Aurora Innovation, Inc. Class A Common Stock Q2 2026 Earnings Call

Greetings, and welcome to the Aurora second quarter 2026 business review call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Stacy Feit, Vice President, Investor Relations. You may now begin. Thanks, Paul.

Good afternoon, everyone, and welcome to our second 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, and David Maday, CFO. Chris will provide an update on the progress we've made across the key pillars of our business, and David will recap our second quarter financial results. We will then open up 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 31st, 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 June 30th, 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, 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 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 represented a meaningful leap forward in our path to scale, anchored by a number of customer wins. To capitalize on this growing demand, we've launched our new fleet of driverless trucks based on the International LT Series without a person behind the wheel. Last week, we debuted Aurora Driver 2, the combination of our new software, second-generation commercial hardware, and this new truck platform. If you didn't get a chance to join the live stream, check out the video on page four of the slide deck. This milestone officially moves Aurora into the start of our commercial scaling phase. Backed by this momentum, we are fully allocated to exit the year with 200 driverless trucks in operation and are in negotiations with a number of driverless service business customers for 2027 and beyond.

Our commercial momentum continues to accelerate after a strong start to the year, driven by a powerful customer flywheel effect. We recently executed transportation as a service agreement with two customers that aim to grow their networks with Aurora Driver-powered trucks, starting in Laredo, Texas, where nearshoring is driving unprecedented freight volume. Charger Logistics will utilize the Aurora Driver to add capacity on its network and drive higher utilization starting on the Dallas-Laredo route, one of the busiest corridors in Texas. Value Truck will initially focus on boosting route density between two key corridors, Dallas-Laredo and Fort Worth-Phoenix. In addition, we expanded our operations with Volvo Autonomous Solutions with their launch of commercial freight service powered by the Aurora Driver for industry leaders DSV and AVI-SPL. Proving the value of our technology across complex networks and diverse applications lays the groundwork for widespread market adoption.

Every new customer acts as a pipeline multiplier. As the broader logistics industry prepares to adopt autonomy, we're streamlining our customer onboarding cycle. This velocity is a powerful testament to the pent-up demand for a solution that helps address systemic industry bottlenecks. While expanding our commercial relationships, the Aurora Driver completed nearly 440,000 driverless miles since launch through the end of June, maintaining 100% on-time performance record and zero Aurora Driver-attributed collisions. With additional trucks entering service weekly, we expect driverless miles to accelerate meaningfully moving forward. Our scaling plan for this new fleet prioritizes driverless delivery to and from customer facilities to further strengthen the Aurora Driver's value proposition. Our work with Detmar Logistics in West Texas illustrates this versatility.

We've deployed driverless operations without a person behind the wheel between their facility in Midland, Texas, and Capital Sand mining site in Monahans, Texas, along I-20. To support this deployment, we validated a frac sand trailer with minimal integration work, demonstrating the modularity and adaptability of the Aurora Driver. To enable nationwide driverless trucking and ensure seamless end-to-end service for our customers, we recently began supervised testing of way station navigation and on-route fueling. While robotaxis will require extensive infrastructure build-out, the freight ecosystem's established service networks and turnkey truck stop footprint makes trucking a plug-and-play market for autonomous technology. Leveraging this infrastructure, we're now piloting third-party fueling and scaling at truck stops. In these pilots, truck stop staff fuel the truck as the Aurora Driver navigates in and out of the fuel island.

Looking ahead, truck stop personnel will utilize automated arrival notifications to efficiently secure, fuel, and release Aurora Driver-powered trucks, enabling continuous long-haul travel. To support customer demand that is accelerating, we continue to advance our hardware and autonomy-enabled truck programs. The launch of our new fleet of driverless trucks also marks the initial commercial deployment of our second-generation commercial hardware kits. Engineered for 1 million miles of operation, this kit is designed to significantly increase uptime and reliability. It also delivers substantial performance gains, including a more efficient computer and an extended 1-kilometer range for FirstLight, our proprietary long-range FMCW lidar. This long-range capability provides the Aurora Driver with more than 34 seconds of reaction time at highway speeds, setting a new superhuman standard for safety.

