Aurora Innovation, Inc. (NASDAQ:AUR) Q2 2023 Earnings Call Transcript

Aurora Innovation, Inc. (NASDAQ:AUR) Q2 2023 Earnings Call Transcript August 2, 2023

Aurora Innovation, Inc. beats earnings expectations. Reported EPS is $-0.14, expectations were $-0.17.

Operator: Greetings, and welcome to Aurora’s Second Quarter 2023 Business Review Call [Operator Instructions]. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Stacy Feit, Vice President of Investor Relations. Thank you, Stacy. You may begin.

Stacy Feit: Thanks, Alicia. Good afternoon, everyone, and welcome to our second quarter 2023 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 Dave will recap our second 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. This include statements relating to the achievement of certain milestones around and realization of the potential benefits of the development, manufacturing, scaling and commercialization of the Aurora Driver and Aurora Horizon on our anticipated time frame, the expected performance of our business and potential opportunities with partners and customers, expected contract commitments from customers for our products and services, expected cash runway and overall future prospects. These statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those projected or implied during this call.

In particular, those described in our risk factors included in our annual report on Form 10-K for the year ended December 31, 2022, 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 June 30, 2023. You should not rely on our forward-looking statements with 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 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 a substitute for or in isolation from our GAAP results.

Information regarding our non-GAAP financial results, including a reconciliation where 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’ll now turn the call over to Chris.

Chris Urmson: Thank you, Stacy. It’s been a remarkable time at Aurora coming off the accomplishments of the first quarter in which we achieved our critical feature complete milestone at the end of March. During the second quarter, we made strong progress toward closing the Aurora Driver Safety Case, enhancing our autonomy performance and expanding our partner ecosystem to support the growth of our business for years to come. Successful execution against our road map to launch Aurora Horizon, our autonomous trucking subscription service, has continued to move us significantly closer to fully autonomous commercial operations. With this tremendous progress, we raised $853 million of total gross proceeds through a public offering, including the exercise of the underwriters’ over-allotment option and concurrent private placement of Class A common stock.

We received very strong support from key institutional and strategic investors. We expect our total liquidity, including the net proceeds from the successful fund raise of $1.6 billion to fund us through our planned commercial launch and into the second half of 2025. Raising this amount of capital in the current discerning capital markets environment is truly a testament to the special company and product holding. Throughout Aurora’s history and in this most recent fund raise, we have had strong support from top-tier institutional and strategic investors. We’re afforded to have these incredible partners. We see this fundraising as continued validation from some of the most sophisticated investors in the world who are recognizing our industry-leading progress and the enormous potential that lies ahead.

Given that the competitive field has been dramatically, we are more confident than ever in our leadership position. We’re delighted to see Aurora featured in the Netflix series Working: what We Do All Day, which premiered in May and explores the meaning of work in a time of rapid change. Produced and hosted by former President Barack Obama, the Docuseries provides a glimpse into how we’re building a company with an unmatched team and culture as well as new innovative career opportunities. As part of the series, we were proud to give President Obama a ride in a fully autonomous Aurora driven powered — Aurora Driver-powered Toyota Sienna operating without a safety driver on our Pittsburgh proving grounds. This is the first time a U.S. President has ridden in an autonomous vehicle.

Consistent with our approach to readiness for our commercial launch, we completed a tailored safety case for this operating domain. Seeing the former President’s excitement for and comfort with our technology was an incredibly rewarding moment for our team. In preparing to transport one of the most highly regarded and well-protected individuals in the world, the process underscored our confidence and the power of our safety case-based approach for the commercial launch of Aurora Horizon. As we stated, the Aurora Driver will be ready to launch when we have a close Safety Case for our Dallas to Houston lane. Our Safety Case is a comprehensive evidence-based approach to confirming our self-driving vehicles are acceptably safe to operate on public roads.

It goes beyond just ensuring the vehicle drives well enough for a demo, rather it demonstrates that our product and our company are holistically and sustainably safe. The Autonomy Readiness Measure, or ARM, is weighted — as a weighted measure of completeness across all claims of our Safety Case for our launch lane. It reflects the percentage of work needed to move from feature complete to our next critical milestone Aurora Driver Ready. We’ve continued to make meaningful progress toward closing our launch Safety Case, achieving an arm of 65% as of June 30, 2023. This 21-point increase during the second quarter is a strong reflection of our advancement and keeps us on track to achieve Aurora Driver Ready later this year. Looking to the second half of 2023, much of the remaining work will be focused on completing the final validation to address the claims in the first pillar of our Safety Case Framework – Proficient.

