hiring up about peak CapEx. I just wanna understand definitionally. I mean, I don't think of you guys as a heavy CapEx company. I think of you as a heavy R&D company. Are we saying that 2027 is, you know, we're close to peak R&D, and R&D comes down? I just wanna make sure I'm understanding what line item on the model and what statement to look at.

No. I think, we have said many times we're a capital efficient or a capital light business, right? As a transportation as a service business to start, you actually have a little bit more capital than what we believe is gonna be our steady state long-term capital. We do expect our CapEx to go down. Our R&D investments, certainly that's a larger percentage of our overall expenditures. We are continuing to invest in our R&D to capitalize on the lead, continue to build that advantage, make the Aurora Driver available everywhere. We kinda look at that as more of a steady state kinda number for the foreseeable quarters, whereas we think the CapEx will start to drop down substantially in 2027.

Okay. Thanks for clarifying. Good luck.

Thank you.

Our next question is from Colin Rusch with Oppenheimer & Co.

Thanks so much, guys. You know, it's, you've done a very judicious job of, you know, waiting to scale until you guys were ready. Now as you move into this next stage of the organization, I'm just curious about how you think about pacing of this scale-up. Because certainly demand isn't going to be an issue, but maintaining quality as you move into these higher volumes is critical. Just wanna think about how you're managing that, how you're managing supply chain to meet those specs, and how you might end up diversifying some of the supply chain to enable a little bit more resilient supply as you go forward.

That's really aligned with our long-term strategy that we've talked about for several years now. Thanks for the question. You know, as we went from the initial vehicles that we launched Driverlessly with last year, that was hardware that we had, you know, built in-house. We had sourced all in-house. As we move to the second generation of hardware, there we're leveraging Fabrinet, you know, the experience they have, the quality process they have, layering on top of that, you know, our quality and sourcing support. We feel good about that.

Of course, as we move to, you know, the back half of 2027, when we expect the hardware kit that we're developing with Aumovio to come to life, there, of course, we're leaning into Aumovio and the strength that they have in managing the supply chain and managing quality, being a true scale automotive supplier. That kind of as you think about the hardware side of it, that's how we're building that supply chain system. When it comes to the software that operates on board, that's been a core part of how we've thought about this is how do we ensure that the software will generalize safely over time. It's what leads us to do as much work as we do in testing and validation.

It's why we've said from day one that safety has to be first. We've ingrained that into the organization, over, you know, the better part of a decade at this point. That leads to process that we think will scale and ultimately drive safe and reliable outcomes for our customers.

Thanks. You know, as you guys prioritize ODDs, you know, I'm curious about how much input you're getting from your customers at this point, or if you're at a place now where you're just really driving capabilities, and then selling it to them. You know, are there priorities that they have that can impact some of the sequencing and focus areas for you on an R&D perspective?

No, that's a great question. We continue to want to learn as much as we possibly can from our partners and understand what the source of demand is and where that's most useful for them. You know, Dave talked about Hirschbach's focus on supporting their employees and what does that translate into places that are useful for us to drive for them. In terms of the capabilities of the Aurora Driver has to have, we do learn some from our customers, but you know, that we kind of infer ourselves. Where we need to go operate, which lanes we should be opening, that is very much, you know, almost purely driven by customer demand.

Thanks, guys.

Thank you.

Our next question is from David Vernon with Bernstein.

Hey, guys. Thanks for fitting me in here. First question for you, Dave. I noticed the language around sufficient liquidity to get to positive free cash flow in 2028 that was in the 4Q letter is not in a 1Q letter. Was that purposeful? Was that just you're still on plan? Can you give a kind of comment what the status is on that the cash flow breakeven by 2028?

Yeah, it's still our plan. We believe that we have sufficient liquidity. Nothing has changed in that to get us to a positive free cash flow.

