Aurora Innovation, Inc. — Q1 2023 Form 10-Q
Reporting period: Three months ended March 31, 2023. Aurora is developing the Aurora Driver, a self-driving hardware, software and data platform intended for trucking, passenger mobility and local delivery. The unaudited financial statements are prepared under U.S. GAAP.
Financial results and liquidity
Amounts below are in millions, except per-share data.
| Metric | Q1 2023 | Q1 2022 / comparison |
|---|---|---|
| Collaboration revenue | $0 | $42 |
| Research and development expense | $177 | $154 |
| Selling, general and administrative expense | $31 | $31 |
| Total operating expenses | $208 | $185 |
| Loss from operations | $(208) | $(143) |
| Other income (expense), net | $14 | $0 |
| Change in fair value of derivative liabilities | $(2) | $66 gain |
| Net loss | $(196) | $(77) |
| Basic and diluted loss per share | $(0.17) | $(0.07) |
| Net cash used in operating activities | $(136) | $(136) |
With no Q1 2023 revenue, a revenue-based operating margin is not meaningful. Cash and cash equivalents were $175 million and short-term investments were $791 million at March 31, 2023; together these totaled $966 million, excluding $20 million of restricted cash. Cash, cash equivalents and restricted cash totaled $195 million, down from $277 million at year-end 2022. Total current assets were $980 million and current liabilities were $103 million. Total assets were $1.867 billion and total liabilities were $238 million. The filing reports operating lease liabilities of $137 million in total ($15 million current and $122 million long-term); it does not provide a clear value for other borrowings or debt.
Cash from investing activities was $54 million, primarily reflecting net maturities of short-term investments; financing cash flow was not significant. Property and equipment purchases were $2 million. Stock-based compensation expense was $39 million. No income tax expense was reported.
Material changes versus Q1 2022
- Revenue fell by $42 million to zero because Aurora had recognized all revenue associated with Toyota collaboration payments by December 31, 2022.
- Research and development expense rose $23 million, or 15%, primarily due to personnel costs, stock-based compensation and cloud-computing costs. Total operating expenses increased 12%.
- Net loss widened by $119 million. In addition to higher operating losses and the absence of collaboration revenue, the comparison reflects a $66 million derivative fair-value gain in Q1 2022 versus a $2 million loss in Q1 2023. Q1 2023 also included $14 million of other income, primarily investment income.
- Operating cash use was unchanged at $136 million. Investing cash flow shifted from a $971 million use in Q1 2022, mainly for short-term investment purchases, to a $54 million source in Q1 2023, mainly from investment maturities.
Outlook, risks and other notable items
- Management expects continued operating losses and says cash on hand and short-term investments should cover working capital and capital expenditure requirements for at least 12 months from the filing date. It expects to raise additional capital opportunistically; future market access and financing terms are uncertain.
- Aurora plans to launch Aurora Horizon, a driverless trucking subscription service, first. It expects a per-mile Driver as a Service model with partners owning and operating vehicles, while anticipating a limited period of operating its own fleet early in commercialization. No new quantified revenue or earnings guidance is provided in the filing text.
- Commercialization depends on technical development, safety validation, regulatory approvals, partner execution and market acceptance. Delays, weaker-than-expected unit economics, competition, reliance on limited-source suppliers, and the need for additional capital are key risks. Cybersecurity, product liability, insurance, and evolving regulation are also identified risks.
- Management reported no material loss contingencies recorded for the quarter and no pending legal matters considered material or likely to have a material adverse effect. The filing identifies no material change to critical accounting estimates. Disclosure controls were deemed effective as of March 31, 2023; no material change in internal control over financial reporting was reported.
- Derivative liabilities are remeasured at fair value, producing non-cash gains or losses that can materially affect quarterly results. The company has a dual-class share structure; Class B shares carry ten votes each, and founders held 48.8% of voting control as of March 31, 2023.
Important facts for investors to verify
- Whether Aurora’s commercialization milestones, safety validation and regulatory approvals support the expected timing of Aurora Horizon.
- Whether liquidity, operating cash use and potential financing needs remain consistent with management’s stated at-least-12-month runway.
- How much future cost growth, including R&D and stock-based compensation, affects losses and cash requirements.
- Whether partners and suppliers can support vehicle integration, fleet operations and the planned transition to an asset-light DaaS model.
- How derivative fair-value changes, share dilution from equity awards or warrants, and the dual-class voting structure affect reported results and shareholders.