We define this as the self-driving vehicle is acceptably safe during nominal operation or in other words, we drive well when everything is working as intended. While on-road testing is important, an autonomy systems performance must be validated against a vast number of scenarios, many of which are thankfully rare on public roads. Getting adequate exposure to rare challenging scenarios by accumulating on road miles alone isn’t feasible. In turn, a key component of our approach leverages Aurora’s Virtual Testing Suite to amplify exposure to rare events to sufficiently at the Aurora Driver’s performance in those scenarios. We do this in 2 ways: First, important but rare on-road events, the Aurora Driver has encountered are turned into simulation tests, and we create variations to further challenge the system’s performance in these scenarios.

You can see an illustrative example of this on Page 7 of the slide deck. Second, for events so rare, the Aurora Driver has not experienced them on the road, we synthetically generate simulation tests using the established NHTSA collision categorization, which enumerates the ways vehicles get into crashes. We’ve included the NHTSA collision taxonomy and an example of a set of these tests on Page 8 of the slide deck to give you a sense of the comprehensive nature of this analysis. For these imminent collision scenarios and rare on-road events, the Aurora Driver has encountered, we are creating tens of thousands of tests. Similar to the expected performance of a human driver, the Aurora Driver is being designed to avoid a collision in these scenarios, if possible.

If collision is not avoidable, as in scenarios where another actor’s behavior renders a collision inevitable, the Aurora Driver is designed to mitigate adverse outcomes. For example, attempting to reduce the impact if a slow-moving vehicle to cut in unsafely close to our truck, just as a human driver ship. Success of these tests will give us the conviction that the Aurora Driver is designed to do the right thing in these rare scenarios. In addition to supporting the closure of the Safety Case for our Dallas to Houston launch Lane, we expect this framework to make the incremental validation straightforward for our planned future lane expansion. We will analyze the differences between existing lanes and the new lane and add new validation tests as needed to support the scaling of our business.

To further demonstrate our confidence in the Aurora Driver’s expected performance on our Dallas to Houston launch lane, specifically, we looked at available accident reports for fatal collision involved a tractor trailer for the years 2018 through 2022. We simulated those collisions to understand how the Aurora Driver would have acted under similar circumstances. Of the 32 collisions, there were 29 where the Aurora Driver could have been operating the initiating vehicle. Based on our analysis, we believe that had the Aurora Driver been driving the combination of its powerful sensor suite and attentive driving behavior would have prevented these collisions. Said simply, none of these fatal collisions would have occurred. On Page 10 of the slide deck, we’ve included an example of one of these simulations that demonstrates the Aurora Driver would have avoided a fatal collision that occurred on I-45.

In this real life situation, the Texas Department of Transportation crash report showed that a driver who was suspected using his cellphone and texting crossed over into the oncoming traffic lanes and crashed head-on into another vehicle. Impact caused a rotation of the vehicles across multiple lanes of the highway. A tractor trailer encountered the crash scene and swerved to try avoid hitting the vehicles but was unsuccessful. It collided with the wrong way driver, and tragically, 2 people were killed. We simulated a recreation of this scenario. And as you can see in the video, as soon as the Aurora Driver perceives the runway driver, it initiates a lane change to navigate around the oncoming vehicle. As it becomes clear to the Aurora Driver that the 2 vehicles are about to collide with one another, the Aurora Driver slows it from 65 miles per hour and attempts to lane change again to avoid contact with the vehicles that have just collided.

When one of the vehicles then spins out and blocks the outer lane as well, the Aurora Driver safely adjusts its course to come to a full stop as it approaches the accident seen. Executing these successful maneuvers enables the Aurora Driver to avoid contact with both vehicles at the scene. Taking a step back, each year that there are approximately 0.5 million truck crashes on U.S. roads and nearly 6,000 people lost their lives in truck-related crashes in 2021. We believe our technology can meaningfully reduce the risk. This is just one very powerful example of this potential. As we work toward completing the necessary validation to close the Aurora Driver Safety Case for our commercial launch lane, we’re continuing our quarterly project release cadence.

