Aurora's Q3 2025 Earnings Call: Contradictions Emerge in Deployment Strategy, Hardware Cost Reductions, and Strategic Partnerships

Date of Call: October 28, 2025

Financials Results

• Revenue: $1.0M, up 12% sequentially vs Q2 2025
• Operating Margin: $222M operating loss (including $51M stock-based compensation); Q3 operating cash use ~$149M; capex $8M

Guidance:

• Q4 2025 cash use expected $175M–$185M.
• Ending Q3 liquidity $1.6B expected to fund operations into H2 2027.
• Launch second-generation commercial hardware kit and new upfitted fleet in Q2 2026 to enable driverless operation without a partner-requested observer.
• Target to exit 2026 with hundreds of driverless trucks (timing may flow into early 2027).
• 2026 financial objectives to be provided in the Feb 2026 business review.

Business Commentary:

• Driverless Milestones and Expansion:
• Aurora Innovation achieved over 100,000 driverless miles on public roads by the end of Q3, more than doubling the cumulative driverless miles in just five weeks.
• driverless commercial operations were launched on the Fort Worth to El Paso lane, adding multiple customers, including a leading carrier.

• This expansion reflects Aurora's rapid advancement in driverless technology, enhancing its leadership position in autonomous trucking.

• Hardware and Technology Advancements:

• The Aurora Driver surpasses 100,000 driverless miles with a 100% on-time performance and a perfect safety record, demonstrating the reliability and maturity of the technology.
• The company's proprietary FMCW lidar now detects objects at 1,000 meters, double the previous distance.

• These advancements support the commercial launch of driverless operations without a partner requested observer, enhancing safety and efficiency.

• Financial Highlights and Cash Management:

• Third-quarter revenue totaled $1 million, marking a 12% sequential increase, driven by record commercial miles.
• Aurora raised $460 million through its at-the-market program, maintaining a strong balance sheet with $1.6 billion in cash and short-term and long-term investments.

• The company expects cash use of $175 million to $185 million in Q4, reflecting disciplined fiscal management.

• Strategic Partnerships and Customer Adoption:

• Aurora secured a new partnership with McLeod Software to streamline integration for cloud customers, accelerating new customer adoption.
• The partnership resulted in an agreement with Russell Transport for driverless hauls, demonstrating Aurora's strategic approach to customer acquisition.
• Additionally, Aurora is purchasing trucks from International, with plans to launch driverless operations without an observer in Q2 2026, supporting its scaling objectives.

Sentiment Analysis:

Overall Tone: Positive

• Management highlighted milestones: 'Aurora Driver surpassed 100,000 driverless miles' with '100% on-time performance' and a 'perfect driverless safety record'; CFO reported revenue growth sequentially (12%), ended Q3 with $1.6B liquidity expected to fund into H2 2027; roadmap items include Gen2 in Q2 2026 and lineside OEM integration—signals of operational momentum and financial runway.

Q&A:

• Question from George Gianarikas (Canaccord Genuity): Maybe first, I'd like to ask if you could sort of give us form and shape to your plans for moving from a terminal to endpoint shipments.
  Response: System already handles short surface-street endpoint drives (~5 miles); rollout to customer endpoints will occur over the next year as volumes and weather robustness (night, rain, wind) allow.

• Question from George Gianarikas (Canaccord Genuity): And maybe as a follow-up in 2 parts. So in your press release, you say that you want to deploy hundreds of trucks next year — is that an acceleration? And is that being enabled by your partnership with International, which I think is new; did you have a partnership with International before this?
  Response: Plan unchanged: tens of trucks this year and hundreds in 2026; International is a new supplier relationship—Aurora will order stock International trucks and upfit them itself (not a co-development).

• Question from Ravi Shanker (Morgan Stanley): I just wanted to confirm, are you just buying the trucks off a lot and rolling that out as a third fleet? Or is this an actual OEM relationship like you have with PACCAR and Volvo; is there a time to commercial launch of that as well?
  Response: We're ordering stock trucks from International (no co-development); expect International trucks to be driverless on the road in Q2 2026.

