Autonomous vehicle technology company Aurora Innovation released its third-quarter earnings report after the bell Wednesday. The company closed out the quarter with about $1.2 billion in cash and short-term investments, which Aurora says will be enough to make it to commercial launch in mid-2024.
Those statements were made just days after former competitor Argo AI shut down operations and Mobileye went public with the third most successful IPO of the year. Both moves are a sign that automakers that were once willing to invest billions into the development of AV tech without near-term profit gains are now turning their attention and resources back to near-term profit centers like advanced driver assistance systems in passenger-owned vehicles. So the question becomes, can Aurora hang on?
Chief financial officer Richard Tame did say during the investor call that Aurora will need to raise more funds, but the company wouldn’t clarify to Bobbys Brane if that would happen pre- or post-2024 launch. (However, in a memo leaked in September, CEO Chris Urmson wrote to Aurora’s board that there was value in finding a “path to raise $300 million in the next year to add around six months to our runway.”) Given the current economic situation and Aurora’s cash burn history, the company might be able to make it to 2024 with the funds it currently has, but only just — and only if it keeps costs in line.
During the third quarter, Aurora’s loss from operations totaled $200 million, which is up from the $128 million reported during the same quarter of last year, but down from the nearly $1.2 billion in losses from the second quarter of 2022. If the startup were able to maintain a $200 million net loss starting in the fourth quarter until the first quarter of 2024, it wouldn’t need to raise more cash before commercial launch. But as a pre-revenue startup working on frontier technology, Aurora will incur tremendous costs in R&D to scale and bring its product to market. In addition, Aurora would need to somehow avoid being impacted by inflation and supply chain constraints. The upshot? Aurora will need to find efficiencies across the board.
The leaked memo also outlined an array of cost-cutting and cash-generating options to Aurora’s board, including a hiring freeze, potential layoffs, spinning out assets, going private and even selling itself to high-profile tech companies. Aurora didn’t mention any of these potential realities during its earnings call, but that doesn’t mean they’re off the table.
The Street responded favorably to Aurora’s attempts to assuage investors. The company’s stock is up 5.85% after market close.
Aurora has prioritized commercializing autonomous freight through a series of pilot partnerships with FedEx, Paccar, Schneider, Werner and Xpress. But the company is also working with Toyota to eventually launch a subscription service for the ride-hailing market. Earlier this year, the company unveiled its test fleet of Toyota Siennas that were custom built for robotaxi operations. In the third quarter, Aurora recognized about $3 million in collaboration revenue from Toyota.