Greetings, and welcome to the Aurora Second Quarter 2025 Business Review Call. [Operator Instructions]. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Stacy Feit, Vice President of Investor Relations. Thank you. You may begin.

Thanks, Latonia. Good afternoon, everyone, and welcome to our second 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 second quarter financial results. We'll then open the call for 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 an 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, the markets and economy. Additional information will also be set forth in our quarterly report on Form 10-Q for the quarter ended June 30, 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 these forward-looking financial measures provide 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. The second quarter marked a pivotal moment in transportation history. Aurora opened a new chapter with the launch of the first driverless commercial trucking operations on public roads in the U.S. From commercial launch at the end of April through the end of June, the Aurora Driver already locked more than 20,000 safe driverless miles. And just last week, we completed the validation and began driverless operation at night, which materially increases utilization potential of our self-driving trucks. This unlocks a game-changing component of the Aurora Driver's value proposition. This progress propels Aurora and the freight industry into a new era. We're executing our crawl, walk, run approach to driverless operations, ensuring a seamless product experience that delivers undeniable value to our customers and deepens trust across our stakeholders. We started with 1 truck and as earlier this month, now have 3 driverless trucks operating between Dallas and Houston. During the second quarter, our driverless trucks had already driven the equivalent of more than 8 coast-to-coast trips. Importantly, we've maintained nearly 100% on-time performance, operating courteously with the flow of traffic while upholding our perfect safety record. And while we added a front seat observer at the request of a partner, given certain prototype parts in their base vehicle, it's crucial to note that the Aurora Driver remains fully responsible for all driving tasks with no interventions needed. This performance continues to prove the advanced capabilities and safety of the Aurora Driver. To provide a window into this progress, we'll be showcasing the Aurora Driver in action during this initial phase of our operations via Aurora Driver Live. You can access the live stream via the link on Page 4 of our presentation or via the live tab on our YouTube channel at Aurora Driver. There, you'll see…

Thank you, Chris. Let's discuss our financial results for which we have provided a summary on Page 10 of the slide deck for reference. With the launch of driverless operations during the second quarter of 2025, we began recognizing revenue, which 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 a record number of commercial miles driven during the quarter. Second quarter 2025 operating loss, including stock-based compensation, totaled $230 million, excluding stock-based comp of $55 million. R&D totaled $146 million, SG&A was $25 million and cost of revenue was $5 million. We used approximately $144 million in operating cash during the second quarter. Capital expenditures totaled $7 million. This cash spend was meaningfully below our externally communicated target reflecting continued strong fiscal discipline. During the second quarter, we issued 57 million shares of Class A common stock through our at-the-market program for net proceeds of $331 million. We used $44 million of the net proceeds to fund the tax liability associated with the vesting of our employees restricted stock units during the second quarter. In turn, we ended the second quarter with a very strong balance sheet, including increased liquidity of $1.3 billion in cash and short- term investments. With this additional capital as well as efficiencies we found in the business and cash preservation decisions we have made, we now expect this liquidity to fund our operations into the second quarter of 2027. In our continued opportunistic approach to fundraising, we are expanding our at-the-market program as it has proven to be an effective and efficient mechanism. The additional capacity can support future fundraising as well as funding of tax liabilities associated with the vesting of our employee RSUs over time. For the remainder of 2025, we continue to expect quarterly cash use of $175 million to $185 million on average. This reflects an increase in capital expenditures and continued development of our new hardware programs, as we prepare to scale our business. For the balance of the year, we will continue to focus on expanding our driverless operations as well as key cost reduction levers to support achieving our initial scaling and profitability ambitions. With that, we'll now open the call to Q&A.

[Operator Instructions]. Our first question comes from George Gianarikas of Canaccord Genuity.

I wanted to ask about the Volvo Trucks. In your press release, you said you expect to receive 20 of the trucks by the end of the year. Do you expect to be operating those trucks, and do you expect them to have an observer in them when they launch?

Yes. Thanks, George. So yes, we expect those trucks to be here by the end of the year. We're going to initially using those for development and bring up. So no, we don't expect to be operating those without an observer by the end of the year. We'll be -- we're continuing to work closely with Volvo, and we'll wait for them to be comfortable announcing the time line for us to launch initially with them driverlessly.