• Question from Ravi Shanker (Morgan Stanley): As you get closer to launching Gen2 and specing Gen3 hardware, when do you get a sense of the bill of materials and the cost of the system, and when will you have conversations with OEM partners and launch actual pricing of the truck and the system for customers?
  Response: We already track BOM costs closely and have good insight; hardware costs are intended to be recovered via subscription (Driver-as-a-Service) and pricing will be refined as deployments scale.

• Question from Colin Rusch (Oppenheimer): You've talked a lot about the simulation expertise—can you talk about any acceleration or transitions hiccups as you move to the new hardware?
  Response: No material hiccups; validation, simulation and release processes were built to scale and support hardware transitions.

• Question from Colin Rusch (Oppenheimer): Now that you're accumulating experience on the road without the driver, how quickly are customers getting comfortable with taking a safety driver out of the cab and deploying without a driver?
  Response: Customer sentiment has moved to enthusiasm—some customers (e.g., Russell Transport) are signing up to operate driverlessly from day one.

• Question from Andres Sheppard-Slinger (Cantor Fitzgerald): Can you give granularity on truck deployments for Q4 and early next year — you have 5 operational now, so how should we think about getting to more than 10 by year-end and any comments on ASPs?
  Response: We expect to ramp to 10 driverless trucks by year-end with deployments through Q4; priority is measured 'crawl, walk, run' scaling rather than focusing on ASP details now.

• Question from Andres Sheppard-Slinger (Cantor Fitzgerald): On the timeline slide you talked about positive gross profit by end of '26 or early '27—what drives that and is there a truck count needed?
  Response: Positive gross profit depends on four enablers—Gen2 hardware (launch Q2 '26), remote assistance scaling, site support solutions, and sufficient mileage/scale—and timing may flow into early '27 given later commercial launch.

• Question from Christopher Pierce (Needham): Will customers be able to buy International trucks that you upfit, or is this something you're doing to pull forward or accumulate more proof points with the Aurora Driver technology?
  Response: Initially these trucks will be owned and operated by Aurora in a Transportation-as-a-Service model; selling upfitted trucks to customers is a potential future option but not the initial plan.

• Question from Christopher Pierce (Needham): There were NVIDIA headlines across mobility today — how should we frame this announcement versus your relationship with NVIDIA and AUMOVIO?
  Response: Aurora has long collaborated with NVIDIA/AUMOVIO on Gen3 hardware; NVIDIA is a capable supplier and wider industry use of their chips is unsurprising and complementary to Aurora's plans.

• Question from David Vernon (Bernstein): You mentioned Gen2 should get a 50% reduction in hardware cost—what scale is required to hit that level, and what's the lifecycle of the hardware (how often will upgrades be needed)?
  Response: The ~50% BOM reduction targets a 1,000+ production run (Fabrinet bridge to 1,000+), AUMOVIO will enable tens-of-thousands scale, and the hardware is designed for a ~1 million-mile lifecycle.

• Question from David Vernon (Bernstein): For the Fort Worth–Phoenix case study, could the truck make the trip in a day vs 2–3, and if so why use $205/mi; is the software subject to hours-of-service?
  Response: Trucks can complete such routes in a day with ~15% better fuel economy; the $205/mi is an industry DAT rate used illustratively and Driver-as-a-Service pricing will vary; the Aurora software is not subject to hours-of-service.

• Question from Mark Delaney (Goldman Sachs): Where do you stand with Volvo — the 20 trucks referenced previously, validation/testing and timing for lineside integration?
  Response: Volvo B- and C-sample development trucks are deployed and being used for commercial loads and testing; lineside integration has begun at New River Valley, but Aurora defers partner-specific timing disclosures while confirming strong progress.

• Question from Mark Delaney (Goldman Sachs): How has the International relationship evolved and how does that support your driver-out timeframes?
  Response: Upfitting International stock trucks allows Aurora to accelerate Sun Belt deployments and supports the plan to operate driverlessly without an observer in Q2 2026 to meet customer demand.

• Question from Itay Michaeli (TD Cowen): As you solved for dust storms, how much was due to lidar versus radar, and did that work push out the rain/heavy wind update?
  Response: We use complementary sensors—FirstLight FMCW lidar plus radar—to see through dust and combine modalities for robust perception; the rain/heavy wind release was delayed a few weeks to January 2026 for transparency after prioritizing the Fort Worth–El Paso expansion.

