Aurora Innovation, Inc. (AUR) Q3 2026 Earnings Report, Transcript and Summary

Greetings, and welcome to the Aurora Third Quarter 2026 Business Review Call. [Operator Instructions] As a reminder, the conference is being recorded. It is now my pleasure to introduce Stacy Feit, Vice President of Investor Relations. You may now begin.

Thanks, Leo. Good afternoon, everyone, and welcome to our third 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 have made across the key pillars of our business, and David 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 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, 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 September 30, 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 forward-looking financial measures 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 reconciliations. With that, I'll turn the call over to Chris.

Thanks, Stacy. With Aurora Driver-powered trucks operating without a person behind the wheel, accelerating production and expanding customer adoption, we've reached an inflection point on our path to commercial scale. We have 20-plus driverless trucks already built and coming into the fleet and production is accelerating. The production momentum equips us to meet growing customer demand. Following our recent Analyst and Investor Day, we hosted a partner summit with leaders from over 35 of the largest and most innovative carriers in private fleets. This customer engagement supported another landmark Driver-as-a-Service MOU. Building on an initial Transportation-as-a-Service agreement signed earlier this year, Charger Logistics has selected Aurora to scale their autonomous fleet with a plan to own and operate 500 Driver-as-a-Service trucks. This MOU represents a potential multiyear revenue stream in the hundreds of millions of dollars. With truck delivery expected in 2027 and 2028, Charger plans to use the Aurora Driver to add capacity on its network and drive higher utilization, starting between Dallas and Laredo, one of its busiest freight routes in the Sunbelt. As customers experience the Aurora Driver operating reliably on the road and see the compelling economic benefits firsthand, we're building a strong foundation to expand into larger long-term commitments. Our scaling plan prioritizes driverless delivery between customer sites to enhance the Aurora Driver's value proposition. In November, the Aurora Driver will be operating directly to sites for several driverless customers, including automated navigation through security checkpoints. Beyond customer sites, a true end-to-end nationwide service requires the Aurora Driver to operate within existing freight infrastructure, just like conventional trucks. Historically, autonomous trucks have relied on voluntarily enhanced pre-trip inspection to bypass weigh stations. With our weigh station traversal capability, which you can see in the video on Page 5 of the slide deck, the Aurora Driver can now autonomously determine if a station is open, navigate to an available scale lane and adapt to different scale configurations. This capability makes it easier for customers to integrate the Aurora Driver into their networks. As the Aurora Driver's capabilities continue to expand, the regulatory landscape increasingly supports scale deployment. Earlier this month, the Federal Motor Carrier Safety Administration granted Aurora and the industry an important 5-year exemption, permitting driverless trucks to use cab-mounted warning beacons in place of traditional manually placed roadside warning devices. By successfully demonstrating that our warning beacon technology would likely achieve a level of safety equivalent to or greater than legacy requirements, Aurora's leadership in working with federal regulators has cleared the way for driverless freight at scale for the industry. To meet growing customer demand for this critical technology, we're executing a phased manufacturing plan, beginning with upfitting at Roush and initial line-side integration with Volvo, while preparing for full OEM industrialization with Volvo and PACCAR. Together with Roush, we're working to establish an annualized production capability of more than 1,000 trucks. You can check out this production facility in the video on Page 7 of the slide deck. While our initial ramp volume over the past month was constrained by material availability, component quality and issues identified during end-of-line testing, our team moved quickly to address these preproduction bottlenecks. With weekly output steadily improving, we now expect to achieve our targeted production rate of 20 trucks per week in early December. Importantly, this is a starting point. Roush has considerable ability to scale production higher through line expansion. In parallel, our strategic partnership with Volvo continues to advance, driven by deep operational alignment and growing customer demand. Volvo Autonomous Solutions driverless trucks will launch with the Aurora Driver in the first quarter of 2027. This supports their plan to deploy more than 300 driverless trucks in 2027, ahead of full industrial production in 2028. Similarly, our leadership with PACCAR continues to progress, driven by a mutual dedication to safety and rigorous product development. Fleet customers are increasingly focused on operational efficiency and freight reliability to navigate industry challenges. Together, we're working to seamlessly integrate the Aurora Driver on to PACCAR trucks, giving carriers the flexibility they're demanding. To support our manufacturing road map and objective to exit 2030 with 30,000-plus trucks on the road, our industry-first Hardware-as-a-Service partnership with AUMOVIO continues to advance on schedule. AUMOVIO has initiated design validation for our third-generation commercial hardware kit while finalizing the line concept and production flow at its dedicated facility in New Braunfels, Texas. Initial line bring up remains on track for later this year ahead of planned start of production in the second half of 2027. As we look ahead, we believe the key pieces are all now firmly in place. With verifiable AI proven on public roads, automotive-grade hardware, accelerating manufacturing and growing commercial demand, Aurora is standing at a true commercial inflection point. As we bring autonomous freight to commercial scale, we're uniquely positioned to make our roads safer, unlock efficiency across the supply chain and create immense enduring value for the industry and our shareholders. With that, I'll now pass it to Dave, who will review our financial results.