And maybe just as a follow-up on commercial momentum. I mean since your launch a couple -- few months ago, have you seen additional incoming interest from other commercial partners that may be interested in expanding their service with you or maybe even launching?

Yes. It's actually been really exciting. I talk about it is, we've gone from selling the promise and the belief into selling the real thing and that's shown up in our sales funnel. We're having lots of exciting conversations with carriers and fleet operators. And so we don't have more we can share today, but the excitement is real, and I think people get the transformational impact this can have on their business, whether it's improving the safety of their fleet or improving both the bottom line and top line. So yes, I think people get it.

The next question comes from Colin Rusch with Oppenheimer.

Can you talk a little bit about the early returns around the wind and rain performance, and how you're tracking and evolving that functionality? And what we can be looking at as you guys continue to work on that part of the business?

Yes. Thanks, Colin. I think just candidly, I think if we put you in the truck today driving in the rain, you'd ask us why we haven't launched it yet, right? The operation and capability of it is very good. It behaves well on the road. And really, it's about the fact that we just put safety first and foremost that we want to go through the process of really thoroughly validating, refining anything that we identify through that validation process and just having the utmost confidence that when we declare something driverless and operate it as such that I put my family out on the road and you'd feel comfortable with your family out of the road around it. So it works well today. We're continuing to work towards the time frame we've laid out by the end of the year. And it's exciting to see the crank that we've talked about this machine for validating and releasing software turning over in the way we'd hoped and continue to be able to do that faster and faster.

And then looking at the FMCW technology and the manufacturing of it, can you talk a little bit about where you're at with yields with your manufacturing partners? And how we should think about the potential cadence for cost reduction on that, as you guys get closer to a higher volume launch?

Yes. So as we've talked about, there's -- we can talk about 2 different dimensions. So one is we see significant steps in cost as we move from building and manufacturing and assembling in-house to moving to Fabrinet as our contract manufacturer and then moving to the hardware-as-a-service partnership we have with Continental. And each one of those generations is going to drive discrete cost downs. One of the big reasons why we're so excited about working with Continental for the long term, it's just they really understand how to deliver automotive quality hardware at scale, on time and do that with high-quality yields. And so that process is all moving along well. The working relationship is strong, and we feel very good about that. In the specific case of the FMCW LiDAR, we've talked in the past about moving from discrete optical components, which is what our systems have today, to LiDAR and chip, which is what we're bringing up already today. And this is a place where we've been investing for the last several years, not just in the design of the optics, but also in the deposition process, the fab process to do this efficiently and effectively. I don't have yield numbers I can share today, but what I can tell you is that development program is on track. And we see that as a meaningful cost-down opportunity in the FirstLight technology.

Our next question comes from Andres Sheppard with Cantor Fitzgerald.

Congratulations on the quarter. Congratulations on the first revenues.

Thank you. It's nice to have at least an R to go with our L. It may not be a P yet.

It's only going to grow from here.

Exactly right.

Just a quick question on maybe the near-term ramp-up of trucks in operation. So right, you disclosed today, you now have 3, I believe, trucks in operations. As we get closer to year-end and towards the tens of trucks, just curious if you can give us a sense of how you're thinking about that ramp-up in terms of vehicles operational in maybe Q3 and Q4? Any color or direction there would be...

Yes. We continue to follow our crawl, walk, run model. And right now, just given the fleet size that we have, we're balancing the growth of driverless operations with the bandwidth for development and testing that we want to really unlock the capabilities that enable the expansion across the Sunbelt next year. And so as we said, really, this year is primarily focused on that capability expansion and unlock, proving out the process for releasing software rapidly as we believe we're starting to and making sure we're set up for scale next year. So it's really going to be driven by how do we maximize the probability of success on that capability expansion points while continue to build and grow traction with our customers. I don't know, Dave, if there's more you'd add to that?

No, I think that's right. The only other thing I'd say, Andres, is like we're going to measure and try to report and think about our success of driving more in terms of mileage than it is in trucks because one of the things that we can do is, obviously, as we can operate now day and night on driverless, we can take 1 truck and operate it on multiple runs around a day. So for us, we want to build the mileage, we want to build the proof point. And again, 2025 is all about delivering the technology promise. So for us, success is being able to operate in almost all conditions that you'd see at this Sunbelt and demonstrate that we are able to do that effectively.

