Good day, ladies and gentlemen, and welcome to the Aurora Third Quarter 2022 Business Review Call. All lines have been placed on a listen-only mode and the floor will be open for questions and comments following the presentation. [Operator Instructions] At this time, it is my pleasure to turn the floor over to your host, Stacy Feit, VP, Investor Relations. Ma'am, the floor is yours.

Thank you, Pat. Good afternoon, everyone, and welcome to our third quarter 2022 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 is Chris Urmson, Co-Founder and CEO; and Richard Tame, CFO. Chris will provide an update on the progress we have made across the key pillars of our business, and Richard will recap our third quarter financial results. We will then open the call to Q&A. A recording of this conference call will be available on our Investor Relations website at ir.aurora.tech shortly after this call has ended. I'd like to take this opportunity to remind you that during this call, we will be making forward-looking statements. This include statements relating to the achievement of certain milestones around the development and commercialization of the Aurora Driver on our anticipated timeframe, the timing of availability of autonomy-enabled truck platforms, the expected performance of our business and potential opportunities with partners and pilot customers, expected cash runway and overall future prospects. These statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those projected or implied during this call. In particular, those described in our risk factors included in our quarterly report on Form 10-Q for the quarter ended June 30, 2022, filed with the SEC on August 12, 2022, as well as the current uncertainty and unpredictability in our business, the markets and economy. 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 be also be found on our Investor Relations website. With that, I will now turn the call over to Chris.

Thank you, Stacy. It's great to get a chance to connect with everyone today. We had the honor of hosting our first Analyst and Investor Day as a public company as we wrapped up the third quarter. We shared our progress towards the commercial launch of Aurora Horizon, our autonomous trucking subscription service and attendees experienced Aurora Driver-operated autonomous truck ride along I-45 near Dallas and from Dallas to Houston. I have the privilege of working with our incredible team every day and this was a great opportunity for them to engage with the investment community and share their passion for Aurora and the progress we're making. The energy of the event was great and the enthusiasm for our technology was palpable. As we shared at the event, we've continue to make strong progress across each of the core elements of our business, the Aurora Driver, operations and service delivery and the truck platform. We introduced a range of new driving capabilities with our Beta 4.0 release that enable the Aurora Driver to navigate more of the unexpected obstacles, vehicles can face every day, moving us another step closer to our Feature Complete milestone. We continue to scale our operations, achieving our commercial load booking target and expanding our pilot with Uber Freight. And we've built and deployed our next generation fleet of trucks with the latest version of Aurora Driver Hardware. These accomplishments underscore the advancements we're making in our roadmap to launch Aurora Horizon by the end of 2024. During the third quarter, we released Aurora Driver Beta 4.0 as part of our commitment to deliver quarterly technical updates that advance the Aurora Driver. This quarter's update includes new capabilities and improvements on ones released in past betas. Each release builds on those that came before, a cycle…

Thank you, Chris. We recognized approximately $3 million in collaboration revenue during the third quarter and $148 million cumulative to-date for development work associated with our agreement with Toyota. As of September 30, 2022, we have received all cash payments under the collaboration framework agreement with Toyota. While our first priority is commercialization of Aurora Horizon, we continue to believe our work with Toyota and other long-lead efforts will spring load us for the eventual launch of Aurora Connect, our subscription service for the ride-hailing market. Third quarter operating expenses, including stock-based compensation totaled $203 million. Excluding stock-based compensation of $37 million, operating expenses totaled $166 million. Within operating expenses, R&D expenses, excluding $32 million in stock-based compensation, totaled $139 million, primarily comprised of personnel costs as we continue to invest in our industry-leading autonomy technology. SG&A expenses excluding $5 million in stock-based compensation were $27 million. Turning to cash flow. We used approximately $142 million in operating cash, which reflects a $5 million inflow during the quarter related to the Toyota agreement. Capital expenditures totaled $3 million. We ended the third quarter with a very strong balance sheet, including over $1.2 billion in cash and short-term investments. We expect this cash runway to fund Aurora through mid-2024, enabling us to continue to develop the Aurora Driver for commercial deployment at scale. With that, we'll now open the call to Q&A.