Thank you, Chris. Let's review our financial results for which we have provided a summary on Page 9 of the slide deck for reference. Third quarter 2026 revenue totaled $3 million across driverless and vehicle operator supervised commercial loads. The Aurora Driver achieved another record number of commercial miles driven during the quarter. Third quarter operating loss, including stock-based compensation, totaled $257 million. Excluding stock-based compensation of $54 million, R&D totaled $160 million, SG&A was $38 million, and the cost of revenue was $8 million. We used approximately $170 million in operating cash during the third quarter of 2026, and capital expenditures totaled $36 million. This cash spend was within our externally communicated quarterly average target. We expect cash use of approximately $250 million during the fourth quarter of 2026 as we continue to ramp production of our driverless fleet. We continue to expect our full year 2026 cash spend to be within our previously communicated target range, inclusive of second quarter cash bonus payments, which were funded through our ATM program. During the third quarter, we issued 6 million shares of Class A common stock through our ATM program for net proceeds of $41 million. We used $23 million of these proceeds to fund the tax liability associated with the vesting of employee restricted stock units. In turn, we ended the quarter with a very strong balance sheet, including over $1 billion in cash and short-term investments. Reflecting a production ramp about 6 weeks behind our prior plan, we now expect 2026 revenue of approximately $9 million, which continues to represent substantial year-over-year growth. We anticipate exceeding the 200 driverless truck milestone by the end of February. Building on this foundation and with a steady-state production rate of approximately 20 trucks per week expected by early December, we remain on track to exit 2027 with more than 1,000 driverless trucks in operation. In closing, we are at an extraordinary inflection point with our driverless operations poised for rapid expansion. With that, we will now open the call to Q&A.

[Operator Instructions] We'll take our first question from George Gianarikas with Canaccord Genuity.

Maybe to start, Daimler Truck recently had an announcement that it's emphasizing its factory integrated chassis and a deliberate open software strategy. And can you just sort of talk about that strategy a little bit and how it shapes the potential for third-party developers like yourselves to maybe be integrated to that?

Yes. We'll let Daimler speak to their strategy on it, of course. We've talked for a long time about how we would like to have the Aurora Driver available on all OEM platforms. And today, we have the privilege of working with some great ones with Volvo, PACCAR and International. Daimler is clearly the leading manufacturer in the U.S. market. We're the leading player in the autonomous vehicle space. And we expect -- well, we look forward to the opportunity to work with them at some point. And when we have a chance to do so, we'll make sure to share that.

And maybe as a follow-up, could you just give a little bit more color on some of the bottlenecks that you saw with getting to the 20 trucks per week and the confidence level that you have in actually reaching that in December?