Following the achievement of our Feature Complete milestone for the Aurora Driver at the end of the first quarter, our product release is now focused on delivering the totality of Aurora Horizon. During the second quarter, we released Aurora Horizon Beta 7.0. Let me share some of the notable advancements on our Dallas to Houston launch line. First and foremost, we enhanced on-road autonomy performance. We also put in place a standard terminal flow incorporating terminal configuration, launching a landing of trucks and autonomy via our terminal app and pre and post trip commercial procedures, including fueling, on-site base stations and tractor trailer inspection. We increased on-site service and maintenance capabilities, including repair service for customer trailers via our partnership with Ryder to drive higher asset utilization and better network performance.

And we strengthened our commercial — our command center capabilities, including our remote system support, dispatch functionality and management. Beta 7.0 demonstrates that Aurora Horizon’s performance, commercial scale and overall readiness are progressing on pace with Aurora Driver Ready and commercial launch requirements. With each advancing product release, we enable our customers to further experience or Aurora Horizon as it is designed to operate at launch. During the second quarter, we unlocked the ability to run complete mock driverless runs, incorporating all components of the driverless process, including pre-mission, on-road and post-mission elements. Through these mock missions, we are honing various operational and technical elements in advance of commercial launch.

During the second quarter, our pilot activity exceeded our target to autonomously haul 50 loads per week for our customers. As we continue to scale our operations, we are now logging over 17,000 commercial miles per week and have already hauled over 1,300 loads year-to-date through July 31, exceeding number of loads we hauled for the entirety of 2022. Cumulative to date, through July 31, we have autonomously delivered under the supervision of vehicle operators, 2,290 loads, driving more than 630,000 commercial miles with nearly 100% on-time performance for our customers, including FedEx, Werner, Schneider and Uber Freight. We continue to see strong interest from our customers and are working to integrate Aurora Horizon into their existing networks.

We remain on plan to contract loads for commercial launch through 2025 by the end of this year. One way we measure our performance to successfully operate the Aurora Horizon service is through the on-road autonomy performance indicator or API. This metric allows us to track not just the state of our technology but the maturity of our processes and procedures in operating our business. The indicator penalizes the use of on-site support, which we have the most expensive support provided to enable the Horizon service. For the second quarter of 2023, the API was 97%, a sequential increase from the first quarter of 2023. The API represents the percentage of commercially relevant miles driven on our launch lane where the Aurora Driver would have operated safely and successfully without needing someone to touch the vehicle.

We share a more precise definition in the shareholder letter and on Page 15 of the slide deck. Notably, none of the support our vehicles received was required to keep the vehicles operating safely. In over 100,000 commercially representative miles driven on the launch lane in 2023, including over 65,000 commercial miles during the second quarter, we experienced 0 safety critical interventions. Across the commercially representative loads completed in pilot operations on our launch lane in the second quarter, we saw a meaningful enhancement of autonomy performance versus the first quarter with about half of these loads having an API of 100% and nearly 75% with an API greater than or equal to 99%. As a reminder, we do not anticipate that aggregate API will be 100% even at launch because certain situations, for example, flat tires will always require on-site support.

As we look ahead to commercial launch and beyond, scalability and ultimately our profitability will be supported by a reduction in the level of on-site support required. We believe it is important to hold our teams accountable to delivering a complete commercially representative product and evaluating its performance on this basis. The API is one way we can do this. Our work with our truck OEM partners, PACCAR and Volvo Trucks, and our new Hardware As a Service partner, Continental, continues to progress as we prepare for commercial launch and beyond. During the second quarter, PACCAR completed a 1.5 million equivalent mile durability test of a Kenworth cab with the Aurora Driver hardware installed. The Aurora Driver hardware remained fully functional at the end of the test.

Volvo Autonomous Solutions and Aurora expect to begin testing an autonomy-enabled prototype Volvo VNL powered by the Aurora Driver in the first quarter of 2024. Separately, Volvo Autonomous Solutions has expanded its footprint in North America with the establishment of an office in Texas and started manual operations in preparation for the commercial launch of its autonomous hub-to-hub transport solution powered by the Aurora Driver. In April, we announced a long-term partnership with Continental to develop, manufacture and service a commercially scalable future generation of the Aurora Drivers hardware kit. Continental has already started development efforts to scale the Aurora Driver. In addition, the partnership’s Hardware as a Service structure will enable Aurora to pay for the hardware on a per mile basis.

