Einride AB (ENRDW) Q2 2026 Earnings Call Transcript

i'm pleased to be joined today by our ceo rusa charlie and our cfo anubav verma following their prepared remarks we will open the call to questions please note that some of the information you'll hear today will include forward-looking statements such as but not limited to statements regarding our product development business model performance comparisons to our competitors market opportunity potential product sales and future demands business and strategic opportunities customer and partner engagement, projections of future operations and financial results, availability of funds, as well as statements containing words like potential, believes, expects, plans, or other similar expressions. These statements are not guarantees of future performance. Actual results could differ materially from the future results implied or expressed in the forward-looking statement. We encourage you to review our SEC filings. These filings describe risk factors that could cause our actual results to differ materially from those implied or expressed in our forward-looking statements. All forward-looking statements are made as of the date of this call, and except as required by law, we undertake no obligation to update this information. In addition, we will present certain financial measures on this call that will be considered non-IFRS measures. For reconciliations of each non-IFRS financial measure to the most directly comparable IFRS financial measure, as well as for all the financial data presented on this call, please refer to the information included in our press release and in our Form 6K dated and submitted to the SEC today, both of which can be found on our corporate website at nride.tech slash investors. This conference call also will be available for audio replay at Enride.tech slash investors. Now I'd like to turn the call over to Ruzda Charlie.

