Aurora Innovation, Inc. — FY 2021 Form 10-K
Reporting period: Year ended December 31, 2021. The filing provides annual results, not standalone fourth-quarter results. Aurora develops autonomous-driving hardware, software, and services; it had not yet begun commercial operations under its planned Driver as a Service model.
Financial results and liquidity
| Metric | 2021 | 2020 |
|---|---|---|
| Collaboration revenue | $82.5 million | None |
| Research and development expense | $697.3 million | $179.4 million |
| Selling, general and administrative expense | $115.9 million | $38.7 million |
| Operating loss | $730.7 million | $218.1 million |
| Net loss | $755.5 million | $214.4 million |
| Net cash used in operating activities | $563.3 million | $191.9 million |
| Capital expenditures | $48.1 million | $6.7 million |
2021 revenue came from a Toyota collaboration agreement and was nonrecurring; Aurora reported no revenue from autonomous-driving subscriptions. Cost of revenue and a meaningful commercial gross margin were not reported. The operating loss increased substantially as spending and staffing expanded; research and development included $206.9 million of stock-based compensation, while total stock-based compensation was $220.1 million.
At year-end, cash and cash equivalents were $1.61 billion; restricted cash was $16.1 million. Total assets were $3.69 billion, total liabilities $348.4 million, and accumulated deficit $1.09 billion. The balance sheet shows no borrowings; operating lease liabilities totaled approximately $146.8 million. Management said existing cash was expected to fund working capital and capital expenditure needs for at least 12 months from the filing date, while warning additional capital could be needed.
Net cash provided by financing was $1.54 billion, principally including $1.134 billion of net proceeds from the business combination and $397.9 million from preferred-stock issuance. Cash, cash equivalents, and restricted cash increased by $1.23 billion during the year.
Material changes and significant transactions
- Research and development expense rose $517.9 million and SG&A rose $77.2 million year over year, primarily due to hiring, acquisitions, and increased development activity.
- Aurora completed its business combination with Reinvent Technology Partners Y on November 3, 2021, becoming a Nasdaq-listed public company. The transaction was accounted for as a reverse recapitalization.
- Aurora acquired Uber’s self-driving unit, Apparate, in January 2021 for approximately $1.9 billion in stock consideration. The acquisition contributed substantially to goodwill and acquired in-process research and development assets.
- Toyota’s collaboration project generated $82.5 million in recognized revenue. Aurora had received $50 million by year-end and reported a $32.5 million contract asset; it expected the remaining $100 million of the agreement’s payments in 2022.
Outlook, risks, and unusual items
- Aurora planned to launch driverless trucking in Texas in late 2023 and driverless ride-hailing in late 2024. These are forward-looking targets, not guaranteed launch dates. It expected to begin commercialization with a limited company-operated fleet before transitioning toward partner-operated, per-mile subscriptions.
- Management expected continued significant operating losses and rising research and development and SG&A costs while developing and commercializing the Aurora Driver. The company’s ability to achieve safe performance, regulatory approvals, customer adoption, partner execution, and anticipated unit economics remains uncertain.
- Key risks include technical or commercialization delays, competition, substantial future capital needs, dependence on strategic partners and limited-source suppliers, product liability and insurance availability, evolving regulation, cybersecurity and privacy threats, and potential intellectual-property disputes.
- Non-cash fair-value expense on warrant and earnout-share liabilities was $20.1 million. The liabilities totaled $118.1 million at year-end; subsequent fair-value changes may cause earnings volatility. Other unusual expense included $3.3 million from equipment disposals and $1.7 million of impairment of acquisition-related assets no longer in use.
- Purchase obligations totaled $268.9 million, and future minimum operating lease payments totaled $177.5 million. Aurora reported no material losses recorded for legal contingencies and said pending proceedings were not considered material.
- The independent auditor issued an unqualified opinion on the financial statements. Management concluded disclosure controls were effective; the filing omitted management’s internal-control assessment and auditor attestation under the transition relief for newly public companies.
Most important facts for investors to verify
- Whether the planned late-2023 trucking and late-2024 ride-hailing launches remain achievable, and what milestones demonstrate technical and regulatory readiness.
- Whether Toyota made the remaining $100 million of expected payments in 2022, and how collaboration revenue and contract assets subsequently changed.
- Whether cash burn, hiring, and capital spending remain consistent with management’s stated minimum 12-month liquidity expectation, and whether additional financing is required.
- Whether partners will own and operate fleets and facilities on commercially viable terms, enabling Aurora’s intended asset-light, per-mile business model.
- The potential effects of stock-based compensation, warrant and earnout-liability remeasurement, future share issuance, and the dual-class voting structure on earnings and shareholder dilution or influence.