This structure is a first of its kind for this industry and aligns with and supports our highly capital-efficient Driver as a Service business model. The model also drives significant value alignment among us, Continental and our customers. We believe industrializing our hardware kit through this partnership will help us achieve the commercial scale and cost structure necessary to support our long-term profitability objectives. Finally, I’m immensely proud of our safety culture at Aurora. We finished the second quarter in June, celebrating National Safety Month. At Aurora, the concept of safety is top of mind all day, every day, especially as the self-driving industry continues to grow and evolve. Automated vehicles should be one of the tools and society’s collective toolkit to greatly reduce the unnecessary loss of human life on our roadways, and our ability to deliver on a self-driving future hinges on our relentless commitment to safety and transparency.

As we continue our evolution from a research and development company to a product company, we announced a leadership transition in June with Dave Maday assuming the role of Chief Financial Officer. Before taking on this role, Dave ran Business Development and Product Strategy at Aurora and brings deep experience in finance that will benefit us as we approach commercialization. Prior to joining Aurora, Dave spent over 20 years at General Motors, including leading the transformation of GM’s product program finance organization, supporting accelerated growth and resource efficiency across a multibillion dollar annual CapEx budget. Dave is a highly accomplished finance leader with a proven track record of managing profitable enterprises at scale.

With the strategic acumen and deep familiarity with Aurora’s product, business and customers, I’m confident we will accelerate our commercial performance while simultaneously increasing our financial discipline across the business. In closing, on the heels of our recent capital raise and strong technical and commercial advancement, we entered the second half of 2023 with strong momentum toward achieving the Aurora Driver ready milestone by the end of the year, which, in turn, prepares us for our anticipated commercial launch by the end of 2024. The magnitude of our recent capital raise represents a tremendous endorsement and the market’s confidence in Aurora’s ability to deliver. Our position continues to strengthen as we execute and build our coalition of partners.

At the same time, the competitive landscape in autonomous trucking has [Indiscernible], offering an even more compelling opportunity for those who continue to execute. Our world-class team, partners and investors recognize Aurora is well positioned to commercialize this technology and generate significant value for our customers and shareholders. With that, I’ll now pass it over to Dave, who will review our financial results.

David Maday: Thank you, Chris. Let’s discuss our financial results. During the second quarter of 2023, we continue to demonstrate strong fiscal discipline while ensuring the team is able to effectively execute our road map to Aurora Horizon. Second quarter 2023 operating expenses, including stock-based compensation, totaled $217 million. Excluding stock-based compensation of $43 million, operating expenses totaled $174 million. Within operating expenses, our R&D expenses, excluding $37 million in stock-based compensation, totaled $150 million. SG&A expenses, excluding $6 million in stock-based compensation, were $24 million. With the Aurora Driver in the final phase of refinement and validation and all revenue under the collaboration framework agreement wit Toyota previously recognized, we did not record any revenue during the second quarter of 2023.

We used approximately $182 million in operating cash during the second quarter of 2023, which includes $49 million in payments associated with our 2022 annual incentive compensation program. In the prior year, incentive compensation payments were made during the first quarter. During the second quarter of 2022, we received a cash payment of $48 million under the collaboration project plan with Toyota. The second quarter of 2023 was not impacted by this cash activity. Capital expenditures totaled $4 million in the second quarter of 2023. We ended the second quarter with a very strong balance sheet, including $785 million in cash and short-term investments. Subsequent to the quarter end, we raised $850 million of total gross proceeds through our public offering, including the exercise of the underwriters’ over-allotment option and the concurrent private placement, which further solidifies our balance sheet.

In conjunction with the capital raise, we shared some incremental financial information. We estimate quarterly cash use of $175 million to $185 million on average from the third quarter of 2023 through planned commercial launch. Prior to the capital raise, we estimated needing $1.6 billion to $1.7 billion in incremental capital beyond our then existing balance sheet capital to become free cash flow positive on a run-rate basis by the end of 2027. The $853 million fund raise we completed reflects roughly half of that incremental capital. With $828 million in net proceeds from the offerings and our cash and short-term investments balance at June 30, we expect our total liquidity of $1.6 billion to support our planned commercial launch at the end of ’24 and fund operations into the second half of 2025.