Thank you very much, Lexi. Good morning, everyone, and thank you for joining Enride's first earnings call as a public company. We've entered the public markets with strong momentum. Today, Enride is live with more than 30 customers across seven countries. We've executed close to 600,000 shipments and built more than $800 million of potential ARR through our joint business class. So far this year, we've added Amazon as a customer. We announced a partnership with Tesla to deploy 500 Tesla semis. We've advanced our autonomous commercialization through a partnership with Duff and completed our first acquisition. Financially, revenue grew 26% in H1, and we expect that growth rate to more than double in the second half. today we'll walk you through how our signed contracts are converting into deployed vehicles and revenue how we're expanding with some of the world's largest shippers and how we're advancing saga ai and our autonomous technology that progress reflects the strategy we've been building scale our business today use that scale to accelerate our technology and progressively introduce autonomy to fundamentally shift the economics of freight as a short overview of NRAT. NRAT is built to be the platform that delivers what the world's largest transport buyers actually care about, cost efficiency, reliability, and safety. We develop and bring together the technology required to create the most efficient autonomous and electric freight networks. Our Sauga AI platform enables the efficient deployment of one of the world's largest fleets of electric trucks. Our autonomous technology allows us to gradually automate a larger and larger proportion of our customers' freight needs that we accumulate on our platform. This isn't a single technology story. It's a platform that keeps compounding at its gate. The freight capacity as a service offering, powered by the Saga AI platform and electrification, starts the journey with our customers. It allows us to start attacking the cost space. It creates a relationship with the customers. It sets into motion the flywheel that leads to our customers continuing to scale with us. It improves and creates denser and denser networks, lower and lower cost basis, and better margins. It does all this while gathering and accumulating data that accelerates our development. It accumulates vast amounts of transport demand on a single platform globally. Autonomous freight adoption starts gradually and increases exponentially. The complexity of deploying driverless capacity in a safe and reliable way into real-world applications should not be underestimated. Neither should its ability to fundamentally change the cost structure and operational logic of a freight network. That is why we expect the adoption of our autonomous technology into the networks of our customers to happen gradually in the initial phases and then increase rapidly. With our approach, data position, and operational understanding of our customers' networks, we are strongly positioned to lead that transition for them. For every new operating domain and set of conditions we unlock with our technology, we know exactly how many thousands and millions of additional lanes we can operate for our customer base and can deploy into those swiftly and efficiently. So where are we on each of these assets? Well, we've generated over $50 million of revenue for the past 12 months. Furthermore, we've accumulated more than $800 million of potential ARR in our joint business plan, which are scaling plans that we set with our customers. We've started the journey towards increasing the level of automation in our customers' networks. We've operated more than 5,400 driverless hours in contracted customer operations, a figure that has grown with about 60% just over the past six months. We see that based on the customer demand captured on our platform so far, about 80% of that is suitable for automation in the medium term, as we continue to advance our autonomous technology. Our platform is scaling fast. Last, we're now live with 30 plus global customers across seven countries, spanning the US, Europe, and the UAE, with new lanes in geographies coming online continuously. Our ability to operate on a global scale is one of the key elements that makes us a relevant partner for the world's largest transport buyers. They want a partner that can help them across their operations, not just in single isolated geographies. As we continue to scale our operations, we're adding more and more lanes in the countries where we operate. We're expanding our U.S. footprint across 15 states, but significantly growing operations in the states we're already active in. We're doing all of this to support the growing demand from our customers, including Amazon, GE Appliances, and PepsiCo. So with that, let's take a closer look at our executions so far this year. 2026 has been about executing what we said we were going to do. Scale with customers, develop our key technologies, and forge partnerships. We've added new customers, including Amazon, to a growing base of global transport buyers. Our revenue grew by 26% versus H1 of last year on a constant currency basis. And we're expecting that growth rate to more than double for H2 of this year. We continue to lay the foundation for further growth and scale, by securing a partnership with Tesla to deploy 500 Tesla semis on our platform. This deployment alone will trip around deployed fleets. In parallel, we continued our autonomous deployments, increasing driverless hours in customer operations by 64% year over year. We're also excited about our first acquisition. In July of this year, we acquired FlipTurn, expanding our charging network and capabilities overnight. We set the stage for scale deployments of autonomous freight with our customers through the partnership with DAF, one of the leading truck manufacturers and part of the PACCAR group. Together these milestones are a few examples of the progress we made so far in 2026. Now let's have a closer look at some of them. Earlier this year we took an important next step in our relationship with Amazon. Following a successful pilot phase we signed an agreement to scale electric freight on our platform for their middle my network working with Amazon which is arguably one of the most complex logistic networks in the world is a true testament to our platform's abilities the initial deployment is 75 electric trucks across five US locations our platform integrates into the Amazon relay network with Enride operating the fleet on Saga AI we're live with the first deployments already and expect to have the majority of this first wave done before year L. Earlier this morning, we also announced a big win towards our scaling ambitions with our customers. We announced a partnership with Tesla that includes deploying 500 Tesla semi-trucks on the Enright Saga AI platform, targeting to be operational with the majority of these before the end of 2027. And as mentioned, this deployment alone means that we will triple our fleet size, driving higher utilization and reinforcing strong unit economics. This partnership is also an important step in accelerating our deployments with customers including converting additional demand within our more than 800 million dollars of potential ARR in joint business plan opportunities into revenue. We also completed our first acquisition a few weeks ago of Fliptern. Fliptern is the leading developer of charging and energy management software for electric fleets. This acquisition consolidates our offering and creates the first fully integrated electric freight technology step including charge point management and energy systems and the brokerage layer that connects fleets to third-party charging networks by aggregating charging demand at scale and it also gains more competitive access to third-party charging efforts which in turn means we can provide cost-efficient solutions to our customers flip turn has a truly top tier found team and an incredibly strong team i'm very excited about what we can achieve together with that we recently announced a partnership with duff a leading truck manufacturer and part of the packer group this partnership will allow us to accelerate large-scale commercialization of saa level 4 autonomous electric freight through the integration of the android driver with the award-winning premium vehicle platform it's a validation of our vehicle agnostic approach and will allow us to scale autonomous deployments with our customers. We're working with DAF and authorities to enable public road operations with interface testing in 2026 and integration and commissioning on DAF trucks in 2027. An important aspect of achieving scale deployments of our autonomous drive stack, the Android driver, is to secure partners for vehicle platforms on which we can integrate our autonomous drive stack outside of our cabless autonomous vehicle. DAF is a perfect example of that and we're very excited to continue working with that. Another great example of expanding the use case of the Enright driver across other hardware platforms is the progress we made within the defense space. We established a defense business unit earlier this year following pilot contracts with the European NATO allied defense organization. By advancing autonomous logistics for dual use operations we're extending commercially validated autonomy into defense applications we're part of sweden's national resilience efforts positioning autonomous freight as critical infrastructure for total defense and supply security we also recently signed a strategic partnership with sentence to extend our autonomous technology platform for real-time threat detection and counter us monitoring with the guidance of general keith alexander who joined our board earlier this year we'll continue expanding our efforts within the defense area both in europe and the u.s and through our core technology and strategic partnerships provide autonomous logistics for defense operation so what's next for us now it is continued disciplined execution on our plan we're executing towards reaching cash flow breakeven point in 2028 we estimate that we need a deployed fleet on the platform of about 1 500 to 2,000 vehicles to reach that point. Through our 800 million of potential AR in joint business plans, we set the basis for that growth. We'll continue to acquire new customers, and with a 3x increase in our sales pipeline, it has never been stronger. But not only does this take us to cash for neutral, it sets the basis for autonomous deployments. We'll continue to develop and deploy our autonomous technology, gradually expanding the environment in which it is deployed, and reach the inflection point for the exponential scaling of autonomous on our platform. So with that, I'll now hand it over to Anubab to walk through the financials in more detail.

