Aurora Innovation Inc.

05/06/2026 | Press release | Distributed by Public on 05/06/2026 15:24

Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of the financial condition and results of operations should be read together with the condensed consolidated financial statements (unaudited) included elsewhere in this Quarterly Report. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of several factors, including those set forth in "Part I, Item 1A. Risk Factors" in our Annual Report and "Part II, Item 1A. Risk Factors" and under the heading "Cautionary Note Regarding Forward-Looking Statements" included elsewhere in this Quarterly Report.
Unless otherwise indicated or the context otherwise requires, references to "Aurora," "we," "us," "our" and other similar terms in this section refer to Aurora Innovation, Inc. and its consolidated subsidiaries. Percentage amounts have not in all cases been calculated on the basis of rounded figures, but on the basis of such amounts prior to rounding. For this reason, percentage amounts may vary from those obtained by performing the same calculations using the figures in our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report. Certain other amounts that appear in this Quarterly Report may not sum due to rounding.
Aurora's Business
Aurora has launched and continues to develop the Aurora Driver based on what we believe to be the most advanced and scalable suite of self-driving hardware, software, and data services in the world to fundamentally transform the global transportation market. The Aurora Driver is designed as a platform to adapt and interoperate amongst vehicle types and applications. To date, it has been successfully integrated into numerous different vehicle platforms: from passenger vehicles to light commercial vehicles to Class 8 trucks. By creating one driver system for multiple vehicle types and use cases, Aurora's capabilities in one market reinforce and strengthen its competitive advantages in others. For example, highway driving capabilities developed for trucking will carry over to highway segments driven by passenger vehicles in ride-hailing applications. We believe this approach will enable us to target and transform the transportation landscape, including trucking, passenger mobility, and local goods delivery market.
We envision a two-phase process for ownership and operation of Aurora Driver-powered self-driving vehicles. Early in our commercialization, we intend to own or lease and operate an initial fleet of trucks and will invest in self-driving system hardware, base vehicles, and commercial facilities (such as freight terminals). We will provide transportation services to customers through driverless operations as well as with vehicle operators as needed. This level of control is useful during early commercialization as we define operational processes and playbooks for our partners.
Following this initial phase, we expect that the Aurora Driver will ultimately be commercialized in a Driver as a Service ("DaaS") business model, in which customers or third parties will acquire, manage, and maintain fleets directly, while subscribing to the Aurora Driver and a suite of related services. In this second phase, we do not intend to own nor operate a large number of vehicles ourselves. We intend to partner with OEMs, Tier 1 automotive suppliers, fleet operators, and other third parties to commercialize and support Aurora Driver-powered vehicles. We expect that these strategic partners will support activities such as vehicle and hardware manufacturing, financing and leasing, service and maintenance, parts replacement, facility ownership and operation, and other commercial and operational services as needed. Throughout commercialization, we expect to earn revenue on a fee per mile basis, or a comparable pricing mechanism. We expect this DaaS model to enable an asset-light and high margin revenue stream for Aurora, while allowing us to scale more rapidly through partnerships.
We launched Aurora Driver for Freight, our driverless trucking subscription service first, as we believe that is where we can make the largest impact the fastest, given the massive industry demand, attractive unit economics, and the ability to deploy on high volume highway-focused routes. We plan to leverage the extensibility of the Aurora Driver to deploy and scale into the passenger mobility market with Aurora Driver for Rides, our driverless ride hailing subscription service, and in the longer-term the local goods delivery market.
Results of Operations
Comparison of the Three Months Ended March 31, 2026 to the Three Months Ended March 31, 2025
The following table sets forth a summary of our consolidated results of operations for the periods indicated, and the changes between periods.
Three Months Ended
March 31, 		$ Change % Change
(in millions, except for percentages) 2026 2025
Revenue $ 1 $ - $ 1
n/m(1)
Cost of revenue 6 - 6
n/m(1)
Research and development 195 182 13 7 %
Selling, general and administrative 44 29 15 52 %
Loss from operations (244) (211) (33) 16 %
Other income (expense):
Change in fair value of derivative liabilities (1) (9) 8 (89) %
Other income, net 22 12 10 83 %
Loss before income taxes (223) (208) (15) 7 %
Income tax expense
- - -
n/m(1)
Net loss $ (223) $ (208) $ (15) 7 %
(1) Not meaningful.
Revenue was $1 million in the three months ended March 31, 2026 due to the commercial launch of Aurora Driver for Freight in April 2025.
Cost of revenue was $6 million in the three months ended March 31, 2026 due to the commercial launch of Aurora Driver for Freight in April 2025. Non-cash stock based compensation in cost of revenue was not significant.