Contradiction Point 1

Deployment and Volume Expansion Plans

It involves differing statements about the company's plans for deploying additional trucks and scaling their operations, which are critical for revenue generation and investor expectations.

What is the outlook for Q4 truck deployments and ASPs? - Andres Sheppard-Slinger(Cantor Fitzgerald)

2025Q3: We expect to have 10 driverless trucks by the end of this year, ramping through Q4. The focus is on balancing driverless operations and utility for customers. - Christopher Urmson(CEO)

How will you increase truck operations in the short term? - Andres Juan Sheppard-Slinger(Cantor Fitzgerald)

2025Q2: We have aspirations to have more than 10 trucks in operation by the end of the year. - Christopher Urmson(CEO)

Contradiction Point 2

Deployment Strategy and Timing

It highlights differences in the company's strategy and expectations regarding the deployment of driverless trucks and the timing of these deployments, which could impact investor expectations and operational planning.

How should we think about Q4 truck deployments and ASPs? - Andres Sheppard-Slinger (Cantor Fitzgerald)

2025Q3: We expect to reach 10 driverless trucks by the end of this year, ramping through Q4. The focus is on balancing driverless operations and utility for customers. - Christopher Urmson(CEO)

What are the expected truck numbers and cumulative miles driven by the end of 2025? - Thomas White (Wolfe Research)

2024Q4: The focus is on technology proof points and expanding operational areas, rather than specific mileage targets. Once established, there will be a step function in the number of trucks and miles driven, aiming for positive gross profit in 2026. - David Maday(CFO)

Contradiction Point 3

Hardware Cost Reductions and Scalability

It involves differing statements about the scalability of hardware costs and the specific production run needed to achieve cost reductions, which could impact financial projections and operational strategy.

What scale is needed to achieve the 50% hardware cost reduction? What is the lifecycle of this hardware? - David Vernon (Bernstein)

2025Q3: The 50% cost reduction is applicable across a production run of 1,000+ units, fitting between tens and tens of thousands of units. - Christopher Urmson(CEO)

Can you discuss the confidence in scaling operations, particularly regarding remote assistance specialists, and the cost reductions from hardware as operations scale? - George Gianarikas (Canaccord Genuity)

2024Q4: Starting with a small number of trucks and ramping up, they will work with partners like NVIDIA and Continental to achieve cost reductions through production scale. - Christopher Urmson(CEO)

Contradiction Point 4

Deployment and Customer Adoption Timelines

It relates to the company's deployment and customer adoption timelines, which are crucial for understanding revenue growth and market penetration.

How should we think about Q4 truck deployments and ASPs? - Andres Sheppard-Slinger (Cantor Fitzgerald)

2025Q3: We expect to reach 10 driverless trucks by the end of this year, ramping through Q4. - Christopher Urmson(CEO)

Can you clarify the vision for this year with truck production ramping up? - Andres Sheppard (Cantor Fitzgerald)

2025Q1: 2025 is about expanding where and when the driver can operate to increase customer value. By year-end, we'll operate on multiple lanes, day and night, in various weather conditions. This sets us up for scale in 2026. - Chris Urmson(CEO)

Contradiction Point 5

Partnership with Uber and Collaboration with PACCAR

It involves conflicting statements about the relationship with Uber and collaboration with PACCAR, which could impact strategic partnerships and operational capabilities.

What is the relationship with Uber post-debt offering, and how critical is Uber to deployment? - Ravi Shanker(Morgan Stanley)

2025Q3: Uber remains a great partner, and they continue to work together. Uber Freight is a major customer. - Christopher Urmson(CEO)

What are the Q3 and back-half catalysts, specifically regarding the second route expansion and milestones with Volvo and PACCAR? - Ravi Shanker(Morgan Stanley)

2025Q2: Following our agreement, we retained rights to the Aurora Driver technology that we've developed for Freightliner and other PACCAR vehicles in our existing agreements. This is a powerful validation of our technology and platforms. - Christopher Urmson(CEO)