Crucially, we expect this kit to drive a 50%-plus reduction in Aurora Driver hardware costs, a key lever supporting our breakeven gross margin target. We expect to have 20 to 25 driverless trucks in operation by the end of the third quarter. To support our scaling plan, our upfitter, Roush, has commenced manufacturing at a dedicated facility for Aurora. We've already received the initial builds and expect Roush to ramp to an annual run rate of 1,000 trucks in October. Concurrently, our ecosystem for series production is on a clear trajectory to hit its stride. At Volvo Group's 2026 Capital Markets Day, the company announced plans for Volvo Autonomous Solutions to begin driverless operations on the Volvo VNL Autonomous in the first quarter of 2027. These trucks will be driven by the Aurora Driver.

They expect to exit 2027 with more than 300 driverless trucks, paving the way for industrial scaling in 2028. We're seeing broad enthusiasm and engagement around the industry, with Volvo projecting $3 billion in autonomous revenue within five years. The industrialization of autonomous freight is definitively at an inflection point. Volvo has already completed several Aurora Driver-powered trucks on their pilot line ahead of the first quarter 2027 driverless launch. Looking further ahead, we've also built Volvo development trucks equipped with components of our third-generation commercial hardware kit manufactured by AUMOVIO. Our partnership with AUMOVIO is intended to support tens of thousands of trucks. We look forward to testing these systems in the coming quarters ahead of AUMOVIO's planned start of production in the second half of 2027.

In parallel, PACCAR and Aurora are jointly defining the path to a scalable launch of our third-generation commercial hardware kit integrated with PACCAR's future autonomy-enabled platform on their assembly lines. We designed our strategy to enable our asset-light commercial model to be deployed across the leading truck platforms, giving us unmatched flexibility to meet diverse fleet preferences as autonomous trucking scales. Our commercial readiness is matched by a highly supportive regulatory landscape. California recently joined the majority of other states in the U.S. to permit the deployment of driverless trucks. Last month, I had the privilege of representing our industry before the California Assembly Transportation Committee. This engagement provided an opportunity to share key learnings from our safe driverless operations, outline our thoughtful approach to regional expansion, and foster shared confidence in the future of autonomous freight in the state.

We have submitted our application to begin the required driver testing in California. At the federal level, we're seeing historic momentum toward a unified national framework. In May, the U.S. House Committee on Transportation and Infrastructure passed the BUILD America 250 Act 62 to 2, a truly bipartisan surface transportation reauthorization bill. This bill features a dedicated framework for the nationwide deployment of autonomous trucks that would help harmonize the current patchwork of state laws and addresses operational updates that Aurora has long championed. For example, the legislation would explicitly permit the use of cab-mounted warning beacons instead of manually placed warning devices when a commercial motor vehicle is stopped. We continue to engage closely with lawmakers to advance this critical legislation into law and secure American leadership in the global autonomous transportation race.

Improving road safety is an important component of that global leadership and core to the Aurora Driver's value proposition. To show you what this looks like in practice, I'd like to share a recent example that powerfully underscores our safety advantage. Earlier this month, one of our trucks was traveling on a frontage road in Fort Worth during a development mission. It was in manual mode, meaning the Aurora Driver system was not engaged in autonomy. The truck was being driven by one of our most experienced vehicle operators with over 2 million miles of Class 8 driving experience and a spotless safety record. The Aurora truck was proceeding into an intersection on a green light, which had been green for more than 25 seconds. Unfortunately, another vehicle entered the intersection against a red light and collided with our truck. Thankfully, no serious injuries were reported by either party.

Our truck and the other vehicle sustained significant damage. While the autonomy system was not engaged, through a combination of log review and simulation, we were able to confirm the Aurora Driver perceived the red light runner nearly six seconds prior to the collision and would have slowed to avoid the collision, even despite having the right of way with the green lights. Events like this motivate our team to keep doing this incredibly important work. Last year, we began operating the first driverless Class A trucks on U.S. public roads. As we continue to scale driverless operations, our commitment to safety and transparency remains a core cultural tenet and key differentiator. We're entering our commercial scaling phase with Aurora Driver 2. We're already fully allocated to exit the year with 200 driverless trucks.

We've earned third-party validation for our Safety Case. We've advanced the industrial partnerships to deliver at the scale this opportunity demands. As our fleet grows week by week, we're positioning Aurora to power a meaningful share of the trillion-dollar U.S. logistics industry. I'm incredibly proud of the discipline our team has shown in executing our vision responsibly, establishing deep credibility, and cultivating an ecosystem of partners, customers, regulators, and investors who share our conviction in the future we're building. I'll now pass it over to Dave, who will review our financial results.

