Greetings. Welcome to the Aurora First Quarter 2022 Business Review Call. Please note this conference is being recorded. I will now turn the conference over to your host, Stacy Feit, Vice President of Investor Relations. Thank you. You may begin.

Thank you, Alex. Good afternoon, everyone, and welcome to our first quarter 2022 business review call. As a reminder, this conference call is being recorded. 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, and were furnished with our Form 8-K filed today with the SEC. On the call today are 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 before we 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 the call has ended. I'd like to take this opportunity to remind you that during this call, we will be making forward-looking statements. These include statements relating to the expected performance of our business, future financial results and guidance, strategy, long-term growth 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 annual report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 11, 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 also be found on our Investor Relations website. With that, I will now turn the call to Chris.

Thank you, Stacy, and welcome, everyone, to Aurora's first quarter 2022 business review call. Our first quarter was a strong start to 2022. We achieved critical milestones, we continued to advance our technology, and we extended our partner ecosystem, providing us with solid momentum continuing into the second quarter. We are pleased to share our progress as we continue to work toward developing the Aurora Driver for deployment at scale with our first priority being commercialization of our autonomous trucking product. We're continuing to make meaningful progress operationalizing our commercial trucking product. We are seeing broad demand to apply our technology and strong customer interest in the lanes we have identified in our initial rollout plan. During the first quarter, we began our collaboration with US Xpress aimed at crafting the deployment strategy and system integrations to enable US Xpress to introduce and efficiently manage Aurora Driver powered trucks in their business. We also brought two new terminal sites online in Fort Worth and El Paso and established the technological and operational infrastructure to support commercial operations on this route. This effort supported the launch of our pilot with Werner Enterprises, one of the five largest full truckload carriers in the United States, on the Fort Worth to El Paso lane. Aurora Driver powered trucks are now autonomously hauling freight under the supervision of vehicle operators weekly on behalf of Werner. The Fort Worth to El Paso lane represents the middle leg between Atlanta and Los Angeles, which is one of the busiest commercial thoroughfares in the U.S. Route to El Paso is also extremely demanding for truck drivers. It's more than 1,200 miles round trip that takes approximately 18 hours to complete. I experienced this route firsthand back in March when I joined our vehicle operators for one of these hauls. The combination of distance and monotony reinforced why lanes such as Fort Worth to El Paso can be so challenging for human drivers. And it is these routes where the driver shortage is felt most acutely. Deploying the Aurora Driver on that stretch demonstrates the applicability of our technology and offers a glimpse of a future in which autonomous trucks can more efficiently operate longer routes, while human drivers can handle more convenient hauls that are conducive to more desirable lifestyles. The geographic expansion, coupled with the scaling up of autonomously delivered loads across both of our lanes, demonstrates the confidence carriers have in Aurora's trucking product and the potential benefits it can bring to their networks. Building a scalable self-driving business requires not only robust technology but also true operational strength that is built through a deep understanding of our customers' needs. The breadth and diversity of our pilot partners, including FedEx, the largest less-than-truckload freight carrier in the United States; Werner, a top five full truckload carrier; and Uber Freight, a significant freight broker, is by design. We've deliberately structured our pilot programs so that we can learn what will be needed for our product to integrate and perform highly within our customers' networks. And since the start of the year, we have already doubled the commercial miles driven and loads delivered by the Aurora Driver compared to 2021, which is providing our team with invaluable insights. Notably, we are operating these pilots in a commercially representative manner, providing our customers with back-end tools for scheduling and executing drop and hook trailer operations. This execution is critical for our pilot partners to get a true sense of how the Aurora Driver can integrate into their operations. In addition to our pilot partnerships, we continue to develop the services we plan to offer customers to support their autonomous fleets. Earlier today, we introduced Aurora Beacon, a suite of tools designed to provide customers with extraordinary visibility and control over their fleets. Aurora Beacon is planned to integrate with and augment existing transportation management systems to allow for efficient scheduling, dispatch, route guidance, health monitoring, remote observation, and incident response. Our vision is for the Aurora Driver to improve the safety, reliability, and