Thank you. [Operator Instructions] And our first question comes from Tom White from D.A. Davidson. Go ahead, Tom.

Hi. This is Wyatt Swanson on for Tom. My first question is, we are kind of hoping you guys could elaborate a bit more on what Argo's shutting down means? If anything for the near and intermediate term evolution of the space? And kind of specifically as it relates to further consolidation or partnerships, does it hurt or help Aurora in any way?

Yes. So we've been talking about consolidation basically since the company was founded. As we think about the future here, what we're seeing is just the natural evolution of any industry. If you think of the automotive industry, at the beginning of the 20th century, there were 250 manufacturers and by the 1930s, there were three. And so like any other space, you're going to see a proliferation of companies to begin and I think that's a very healthy part of building the ecosystem. And then over time, those of us who have the team, have the technology and have the ability to execute are going to be positioned for success. We look at Argo, as I said in my post about this, these are folks who are aligned on the mission with us and many of them are friends, so we're a little sad to see that happen, but we think it's just a natural course of business. For us, it really puts into stark relief the value of being an independent company. The fact that we -- will have to align people behind the mission that we're on and be able to steer the ship where it needs to go to be successful, right? And it is the bet as opposed to one of the bets and we believe that from day one.

Right. That makes sense. And then just one more from me. It's more of a high-level question on like how the self-driving industry/ecosystem may be impacted by a prolonged period of high interest rates, inflation and recessionary pressures and what sort of impact might that have on your timetable for commercialization or rate of cash burn, if any?

So maybe I'll start Richard then I will pitch it to you. So I think when we look at the opportunity in the space, nothing has changed. If anything, there's even more demand for freight than there was a few years ago. And so having a company that has the right business model, the technology and the approach to the market and going after what is clearly the right entry point, I think sets us up for success. And I expect most of our investors when they look at the opportunity in this space, if we are able to continue to execute as we expect, we expect to be in a very strong position and if anything, this downturn is kind of helping clear the table and make it more clear who the winners are and who the losers will be. In terms of the economic environment, internally, we've taken efforts to focus our spending, be efficient with the money we're using and to push out the runway for the company. And I don't know Richard, if you care to add more to that?

Sure. I agree with everything Chris said and we are fully aware of the macroeconomic environment and how that's not favorable for growth stocks like ours but, as Chris said, the opportunity underlying the business is still the same, if not bigger and it's all about our ability to execute against our roadmap. And we certainly feel very fortunate that we raise the capital that we did in the past, so as we said, at the end of Q3 with $1.2 billion cash and short-term investments on the balance sheet, we really feel that gives us the opportunity to ride out the current situations in the market, gives us the ability to continue execute on the roadmap and we feel confident that we will have the opportunity to raise more capital that we will need to execute into the future. So we've never shied away from the fact that we do need to raise more money and our current run rate gets us through mid-2024, but we certainly feel that gives us plenty of time for the macroenvironment to change for us to execute and we feel good about our position.

Great. Thanks.

Thank you.

[Operator Instructions] And there appear to be no -- and there is a question from Mark Delaney from Goldman Sachs. Go ahead, Mark.

Hi, guys. You have Ryan Heeb on for Mark Delaney, and thank you very much for taking the question. And are you guys seeing the macroeconomic backdrop at the moment impact any suppliers timelines as it relates to when AV truck platforms could be ready, perhaps if they're being a little bit more disciplined on the R&D?

I think I listened into the PACCAR earnings call the other day and I think they had a record quarter. So I think the demand for freight is just increasing and so they seem to be doing great work. I think Preston had great answer to a question about how much they invest in R&D and it's where they see immense value for customers and from where I say see -- where I sit, the benefits of what we're building together are profound for customers, increasing safety on the road for their customers, improving efficiency, increasing truck utilization. So we're excited and continue to be really happy with the execution with our partners.

Thank you.

Thank you.

And that appears to be -- sorry, that appears to be the last question. At this time, I'd like to now turn it back to management for any closing remarks.

Thank you, everyone, for joining us and we look forward to connecting on our next call to share our progress.

Thank you. This does conclude today's conference. We thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.