Got it. That's super helpful. I appreciate you both. Super helpful. And maybe just a quick follow-up. I wanted to go back to the rain and heavy wind preparations, which is encouraging to hear that you feel comfortable enough that the vehicle could already do that today. Without maybe getting too technical, but just curious like what lessons, what differences rain and heavy wind -- like what lessons you have learned from that? And ultimately, what I'm getting at is this is maybe where the case of LiDAR becomes much more superior than non-LiDAR. So just any color there? Any lessons learned? I mean what was that process like? What is that process like and the progress that you can share?

Yes, yes. Like I said, is not that -- I just want to be careful. We are not ready to launch in rain today. But I think as someone riding in the truck, you would wonder why, right? Because if you got in the truck today, it would behave very similarly to the way that it does in the daylight or at night in that it would be super boring and just kind of drive down the road [indiscernible]. As we -- areas where we expect are probably the kind of the most challenging things to both validate and ensure we're getting the performance, particular things like the same places that we've talked about in the past with daytime driving. So pedestrians lying in the road, right? It turns out that doesn't happen very often. In fact, I don't think I've ever seen one in my driving lifetime. But if it does, we want to make sure we handle it well and appropriately. And that was one of the last capabilities that we were able to get to go with in daytime and incrementally more challenging at night and then you can imagine with rain that's incrementally more challenging again. You're right that when we operate in more challenging environments, whether it's in the rain or whether it's in dust that having a complementary set of sensors is very powerful because they could each see through different conditions. They each give different kinds of data. And we believe that's really an important aspect of building a robust and safe system. And again, we're not really interested in building a thing that we can give a demo in. We're building a technology that ultimately will transform freight and transportation. And that means it needs to work. It needs to be able to turn your back trust it. And that's where the bar we're holding to for the driverless releases that we're putting out today.

The next question comes from Ravi Shanker with Morgan Stanley.

This is [indiscernible] on for Ravi Shanker. It would be helpful to hear about other catalysts set for the third quarter and back half of the year, specifically the timing of that second route and next major milestones on your partnerships with both Volvo and PACCAR.

Yes. And I don't think we're going to provide more resolution than we have already. What we're pushing for through the end of the year is unlocking the ability so that in '26, we're able to rapidly enroll routes across the Sunbelt. And so by the end of the year, we hope to be able to operate in -- and we intend to be able to operate in day and night in the rain. We intend to unlock the Fort Worth to El Paso, El Paso to Phoenix and Fort Worth to Phoenix as routes. To do that, there's some discrete capabilities that we know we need. We've talked in the past about the custom border patrol station that's between El Paso and Fort Worth. That's the thing that we handle autonomously today, but we'll want to validate performance for that. And then there's kind of surprising like little things that are really from learning from our experience with customers. So for example, for those of you who aren't deeply familiar in the freight space, is I think called a super single tire, and what that is, is where instead of putting 2 tires in tandem on an axle, you put one larger one that has various trade-offs and economics and fuel efficiency and whatnot. And it turns out that we didn't really understand prior to launch that for some of our customers that was important, we'd asked them, and in fact, they said it wasn't really. But as we've been beginning to operate driverlessly, we found out that it actually is more important. And so part of what we'll be doing in the near future is finalizing the validation for what happens when we're running super single tires and making sure in the case of a blowout or puncture that we can detect and respond to that appropriately. And so it's great to be able to kind of both have a clear road map for where we're going. And then because we have vehicles in operation, we're able to get feedback from customers and kind of tune the near-term milestones so that we maximally meet the value for them.

That's all really helpful. And then if I could squeeze in one more question? It'd be helpful if you could give us a little bit of insight into your relationship with Uber, post their debt offering against your stake and some of the other autonomous bets. How critical are they to deployment?

