Aurora Innovation, Inc. — Q2 2023 Form 10-Q
Reporting period: Three and six months ended June 30, 2023. Aurora is developing the Aurora Driver, a self-driving technology platform for trucking, passenger mobility and local delivery. It has not yet reported commercial revenue for the current period.
Financial performance and liquidity
| Metric | Q2 2023 | Q2 2022 | Six months 2023 | Six months 2022 |
|---|---|---|---|---|
| Collaboration revenue | $0m | $21m | $0m | $63m |
| Research and development | $187m | $184m | $364m | $338m |
| Selling, general and administrative | $30m | $34m | $61m | $65m |
| Net loss | $218m | $1,154m | $414m | $1,231m |
| Net loss per share | $0.18 | $1.02 | $0.35 | $1.09 |
| Cash used in operating activities | Not provided | Not provided | $318m | $225m |
At June 30, 2023, Aurora had $165m of cash and cash equivalents and $620m of short-term investments, plus $17m of restricted cash. Total assets were $1.679bn, total liabilities $229m and stockholders’ equity $1.450bn. Liabilities included operating lease obligations; the filing reports no debt balance in the presented balance sheet. Gross or operating margins are not meaningful given the absence of current-period revenue.
Changes versus the prior comparable period
- Revenue fell to zero after Aurora recognized all revenue associated with prior Toyota collaboration payments by December 2022.
- Six-month R&D expense rose 8% to $364m, driven mainly by personnel and software development costs; SG&A fell 6% to $61m.
- Net loss narrowed substantially, principally because 2022 included a $1.0bn goodwill impairment. Excluding that unusual prior-year charge, the headline improvement is less pronounced. Derivative fair-value changes also moved from gains in 2022 to losses in 2023.
- Operating cash use increased by $93m year over year. The company cited $95m of Toyota collaboration receipts in the first half of 2022, which did not recur in 2023.
- Cash, cash equivalents and restricted cash declined to $182m from $277m at year-end 2022; short-term investments declined to $620m from $839m.
Outlook, risks and notable items
- Management expects continuing operating losses and says additional capital may be needed to develop and commercialize the Aurora Driver. It stated that, following post-quarter equity financings, liquidity should cover working-capital and capital-expenditure needs for at least 12 months from the filing date. No numerical revenue, earnings or launch-date guidance is provided in the supplied filing text.
- Aurora plans to launch Aurora Horizon, a driverless trucking subscription service, before expanding to passenger mobility and delivery. Its intended longer-term model is Driver as a Service, with partners owning and operating most vehicles; Aurora expects to operate a small fleet during early commercialization.
- On July 21, 2023, Aurora completed a private placement and public offering, including the public offering’s over-allotment. Together these raised $853m before transaction costs and generated $828m in net proceeds, with substantial new Class A shares issued.
- Aurora’s April 2023 strategic partnership with Continental makes Continental the hardware-as-a-service partner for the future Aurora Driver hardware generation. The agreement runs through December 31, 2030, includes per-mile payments and defined exclusivity periods. Aurora also identifies reliance on Continental and other single-source component suppliers as a supply and execution risk.
- Key risks include technical and safety challenges, commercialization delays, regulatory approval, market adoption, competition, capital needs, partner execution, supplier availability, cybersecurity and potential product-liability exposure. Derivative liabilities are remeasured at fair value and can cause non-cash earnings volatility.
- The filing reports no material loss contingencies and says pending ordinary-course legal matters are not considered material. Management concluded disclosure controls were effective as of June 30, 2023. Aurora expected to lose emerging growth company status as of December 31, 2023.
Investor verification priorities
- Track quarterly cash burn and remaining liquidity after the July 2023 financings, including whether management’s stated 12-month liquidity expectation remains supported.
- Verify progress toward safe, approved commercial deployment of Aurora Horizon and the assumptions behind any public autonomy-readiness or performance metrics.
- Assess the timing, cost and availability of Continental hardware and other single-source components, and whether alternative suppliers are viable.
- Monitor share-count growth, resale registration and potential selling pressure following the July equity issuance; compare the post-offering share count with the July 26 reported outstanding shares.
- Separate recurring operating performance from non-cash derivative remeasurement and prior-year goodwill impairment when evaluating losses.