Thanks, Chris. Let's review our financial results for which we have provided a summary on page six of the slide deck for reference. Second quarter 2026 revenue totaled $2 million across driverless and vehicle operator supervised commercial loads. The Aurora Driver achieved another record number of commercial miles driven during the quarter. Second quarter operating loss, including stock-based compensation, totaled $266 million. Excluding stock-based compensation of $60 million, R&D totaled $164 million, SG&A was $37 million, and cost of revenue was $7 million. We used approximately $225 million in operating cash during the second quarter of 2026, and capital expenditures totaled $31 million. Excluding $63 million in cash bonus payments, which were funded through our at-the-market program, our cash spend was within our externally communicated quarterly average target.

During the quarter, we issued 30 million shares of Class A common stock through our at-the-market program for net proceeds of $215 million. Using a portion of these proceeds as planned to fund the referenced cash bonus payments, as well as the tax liability associated with the vesting of employee restricted stock units, we increased our liquidity by $126 million. We ended the quarter with a very strong balance sheet, including nearly $1.2 billion in cash and short-term investments. 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 an approximately $80 million revenue run rate for our Transportation as a Service business. This establishes a powerful foundation for 2027 when we expect the core Driver-as-a-Service business model to commence. To support our scaling plan, we continue to expect quarterly cash use of approximately $190 million-$220 million on average in 2026. This includes approximately $150 million in anticipated full year capital expenditures, primarily attributed to our capacity plan. The focus execution driving Aurora's 2026 transition continued in the second quarter. We are making the strategic investments necessary to bring Aurora Driver 2 to large scale industrial deployment. With every truck on the road, we are driving a safer, more efficient era for logistics. With that, we will now open the call to Q&A.

Thank you. We'll now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. One moment please while we call for questions. Thank you. Our first question is from George Gianarikas with Canaccord Genuity.

Hi, everyone. Thank you for taking my questions. Given the positive commercial momentum you've been announcing and recent industry announcements like the one from TFI yesterday around expanding its autonomous operations. What specific catalyst do you think will drive the next real inflection point in commercial adoption? If I may ask, are you directly involved with TFI? Thank you. Hey, thanks, George.

As you know, we're not going to comment about potential partnerships or customers until we're able to do that and aligned with them and whatnot. No comment there. In terms of catalyst demand, I think it's just a continued building of trust and credibility. Right? We've seen with each step forward with technology and each step forward with customer adoption, we get this flywheel effect where the engagement we have with our commercial team just continues to grow and grow. I expect as we put more and more of these second-generation trucks on the road, and we continue to build the volume there, success begets success here is my expectation.

Thank you. Maybe as a follow-up regarding the unit economics and the scaling roadmap, how confident are you that you can achieve your projected hardware cost-downs given what's happening from an inflationary perspective? Maybe on the hardware maintenance front, specifically on your proprietary lidar, how resilient is the stack against real-world field degradation? Should the units require service or replacement? How does that cost curve look like for maintaining your in-house components at scale? Thank you. Yeah. We continue to have confidence in our ability to achieve the targets we have for the cost of the hardware kit and the maintenance and support of that hardware kit to achieve our long-term economic objectives there.

Continue to be very happy with that. It's really important to understand the level of rigor and testing we put these systems through to achieve the durability we intend to get out of them. We've been testing these units for months already, and we'll continue to test them forward so we can continue to build confidence in them. We've already begun some of the reliability testing for the third-generation hardware components. This is work that is in flight and gives us a lot of confidence on what we can expect going forward with the fleet. I don't know, Dave, if there's more you'd add.

Yeah, I think in terms of confidence of the economics just generally, obviously we are already building our second-generation kit. We have costs for the ones we're producing today and the ones that we'll be producing into next year, we have estimates. We have a pretty good handle in terms of that. Certainly, there are some headwinds in terms of costs, but these kits are also designed and expected to last a million miles. Some minor increases in component costs when you look at on a unit economic basis, George, for gross profit over a per mile basis, are not materially going to impact our gross margin projections.

Thank you. Our next question is from Ravi Shanker with Morgan Stanley.