With that, we’ll now open the call to Q&A.

Q&A Session

Operator: [Operator Instructions] Our first question comes from George Gianarikas with Canaccord Genuity.

George Gianarikas: I’d like to ask a broader industry question and look for your insights as to what you think is happening in terms of the competitive landscape, particularly with Waymo’s recent decision to slow down the development of its autonomous trucking platform. I mean when you look at the landscape, it’s you and maybe some other upstarts like Kodiak or Plus, I’m curious as to whether you can help us understand what you think drove their decision and how you see the landscape evolving over the next several years?

Chris Urmson: So first, I’d say it’s an incredibly exciting time in automated vehicles. We feel like we’re making tremendous progress in looking to launch our trucks next year. It’s really exciting to see what companies like Waymo and Cruise are able to do with passenger vehicles in urban environments. And it’s just exciting to see as somebody who’s been working in this space for a long time. For us, we have said for many years that we expected consolidation happen in the landscape to clear and that we’ve been building the company, whether it’s through the capital partners we’ve developed or strategic bets we’ve made on technology to be positioned to be one of the folks who come out and have an impact and be victorious in this space.

We look at investments we made like the acquisition of Blackmore 5 years ago that to the first Light LiDAR technology that we see as a critical element of delivering a safe trucking product, and we don’t see others with that capability. We look at things like our investment in simulation and the speed that, that gives us in our ability to iterate and the ability for us to validate our system efficiently. And those are bets we made 5-plus years ago and are really coming to fruition today. And then the strength of the partnerships we put in place, whether it’s with our customers or with our OEM partners, that those are differentiated and are enabling us to be successful. We also look at it as this landscape. And honestly, we focus on what we’re doing ourselves.

And really, for the next decade, we see this as a pie that will grow rather than something where we’re fighting over slices in the pie, but it’s exciting the progress we’re making and exciting to see the endorsement we’re able to get from some very smart investors.

George Gianarikas: If I could just ask a follow-up and changing gears for a second, I’d like to ask about scalability. Over the next couple few years as you add additional lanes, can you just talk about the incremental learnings that are required incremental spending that’s required to open those up and how you feel about the [Indiscernible]?

Chris Urmson: And this has been a critical part of the way we’ve thought about the profit for day 1 is that, again, I’ve been working on this for 20 years now. And there’s been a lot of demos along the way. And those have been important learning moments. But in building Aurora, we knew from day 1 that it was not about a science project or a demo. It was about how do we deliver technology that will ultimately be scalable, be commercially viable and actually allow us to build a real business and benefit society and benefit our shareholders and our customers. And so things like our approach to safety and Safety Case Framework, which holistically looks at our business and allows us to really think about the components that make up safety enable us to be in a position to scale.

Things, again, like I mentioned in this call today, the work we’re doing around testing very rare events. Well, we have a collection of those that we anticipate we might occur — might encounter on our initial launch lane. As we move to new launches or new lanes, we can potentially expand those. Concretely as we think about moving from Dallas, Houston to Fort Worth El Paso, which we anticipate to be our second lane, there’s really two differences. One is that you have to drive through a custom and border patrol station and the other is that there’s a big hill. Today, we’re, as far as we know, the only company that’s operating regularly autonomously through that border patrol station. And that’s due to a partnership that we’ve put in place with customs and border patrol.

And that tells you a little bit about the efforts and engagement we have with regulators and public policy folks. And so today, we do that, but we won’t be validating that until we decide time to start focusing on turning on that lane. And then the other big difference is the fact that there’s a big hill. And why does that matter? Well, you can’t just use the service brakes to go down the hill because you’ll cook them and reduce your braking capability. So we have to use engine braking. Well, our system does that today, but we haven’t fully validated it, and that will be another one of those small features that we’ll have to validate as we unlock that lane. And so as we think about rolling out to other lanes, I’m sure that as we go from El Paso to Phoenix or from Dallas to Atlanta, there’ll be small incremental things like that we’ll have to do, but the vast majority of the driving will be consistent and transferable, and we expect that to lead to a very scalable system.

Operator: Our next question is from Tom White with D.A. Davidson.