Okay, thanks. Then maybe the 4,000 miles per truck per week that you guys are quoting on the utilization that you're getting out of Werner. Is that the right number to use in terms of a run rate assumption to underpin the $80 million sort of TaaS exit run rate? Then I guess the follow-on to that would be if, you know, that turns into be the right sort of revenue per mile-ish range, you know, how does the DaaS thing compare? You know, is it half? Is it three quarters? Like, anything you can give us relatively on what we should be thinking about plugging into a model around the DaaS versus the TaaS rate would be helpful.

Yeah, I think for the mileage, I think that's really gonna vary based on the customer use cases. We're very confident in our ability to achieve double utilization, and it is really gonna depend on which routes they put them on and the load frequency that they have. Certainly we think this, you know, 200-250 thousand mile range is still a very good source. We've used that several years ago, we still think that that's a good target that any customer can achieve. We think that's probably good there. In terms of, you know, the pricing dynamics, you know, I can't get into too many specifics without, you know, kind of comparing individual customers.

What I can tell you is the information that we shared before, relative to anywhere from $1.50-$2 a mile for TaaS plus, fuel surcharge, and then, on the Driver-as-a-Service, you know, again, our indicative thing, pricing is about $0.85. Again, we think that that's a pretty good mix, and so you can kind of do the math from there.

Okay, thanks.

Thanks, David.

Our next question is from John Saager with Evercore ISI.

Hey, everyone. Thanks for taking my call. I'd hate to continue to dig into the numbers a little bit, but to get to sort of $15 million of revenue, you're charging somewhere around $2 per mile.

If I'm backing into gross margin breakeven, that means that your cost is something like $1 per mile to operate. Is that a fair way of thinking about it?

No.

back your progress like that.

Yeah. Yeah. No, no problem. Our cost of goods sold is a measurement that we're looking at for our gross margin. You will see, if revenue is about two, that's our target for our cost of goods sold, is about $2 a mile. That will obviously change when we go to the Driver-as-a-Service. You gotta remember, in our current Transportation as a Service business model, it's not just the cost of being able to deploy the Aurora Driver, it's the cost of purchasing the trucks, financing the hardware.

Terminals

fuel costs.

Terminal costs.

terminals. I think you'll see us, really targeting roughly that $2 a mile for a breakeven target.

Okay, perfect. As we look out into 2027, at what point do you make that transition to the point where the customers own the trucks? Like, when can you give us any sense of timing on that? Does it all happen at once, or is this sort of a customer-by-customer basis?

It's not a hard line. We will start the process in 2027, it will really be customer by customer specific. I would also point out that we will still have Transportation-as-a-Service trucks operating for several years, even with customers who have signed up for our additional Driver-as-a-Service contract. We're going to continue to utilize a small fleet of Transportation-as-a-Service trucks for its life, we will kind of just build upon that going forward. We do expect, you know, again, some general starting. We will start in 2027, there's no hard line of when it will exactly start. We're not making some fundamental shift of we will only do Driver-as-a-Service going forward.

It's important for our customers to support the adoption, to be able to see and experience the Aurora Driver in a scenario where they don't have to make huge investments until they've seen the product work and provide value to them.

That is something that I think will evolve over time, right? Today, we're, you know, we're gonna be the only provider, the first provider of this technology in market. I think there's gonna be more customer education. The Transportation-as-a-Service, as Dave said, allows us to have this low-friction way for them to get introduced, get used to it. What we do see is that as customers get used to it, you know, they believe in their, you know, the value they provide in owning, operating, maintaining, using these trucks efficiently. That's a confidence that we don't think that it's core to Aurora. We see customers excited to take that on, and we look forward to it.

Okay, great. Thank you so much. Very helpful.

Thank you.

Our next question is from Mark Delaney with Goldman Sachs.

Good afternoon. Thank you for taking my questions. Nice to see the improved and new rollouts to new locations. Thanks for all the updates on that. Chris, I was hoping to get your latest thoughts on AI technology and any new innovations that Aurora is looking at. One thing that's had more discussion in the investment community and tech community recently has been world models, but curious whether it's that or other newer technologies that you're observing and anything that could be impactful for Aurora.