Great, thanks. Afternoon, everyone. Chris, you said that in the release that you are in negotiations with a number of customers for the DaaS business model by 2027 and beyond. Can you just unpack that a little bit more and maybe give us a glimpse into what momentum of negotiations have been like, especially after the first few commercial agreements that you've announced in the last few months?

Enthusiastic, I guess, would be the right way to frame it. We announced a few months ago now that MOU with Hirschbach, we continue to progress that deal forward. That really will create the framework for the rest of the partnerships that we have in the space. The core elements of that we have clarity on, and we'll just continue to move that forward. Customers want to own these assets. They want to see the benefit from it, and we're excited to get them to them.

The other thing I'd say, Ravi, is that for every customer that we sign up with a Transportation as a Service agreement, it is with the intent to then move into the Driver-as-a-Service in the following year. In terms of the active negotiations, we are working with a couple of folks just to make sure that the paper that we put in that we want to apply broadly works for everybody. That's why we're actively working with multiple folks. The intent is, if you're a Transportation as a Service customer today, we would expect that you'll start to add Driver-as-a-Service business model in 2027.

Understood. Maybe as a follow-up, again, to the comment that Volvo is projecting $3 billion in autonomous revenue in five years. Not to make you answer for Volvo, but I'm assuming if they're putting out a revenue target, they've done some fairly detailed math on what they think the trucks are going to cost and how they share the economics and such. I'm wondering if they've shared any of that with you and if you can share with us.

We certainly can't share anything of Volvo's model with you, but I can share that we have clear an understanding of the economic arrangement between Aurora and Volvo, and we're excited for that. We're excited to see them continue to grow their customer cohort, and we look forward to supporting them and helping them build their business.

Very good. Thanks, guys. Thank you.

Our next question is from Andres Sheppard with Cantor Fitzgerald.

Hey, everyone. Good afternoon. Thanks so much for taking our questions and congratulations on the quarter and on getting Gen 2 out. Very exciting. Wondering if you can maybe help us quantify the current fleet size, how many Gen 1s versus Gen 2 trucks are in operation today as we think about your target for Q3.

How should we think about that unit mix? Similarly, as we scale to the more than 200 trucks by year end, how should we be thinking about that unit mix going forward? Thank you. Yeah. Great question.

Thank you. Today, we have on order of 25 trucks that are operating, and a handful of them are the new International trucks. We expect to grow that to 20 to 25 trucks that are of the International trucks by the end of this quarter. By the end of the year, as we said, have a couple of hundred trucks operating. You can expect the vast majority, if not all of that fleet will be Well, all of that fleet by the end of the year will either be International or Volvo. We're excited to see those come online, and we'll start to phase out the Peterbilt trucks, with an eye to looking forward to reintroducing Peterbilt trucks with our third generation hardware in the future.

Wonderful. Very helpful. Just a quick follow-up to that. You kind of alluded to there just at the end, now that the Gen 2 has launched, will Gen 1 trucks just be phased out completely or upgraded? How does the 50% improvement in hardware cost reduction on Gen 2, how does that change your path to profitability? Thank you. Yeah, we do expect to just phase those trucks out.

They've served a really important purpose for us in demonstrating the technology, starting to build early customer traction, and really kind of being a tremendous learning test bed for us as a company. We're very excited to get on to the Gen 2 platform with all the benefits that come along with that and the ability to scale that for customers. Excited for that. In terms of the 50% cost reduction, this is what we've been talking about for some time, is how that second generation hardware ultimately allows us to get to a point where we can operate the business with unit economic profitability. We expect that to continue to play out as we continue to improve our execution and drive efficiencies in the operations of the business and improve the system.

Ultimately, that third generation hardware will take another step function in hardware cost for us, and that will allow us to drive to the ultimate margins that we anticipate in the business.

Excellent. Thank you so much. Congrats again. We'll pass it on.

Thank you. Appreciate it. Our next question comes from Chris Pierce with Needham & Company.

Good afternoon. This year to date, you've had a lot of customer announcements. I guess I just want to understand, how are customers thinking about why are they moving forward? Is it to add capacity and win share? Is it to better utilize their assets? Is it about lowering per hour driver costs? Like, how would you bucket those?