Research and development expenses increased by $13 million, or 7%, to $195 million in the three months ended March 31, 2026 from $182 million in the three months ended March 31, 2025, primarily driven by an increase in non-cash stock-based compensation costs, personnel costs, and cloud spend, partially offset by costs now recognized as cost of revenue after commercial launch in April 2025 as well as costs now recognized as selling, general and administrative due to a realignment of resources. Research and development expenses included non-cash stock-based compensation of $36 million and $29 million in the three months ended March 31, 2026 and 2025, respectively.
Selling, general and administrative expenses increased by $15 million, or 52%, to $44 million in the three months ended March 31, 2026 from $29 million in the three months ended March 31, 2025, primarily driven by an increase in personnel costs including costs previously recognized in research and development now included in selling, general and administrative due to a realignment of resources, and non-cash stock-based compensation. Selling, general and administrative expenses included non-cash stock-based compensation of $10 million and $5 million in the three months ended March 31, 2026 and 2025, respectively.
The change in fair value of derivative liabilities resulted in expense of $1 million and $9 million in the three months ended March 31, 2026 and 2025, respectively, primarily due to the change in the market price for the underlying instrument during each period.
Other income, net increased by $10 million, or 83%, to $22 million in the three months ended March 31, 2026, from $12 million in the three months ended March 31, 2025, primarily due to remeasurement of non-marketable equity securities resulting in unrealized gains during the period.
Liquidity and Capital Resources
As of March 31, 2026, our principal sources of liquidity were $273 million of cash and cash equivalents, $952 million of short-term investments, and $52 million of long-term investments, exclusive of restricted cash of $16 million. Investments consist of primarily U.S. Treasury securities as well as corporate bonds and commercial paper.
We have incurred negative cash flows from operating activities and significant losses from operations in the past. We have only recently started to generate revenue, and we do not expect to generate significant revenue until we reach commercial scale. We expect to continue to incur operating losses and we expect to opportunistically raise additional capital to solidify our balance sheet with an appropriate minimum cash balance to support our longer-term operations.
During the three months ended March 31, 2026, we offered and sold 3 million shares of Class A common stock through the ATM Program, raising $15 million in equity capital and receiving net proceeds of $14 million after transaction costs.
We expect our total liquidity will be sufficient to meet our working capital and capital expenditure requirements for a period of at least twelve months from the date of this Quarterly Report. Management will continue to evaluate the timing and nature of discretionary operating expenses, as necessary.
Worldwide economic conditions remain uncertain, including inflation volatility. The general economic and capital market conditions both in the U.S. and worldwide, have been volatile in the past. The capital and credit markets may not be available to support future capital raising activity on favorable terms. If economic conditions decline, our future cost of equity or debt capital and access to the capital markets could be adversely affected.
Cash Flows
Cash flows for the periods were as follows (in millions):
Three Months Ended
March 31,
2026 2025
Net cash used in operating activities $ (159) $ (142)
Net cash provided by investing activities 209 19
Net cash provided by financing activities 4 82
Net increase (decrease)
54 (41)
Cash, cash equivalents, and restricted cash at beginning of the period
235 227
Cash, cash equivalents, and restricted cash at end of the period
$ 289 $ 186
Cash Flows Used in Operating Activities
Net cash used in operating activities was $159 million for the three months ended March 31, 2026, an increase of $17 million from $142 million for the three months ended March 31, 2025 primarily due to hardware development programs to support our scaling plan.
Cash Flows Provided by Investing Activities
Net cash provided by investing activities was $209 million for the three months ended March 31, 2026, an increase of $190 million from $19 million for the three months ended March 31, 2025, primarily due to decreased purchases of investments and increased maturities of investments, partially offset by increased payments for fleet builds.
Cash Flows Provided by Financing Activities
Net cash provided by financing activities was $4 million for the three months ended March 31, 2026, a decrease of $78 million from $82 million for the three months ended March 31, 2025, primarily due to decreased proceeds from the ATM Program and the exercise of stock options as well as increased tax payments in connection with the net settlement of RSUs.
Contractual Obligations, Commitments and Contingencies
Aurora may be party to various claims within the normal course of business. Legal fees and other costs associated with such actions are expensed as incurred. We assess the need to record a liability for litigation and other loss contingencies, with reserve estimates recorded if we determine that a loss related to the matter is both probable and reasonably estimable. No material losses were recorded in the three months ended March 31, 2026 and 2025.
Critical Accounting Estimates
Our condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles, or U.S. GAAP. Preparation of the financial statements requires our management to make judgments, estimates and assumptions that impact the reported amount of revenue and expenses, assets and liabilities and the disclosure of contingent assets and liabilities. We consider an accounting judgment, estimate or assumption to be critical when (1) the estimate or assumption is complex in nature or requires a high degree of judgment and (2) the use of different judgments, estimates and assumptions could have a material impact on our condensed consolidated financial statements. Our significant accounting policies are described in Note 2 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report and in the notes to the consolidated financial statements included in Part II, Item 8 of the Annual Report on Form 10-K for the year-ended December 31, 2025. There have been no material changes to our critical accounting estimates since our Annual Report.
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