operational efficiency of our customers' fleets. Our remote observation tool will enable fleet managers to see what's happening on the ground for any of their Aurora-powered trucks, receive proactive health and mission status notifications, and provide high-level direction to the trucks. We're really excited about Aurora Beacon's potential, and in particular, its ability to capture the collective intelligence of a fleet on the road. Taking a step back, you can see how all of these pieces fit together. We're continuing to build the technological, operational, and logistical muscle that we believe will be necessary to launch and scale Aurora Horizon to seamlessly meet our customers' needs. Additionally, we believe our holistic product suite within Aurora Horizon will drive our ability to autonomously move goods for our customers 24 hours a day, seven days a week and support our Driver as a Service business model. Our existing partners have continued to deepen their commitments to our approach, while at the same time, we have developed new relationships with leading carriers, giving us tremendous confidence in the value Aurora Horizon can deliver to the freight ecosystem. In addition to the commercial progress we have made, we achieved a critical milestone during the first quarter around transferability. We demonstrated the Aurora Driver's ability to power both Aurora Horizon, our trucking product, and Aurora Connect, our product for the ride-hailing market. We designed the Aurora Driver with a common core technology that is vehicle agnostic. This allows us to focus on a single architecture that enables Aurora's technology to integrate with and benefit multiple vehicle types, from Class A trucks to light passenger vehicles. In March, we unveiled our first fleet of purpose-built Toyota Sienna vehicles and delivered several days of autonomous passenger rides with the Toyota team, navigating both highways and suburban roadways in the Dallas-Fort Worth Metroplex. On one of these trips, I had the pleasure of spending time with Ted Ogawa, the President and Chief Executive Officer of Toyota Motor North America. His reaction that it felt simple, even boring, was actually incredibly exciting. It was great to discuss with him how autonomous driving will play a part in Toyota's mobility for all initiatives. By using the same underlying software and hardware, our Sienna fleet inherited the capabilities of our trucks. This increases the impact of our work and allows our technology and teams to learn in a wider variety of situations. That impact is felt in our speed of development. Our Sienna fleet achieved parity of performance with our trucks in just six weeks of on-road testing and is now positioned to handle many complex highway driving situations. For example, on Page 6 in the slide deck, we've included a video of both our trucks and cars recognizing upcoming construction on the side of the highway and gracefully changing lanes in autonomy. I'll share more on the construction capabilities we're developing and the positive impact they're having on our autonomy performance in a moment. Our Siennas are already able to operate at highway speeds up to 70 miles per hour, which you can see in the video on Page 5 in the slide deck. The ability to offer highway dominant trips creates a competitive advantage that we expect will allow us to tap into a differentiated and lucrative segment of the passenger mobility market. We believe Aurora is the only autonomous vehicle company pushing this unique go-to-market approach and that it will enable us to deliver and rapidly scale both autonomous trucking and passenger mobility while unlocking the sizable market opportunity. Moving on to our technical updates. We made excellent progress toward commercial deployment during the first quarter. We launched Aurora Driver Beta 2.0, the second release of the integrated hardware and software stack that is powering both our next-generation trucks and Toyota Sienna test fleet. In this release, we debuted new capabilities necessary to operate on our recently launched Fort Worth to El Paso Lane. Specifically, we can now autonomously drive through complex construction zones that require changing lanes and adjusting left to right in the lane for concrete barriers or cones. We can also identify and react easily through temporary stop signs and lane closure signs, construction vehicles, trucks hauling oversized equipment, and other unique vehicles you see along many stretches of highway. You can see these capabilities come to life in videos that we included on our slide deck, on Page 7 in the video on the left, an Aurora-driven truck, the tech signs and cones marking a lane close for construction ahead. The Aurora Driver proactively changes lanes and decelerates to pass the active work zone. In the video on the right, the Aurora Driver is able to detect the construction zone at night and navigate around the barrels. The Aurora Driver safely adjusts its position in the lane and even knows it's okay to temporarily cross the shoulder line to effectively avoid these obstacles. Let me take a moment to frame why these are such critical technical developments. In 2021 alone, there were more than 3,100 active construction zones on Texas roads. While the number of construction sites varies by season, on our Fort Worth to El Paso route specifically, our vehicles are currently encountering about 40 construction sites each round trip. So while shorter routes may not present construction at any given