Thanks, Roswell. I'm excited to share with you our H1 2026 results. As a foreign private issuer, our standard reporting cadence would be a half a year reporting cycle. However, beginning in 2027, we intend to move to a regular cadence of reporting our results on a quarterly basis. For Q3 of this year, we intend to provide a business update and select key figures in the fall. The central theme of our strong H1 results is growth. With our strong momentum, we're now well positioned to continue sustainable, long-term growth with our customers through the following drivers. number one we're scaling the business with capital efficient fleet expansion we're well on track to triple our fleet size in the near term this rapid growth is a direct response to a customer demand and underpins the revenue acceleration we discussed earlier this feed expansion will be funded through asset-backed debt facilities provided by third parties resulting in zero equity dilution for our shareholders. We can continue to match asset-backed leverage directly with revenue-generating assets. In doing so, we preserve our capital and position the company for profitable, sustainable growth. Second, the top-line revenue conversion is expansion fueled by the customer demand. We're seeing strong, repeatable conversion across our sales funnel, moving efficiently from JBP into revenue. This conversion gives us revenue visibility and validates the underlying unit economics of our freight capacity as a service model. Third, over the past year we deepened our R&D investments to accelerate our R&D efforts towards the further expansion of our autonomous vehicle capabilities. With these drivers we are targeting a cash flow breakeven point in 2028 while our s-cath model will be the primary growth driver in the near term we are simultaneously expanding our technology licensing model for the android driver and android saga ai we expect these revenue streams to scale up progressively and the recent work within defense and our partnership with daf are examples of the strides we have made so far in short we're managing our balance sheet with discipline today funding our growth efficiently and investing in the scaling of a high margin technology platform revenue on a constant currency basis grew from 21 million in h1 2025 to 27 million in h1 2026 up 26 this top line performance was driven by expansion within our existing customer portfolio as clients expanded capacity alongside new customer deployments across our networks looking ahead to the second half we expect our constant currency revenue growth rate to roughly double taking h2 revenue in the 39 to 42 million dollar range this acceleration will be fueled primarily by two catalysts number one the continued ramp up of our amazon deployment and second the initial deployment phase of our tesla semi fleet consequently we are on track to exit december this year with an annualized revenue run rate of 85 to 95 million dollars on a constant currency basis this would result in over 80 percent increase year over year as compared to december last year and this trajectory represents the systematic conversion of signed revenue contracts disclosed previously in the year now let's talk about our cost structure contribution margin is a measure we track closely it provides a good view on the contracting model and operational development in the deployment portfolio it reflects how we are able to drive operational productivity and optimization on our platform we define contribution margin as a revenue less direct cost of transportation which primarily includes all variable costs such as driver cost electricity maintenance and insurance and excludes all vehicle capital costs and certain direct FTE expenses for each one our contribution margin stood at 21% as our revenue expands and fleet utilization clients in the second half of this year we expect contribution margin to land between 21 and 23 percent for the second half of this year. As we look forward, the combination of higher utilization and progressively lower vehicle acquisition costs will strengthen our operating leverage, ensuring that as revenue scale, they scale even more profitably. Turning to adjusted EBITDA, which has been normalized for one-time transaction expenses related to the business combination. During the past year we have increased investments in tech and rnd to accelerate autonomous development furthermore we have invested in ipo preparedness and central corporate infrastructure and compliance on our path to public markets we also made investments in our commercial teams to further drive the growth that has translated into tripling of our pipeline as of june 30 2026. adjusted ebitda was a negative thirty four point six million for h1 2026 on a constant currency basis compared to a negative 21 million last year looking ahead to the second half of the year as we continue to invest in our commercial customer ramp we expect h2 2026 adjusted ebitda to be between negative 35 and 37 million on a constant currency basis as mentioned previously we are executing on our plan to reached cash flow break-even point in the second half of 2028 with a deployed piece of fleet of 1,500 to 2,000 vehicles. The total R&D expenditure on a constant currency basis stood at 20.4 million in H1 2026 compared to 13 million in H1 2025. Following last year's ramp-up, we made foundational investments in R&D to accelerate autonomous vehicles and platform development these investments directly accelerate to major strategic initiative number one accelerating our autonomous development and number two advancing the implementation of quantum computing technology into our platform which will optimize network efficiency and unlock operational leverage across our customer footprint to close out three things I'd like you to take away from today we had a robust h1 performance setting the stage for the company to double the growth rate in h2 this year driven primarily by existing signed contracts including amazon and other customers jbps and new customers will drive the growth in 2027 and beyond number two with our strategic partnership with tesla for 500 semis we will be tripling our fleet to third-party financing with zero dilution to shareholders. With their improved hardware and mileage, it will unlock new routes and higher utilization to accelerate conversion of JBPs into revenue. And lastly, our capital-efficient model for growth enables us to scale faster and pave the path for a cash flow break-even point in 2028. With strong and improving unit cost economics, we're positioned to drive profitability at scale. With that, we'll open the lineup for analyst questions. Operator?