Yes. So we had, of course, got through some of the early preliminary builds before our announcement at Investor Day, and things were looking quite good. As we started to ramp production, we bumped into problems with material availability, component quality and just finding challenges at the end of line. We, of course, swarmed the team on this. We've been working hard to overcome it, and we're excited about the improvements we've made. These, of course, were unplanned challenges. Otherwise, we would have had a different plan, but they're not uncommon in starting up manufacturing as I'm sure you're familiar with. We've taken the process -- the time to make sure that the quality of the components meets the stringent reliability thresholds we have. Some of the time, this was due to problems with complex components where we had material delays. And so we'd have to go back and in certain cases, source an alternative supply for them. So that added up to this about 6-week delay we've seen in the ramp that we wanted. We still expect to get 200 trucks out of this in February, and we see this still enabling the 1,000-plus trucks we expect on the road by the end of next year.

We'll move on now to Ravi Shanker with Morgan Stanley.

This is Nancy on for Ravi. I had a quick question about the cash burn guidance in the fourth quarter. How much of that increase reflects maybe temporary working capital or production costs versus a structurally higher expense base? And how should we think about that quarterly cash burn into 2027?

Yes, from the prior quarters is all related to scaling up the fleet, right? So we're buying additional kits and the associated components and just increasing the production capacity and obviously having Roush build those. So from a pure R&D structural cost basis, there's not a lot of change. You'll see a little bit, kind of, in our G&A just from the supporting as we start to deploy hundreds of trucks on the road, you're going to need a slightly larger infrastructure on the G&A side. But the vast majority of the increase is planned. It has been expected, and it is all related to building up the fleet. And again, I would say this is all within our, kind of, quarterly average target that we anticipated to start the year.

Got it. And then with the Charger announcement and Volvo's planned deployments next year, how much of the 2027 capacity is already accounted for versus still needing to be contracted?

Yes. So the initial 200 trucks we've talked about is fully contracted. For the -- as we've talked about, we expect to have a TaaS fleet capped at about 500 trucks. That's nearly fully allocated at this point. And then we've announced 1,000 trucks worth of DaaS MOUs over '27 and '28. So we're seeing really strong demand and interest from customers and feeling really quite good about the volumes to achieve our '27 objectives.

We'll move on to Ryan Sigdahl with Craig-Hallum Capital Group.

Just on Daimler, as we look at the 30,000-truck target for 2030, is Daimler included in that? Or is it only the existing partnerships you had at the time, Volvo, PACCAR, Roush?

No. We see that the demand is going to be there from the customer side. We've, kind of, looked at our best model for how it's going to grow. And our expectation is that the Aurora Driver is going to be incredibly valuable to our customers. And while today, they certainly have a preference for OEM, and we'd like to meet them where those preferences are, when push comes to shove, they'll ultimately want to get the Aurora Driver on the vehicles they can.

Yes. The thing that I'd add with that, Ryan, and we talked about this a little bit at the Analyst Day is that, like, this is a cumulative number. The industry builds about 250,000 trucks per year. So this is a relatively small percentage. It's really huge and a great opportunity for the autonomous technology and for Aurora. But on a capacity basis, it's relatively small. So there's a number of ways and a number of combinations with other OEMs that you could get to a cumulative 30,000.

Makes sense. So just a follow-up question. There was a very well-done Wall Street Journal article a couple of weeks ago. They mentioned you guys mentioned autonomous trucking being safer, more efficient, kind of, all the things, but also highlighted the most polite trucker in America. Curious, I guess, if societal benefits are being better appreciated, not just for safety, but also the consistency, courteous driving, et cetera.

Yes. I think we continue to work to help tell the story as the leader in the industry. We feel it's part of our responsibility to go out there and share our beliefs in the immense positive impacts, whether it is in safety, in sustainability, in the ability to drive counter inflationary forces through reducing supply chain costs, right? These are all things that I think once we're able to demonstrate them, the argument story is going to become even stronger. So -- but we always enjoy having the opportunity to engage with the press and share the point of view.

We'll move on now to Colin Rusch with Oppenheimer & Co.