time and therefore could be traversed by an autonomous vehicle without deep construction capabilities, to truly deliver on the promise of autonomous long-haul trucking, it's imperative for the Aurora Driver to be able to navigate these complex driving scenarios. We shared a chart in our shareholder letter as well as on Page 8 in the slide deck that is a great example of the depth of our future development work across a number of elements and how it drives improved performance of the Aurora Driver. In this case, you can see the complexity of delivering a feature such as navigating construction. It's not actually just one capability, but rather a composite of many underlying capabilities from navigating inactive work zones to shifting out of lane for concrete barriers and a host of developments in between. Throughout our advancement since late last year, we have driven an 18-fold improvement in construction handling on our Fort Worth to El Paso route, demonstrating meaningful tangible progress in this operating domain. With these and other capability improvements, we have also reduced our policy intervention rate by 85%. We define a policy intervention as an action our vehicle operators take to preemptively disengage the Aurora Driver when we know it's not yet capable of confidently navigating a particular scenario. As we continue to execute on our technical roadmap, we expect to continue to drive our policy intervention rate down and demonstrate capability-specific progress like we've seen with our construction handling as we work towards launching Aurora Horizon, our trucking product in late 2023. Another capability we've advanced is the ability to autonomously perform Texas U-Turns. These are road configurations adjacent to interstates commonly found in Texas that allow a vehicle to quickly move from one direction on a frontage road to another. Being able to navigate Texas U-Turns is essential for autonomous terminal-to-terminal trucking operations. We first developed this capability on our Aurora Driver powered Toyota Sienna vehicles, which you can view in the video on Page 9 in our slide deck. Just this week, we completed final deployment of this capability onto our Aurora Driver powered trucks. This is another great example of the transferability of the Aurora Driver's common core of technology across different vehicle types, with work on the Sienna fleet benefiting our autonomous truck development. For some entertainment this afternoon, I thought I'd share something fun we encountered during the recent road test. We finally have the answer to an age-old question that self-drive enthusiasts may or may not have been asking. Does perception detect and track a motorcycle, even while it's performing a wheelie? For the Aurora Driver, the answer is a resounding yes. Recently, as one of our Toyota Siennas was performing a Texas U-Turn in Dallas, our rear camera caught an over-the-shoulder view of two motorcycles closing in fast. One clearly recognized they were on camera and put on a show, which you can see in the video we included on Page 10 in our slide deck. We've been working to strengthen the Aurora Driver's detection and perception of motorcycles and other vulnerable road users as our Fort Worth to El Paso route has high levels of motorcycle activity. You can see we're clearly making great progress on this front. Developing and maturing all of these capabilities allows us to begin populating evidence to support the proficiency pillar of our safety case for our planned trucking launch. Work is also underway on our validation strategy for safety and performance to support operating our trucks in commercially representative settings without a vehicle operator. At the same time, we continue to advance our fault management hardware and software systems. During the third quarter of this year, we expect to demonstrate the Aurora Driver's ability to respond to system failures at highway speeds by safely pulling to the shoulder without vehicle operator intervention. This capability is a critical milestone that we expect will demonstrate the maturity of the Aurora Driver and our progress towards satisfying the failsafe core claim of our safety case for our expected trucking launch. We are proud of the technical progress we continue to make, and I look forward to sharing more in the coming quarters. Anytime we measure our progress and performance, it's always helpful to reflect on what brought us here. We founded Aurora with a bold ambition to transform transportation. To do that, we need to build a product that is innovative and scalable. This requires equal measures of urgency and patience. I'm incredibly proud of the progress we have made thus far in 2022 across all facets of our business, including our technology, partnerships, product suites, and safety case. These advancements position us well to continue to tackle the trucking market first. We continue to believe that the size, customer demand, and unit economics of this market make it the best entry point for our self-driving technology and that the value the Aurora Driver can provide to our future freight customers is tremendous. Progress in self-driving technology development is a continuum. Each incremental advancement represents a meaningful step toward our objective of commercial deployment at scale. We continue to work towards the launch for Aurora Horizon, our trucking product in late 2023 and look forward to keeping you appraised of our continued progress. With that, we'll now open the call to Q&A.