I'd say it's much more the first two of these. Every one of our customers put safety first and then talk about the importance of their people, their drivers, and how this technology complements them. It really will, we expect, allow them to expand their business, allow them to increase the utilization of their assets, and allow them to have those incredible humans that they have on their team focus on things where they add the most value, where they can be the face of the company to their customers. We're excited to see this help these customers grow and become more profitable.

On that, is it fair to say they see a situation where they can outgrow their peers or they can really grow their business and kind of win share by those that are moving slower? Is that sort of the right way to think about it?

I think you'll have to ask them. As we look at it, you've heard me say before that this technology is so impactful, transformational, improving safety, improving fuel economy, improving utilization, for customers, that if you're not using our stuff in the next five years, you just won't be competitive in long haul. We're excited for that. Okay, perfect.

Just one last one. In the letter, it talks about streamlining customer onboarding. Can you kind of give us an example of a gating factor that was up and has come down on your side and sort of why you chose to kind of highlight this?

Yeah. We're just seeing conversations move more quickly. We think part of that is just the visible experience and credibility we've built by operating driverless trucks for some time. Part of it is us just being smarter, understanding more what's involved in integrating with a customer business and getting the lessons learned from that, and allowing us to do a better job of meeting the customers where they are today. It's experience you just don't get without actually operating the fleet and serving customers.

I'd say the other thing on that is because we've reached a point in the economy performance and the generalizability and just where we are, our ability to take a customer request and go react to that quickly, is really improved dramatically. We have a few more trucks and we're adding a lot more trucks. We have more people to support them and the autonomy systems. We can go react to customer requests much quicker. Remember when we first started, we were on Dallas to Houston. You couldn't talk about when you were going to exactly get to Oklahoma City right away. Once we got to a point where we were comfortable and generalizable, adding Oklahoma City as a potential route took weeks to do. Our ability to move faster is one of the key elements as well.

I'd just add to that one last point, which is you just wouldn't have been able to meet supply with trucks for our customers last year between both the limitations for first generation hardware, and the work we had to do to do the integration onto the new platform. At this point now, we've kind of unlocked that ability to scale the business, and it's much easier to have a conversation with customers when we have clarity on how we can serve them and when we can serve them.

Okay. Thank you very much.

Thank you. I think we have others in line for questions here still.

Paul, are you able to open the line to the next question?

Well, we apologize for folks waiting in line. Hopefully, the operator will come back here and connect us.

Our next question is from Ryan Sigdahl with Craig-Hallum Capital Group.

Hey, good afternoon, guys. Chris, maybe curious on Volvo, just how you're thinking about Aurora's place in the AV ecosystem longer term as OEMs like Volvo work to build out their own TaaS businesses, or as they call it, BaaS. If you ultimately care who you're selling to, whether it's an OEM running their own fleet or whether it's direct to the fleet customers yourself under a DaaS model. Then maybe second to that, Dave, if you're willing to comment on the financial implications of OEMs TaaS versus fleet DaaS from an economics to Aurora standpoint.

Yeah. We really think about that relationship we have with Volvo as kind of having two dimensions. One is the integration with the OEM platform and then the support and engagement we have with Volvo Autonomous Solutions and their business. When we look at Volvo Autonomous Solutions, we have a close relationship with them, of course, because of that broader relationship around the platform. Really, we look at them as a Driver-as-a-Service customer to us. That's great, and we are excited for them to go out and serve customers and build their business. We will continue to work with them that way.

Yeah, relative to the financial differences, I would say this. Each of them, whether you're doing Aurora Driver for Freight and selling a TaaS or a DaaS business, or we're working with Volvo Autonomous Solutions, we have gross margin targets to run the business. We look at both our cost structure to support that business and then the necessary margins. We look at them all together. It's a good balance. I don't want to say they're exactly the same, because the inputs and the cost to support those businesses are slightly different. We do look at holistically, each of them independently and then add them up together to make sure that it matches our overall projections.

Good. Just on the Gen 2 International truck launch, in the video you posted last week, you could see at least a dozen, a little more than that, kind of trucks in the background. Implies you have high visibility to that 20-25 you guided for Q3. I guess, is that a reasonable inference or is there a reason some of those wouldn't necessarily be used for commercial operations? Second to that, I guess, would be just the path with Roush on track for 1,000 unit annual capacity by October. That implies 250 trucks a quarter. I guess, why wouldn't you exit the year with more than 200 commercial trucks on the road?