Congrats on the incremental MOU here. Can you just give us an update on those negotiations, reaching definitive agreements, how we should think about the timing and the key elements that are still being discussed with those customers?

We're excited about the progress we're making with all the customers, and we're excited to add another member to the cohort. These are complicated agreements. We have all of the, kind of, core elements of those agreements were negotiated as part of the MOU. So we're excited for that. We're really putting effort into getting feedback from across various important customers so that we can have an agreement that will travel well and expedite signing in future engagements. I don't know, Dave, if there's more you'd add.

Yes. I think -- again, I think some of the big ones that everybody looks for in terms of pricing and volumes and, kind of, how you allocate it, those are not things that are contentious at all. I think we've already aligned on all of those when we did the MOU. This is things that people might not think about sometimes is, like, how do you get the truck serviced and who can do what servicing at the end of life, how are we going to dispose of the truck and, kind of, what's going to be its second life usage and things like that. So it's more around the operational -- like the less glamorous, but truly the operational things to make sure that we're operating trucks for 1 million miles in 4 to 5 years.

Okay. Excellent. And then on the policy front, you guys took the time or the space in the letter to discuss the federal framework and some policy measures that might start moving through. As we get through the election and get into the lame-duck session, I guess, how are you thinking about puts and takes around the potential for a federal framework around autonomous trucking to actually get pushed through and made it into law here?

Yes. We continue to see a very strong and supportive engagement from the Executive branch and administration and certainly from Congress as well. The progress that had been made on the BUILD America 250 Act, the surface reauthorization language had bipartisan support. So I'm optimistic that, that could move forward to the degree to which any legislation will move forward if we end up in a split Congress. We continue -- I would continue to see support, as I said, from the administration, and there's a lot that they can do to help move regulation forward there as well. So somewhat optimistic, but much like you, kind of, waiting to see how things fall here over the next couple of weeks.

We'll move now to Mark Delaney with Goldman Sachs.

You have Aman on for Mark here. Maybe just, kind of, double-clicking on the material availability part of the equation that you called out for some of the delays here. Can you talk about to the extent that entailed higher pricing for those components, what that might mean for margin and free cash flow into '27 and if that impacts the targets you gave at Investor Day for gross profit positive?

Yes. This is Dave. I'll try to tackle it. Let me start from the bottom part. It doesn't really impact our gross margin. This is not really a cost per component issue. This is more about us moving and developing an all-new platform on our second-generation hardware and making sure that we have the right quality and reliability of the parts that we have. So in some cases, we decided that the quality level that we're receiving for some of our complicated components, such as wire harnessing as an example, would be better served if we resource them to a more capable production supplier. This didn't have or doesn't have cost impacts for us. In most cases, this was cost neutral to even potential savings, especially if you look at the reduction in the rework and the quality benefits of it. And in some cases, this is just early start-up issues that you see when you start up a new production line from scratch. Like, we've talked to Roush, who's a very capable partner that's done a lot of these. And, like, they're quite optimistic. As a matter of fact, they'd say you guys are much further along than almost everybody that we've done before in terms of the capability of your drawings, your material strategy and things like that. It's just any time you start up a new line, you'll see that some of the parts and pieces don't fit together perfectly, and you're going to need to make some adjustments on those. And so that was some of the biggest issues is making sure that our vehicle integration elements all work together. The good news is, like, our -- supply of our Aurora Driver kits from Fabrinet, those are actually pacing ahead of the truck build. So we feel like as soon as we get the integration and the truck builds together, we're going to be going really well. And we've seen tremendous progress in the last 2 to 3 weeks, specifically. And so we're now starting to run a second line there. So that ensures that you've, kind of, got a lot of the kinks worked out and the material availability issues behind us. So we're going to continue to grow from there. I really do think that this is just a little bit of a pivot to the right in terms of, like, when we can start hitting the run rate, but there's nothing that's really prohibiting us from hitting the run rate at this point.

Just -- you said second line, I'm pretty sure you meant second shift.

Second shift.