Wyatt Swanson: This is Wyatt Swanson on for Tom. You guys made on this in the prepared remarks, but with the capital raise being completed now, does that mean anything different in terms of the timetable towards commercial launch or anything like that? And then related to that, is the capital raise going to change cash burn trends going forward? How should we think about that over the balance of the year and over the next 12 to 18 months?

Chris Urmson: So we’ve made no secret of the fact that since we went public, we need to raise capital. And this was the right moment given combination of factors to be able to attract the capital need and put that on our balance sheet. It’s going to go primarily towards continuing to deliver and execute on the road map we have in place. We continue to expect to be on path to deliver Aurora Drive at the end of this year and to launch commercially next year. Maybe, Dave, do you want to speak to the cash burn.

David Maday: I think for the cash burn trends, as we indicated, we expect to be relatively consistent on a quarter-by-quarter basis through our planned commercial launch. And so because of that, we have a high degree of confidence the estimated total capital that we need to raise to get to a free cash flow basis. So we don’t have any extraordinary expenses that we’re anticipating at this time. And importantly to note, we really have a solid foundation from a head count and a team perspective where we don’t see a need to grow substantially in any individual area, not only to launch but then to be able to scale effectively. So we’re pretty confident in kind of the outlook for the cash burn.

Chris Urmson: And one of the missions that Dave has taken out the role as our CFO is to continue to reinforce and enhance our cost discipline. So we’ll continue to put pressure there as well.

Operator: [Operator Instructions] Our next question comes from David Vernon with Bernstein.

Unidentified Analyst: This is [Justin Mill] for speaking on behalf of David Vernon. So we’re just wondering with these other autonomous trucking companies backing away, is this impacting your partnerships? Are you seeing more players turn to you now for partnerships? That would be great to hear.

Chris Urmson: So again, we’re excited about the position we’re in, and it does reinforce a lot of the strategic bets we’ve made. We continue to have very strong partnerships with PACCAR and Volvo. And together, they make up about half the trucks sold in the U.S. market. We’ll continue to look and find the right time to add partners to the fleet. Ultimately, we’d love to be driving every platform that’s out there, but we’ve got some time for that. So we look forward to those conversations when they’re appropriate.

Operator: Our next question comes from Mark Delaney with Goldman Sachs.

Mark Delaney: The first one is on AI and with so much focus in the broader tech industry on AI. I’m hoping to better understand if there’s anything with the most recent AI training capabilities and latest GPUs that may help Aurora to more quickly develop its driver technology and the scenarios that can work under.

Chris Urmson: So it is exciting to see what’s happening in the large language model space and the Generative AI space. What exciting is a number of the insights that have driven that have actually been at the foundation of what we’ve been doing at Aurora since very early on. So one of the core technologies that’s part of that revolution is the transformer. And this is something that we’ve been using again since before it was cool and use that as part of the way we predict other traffic will react to traffic on the road in our behavior. And it’s been, again, something we’ve been using since I want to say, 2018, 2019. So a lot of the things that are coming into play there, we’ve already incorporated. One of the other things that’s really interesting is we’ve talked for a while about the importance of collecting the right data and having high-quality data and how that drives good return and good performance out of your learned models.

We’re starting to see that become more evident in the large language model spaces, where some of these smaller companies that may not have access to the same corpuses that the tech giants do, we’re able to get really high-performance models because they have carefully curated the data set they’re using. So we see that also as indicative of the kind of the strategic bets that we made early on, being reinforced by outside evidence.

Mark Delaney: My other question was just a hope and understand the testing that you said was done in collaboration with PACCAR. And in particular, given that the truck platforms had been delayed previously, and it was one of the reasons that time line is now in 2024. So any more color on how that’s going and what your confidence and visibility is at this point on the truck platforms being ready for the launch next year?

Chris Urmson: We continue to work with those teams on a daily basis, both with PACCAR and Volvo truck. In this case, it was a Kenworth cab where we were doing vibration and environmental — I think just vibration testing. I think 1.5 million miles. And internally, we pride ourselves on building and designing reliable hardware. We have to be in this industry. And so to have this go through the type of testing that they put their platforms through and see it ride it out and continue to operate is really an exciting feather in the cap of our engineering team. We continue to believe we’re on track to launch a commercial product on the road with no driver in it next year. And we’ll, if that changes, we’ll, of course, provide updates as appropriate.

Operator: There are no further questions at this time. This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.