Yeah. We have really good visibility in our access to trucks to support the $20 million-$25 million in the quarter. As you know, there's a ramp-up that it takes whenever you stand up a new manufacturing line. We expect that to ramp in Q4 to the full velocity. We also understand that there may be challenges along that path. We're trying to provide what we think is reasonable guidance to where we expect that to net out. I don't know, Dave, if you'd add more there.

I think for certain, if we have the ability to build more, I'm sure we have stronger customer demand. We'll take advantage of that. For right now, we think that this is a pretty good plan. It's what we've guided to before. It is our appropriate target at this point in time. Relative to your trucks count, just generally, like the videos and everything you're going to see, we do have development trucks as well. We have first generation and second generation trucks out there. I wouldn't look too much at it. I think that the important thing for us is we've got a handful of the International trucks already operating driverless on multiple routes, two customer endpoints as well. By the end of the quarter, we expect to have 20-25.

That will be the highest number of dedicated commercial trucks we've had going forward. We're just going to build upon that. We're super excited about the opportunity. For a very long time, we've known this is coming. Now we can confidently see the future and the growth in the truck supply. We're excited as hell about that.

Yeah. For us internally here, we've been investing heavily to get to this point and be able to start to see these things come off the line and get used, and it's going to be a blast.

Thanks, Chris, Dave. Exciting times.

Thank you. Good luck, guys.

Thank you. Appreciate it. Our next question is from Colin Rusch with Oppenheimer.

Thanks so much, guys. Could you talk a little bit about what you're seeing from Roush from a tack time perspective in terms of production and validation that gives you some comfort around the scale up to the 1,000 trucks a year?

Yeah. First, I think it's just important to recognize that Roush does this, right? They're one of the folks that do finishing work from OEMs and do this at scale, even scale much larger than what we're talking about. Part of the reason we selected them is the pedigree, experience, and competence that they have. We have very little doubt there. We're still early in the ramp. They're familiar with the work. We engage with them on a, if not a daily basis. We just have a high degree of confidence it's going to come together.

Yeah. The other thing that I'd say, Colin, is tack time for production supply when you're doing large scale, somewhat relevant here. This is a dedicated facility, dedicated stations. It moves through like an assembly line, instead of one person building the entire truck, so it will be highly efficient. Tack time's not necessarily the thing that we're looking for. We look at the number of stations and the number of trucks we can build per week, and we try to match that to the supply of the Aurora Driver hardware kits that we'll have coming forward.

Great. Thanks so much. Obviously, you guys are focused on the trucking market, but I'm sure you're getting a variety of inbound for other form factors and other applications. Given the sophistication of the platform and the kinds of learning cycles that you guys have demonstrated, just curious if you're starting to evolve your thinking about the ability to serve other markets and potentially carve out some other applications that could be a separate growth driver.

Yeah. We've consistently believed that the Aurora Driver itself and the broad competence and capabilities we've built as a company that allows us to deliver a safety-critical, highly complicated, AI-enabled system into the world is going to travel. Right now, we look at the trucking market, and it's hard to imagine a market that we could be both better positioned for and that has better opportunity for us to grow and succeed in the business. For sure, we are starting to think about where the other places that we should go apply this and exactly what the right timing is to begin investing in those spaces. I would not forgive myself, and I am sure our investors would not forgive us, if we didn't execute with excellence in delivering on the trucking application. We'll keep that very much front and foremost.

Great. Thanks so much, guys.

Thank you. Our next question is from Scott Group with Wolfe Research.

Hey, guys. It's Cole on for Scott. Can you size roughly how many truck carriers intend to put onto their balance sheets in 2027 following some of your customer negotiations around the DaaS model?

Yeah, I don't think there's much more we can share there than what we've already said, which is, with that MOU we have in place with Hirschbach, they're expecting to put 500 tractors into their fleet over 2027 and 2028. We'll look forward to sharing more with you as we can.

Maybe just on the OEM side, how do you think, or do you think the OEM appetite to scale autonomous is keeping up with your targets? What's the risk that you'll have to switch to a more transportation as a service dominated model going forward?

