What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2026-02-11 compared with 2025-02-14 · 47 added, 62 removed, 109 unchanged (50% of the section changed)

9 unchanged sentences

Certain other amounts that appear in this Annual Report may not sum due to rounding.

Corporate History and Background

On November 3, 2021 (the “Closing Date”), Aurora Innovation, Inc.

(f/k/a Reinvent Technology Partners Y and referred to herein as the “Company”), consummated a business combination with Aurora Innovation Holdings, Inc., a Delaware corporation (f/k/a Aurora Innovation, Inc.

and referred to herein as “Legacy Aurora”), and RTPY Merger Sub Inc., a Delaware corporation and a direct wholly owned subsidiary of the Company (“Merger Sub”), pursuant to an Agreement and Plan of Merger dated July 14, 2021 (the “Merger Agreement” and the transactions contemplated thereby, the “Merger”), by and among the Company, Legacy Aurora and Merger Sub.

Pursuant to the terms of the Merger Agreement, a business combination between the Company and Legacy Aurora was effected through the merger of Merger Sub with and into Legacy Aurora, with Legacy Aurora continuing as the surviving company and as a wholly-owned subsidiary of the Company.

On the Closing Date, the Company changed its name from Reinvent Technology Partners Y to Aurora Innovation, Inc.

Aurora’s Business

Aurora is developing the Aurora Driver based on what we believe to be the most advanced and scalable suite of self-driving hardware, software, and data services in the world to fundamentally transform the global transportation market.

Aurora has launched and continues to develop the Aurora Driver based on what we believe to be the most advanced and scalable suite of self-driving hardware, software, and data services in the world to fundamentally transform the global transportation market.

The Aurora Driver is designed as a platform to adapt and interoperate amongst vehicle types and applications.

6 unchanged sentences

We do not intend to own nor operate a large number of vehicles ourselves.

Throughout commercialization, we expect to earn revenue on a fee per mile basis.

Throughout commercialization, we expect to earn revenue on a fee per mile basis, or a comparable pricing mechanism.

We intend to partner with OEMs, Tier 1 automotive suppliers, fleet operators, and other third parties to commercialize and support Aurora Driver-powered vehicles.

1 unchanged sentence

We expect this DaaS model to enable an asset-light and high margin revenue stream for Aurora, while allowing us to scale more rapidly through partnerships.

During the start of commercialization, though, we expect to briefly operate our own logistics and mobility services, where we own or lease and operate a small fleet of vehicles equipped with our Aurora Driver.

During the start of commercialization, though, we are operating our own logistics and mobility services, where we own or lease and operate a fleet of vehicles equipped with our Aurora Driver and provide transportation services to customers through driverless operations as well as with vehicle operators as needed.

This level of control is useful during early commercialization as we define operational processes and playbooks for our partners.

We plan to first launch Aurora Driver for Freight, our driverless trucking subscription service, as we believe that is where we can make the largest impact the fastest, given the massive industry demand, attractive unit economics, and the ability to deploy on high volume highway-focused routes.

Future success will be dependent on our ability to execute against our product roadmap to launch Aurora Driver for Freight.

From there, we plan to leverage the extensibility of the Aurora Driver to deploy and scale into the passenger mobility market with Aurora Driver for Rides (formerly Aurora Connect), our driverless ride hailing subscription service, and in the longer-term the local goods delivery market.

We launched Aurora Driver for Freight, our driverless trucking subscription service first, as we believe that is where we can make the largest impact the fastest, given the massive industry demand, attractive unit economics, and the ability to deploy on high volume highway-focused routes.

We plan to leverage the extensibility of the Aurora Driver to deploy and scale into the passenger mobility market with Aurora Driver for Rides, our driverless ride hailing subscription service, and in the longer-term the local goods delivery market.

Significant Events and Transactions

Public Offering

On August 2, 2024, the Company completed a public offering (the “2024 Public Offering”) of approximately 134 million shares of Class A common stock at a price of $3.60 per share, for proceeds of $466 million, net of transaction costs, including the full exercise of the underwriters’ over-allotment option.

Launch of Aurora Driver for Freight

In April 2025, we launched Aurora Driver for Freight and began driverless operations of trucks hauling customer loads.