Thank you, sir. As a reminder to ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Once again, it's star 1-1 to ask a question. We are now going to proceed with our first question, and our first questions come from the line of Itai Mikhaeli from TD Cowan. Please ask a question.

Great. Thanks. Hi, everyone, and congrats on your first earnings call. Maybe just as a first question, just hoping to talk a bit more about the Tesla semi-economics and kind of how you think, how that compares with the other trucks in the fleet, and how we should think about the impact go forward to contribution margins and maybe even unlocking part of the $800 million ARR that you have through the deployment of that incremental fleet.

Absolutely. Thanks so much for that question. So I would say, you know, when we look at across our fleet in terms of determining the hardware platforms to utilize, we base it off the customer data that we have and the operational sort of environment in which they're going to be operated and try to choose, you know, a combination of truck specifications, cost, quality, etc. And I think what we're seeing with the Teslas is that, you know, they are matching up pretty well on those on those metrics i think what what the 500 truck order will help us do is really scale into as you mentioned right scale into more and more of that 800 million dollars of of jvps the the capacity of the vehicles and the specification of vehicles also unlocks a sort of another realm of of of use cases for customers in terms of of of of lanes and and distances so i think overall we're going to see a positive effect on on you know both on the revenue side in terms of uh deploy more and more of the joint business plans, but also on the contribution margin side.

Terrific. Thank you. As a follow-up, thank you for the call on 2028, the cash flow break even.