Our first question comes from Tom White with D.A. Davidson.

I want to start by thanking you for adding the video to the slides. I found it very useful in visualizing your discussion. I have a high-level question for you, Chris, regarding the current state of talent acquisition in the autonomous driving industry. How has that been for you? How is Aurora distinguishing itself from other companies trying to hire individuals with specific skills and backgrounds? Additionally, what are the most critical factors that candidates prioritize? I assume compensation is a major aspect, but what other strategies do you have to attract the talent you seek? I'm also interested in how being a public company might benefit you in this regard.

Yes. So thanks for the question. Acquiring talent continues to be critically important to us. As we think about our key differentiators, it’s our people, our technology, our partnerships, and our go-to-market strategy. And what we found with as we approach candidates, is that they kind of get it that we have a strong, healthy culture at the company that people enjoy being part of, that they get to work with exceptional peers, and they get to work on a mission that matters. And they believe that we’re on an approach that’s going to be successful. And so we’ve continued to be in a competitive hiring environment, but have had success in bringing great talent into the company. When I think about how we position ourselves for those folks, my philosophy is that, first, you need to have a mission that makes sense and is exciting and important and speaks to people. And then you need to surround those people with that opportunity and teammates that they enjoy working with, and then you need to pay them enough that they’re not embarrassed, right? And the first one is kind of why you get up in the morning and it’s the thing that gets you through the tough days, right? That mission, that purpose that you feel and what we’re doing with the Aurora Driver, and what we’re building here, I think, speaks to so many people that opportunity to improve safety. That opportunity to improve the efficiency of supply chains and move the economy forward. I think it’s just a very important mission being part of the next generation of transportation. And then the second part is equally important that the people you work with you enjoy and that the work you do is on a day-to-day basis is interesting because it doesn’t matter how good the mission is. If every day is miserable, then you’re not going to spend your time there. And then finally, compensation obviously matters. People take a job to get paid as part of it. And so we like to make sure that we are able to compensate people in a competitive manner. And I think we’ve been successful with that. Certainly, part of the calculus of becoming a publicly traded company was to enable us to be competitive with compensation packages and equity for employees that some of our competitors that are part of larger organizations were able to kind of offer.

Our next question comes from the line of Mark Delaney with Goldman Sachs.

First thing, thank you for the data on interventions and construction zones, I thought it was helpful. I'm hoping to better understand, do you think that example is generally illustrative of the progress that's being made on hard problems? Both in terms of the magnitude of improvement you're seeing and over that type of duration. And then if we could take that rate of progress and then magnitude of progress is set further, could you talk about what difficult situations are left to prove upon before you can deploy in late 2023? And what gives you the confidence of getting that done on time?

Yes. Yes. So we wanted to share that example because it is an area where we had been particular focus on development and that we thought it would be educational for folks to understand that when you talk about a feature, it's not really one feature. There's a collection of elements that build into it and know how people understand how that those different sub-elements unlock performance over time. So yes, we're excited about the progress there. We do expect there's sub-elements of what we'll build that we'll continue to see rapid advancement as well. Some of the things that we're working towards. So one we've shared is that we're working towards this fail safety, the fault management system, the implementation and demonstration of that capability. We think that's a really important element of the vehicles being commercially ready. So most of the time, we talk about all of these kind of exciting machine learning, computer vision type problems, which are obviously important. We have a bunch of brilliant people working on those, but to actually have a commercially viable product, you need to be able to deal with when the system breaks in some way. And that's what fault management is all about. So whether it's a sensor fails or a fault in an algorithm somewhere the vehicle must handle that and respond in a way that keeps everyone safe. So that's a major effort that we're undertaking right now, and we look forward to demonstrating. We're working on things like dealing with emergency vehicles. That's one of the other significant areas that we're putting time into.

That's very helpful, Chris. And my second question, maybe for both of you is on the cash use for the year. Cash was a little bit less than I was expecting in the quarter, which is good news. But maybe talk a little bit more, if you could, around what kind of cash you should expect in 2022. And any thoughts around potentially raising capital.

Yes. Thanks, Mark. Again, as we said last quarter, as a pre-revenue company, we don’t believe giving financial guidance is meaningful. So we’re not going to talk about what we think we’ll spend in 2022. Because of that, we ended March with $1.5 billion of cash and short-term investments on the balance sheet. And we still believe that, that’s sufficient to get us through commercialization and into 2024.

Our next question comes from the line of Steven Fox with Fox Advisors.

Chris, I'm interested in your perspective on the recent developments from companies like Mobileye and Waymo, which are involved in self-driving technology for ride-hailing. My impression is that there's significant activity happening in specific cities, particularly San Francisco. I'm not suggesting that this undermines your strategy, but how do you see this affecting your market position when you enter the ride-hailing space in a few years? I understand your approach differs from these companies, but I think it's relevant to consider.