No. We continue to pay attention to what's happening outside. We're excited about the models that we've been building at Aurora. You know, we continue to be deep believers in verifiable AI. The idea that you would trust one of these giant trucks driving down the road with something where you just kinda hope the output is the right thing given the input, it just doesn't make sense. You know, we continue to look for ways we can bring those ideas in and fuse them with our approach to ensuring that we can deliver a safe vehicle on the road.

Understood. Thanks. My other question was around the planned start of operations without a driver this quarter. Maybe just speak a bit more, if you could, please, around what still needs to happen for that to materialize. Is it additional testing and validation or anything else that may still be left in order to meet that timeline? Thank you.

It's really, you know, imminent. We're excited about the progress we're making. It's predominantly testing and validation at this point. We're continuing to look forward to having them on the road in Q2.

Our next question is from Ken Hoexter with Bank of America.

Hey. Great. Good afternoon, Chris and Dave. Earlier you talked about some of the new routes going from Dallas to Laredo, Dallas, Oklahoma City. For the 200 trucks by year-end, can you talk to about how many total lanes would that encompass? What's the expansion target? How many different customers are part of that 200 trucks? Are you focused on the existing customers? Do you start talking about new stickers on the trucks? Thanks.

Yeah. For the second question first, we expect there to be many new stickers on the trucks by the end of the year. You know, we continue to want to support and ensure that the folks who've been with us early on, are able to benefit from it and grow their businesses. You know, we appreciate the trust they've put in us. We aspire to have the Aurora Driver on, you know, every truck ultimately. We're excited to have new customers come in and grow with them. On the lanes front, it's really gonna be driven by customer interest and demand and where it makes sense for those customers to have the trucks operating. We expect it to span across the Sun Belt, as we have said for some time.

The specific lanes and lane count will really be dictated by that. That's what's great, is that we're moving in the direction with our ability to unlock new lanes, that it's a comparatively, you know, the complexity and difficulty of making that happen has come down dramatically. We can be much more responsive and reactive to where customers want us to operate.

Great. Makes a lot of sense. If I can get a follow-up then on the routes, right?

Sure.

Maybe talk about how much of that is, I don't know, end-to-end versus drop and hook yards or maybe just understanding the last mile at this point. And then on the production, if you're targeting 200, you know, or 20 trucks a week at this point, by year-end, how much can that scale into 2027 on both the truck manufacturing and the Aumovio side?

Okay. And maybe let me make sure what we mean by end-to-end. End-to-end means going from a customer site to a customer site, generally a distribution center or some kind to a customer distribution center or terminal. We're not talking about going to the Safeway or, you know, the restaurant. We expect by the end of the year that the miles we drive are predominantly going between customer endpoints. That's our expectation. We think that is the right way to deliver the product. We think it's valuable to the customer. We're looking forward to that. As we mentioned, we're already doing the work with customers today with Werner, Hirschbach, and others at that mart in particular, to open up their endpoints and operate those robustly.

I feel like there was a second half of your question there that I lost somewhere. I apologize.

Just the second was just back to the production, right? You talked about 20 trucks a week and kind of thoughts on scalability to 27.

Yeah. We're starting by setting Roush up with the bandwidth to be able to produce 1,000 trucks a year. As we go into 2027, as we see, you know, the demand for that, we can increase that scale further. We really see this as a complement to the other programs we're running with Volvo and Peterbilt PACCAR. You know, it's a third option relative to those two.

Wonderful. Thanks a lot. Thanks for the time.

Thank you.

Thank you. That is all the time we have for questions today. This concludes our today's presentation. You may disconnect your lines at this time. We thank you again for your participation.

Greetings, and welcome to the Aurora Fourth Quarter 2025 Business Review Conference Call and Webcast. [Operator Instructions] As a reminder, this conference is being recorded. [Operator Instructions] It's now my pleasure to turn the call over to Stacy Feit, Vice President, Investor Relations. Please go ahead, Stacy.