Sorry, don't want you all to write down that we're setting up the second line. Sorry, second shift.

And then maybe on the financial side, or I guess, more on the capability side, you talked about the ability to navigate the weigh stations autonomously and some of the capabilities around the security checkpoints. Can you maybe talk about what Aurora is looking to help customers address or better integrate into the typical truck workflow from here and how that is being balanced with some of the lane expansion stuff you previously talked about?

Yes. We want to make sure that the Aurora Driver is the most capable, most useful driver that they can possibly have. And so we continue to -- as we work with customers, continue to see where there is value and opportunity to serve them. EPTI is a really useful tool that allows you to have certainty and bypass weigh stations, but it also adds complexity in training and operations at customer sites. And so by -- we heard that feedback from customers and work to make sure that we were able to actively detect, enter and traverse weigh stations and doing that in partnership with the state authorities who operate those weigh stations. And so that's an example of how we can help make sure the customer -- sorry, the product integrates most seamlessly with the customer. We'll continue to look for further ways to add the value, whether it is the work we've talked in the past of delivering driving to fueling stations so that you can support seamless extremely long-haul traversals or whether it is navigating within the customer yard. To date, the navigating inside the customer yard isn't nearly as important as some of the other things we're working towards.

We'll move on to Cole Couzens with Wolfe Research.

Beyond the 1,000 truck public MOU announcements over the past year, is there any way to frame up how big your more near-term DaaS pipeline is right now? And at what point we should start to see those convert to purchases?

Yes. We have not really -- we don't think right now is the right time to talk about the backlog. We think that's probably not going to allow you to have the best understanding of the business. We like to talk about deals like these MOUs where the core terms have actually been negotiated. We think that's the most credible way to describe the demand we're seeing in concrete terms for you. I don't know, Dave, if you'd add more.

Yes. I think, Cole, a couple of things. On the 2 MOUs, we fully expect these to convert. So like that's going to be 1,000 trucks right there that we expect to convert. And we are also talking with multiple customers right now to help work on the actual final contractual language. But you should assume that every customer that is a Transportation-as-a-Service customer also intends to be a Driver-as-a-Service customer. It is what allows them the ability to scale and realize the full benefits, especially when you think about it from a TCO perspective. So you don't really see customers who only want to do the Transportation-as-a-Service. They all want to go to the Driver-as-a-Service. So it's really just about us continuing to build and expand our capabilities on more routes and the businesses will grow with our customers, and we will add more driverless customers. I mean it's important to note, we have 10 driverless customers today, right? Like -- and that's growing. And, like -- again, I think we're leading the way, and we're continuing to, kind of, show the path.

And just doubling down on what Dave said, we're pretty clear -- we've been very clear that our competence is in delivering the driver, not in becoming a trucking company. And so for us, as we have these engagements with customers, we're upfront about that, and it aligns with exactly how they want to own or how they want to run their business and they want to operate these assets. So it works out nicely.

That's helpful. And at the Analyst Day, I noticed, like, the cost per mile analysis, there was some footnote about customer endpoint costs. Is there any way to frame up how cost prohibitive those are today? Or what type of facility modifications need to happen to support broader adoption across the industry?

Yes. So we think this is not de minimis. In terms of changes to the facilities, our intent is to be able to operate from the facilities as they are today. I do imagine over time, as customers get used to operating these fleets, they'll restructure their sites to optimize it, right? Anytime you have one of these high throughput facilities, they're constantly looking at how they can increase the efficiency out of those locations. So I imagine there will be a lot of fine-tuning, but to get started, there's nothing. In terms of resources, we really think about this as there needs to be someone who does the pre-trip inspection and launch and land the truck. And so in many facilities, there's already staff on site that are hauling tractors or hauling trailers around, yard hostlers, they're there. In some cases, there may be an incremental staff. But those are going to be spread over the whole fleet that operates from those endpoints. So we don't see this as a really truly material cost.

Thank you. At this time, we've reached our allotted time for questions. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.