Uber has been a great partner and continues to be. And as you know, Dara has been on the Board and we continue to have a close working and personal relationship. Uber is focused on ride hailing, and we're focused on trucking. And so in the near term, I think the importance there is kind of relatively disconnected. Of course, Uber Freight is one of our pilot customers, large customers for driverless operations, and we continue to work with them and continue to grow business there. Over the long term, we see the capability we've built to safely operate vehicles on the public roads as something that will ultimately unlock automated passenger vehicles as well. And at some point, we'll engage in that space. But right now, we're really focused on delivering the promise of trucking and building that business.

The next question comes from Chris Pierce with Needham.

Just for clarity, and I'm not sure how much of this you can go into, but on the PACCAR earnings call, they talked about the importance of validated production. In your letter and in your comments, you talked about production on their end of prototype parts in the new trucks and you have a lot of medium there about your production with your contract manufacturer and with Continental. How can you -- I guess I just want to get a sense of what -- how to think about this relationship? And are these surprising to you? Are you pulling forward production? Is this sort of everything is in line with how you expected as far as your production partners? I just kind of want to get a sense if you could talk to that relationship and what -- how are you testifying production?

No, we -- well, first, let me begin by saying we continue to really value the relationship we have with PACCAR and continue to kind of push forward in there. And it's wonderful to see them moving forward their autonomy-enabled truck platform. I think the right way to think about this is there's a truck and there's a driver and we work with our OEM partners to specify and then they go and develop and design the platform, the vehicle itself, the truck. And that has a variety of components in it. And the vehicles we're operating today still have some prototype parts from our OEM partners in them. In contrast and in parallel with that, the driver parts that we operate and are building the parts we develop and build with Fabrinet and we'll be building with Continental are really around the development process of that driver. And the driver, of course, works across multiple different OEMs. So today, we work with PACCAR and Volvo. In the future, of course, we hope to work with other OEMs as well. And so that's maybe -- I apologize for the confusion, if there is any there. But we're tracking and supporting our OEM partners as they mature their platforms. And then in parallel, we're advancing the development of the Aurora Driver and bringing that to production with the second generation coming online next year and then working with Continental to bring that third generation online in '27.

Okay. Perfect. And then you sort of hit on my next question. You want to work with other OEM partners in the future. How do you see this autonomous trucking developing? Do you see an OEM having multiple autonomous partners and then the logistics customer makes a choice? Or do you see -- how do you see the business developing over time given this is an industry that's had a lot of dual sourcing from all sides?

Yes. I think our aspiration is to drive every truck that's out there. And we'll continue to advance as quickly and rapidly as we can to accomplish that by building the best technology, the best product and providing the best service for customers. That said, it's a $1 trillion market. And everyone is going to want and hope for another player in the space, and we look forward to competing with them. Today, Aurora is the only company in the world that can drive trucks on the road at freeway speed and do that safely, driverlessly. And we'll continue to accelerate based on the tools we put in place to validate and release new software, and we'll welcome the competition when it gets there.

The next question comes from Doug Dutton with Evercore ISI.

Just wanted to first ask on the ramp from the 2 trucks to the 10-plus by year-end, is the idea that each of those trucks has a dedicated customer, whether there's customers with 2 or 3 or customers with one? Or how is that rollout sort of happening?

Yes. Thanks for the question, Doug. So really, we're going to -- I guess the short answer is no, at this point, we don't really intend to allocate a specific truck to a specific customer. We're going to provide the capability to move goods from A to B for the different customers, and we'll fill that need with a truck as appropriate as we move forward.

Okay. Understood. That's helpful. And then diving deeper, just on the math here. If you have 2 trucks on the road right now per quarter running each day 200 miles, we'll call it. You got about 60 days, so it's 12,000 miles per quarter per truck. Is that the type of math that you would start to share in the future or that makes sense to sort of calculate the miles driven in the future?

Yes. I think -- it's Dave, Doug, good to hear from you. I think like generally, if you're talking about an individual lane, that's right. We kind of think about it a little bit differently. So if you think about it this way, daytime had like an 8-hour restriction and we can't drive in rain. So you're able to operate in a certain percentage of time. And for us, when the time was available and it wasn't raining, we do a round trip, which was like 400 miles for a truck. As we unlock nighttime, then you can kind of double that. As you go to longer lanes, you can go even further. It really is somewhat lane dependent and then your capability dependent. For us, our focus has been on just growing the driverless number of miles each quarter, which we'll continue to demonstrate and being able to technically operate in almost all of the conditions that are required for the Sunbelt. So being able to exceed hours of service, being able to drive it day and night and in rain and in wind and I think at that point, then we'll start thinking more about like utilization. But we do expect that our trucks to have higher utilization than kind of the average as soon as we're able to operate day and night and in rain. And so we'll continue to demonstrate that overall. So we do think mileage as opposed to trucks is really the right way to measure this.