I hope you could maybe have a few more details in terms of thinking about maybe revenue per truck, how you're thinking about utilization and kind of contribution margin in 2028, as well as maybe a little bit on kind of OPEX growth and even a little bit, it looks like there's a little bit of licensing revenue you expect by then as well so any of those details will be would be super helpful thank you yep of course no thank you tie so the way we think about the utilization so today roughly our trucks operate at $300,000 per year we expect that with the deployment inclusion of Tesla's in our fleet this number will climb up and obviously driven by more customers on our saga AI platform we will be able to drive this number up and same and obviously the incremental growth in the revenue per truck will be uh dropping down to the contribution margin uh because that's really driven by uh because we have fixed costs so that will drop down to the bottom line what is very helpful here uh as the cost of vehicles electric vehicles improve the net profit including the hardware costs will also work in our favor to for the net cash profit to further ramp up in 2020. And so those are the two drivers for cash flow break even from the from the operating side, you know, because our platform, the electric vehicle platform has gotten better. And lastly, I would say, in terms of increasing our investments, look, our R&D cost structure is pretty competitive and we might, you know, need to ramp up some R&D investments in the coming years, but we expect that with the increasing utilization and the number of trucks in our fleet, we expect to hit cash flow breakeven driven by these factors. So, that's why we have a path to breakeven in 2028. Terrific. That's all very helpful.

Thank you we are now going to proceed with our next question and the questions come from the line of Chris McNally from as a call please ask your question particularly on the Tesla announcement which I know probably covered well over the course of the call so maybe we could focus on the AV side where you know somewhat ironically it's been the legacy class 8 OEMs which has been one of the industry bottlenecks um the traditional uh we we can't really hear could you speak up a bit sorry about that sorry about that um my question's on the the av side where um somewhat ironically it's been the legacy class 8 oems is one of the industry bottlenecks um i think the traditional oems have been you know rather slow for production ready reduction redundant chassis thus far and the bigger issue with trucking than AV rideshare because of the cost of the validation is going to sit on you and and upfitters for the time being so my question respect could you could you talk a little bit about how you're thinking about that bottleneck you know with your canvas AV pod as a separate issue and then really relate that to the DAF partnership which which sounds like it's a step in the right direction for highway class eight thanks so much thank Thank you.

Thanks for that question. No, I mean, you have to, you know, one of the key points, right, of achieving the scale deployment of autonomous is, as you said, the hardware platforms. And we early took an approach of the self-developed capitalist autonomous trucks, which we built together with our contracting manufacturing partners. It is, as you said, the scaling of that comes with the challenges in terms of how that's going to look and also in terms of the use cases in which you deploy the capacity. So we've taken an approach early on to, as similar as we do on the electric truck side, to have a sort of multi-OEM type of thinking or multi-hardware platform thinking, depending on what the customer use case that we're addressing is in this case. And I think, you know, the DAF partnership is a perfect example of that, right, where it will allow us to, it will also sort of show our ability to implement the Android driver onto different types of hardware platforms that we've done in the defense space, for example, and now in our own developed vehicles, but now also doing it on an OEM truck platform. But it's also a clear path to that scale deployments of access to hardware for scale deployments of autonomous. So I think it's, you know, generally, I would say we're seeing more and more of that, you know, direction in the market in general as well. Of course, there is, you know, testing and validation, et cetera, to be done. But I think we're on a good path together with that.

And Ruz, just a follow up to paraphrase. So the upfit will be sort of stage one, you know, you'll determine who the upfitter is for someone like DAF probably, you know, going forward soon, but then that will theoretically develop the relationship when an OEM is ready for their production, you know, assemble validated AV vehicles. Is that a fair way of discussing it?

You broke up the last part. I heard the first part. You broke up on the last part.

Yeah, the second part is that that would be an evolution into when an OEM is ready for a production-ready vehicle.

Yeah, so that's the path that we're working on together with DAF in this instance. Starting with the interfacing between the NRI driver and the vehicle platform. That's what we're going to do during the sort of better part of this year and coming into 27. and then commissioning for next year and then from that sort of moving into more scale deployments.

Thank you, team. Sorry about that.

Thanks, Chris.

We are now going to proceed with our next question. And our next questions come from the line of Jesse Sebelsen from BTIG. Please ask your question.