We commenced recognizing revenue during the three months ended June 30, 2025.

Supplementing our strategic partnerships, in 2025 we began a truck program to support our commercialization strategy by providing customers with greater driverless capacity.

Under this program, trucks, including a fleet based on International® LT® Series vehicles, will be upfitted by or on behalf of Aurora and used for driverless operations.

At-The-Market Offering

On February 14, 2025, we entered into a sales agreement with Cantor Fitzgerald & Co., TD Securities (USA) LLC, and Allen & Company LLC, as sales agents (the “Sales Agents”), pursuant to which we may, from time to time, sell up to an aggregate amount of $500 million of the Company’s Class A common stock through the Sales Agents in an “at-the-market” offering (the “ATM Program”).

On July 30, 2025, the Company increased the aggregate dollar amount of the Company’s Class A common stock that it may sell under the ATM Program to $1,421 million.

During the twelve months ended December 31, 2025, we offered and sold approximately 151 million shares of Class A common stock through the ATM Program at an average price of $5.96 per share, raising $898 million in equity capital and receiving net proceeds of $874 million after transaction costs.

Global Economic Conditions

Unfavorable conditions in the economy in the United States and abroad may negatively affect the growth of our business and our results of operations.

For example, macroeconomic events, including rising inflation, tensions in U.S.-China relations, the COVID-19 pandemic, high interest rates, recent and potential future disruptions in access to bank deposits and lending commitments due to bank failures, the Russia-Ukraine war, and the conflicts in the Middle East have led to economic uncertainty and volatility globally.

For example, macroeconomic events, including rising inflation, tensions in U.S.-China relations, high interest rates, recent and potential future disruptions in access to bank deposits and lending commitments due to bank failures, wars, conflicts and political tensions in certain regions have led to economic uncertainty and volatility globally.

In addition, changes in trade policy, including existing and potential tariffs and other trade restrictions on vehicles, electronics and other components used in our hardware and the vehicles on which it is deployed, could increase our costs, disrupt our supply chain, or reduce demand for our technology and services.

The effect of macroeconomic conditions may not be fully reflected in our results of operations until future periods.

Moreover, negative macroeconomic conditions could adversely impact our ability to obtain financing in the future on terms acceptable to us, or at all.

In addition, the geopolitical instability and related sanctions could continue to have significant ramifications on global financial markets, including volatility in the United States.

In addition, geopolitical instability and related sanctions could continue to have significant ramifications on global financial markets, including volatility in the United States.

Our operating results could be materially impacted by these changes and other changes in the overall macroeconomic environment and other economic factors.

3 unchanged sentences

(in millions, except for percentages) 2025 2024

Operating expenses:

$ 3 $ — $ 3 n/m (1)

Cost of revenue 17 — 17 n/m (1)

Research and development 745 676 69 10 %

Selling, general and administrative 142 110 32 29 %

Total operating expenses 786 835 (49) (6) %

Loss from operations (901) (786) (115) 15 %

2 unchanged sentences

Other income, net

56 62 (6) (10) %

Loss before income taxes (816) (748) (68) 9 %

3 unchanged sentences

(1) Not meaningful.

Operating expenses

Research and development expenses decreased by $40 million, or 6%, to $676 million in the twelve months ended December 31, 2024 from $716 million in the twelve months ended December 31, 2023, primarily driven by decreases in non-cash stock-based compensation, hardware costs for development fleets, and personnel costs.

Revenue was $3 million in the twelve months ended December 31, 2025 due to the commercial launch of Aurora Driver for Freight in April 2025.

Cost of revenue was $17 million in the twelve months ended December 31, 2025 due to the commercial launch of Aurora Driver for Freight in April 2025.

Non-cash stock based compensation in cost of revenue was not significant.

Research and development expenses increased by $69 million, or 10%, to $745 million in the twelve months ended December 31, 2025 from $676 million in the twelve months ended December 31, 2024, primarily driven by increases in non-cash stock-based compensation, hardware costs for development fleets, and personnel costs, partially offset by expenses recognized as cost of revenue due to commercial launch in April 2025 and personnel costs previously recognized in research and development now included in selling, general and administrative due to a realignment of resources.