Yeah, those feel like very different questions. Can the OEMs keep up with the demand? I'm a big believer in the market system, and that if customers are seeing the benefits that they will with the Aurora Driver and the pull that will generate, it's going to encourage OEMs to produce vehicles to meet that demand. This is going to be transformational. It's going to have a huge positive impact for our customers. I think that the more we can demonstrate that value, the more enthusiasm and energy the customer pull will generate with OEM partners. The second question is, do you think we'd have to pivot towards a transportation as a service business? Not from where we see today, no. Again, why do we take the approach we're taking?

We think we're really good at building autonomy systems and the driving capability, but we have the humility to understand that others are great at what they do. I would much rather support a Werner or a Hirschbach or a Schneider or any of these other companies that we work with, and help them build and grow their business and allow us to stay focused on what we do. I think together, that's the way we have the biggest impact in the world and the way we succeed the best.

Okay. Thanks, guys. I'll turn it back.

Thank you. Our next question is from Michael Latimore with Northland Capital Markets.

Yeah, great. Thanks. In terms of launching new routes, can you discuss a little bit about the time to launch a new route? Do you expect that to continue to shrink? Maybe can you quantify where it is now versus where it would be optimally?

Yeah. First, we're really focused on where the customers want us to be operating, and that's going to drive route expansion for us. As we mentioned, there's a lot of excitement right now with routes coming out of Laredo given the nearshoring, and we're excited to be supporting customers there and continuing to build across the Southern Freight Corridor. For us, we look at this as a thing where the cost for us to build new routes is going to continue to decrease and the time associated will continue to decrease. This is not a thing that I really worry about as driving the scale of our business over time. This is something where you'll see us start to pick up more routes as customer demand for it drives it and through the back half of this year and in years going forward.

It's not really something that we think of as a major cost driver for the business.

How many routes do you expect to have by year-end?

What we've shared is that we expect to be expanding into the Sun Belt through the year-end. We haven't been specific about the number of routes.

Okay, great. Thanks on the Detmar program, any kind of additional opportunity there or expansion opportunities from where you are now?

Yeah, I think that I would imagine like any other business, as we prove our value, and demonstrate how we're able to support and help them grow their business, that will drive increased demand. So far, we're excited to be off and started with them and operating driverlessly between their relevant endpoints. We'll look forward to updating you as we continue to build that relationship with them.

Okay. Thank you. Thank you.

Our next question is from Itay Michaeli with TD Cowen.

Great. Thanks. Good afternoon, everybody. Just a first question on the Aurora Driver 2. I was hoping you'd talk more about the degree of performance improvement in the new generation, just given it's both kind of hardware and software upgrades. Whether that performance improvement comes in the form of safety or perhaps just more ODD coverage.

Yeah, it really drives both a reduction in cost, which is important for us to grow our business. It does have some important performance in ODD expansion capabilities. We certainly wouldn't have put anything on the road that we didn't believe was safe. So it continues to be a safe product that we have out there. But that extra range that we have with the FirstLight lidar allows us to reach sooner, particularly to situations at night, which is a big advantage. The conditions in which we can operate continue to expand, which does a better job of serving our customers.

Great. That's helpful. As a follow-up, I'm curious about your latest thoughts on just remote assistance and on-site support costs, how to think about those over the next 12-18 months, just from what you've kind of gained experience with the last few quarters. Maybe along those lines, too, how you think about insurance costs and how those are being treated in some of your latest customer agreements.

Yeah. On both remote assist and on-site support, we continue to see positive trends in how we're deploying the technology and how that is translating to the rate that we need to, and ultimately that will drive the cost of delivering the Aurora Driver. We are excited for that. We continue to be on track in delivering a product that's going to be performant and meet our business objectives there. In terms of insurance, Dave, do you want to speak to that?

Yeah. Because we are the DOT holder today, for our Transportation as a Service business, we carry the insurance associated with that. We have insurance coverage for all of our trucks. We have really good rates, really on a per truck basis because of the safety performance of the system. While still limited in a track record, we've got a pretty impressive track record coming up to leverage. We will continue to expand upon that. When we shift over into Driver-as-a-Service, this is an opportunity for both sides. It's an opportunity for us to just have coverage associated with the Aurora Driver itself and not other things that happen. For our customers, it's an opportunity for them to have increased level of confidence and reduce incidents in safety and coverage for them. All things that they don't have today.

I think it's a win-win across the board.

Great. That's very helpful. Thank you.

Thank you. Our next question is from Mark Delaney with Goldman Sachs.