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 8-K filed today with the SEC. On the call with me today are Chris Urmson, Co-Founder and CEO; and David Maday, CFO. Chris will provide an update on the progress we 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 will be making forward-looking statements. These statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed, projected or implied during this call. In particular, those described in our risk factors included in our annual report on Form 10-K for the year ended December 31, 2024, and other documents filed with 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 31, 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, Stacy. 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 has accelerated into compelling growth. In January, the Aurora Driver passed 250,000 driverless miles, nearly tripled 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 7 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 Sunbelt 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 Sunbelt, 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 1,000-mile multistate 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 U.S. 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 2 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. The 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 map 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 Laredo to support Driscoll's. We're also running along I-20 for Detmar between their facility in Midland, Texas and Capital Sand's 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 an unmatched value proposition. It can navigate the complexities of diverse road types, maintaining 24/7 operating schedules while providing endurance far beyond hours of service limits and delivered 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 Driver-as-a-Service in 2027 and beyond, customer interest already supports the pipeline of thousands of trucks. We're continuing to expand with our current driverless customers and recently announced a new opportunistic agreement with Detmar Logistics, a leading provider of dry bulk and frac sand 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 frac sand 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 hauls 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 DaaS 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 VNL 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 AUMOVIO, which is intended to supply tens of thousands of trucks. We welcome AUMOVIO'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 long-standing 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 2 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 is 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, Werner, 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 recognized 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, in 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 million to $16 million, up 400% year-over-year at the midpoint. Revenue will be back-end loaded with the fourth quarter projected to contribute over half of full year revenue as we scale driverless operations 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 DaaS 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 million 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.

[Operator Instructions] Our first question today is coming from Ravi Shanker from Morgan Stanley.

This is Nancy on for Ravi. Thank you so much for all the 2026 guidance, but it would be helpful to kind of square away the end of year truck 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.

Yes. 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-end 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. And then it would be also helpful to hear a bit more on your expected time line within 2027 for the start of serial commercial production.

Yes. 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 launched 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 '27. 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 AUMOVIO, we then have the ability to start building tens of thousands of trucks, and that's like kind of the trigger for more of a serial production that you would think of in the automotive industry.

Next question today is coming from Andres Sheppard from Cantor Fitzgerald.

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 backloaded, 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?

Yes. So when we talk about that fleet of 200-plus trucks, that is no observer, driverless, no one behind the wheel, right? That's exactly where we're heading, and that's really a critical enabler of scaling. We have the trucks on order. We expect to see them delivered, and we put in place the 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.

Yes. And just one other thing. I just -- it's important to mention like we talk about driverless -- the miles that we report today, 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.

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 granularity there.

Yes, 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 in the 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 FirstLight Lidar, where, again, we've been able to take a design for manufacturability and design-for-cost [indiscernible] was appropriate. What's even more exciting is as that third-generation hardware kit comes out with AUMOVIO, 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 drive down the cost of this. So it's -- as I said '26 is going to be a healthy year and '27 is going to be spectacular.

Next question is coming from Colin Rusch from Oppenheimer.

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?

Yes. 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 the 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, you know, be able to drive both on the surface roads, go to their mine site and drive on the freeway. And so 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 I 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 2 elements to expanding where the vehicle operates. The first is having the generalizable set of skills that allow you to operate there. And then 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 diminishing to de minimis kind of things that we have to learn and add to the capabilities of the driver. So as we pointed out, 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 the approaches we've taken with AI 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 paying huge dividends 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 we'll just continue on the development side, it will 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.

[Operator Instructions] Our next question is coming from Chris Pierce from Needham & Company.

You guys had positive free cash flow in [ 2020 ], I believe you first mentioned that at the Analyst Day in '24. But sorry if I missed it, but I don't see anything about revenues or gross margin guidance in [indiscernible]. 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 and on mapping? Or I guess, just how should we put the pieces together there?

Yes. Chris, great question. I 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 free cash flow 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 over the last 1.5 years, 2 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, right? We ended the year again with 1.5 -- 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. And then I guess you hear about this momentum with 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 like are customers getting enthusiastic about autonomy again? Or is this something that you already knew this, this is the first time you're sharing this sort of supply versus demand imbalance in the near term with investors?