Research and development expenses included non-cash stock-based compensation of $153 million and $122 million in the twelve months ended December 31, 2025 and 2024, respectively.

Selling, general and administrative expenses decreased by $9 million, or 8%, to $110 million in the twelve months ended December 31, 2024 from $119 million in the twelve months ended December 31, 2023 primarily driven by decreases in insurance costs and other general and administrative costs.

Selling, general and administrative expenses increased by $32 million, or 29%, to $142 million in the twelve months ended December 31, 2025 from $110 million in the twelve months ended December 31, 2024 primarily driven by increases in personnel costs, non-cash stock based compensation, and personnel costs previously recognized in research and development now included in selling, general and administrative due to a realignment of resources.

Selling, general and administrative expenses included non-cash stock-based compensation of $35 million and $22 million in the twelve months ended December 31, 2025 and 2024, respectively.

Other income (expense)

The change in fair value of derivative liabilities resulted in expense of $24 million and $20 million in the twelve months ended December 31, 2024 and 2023, respectively, primarily due to the change in the market price for the underlying instrument.

Other income, net increased by $3 million, or 5%, to $62 million in the twelve months ended December 31, 2024, from $59 million in the twelve months ended December 31, 2023, primarily due to an increase in interest income earned on cash equivalents and investments.

The change in fair value of derivative liabilities resulted in income of $29 million and expense of $24 million in the twelve months ended December 31, 2025 and 2024, respectively, primarily due to the change in the market price for the underlying instrument.

Other income, net decreased by $6 million, or 10%, to $56 million in the twelve months ended December 31, 2025, from $62 million in the twelve months ended December 31, 2024, primarily due to a decrease in interest income earned on cash equivalents and investments as a result of lower market rates.

Comparison of the Twelve Months Ended December 31, 2024 to the Twelve Months Ended December 31, 2023

2 unchanged sentences

(in millions, except for percentages) 2024 2023

Collaboration revenue $ — $ 68 $ (68) n/m (1)

Operating expenses:

1 unchanged sentence

Selling, general and administrative 110 119 (9) (8) %

Goodwill impairment

— 1,114 (1,114) n/m (1)

Total operating expenses 786 835 (49) (6) %

4 unchanged sentences

Loss before income taxes (748) (796) 48 (6) %

Income tax expense

— — — n/m (1)

Income tax expense — — — n/m (1)

Net loss $ (748) $ (796) $ 48 (6) %

(1) Not meaningful.

Collaboration revenue

Collaboration revenue was $68 million in the twelve months ended December 31, 2022 under the collaboration project plan with Toyota Motor Corporation.

As of December 31, 2022, the Company had recognized all revenue associated with cash payments received under the collaboration project plan and, as a result, no revenue was recognized during the twelve months ended December 31, 2023.

Operating expenses

Research and development expenses increased by $39 million, or 6%, to $716 million in the twelve months ended December 31, 2023 from $677 million in the twelve months ended December 31, 2022, primarily driven by an increase in personnel and software development costs, partially offset by a decrease in hardware development costs.

Research and development expenses included non-cash stock-based compensation of $122 million and $139 million in the twelve months ended December 31, 2024 and 2023, respectively.

Selling, general and administrative expenses decreased by $10 million, or 8%, to $119 million in the twelve months ended December 31, 2023 from $129 million in the twelve months ended December 31, 2022, primarily driven by a decrease in insurance costs.

Selling, general and administrative expenses decreased by $9 million, or 8%, to $110 million in the twelve months ended December 31, 2024 from $119 million in the twelve months ended December 31, 2023, primarily driven by decreases in insurance costs and other general and administrative costs.

Selling, general and administrative expenses included non-cash stock-based compensation of $22 million and $21 million in the twelve months ended December 31, 2024 and 2023, respectively.

The Company recognized goodwill impairment of $1,114 million during the twelve months ended December 31, 2022 as a result of goodwill impairment assessments performed due to significant declines in the market price of the Company’s Class A common stock and its market capitalization.

No goodwill impairment was recorded during the twelve months ended December 31, 2023.

Other income (expense)

The change in fair value of derivative liabilities resulted in expense of $20 million and income of $114 million in the twelve months ended December 31, 2023 and 2022, respectively, primarily due to the change in the market price for the underlying instrument.