Hey, Nolan. Congrats on your closing the transaction and moving forward here with your first earnings call. I'm curious on just the scaling of the fleet. you mentioned um the Tesla deliveries there's 500 to triple what it sounds like roughly the fleet might be around 250 and then um uh you mentioned i think the first wave of a contract with amazon i'm not sure if that's 75 or just a portion of it can you tell us where the fleet is today and where we expect the fleet to be by the end of this fiscal year yeah so so so the fleet is As you said, it's about 250 default trucks split between Europe and the U.S.

We're expecting, as we mentioned in the Amazon, we're expecting that those initial debates of 75 trucks, the majority that have to be deployed on this side of the year, and then also the initial parts of the Tesla semi-deployment. So the way I would think about it is a fleet towards the end of the year, just shy of 400 trucks.

Okay, great. And then in terms of just thinking about the contribution margin versus the gross margin here, 21% contribution margin minus 50% gross margin must imply there's a lot of fixed costs in this gross line that, I mean, maybe they need to be covered through scaling. Can you just elaborate on the difference there and what needs to happen to improve gross margin to get to an area, to get to a level where we'll be at a cash flow breakeven rate in 2028?

So in the gross margin line, there is depreciation and amortization of roughly about 95 million secchi or, you know, thereabouts. so the way I think I want you to think about this is obviously as we ramp up customers there are fixed costs that are in the system and as we ramp up the cause the revenue scale much faster than the cost so what we expect in the future is this contribution margin of 20% where we are today to trend towards the 35% number which we have also guided the markets in the in the you know long-term what we believe the business can perform so we expect we'll have a trajectory going from 20 to 35 and in my prior comment i also mentioned about as the vehicle cost or the vehicle acquisition costs come down the the net cost will also come down after the uh the contribution margin so essentially the gross margin will start trending towards uh 20 going forward And that's what we estimate to happen in the next, you know, short to medium term as we improve utilization. Because remember, every extra dollar of revenue comes down to the bottom line. Thank you.

We are now going to proceed with our next question. And the questions come from the line of Matt Patchouli from Caneco Genuity. Please ask your question.

Hi, everyone. Thank you for taking my questions and congrats on all the success this quarter. um maybe just on the the joint business plans you have so you're kind of targeting this 85 to 95 million of arr by december of the year you know what are the kind of key bottlenecks to accelerating that and how should we think about you know those conversions um falling over the kind of coming months and as we move into early 2027 yeah thanks for that so i would say the the the formats that you know, to leading up to that 85 to 95, have sort of moved from the joint business standpoint into the, into the contract effect.

So it's more a deployment of, of, of deploying the capacity and getting the capacity online that will drive the growth towards that.

The absolute majority of that growth is through sort of existing or assigned contracts, which have been part of the JVTs, converted into contracts and now converting into, into, into deployments great um and maybe just uh you know on kind of the path to 1500 2000 trucks deep outline for your cash flow break even um you know you'll be at kind of 750 is the number i believe you've mentioned by the end of 2027 you know i guess where do those incremental kind of thousand ish trucks come from um and then maybe just to double up on the cash flow break even is that exclusively through just having trucks on your platform? Or, you know, do kind of autonomy in your other revenue streams really help to drive that further? And is it a factor of that?

Yeah. So, I mean, to answer your first question there in relation to the scaling towards the 1,500 to 2,000 trucks, so the tripling of the fleet is looking only at the Tesla So they stand alone with sort of triple our fleet and we're expecting to deploy those trucks up between now and the end of 2027. Alongside that, of course, we'll continue growing the other parts of the business with other OEM and other deployments as well. And the way to think about it a bit is, you know, that in the joint business plan, if I look at the data that we have in the joint business and the scaling plans that we set in those joint business plans, The volume catch in that is about, you know, 1.4 to 1.8 times the volume required for those 1,500 to 2,000 trucks. So what you'll see is you'll see, you know, the Tesla deployments going into those contracts. You'll see conversion of the joint business plans into deployments outside of the Tesla deployments as well. But also, of course, continued growth of the joint business plan portfolio and the contract with new customers. And I think, as Anu mentioned earlier, the investments we've made into our sales efforts over the past, I would say, six to eight months have resulted in 3x or so growth in our sales pipeline. So it's going to be a combination of existing and new customers. the majority are going to be based off our existing customer base and existing joint business plan portfolio great thank you okay we are now going to proceed with our next question and the questions come from the line of ryan sigdalt from craig hallam capital group please ask your question hey good day guys uh on the tesla just a few follow-ups maybe talk through First phase implies something like 150 by year end.