Hi, team. Good evening. Thank you for taking the questions. You have Aman on for Mark. Maybe starting with some of the comments you made on the kind of path exiting the year. You talked about being able to leave the year with 200+ driverless trucks, also transitioning to DAS next year. How should we think about your ability and willingness to add trucks beyond that into 2027 and beyond? How might that impact your cash use per quarter targets that you've laid out for 2026 going into 2027?

In 2027, it will be the transition year where we move from primarily Transportation as a Service business to a primarily Driver-as-a-Service business over the course of the year. We may add more trucks in 2026 under the TaaS business. As we look at that, we obviously generate more revenue, we expect to do so at a lower margin with a TaaS vehicle versus a DAS vehicle. I don't know, Dave, if you want to add more to that.

Yeah, we haven't provided any guidance for 2027 cash use and capital expenditures, but we do have projections. We will add additional TaaS units into 2027. It's not like we go from on January one, everything's DaaS.

Yeah. It's every customer. This is customer adoption and support.

It's going to be a customer-by-customer transition. We do have that built into our forecast for our overall liquidity projections, I think we've shared before that we'd be willing to support up to 500 TaaS trucks if needed. I don't think it will be that many, but we obviously have flexibility in our modeling and in our financing to support that.

Understood. Thank you for that. Maybe to the earlier point that, Chris, I think you made, how are you guys thinking about some of the other functions that you're planning to add, like some of the other weather conditions and being able to haul different types of trailers? Can you maybe provide some color on progress there, given that you're planning to do lane expansions more to customer demand?

Yeah. We continue to expand the conditions the truck can operate in. Right now, it has a fairly broad operating environment. One of the things we'll be looking to add as we get towards the end of this year is operation in light snow and cold weather. That'll be an important enabler for the system as we go forward. At this point, we have a fairly broad set of trailers that we do support, supporting many of the uses for our customers. As we continue to add customers, we'll look at the trailers that are needed to support that growth of the business.

Adding a trailer is not a big deal. We take safety very seriously. It means that we do go through a process, a deliberate process, to make sure it actually works, not just kind of one-shot it and hope. It's not a material amount of effort.

Our next question is from David Vernon with Bernstein Research.

Hi there. This is Justine Weiss speaking on behalf of David Vernon. Thanks so much for taking our question. First, it looks like the number of driverless trucks in operation expected by year-end has gone from more than 200 mentioned last quarter to this quarter's presentation saying just 200 trucks. Has something changed with build rates or deals that shifted that outlook down slightly?

Hey, Justine. It's Dave. I wouldn't read too much into that. We're fully allocated at 200. We have the flexibility to go more. I wouldn't look too much into it. If we had to get to 201, 202, 205, that's not really our concern right now. We've been really just trying to match the supply with our customer demand. We said we have a lot of demand right now. We just want to make sure that we're pretty solid on the supply. We'll actually have more trucks built than that, but we also have to have some trucks that are able to support development. Then we have to have trucks that can backfill during regularly scheduled repair and maintenance of base trucks and things like that. I wouldn't read too much into it right now.

Got it. Okay, that's helpful. Thanks. Then the other thing, I'm hoping that you can help us get a sense of the economic impact of these commercial deals being announced. When we see these press releases come out about new deals like the Hirschbach one or the Value Truck one, can you help us think about how to frame the revenue impact for investors? Can you discuss, and maybe discuss the difference between the revenue impact of the TaaS versus DAS deals?

Well, obviously the TaaS deals have a higher per mile revenue outlook because it's the full service. As we've said before, kind of in that $2 plus range, whereas DAS is targeting the $0.85 plus. There's a substantial difference in TaaS versus DAS on a revenue side, but there's also a substantial difference on the cost side and on the margin side. In terms of our announcements, essentially, I would guide it this way. We're fully allocated to 200 trucks. 200 trucks at the end of year equals roughly a revenue run rate of $80 million. By the end of the year, before we add any trucks into 2027, before we add any more to go above 200, we would have a contractual rate, which is roughly $80 million revenue run rate.

For us, if you think about where we were to start the year and then in one year having a run rate of $80 million, it's hyper-growth for us.

Got it. Thank you. Thank you.

We have reached the end of our question and answer session. This does conclude today's conference call. We thank you again for your participation. You may disconnect your lines at this time.