The next question comes from Mark Delaney with Goldman Sachs.

This is Aman Gupta on for Mark Delaney. Maybe going back to this safety kind of observer in the vehicle, kind of what needs to happen for both the Aurora and then PACCAR to feel comfortable kind of removing that person? And is there some sort of time line that you can share on when you guys expect that to happen?

Yes. From Aurora's perspective, we are comfortable today and that observer is in the vehicle really out of respect and appreciation for our partnership with PACCAR. From PACCAR's, we'll let them speak for themselves, but I think what they've shared and what I can share is that it's really about their process and the fact that these trucks have prototype parts in them. And so for them to ultimately bring these trucks to production and operate them driverlessly, we expect that to correlate with when they launch their autonomy- enabled truck platform.

Understood. That's helpful. And then maybe one on the financial side. One of the slides quoted like $1.84 per mile for cost with the Aurora system. Is that ballpark a good assumption for revenue? And then does that kind of change if there's still the safety observer in the vehicle or as the ODD continues to expand, does that get larger? How should we think about that?

Yes. I think -- so when you're -- I think you're looking at the part which is the carrier perspective example, and that was really the focus on being able to drive beyond the hours of service limitation that you normally had. So from a revenue standpoint, we just kind of used the average revenue that was out there. And then from the cost perspective, we used a lot of the ATRI data and then just provided some discounts for what we are able to provide. It's not a model specifically for our cost. But like generally speaking, we do expect that we are going to lower the cost of operations for our carriers. We're going to be able to do that in the near term, really based on fuel efficiency. We are getting really better fuel efficiency by driving this autonomous trucks. We will be able to do it on driver costs. You think about driver cost, you think about like our indicative DaaS price range, which we provided before, and if you look at the current driver costs on average, which are now at roughly $1 per mile, like there is an opportunity for us to drive the TCO benefit down. But the other most important thing is it's the utilization, so it's the revenue side as well. You're able to take a truck and generate more revenue on a daily and on an annual basis. So it's just a way to think about how to predict it. I don't know that I would go and take those specific numbers and put them into a model because that's very specific to an individual lane.

And just around the part around the observer on board, right? This is both a temporary element and the cost for us in practice is de minimis, right, that we're running a small number of trucks. It is what it is, and it's just not that big a deal. It has no impact on our road map or plans for growth or anything.

The next question comes from Scott Group with Wolfe Research.

This is Cole on for Scott. It's good to see progress with the next generation of hardware in the press release. Is there any way to frame up how we're progressing relative to your original expectations, either from the Fabrinet perspective or the Continental generation?

Yes. I guess at the high order that we haven't shifted our expectations, right? I think we've been fairly consistent about talking about that second generation of hardware coming online in '26 and the Continental generation, the third generation hardware-as-a-service components coming online in '27. We're literally working with these systems on a daily basis. The fact we have the samples from Fabrinet in a truck, and we're in the process of bringing up and validation there is really exciting and kind of aligned with what we would hope. And then the partnership with Continental is just moving forward. We've got through the norming and forming and we're solidly into the storming phase of that partnership.

Okay. That's helpful. And maybe just on the prototype trucks that you've called out, which hardware generation is going to go into those? And maybe expand on how you see that actually playing out over the next 12 months?

I'm sorry, I don't know that I followed the question. I apologize.

So in the -- with the prototype trucks that your OEM partners are delivering, is this going to be the Fabrinet hardware going into it? Is it going to be -- what hardware is actually going to be in those trucks?

Yes. Depending on exactly when and which truck, some of it will be our existing first-generation hardware, which we're using to do kind of bring up a validation of the interface, some of it will be with the second-generation hardware and some will ultimately have components or kits from the third-generation hardware set. It's really driven by internal engineering execution and need.

Thank you. Ladies and gentlemen, at this time, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a great day.