Aurora Innovation, Inc. — FY2022 Form 10-K
Reporting period: Fiscal year ended December 31, 2022. Aurora is developing autonomous-driving hardware, software and services; it had not yet launched its planned driverless commercial services. The filing was signed February 21, 2023.
Financial performance and position
| Metric | FY2022 | FY2021 |
|---|---|---|
| Collaboration revenue | $68 million | $82 million |
| Research and development expense | $677 million | $697 million |
| Selling, general and administrative expense | $129 million | $116 million |
| Goodwill impairment | $1.114 billion | None |
| Operating loss | $1.852 billion | $731 million |
| Net loss | $1.723 billion | $755 million |
| Net cash used in operating activities | $508 million | $564 million |
Revenue was entirely collaboration revenue, primarily recognized under the Toyota project plan; Aurora reported that it had recognized the full $150 million provided under that plan by year-end. No product-service revenue or operating margin is reported. The larger net loss chiefly reflects a non-cash $1.114 billion goodwill impairment, recorded after declines in Aurora’s share price and market capitalization. A $114 million non-cash gain from remeasurement of derivative liabilities partly offset the loss.
At December 31, 2022, Aurora had $262 million of cash and cash equivalents and $839 million of short-term investments, or $1.101 billion combined, plus $15 million of restricted cash. Current assets were $1.118 billion and current liabilities $83 million. Total liabilities were $217 million, including $136 million of operating lease liabilities; the filing does not report conventional borrowings. Management said cash and short-term investments were expected to cover working capital and capital expenditures for at least 12 months from the filing date, while also noting that additional capital may be needed.
FY2022 investing cash outflow was $852 million, mainly reflecting net purchases of short-term investments; financing cash inflow was $11 million. Cash, cash equivalents and restricted cash ended the year at $277 million, down from $1.626 billion. The operating cash outflow improved by $56 million year over year.
Material changes and operating developments
- Revenue declined 17% to $68 million as fewer hours were incurred under the Toyota collaboration plan.
- Research and development expense decreased 3%; lower stock compensation and severance were partly offset by higher payroll and hardware-development costs. SG&A rose 11%, primarily due to payroll, stock compensation and insurance.
- The $1.114 billion goodwill impairment reduced the carrying value of goodwill to zero. Goodwill had arisen largely from the acquisition of Uber’s self-driving unit.
- Aurora reported supervised autonomous trucking pilots with FedEx, Werner, Schneider and Uber Freight, and a fleet-maintenance pilot collaboration with Ryder. These were development and pilot activities, not evidence of a launched driverless service.
- Headcount was approximately 1,700 at year-end. Stock-based compensation expense was $156 million, compared with $220 million in 2021.
Outlook, risks and contingencies
Aurora plans to launch Aurora Horizon, a driverless trucking subscription service, first in Texas, then expand to other freight corridors. It intends later to pursue Aurora Connect for ride-hailing and, longer term, local goods delivery. The anticipated Driver as a Service model would charge on a per-mile basis and rely on partners for vehicles, fleet operations and related services. Aurora expects this approach to support asset-light, higher-margin growth, but the filing provides no specific financial guidance or quantified launch-date forecast.
- Commercialization depends on safe and reliable system performance, testing and validation, regulatory approvals, public acceptance, and execution with vehicle, fleet and logistics partners. Delays could extend losses and increase capital needs.
- Aurora expects continuing operating losses until commercial operations begin. FY2022 net loss was $1.723 billion; it cautioned that losses could remain significant and commercialization may take longer than expected or may not occur.
- Key uncertainties include whether partners will enter definitive commercial arrangements and operate vehicles at scale, whether expected unit economics and a transition to the DaaS model will materialize, and whether additional financing will be available on acceptable terms.
- Risks also include competition, dependence on single- or limited-source components, evolving autonomous-vehicle regulation, cybersecurity and product-liability exposure, and possible supply-chain and macroeconomic disruption.
- Non-cancelable cloud-hosting commitments totaled $224 million through 2026. Aurora reported no material loss contingencies for 2022 and no pending legal matters considered material.
Important facts for investors to verify
- Progress toward driverless launch: confirm current route, safety validation, regulatory status and independently assessable operating performance.
- Liquidity and cash use: track operating cash burn, investment maturities, financing needs and the assumptions behind the stated 12-month liquidity outlook.
- Commercial readiness: verify whether pilots convert to definitive customer contracts and whether partners can provide vehicles, maintenance and fleet operations at scale.
- Underlying economics: test expected per-mile pricing, hardware and operating costs, utilization and margins against actual results as commercialization develops.
- Accounting and dilution: distinguish non-cash impairment and derivative remeasurement from cash performance; monitor stock compensation, outstanding warrants and potential share issuance.