What are the next phases as we think about getting all of those deployed next year? And then terms on the third-party financing, if you can share them.

And then lastly, do you have any customers that are specifically requesting the Tesla semi-trucks, or do you plan to just opportunistically, based on Saga, deploy these across all of your various routes? yeah so i'll take the uh the first two and then and then i'll hand it down to talk more about the uh about the uh the financing so so i think in terms of of uh you know the the test that we're doing the first way of deployments uh some of that with as i mentioned with amazon some with other uh with other customers between now and year and we're doing other deployments between now and year and so all of the growth between now year and is not is not exclusively from from the from the and then we're looking to deploy the rest of those during 2027 when it comes to you know if there's customer specifically requests I would say generally speaking you know the the the customers are not that there's no sort of specifics around the hardware platforms there they were you know what we choose the hardware platforms based on the capabilities of the vehicles the use case, our understanding of the data, and sort of how, you know, how we plan to operate So it's very seldom, you know, generally speaking, it's very seldom that we get specific hardware requests for specific customer or for specific customers.

And regarding the terms of the financing, we'll be posting some more information in our 6K that will be published shortly. So, I'm excited about this financing, Ryan, because this is a 100% asset-backed equipment loan with no equity down for the truck. It's a facility that we can draw down with the delivery of the trucks as the delivery rolls around in our schedule. The effective interest rate is roughly around 14%, which, again, signals the evolution of the financing markets in this particular asset class as well. As the technology improves, as the hardware improves, the financeability of these assets also improves as the range and the hardware becomes better. So this would be a four-year facility with each draw. And like I said, there will be more information, but I'm excited about the terms and the fact that the fleet can be funded with legal valuation.

Then just on the DOF announcement partnership, can you explain what each side is doing here? Because I guess it sounds like an up-bit agreement first. Maybe that eventually moves to a factory line-side integration in the future. But with the up-bit, are you guys effectively buying trucks, up-bitting them, deploying them, and handling the costs? Or what is each side doing here?

And then what are the key milestones we should be watching for over the coming quarters? yeah i mean to start with so i think the first the first phase that we're in right now is is you know the sort of uh initial testing and initial interfacing between the two between the two headphones being also verified by tno uh in terms of the of the safety case and the integration of the language in which the the pets must speak to each other basically um and then for next year there will be the commissioning of the trucks and then the following that will go into the sort of scale we're working through together with that in terms of the exact timing and exact details of how that scaling is going to look and the economic models around it but right now we're focused on doing the commissioning, doing the testing doing the commissioning, getting the first set of vehicles out on the road and then And in parallel, they're also working on the public road verification for the platform.

If I may ask one follow-up on that, are you aware of any other AV technology partners working with them? Because PACCAR has historically been reluctant to go driverless in the U.S. or taking their time anyways. So curious kind of how they view the European sector.

Yeah, I'm not aware of that together with DAFNL. So we are the first partner, as far as I'm aware, that they're working on this, on the electric side.

You said autonomous or electric?

Autonomous. So sorry, but this is their electric platform as well.

Gotcha. Helpful.

Thank you.

As a reminder to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. We are now going to proceed with our next question. And the questions come from the line of Mike Latimo from Northland Capital Markets. Let's ask your question.

Great. Good morning. Congrats on the first earnings call here. You mentioned the pipeline tripled.