So first, I think it's exciting to see the progress that's being made, right? I think that fundamentally, this technology is important for road safety. I think it's important that the U.S. is a leader in this technology. And so it's great to see folks making progress here. I also believe that the space is extremely large, right? We're talking about something that in the U.S. is more than $1 trillion opportunity in the long term or a $1 trillion space to operate in. And so we see a huge, huge potential there, and it's going to be large enough that there's going to be room for more than one player. And it's extremely early innings, right? We are somewhere in the pre-Model T phase of self-driving. So it's great to see the progress being made. We think that the strategy we're taking is the right one: entering through trucking where we see a very clear demand; we believe it's going to be easier to scale operationally the business there; and the economics we think are stronger than in ride-hailing. That will generate, we hope, we anticipate meaningful cash flow and that will allow us to build the business and go after these ride-hailing opportunities over time. The fact that we're entering from the high-speed segment of the market, we think is partly because we have a technology others don't with our FirstLight Lidar capability that unlocks that opportunity. And so we'll be entering different markets in a different way than what we see today with the low speed kind of trucking entrants. So it's exciting to see; it's not surprising to see; and we think it's, like I said, kind of great that folks are making progress, but it doesn't really shake our belief in the approach we're taking.

Great. Regarding driver shortages, you previously reached extreme levels a few months ago. Uber mentioned today that there might be some easing in driver shortages. Can you confirm if you have observed anything that might challenge your belief in the need for, or the ongoing trend of, the trucking industry facing long-term driver availability issues?

Absolutely not. The driver shortage has been particularly severe recently because this is a long-term trend that shows no signs of improvement. While the situation may have shifted from extreme urgency to a high level of demand, it remains a fundamental shortage, and we don't anticipate any changes. Richard, do you have anything to add?

No, I think that’s exactly right, Chris. That’s what we’re hearing from the partners. I think the partners and the potential customers are still very excited by the technology, want to get it launched, and work with us towards getting in there.

Our next question comes from the line of David Vernon with Bernstein.

So first question for you, Chris, and then I have a follow-up for Richard. As you think about launching the trucking product in late 2023, can you give us a sense for how many trucks you expect to be putting into commercial operation at that time? And where you are in the discussions with your OEM partners around more production-ready vehicles?

Yes. So we're anticipating a scale of around 20 vehicles as part of that initial launch at the end of '23. We've been working closely with our partners at PACCAR, our partners at Volvo in their vehicle development programs to work towards time frames that are compatible with that.

Okay. I'm assuming those will be fully subscribed when you launch these 20 trucks with customers, or will these trucks be available on a for-hire basis? I just want to understand what the launch entails.

Yes. As we engage with our customers and build an exciting network of partners, we're following a three-step approach. Initially, we have received preliminary, nonbinding indications of demand based on the expected rollout and the operational lanes we are targeting. We will later return to them with more details regarding the specific lanes and timing, at which point they will provide us with an allocation. Ultimately, this will lead us to a phase of binding demand. Currently, we have more demand projected through 2025 than we can supply.

Okay, that's helpful. Richard, I’d like to understand the collaboration revenue line. It seems like you either pulled forward the balance of the Toyota revenue or there was more than expected. Should we anticipate additional revenue for the remainder of this year, or is the collaboration agreement with Toyota pretty much exhausted?

Yes. So we'd expect to have more collaboration revenue going forward. We haven't exhausted all of that yet. That was more recognized in Q1 2022 than we had previously thought. And that's because one of the initial milestones was that we would have 12 vehicles delivered, and then we decided we worked with Toyota, and we decided that eight Siennas were the number that we needed, that got achieved earlier because there were less vehicles and thus, because of accounting standards, we recognized more revenue. So we do expect the revenue; there's $150 million of revenue that we'll earn over the period. So we have some more to come on the revenue side, but we have more cash to come than revenue to be recognized because of the way that that works. And we expect to get another $52.5 million from Toyota over the coming quarters.

Yes. So $52.5 million is the number over the remainder of the year?

That's cash.

Okay, as far as revenue?

Yes. The revenue is, I'm sorry?

I'm sure it's less than that; you mentioned it was less than the cash amount, but I'm just trying to get a sense of...

Yes, for sure. Yes, we recognize the revenue in cash. Yes.

Ladies and gentlemen, we have reached the end of the question-and-answer session. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation and have a wonderful day.