Yes. 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 like 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. Like 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 kind of 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. So it's -- there's a difference between interest and truly contracted demand. We felt like this was a good time that we can 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.

I'd just add a couple of 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 is going to say yes. And what's happened over the last -- 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 they said, we've tried to be consistent in not overhyping 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.

[Operator Instructions] Our next question is coming from Leanne Hayden from Canaccord Genuity.

To the extent that you're able to comment, curious how you expect the observer 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.

Yes. 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 yes, there's nothing like seeing and nothing like experiencing real. And so yes, I don't foresee any problems moving forward with this.

Yes. Maybe let me just add one additional thing on hearing. 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. We have a path with PACCAR. They were a little bit uncomfortable because they have prototype parts on their base components. And so that's why we had the right 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, it'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 hopefully, this is going to continue to build momentum overall for the market and everybody's excitement about having an opportunity to deploy trucks that operate driverless.

Got it. Yes, 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?

Yes. We certainly did some development operations in the conditions, but those will 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.

Next question is coming from Mark Delaney from Goldman Sachs.

Nice to see the expanded operating demand, both with respect to the lanes as well as the expanded 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?

Yes. I guess I can't share Volvo's launch time line. 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. Understood. And then my other question was on the 2027 outlook and lineside 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 because I think in order to do that lineside integration next year, you would need the truck OEMs to have redundant platforms ready, AUMOVIO 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 kind of where you stand on those various things and your visibility into achieving that 2027 plan, that would be helpful?

Yes. 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 lineside production. When it comes to AUMOVIO, the third-generation hardware and AUMOVIO, 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 is aligned incentives near perfectly. And we're seeing that play out in reality. And both Aurora and AUMOVIO are committed to achieving our start of production of that in 2027. So we're very excited for that. And then, of course, we augment the lineside installation with our OEM partners with the infrastructure we're putting in place with Roush to allow us to upfit and even scale up the production we're talking about this year to be able to produce significant volumes on the international OT platform as well. So like I said, 2027 is going to be a heck of a lot of fun.

Your next question today is coming from Itay Michaeli from TD Cowen and Company.

Just wanted to go back to the customer interest into 2027 with a pipeline of thousands of trucks. Hoping 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?

Yes. So maybe I'll take a start at that, Dave, and I'll hand it to you. So in terms of the lineside of this, as 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 will just be a course of action and operational exercise that we do relatively rapidly. And so I'm not really worried about the constraint, I guess not really is understanding 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 add?

Yes. 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 our customers. 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 the 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 rolls that we've showed before, which we have no concerns over being able to drive in all those areas, those represent 50 billion 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 mileage that is driven feels very attainable to us. The reason why we have such conviction in this is that some of our customers, both our existing customers and even new customers, when they talk about interest in deploying autonomy, they're talking about large quantities of volume. So like some customers have huge fleets, big package delivery. And for them, unless we can do thousands of trucks, it's not worthwhile for them, right, like because it just ends up being -- just such a small percentage of 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? Kind of how should we think about the ramp and ultimately kind of leading to sort of like what can go right and wrong in the target to a breakeven gross margin by the end of the year?

Maybe to start with the first part of this. So at this point, we well understand the cost. 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, we're locked and loaded there. And between the engagement we have with Fabrinet and the process 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. 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.

Yes. 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 3 elements of the hardware kit that -- 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 FirstLight. 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 1 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 and higher volumes, whereas we're just not set up that way. We're more of kind of a prototype build. In terms of like the confidence in that, we have contracted with suppliers all the part costs already. The FX exposure, we've taken a conservative approach and use the latest assumptions for like the 2 biggest areas, which are China and Thailand. So I think we've built in the right elements to be confident in that. And again, I think with the remote assistant and the on-site support, we're going to be able to demonstrate that very well once we have sufficient number of trucks operating on the roads where we can actually start to report out some of those numbers.

Thank you. We 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.