Can you just give a little bit more detail on what you're seeing there? you know is it coming in sort of how diverse is it you know what regions it's coming from you know what use cases are there you know is it tied to more marketing or just a little more detail on why the pipeline's growing so quickly yeah absolutely i would say it's a combination of a few things uh i would say that it is you know a quite sort of efforts uh in terms of investments into into our sales team and sort of you know and marketing etc related related to that But I would say that we see a stronger development on the U.S. side, also following the Amazon announcement. I think the sort of conclusion I think a lot of the market drew from that is if these guys can handle the complexity of Amazon's network, they can handle ours. So we had quite a lot of inbound and sort of increasing that following the Amazon announcement as well. But also, I would say, growing across our verticals. And it's also, you know, as we go live with more and more customers and continue scaling with more customers, both in Europe and the U.S., that also, you know, has an effect on especially within the verticals that we're focusing on. So, yeah, I would say it's a combination of, you know, good continued momentum with existing customers and also concerted efforts on our side. great great and then maybe just in terms of the the time to convert customers from uh you know pilots to deployment and also just the deployment time frames um how do you see those trending over the next year or so yeah i mean so so generally speaking and then i can comment a bit more specifically on on what we're seeing right now generally speaking you know the the the the land and expand sales strategy that we that we sort of had right get in with the large transport buyers analyze their data, set that plan, and then gradually scale together with them. It's also partly said because the initial sales cycle is long. If you're selling to a PepsiCo or an Amazon or others, you're going to have a long initial sales cycle. But what we see across the customer base is that the customers continue to scale with It's worth investing that time. I do see, and to comment mostly on the trends sort of more near term, I would say we've definitely seen deployment cycles and deployment times come down quite significantly over the past 12, 18 months, as driven by both sort of the availability of hardware, as we build out our charging infrastructure, you're deploying into a network where you already have infrastructure set up, You're deploying into regions where you have a context already. So we're sort of shortening lead times there. So I would say generally trending in a good way when it comes to the time between sale and deployment.

Great. Thanks a lot. Best of luck this year.

Thank you so much.

We are now going to proceed with our next question. And the questions come from the line of Colin Rouge from Oppenheimer and Company. Please ask your question.

Thanks so much guys. You know, with the Tesla agreement, can you talk about any sort of performance guarantees that you're getting from them in terms of uptime, as well as any contributions around maintenance and charging and any other infrastructure access that you'll get in that agreement?

Yeah, so I would say that we're getting pretty good. I can't go into all of the details of the contracts. We are working with them on the charging side and choosing the locations in which, based on what we see on our customers' data, where it's been deployed and the build-out of their charging infrastructure network. So we're good sort of collaboration on that side. And I would say sort of pretty decent terms when it comes to downtime and provisions like that without necessarily going to all of the details, unfortunately.

Great. Right. And then, you know, in terms of the military opportunity, you know, obviously you guys are in a unique position to support a variety of applications. Can you talk about just the pipeline of opportunities you're looking at, how you see that converting into to actual sales agreements and then the potential revenue we're at?

Yeah. No, it's a question. I think, you know, we're sort of in the early phases of that effort. We started actually from making the NRA driver available, taking it basically outside of our own vehicle platforms with the ambition of deploying it into other vehicle platforms. That was about 12 months ago or so. And on the back of that, we had a pilot contract with a NATO allied organization to sort of work on a couple of equal platforms. We then took that to the Swedish Resilience Initiative, which we're working on as well. So I would say we're in the initial phases of that. I expect, you know, that to see in terms of revenues that progressively we'll start seeing some revenues in for next year. But it is, you know, and then gradually scaling into becoming a more and more important part of the business.

Great. Thanks so much, guys.

Thank you. We have no further questions at this time. So I'll now hand back to Ruth B. Charlie, CEO, for closing remarks.

Perfect. Thank you. Thank you, everyone, for joining us on this first earnings call as a public company. We very much look forward to hosting you again for our Q3 update in the fall. so please keep a lookout for that when that comes. Thank you so much for today.