Other income, net was $59 million in the twelve months ended December 31, 2023, compared to $15 million in the twelve months ended December 31, 2022, primarily due to an increase in interest income earned on cash equivalents and investments.

Liquidity and Capital Resources

As of December 31, 2024, our principal sources of liquidity were $211 million of cash and cash equivalents and $1,012 million of short-term investments, exclusive of restricted cash of $16 million.

Cash and cash equivalents primarily consist of money market funds and U.S.

Treasury securities as well as commercial paper.

As of December 31, 2025, our principal sources of liquidity were $221 million of cash and cash equivalents, $1,055 million of short-term investments, and $183 million of long-term investments, exclusive of restricted cash of $14 million.

Cash and cash equivalents primarily consist of money market funds.

Investments consist of primarily U.S.

Treasury securities as well as corporate bonds.

Treasury securities as well as corporate bonds and commercial paper.

We have incurred negative cash flows from operating activities and significant losses from operations in the past.

We expect to continue to incur operating losses and that we will need to opportunistically raise additional capital to support the continued development and commercialization of the Aurora Driver.

We have only recently started to generate revenue and we expect to continue to incur operating losses requiring us to opportunistically raise additional capital to support continued development and commercialization.

We believe our cash on hand and short-term investments will be sufficient to meet our working capital and capital expenditure requirements for a period of at least twelve months from the date of this Annual Report.

During the three months ended December 31, 2025, we offered and sold approximately 4 million shares of Class A common stock through the ATM Program at an average price of $4.42 per share, raising $15 million in equity capital and receiving net proceeds of $15 million after transaction costs.

Cash flows for the periods were as follows (in millions):

5 unchanged sentences

Net (decrease) increase

(291) 241 (1,349)

Cash, cash equivalents, and restricted cash at beginning of the period

518 277 1,626

Cash, cash equivalents, and restricted cash at end of the period

1 unchanged sentence

Cash Flows Used in Operating Activities

Net cash used in operating activities decreased by $30 million in the twelve months ended December 31, 2025 from $611 million for the twelve months ended December 31, 2024 primarily due to the annual bonus being settled in equity in the current year partially offset by increased compensation and benefits.

Net cash used in operating activities increased by $13 million in the twelve months ended December 31, 2024 from $598 million for the twelve months ended December 31, 2023 primarily due to advanced payments for hardware materials for fleet builds partially offset by decreases in other operating expenditures.

Net cash used in operating activities increased by $90 million in the twelve months ended December 31, 2023 from $508 million for the twelve months ended December 31, 2022 primarily due to receipts in the comparative period of the final payments under the collaboration project plan with Toyota.

Cash Flows (Used in) Provided by Investing Activities

Net cash used in investing activities increased by $73 million in the twelve months ended December 31, 2025 from $172 million of net cash used in the twelve months ended December 31, 2024, primarily due to increased purchases of investments net of maturities.

Net cash used in investing activities increased by $180 million in the twelve months ended December 31, 2024 from $8 million of net cash provided in the twelve months ended December 31, 2023, primarily due to the net purchases of short-term investments compared to net maturities in the comparative period.

Net cash provided by investing activities increased by $860 million in the twelve months ended December 31, 2023 from $852 million of net cash used in the twelve months ended December 31, 2022 primarily due to the net purchases of short-term investments in the comparative period.

Cash used for purchases of property and equipment were $31 million, $34 million and $15 million in the twelve months ended December 31, 2025, 2024 and 2023, respectively.

Cash Flows Provided by Financing Activities

Net cash provided by financing activities increased by $342 million in the twelve months ended December 31, 2025 from $492 million for the twelve months ended December 31, 2024 due to higher net proceeds received from equity fundraising and increased proceeds from the exercise of stock options partially offset by increased tax payments in connection with the net settlement of RSUs.

Net cash provided by financing activities decreased by $339 million in the twelve months ended December 31, 2024 from $831 million for the twelve months ended December 31, 2023 due to lower net proceeds received from equity fundraising.

Net cash provided by financing activities increased by $820 million in the twelve months ended December 31, 2023 from $11 million for the twelve months ended December 31, 2022 due to net proceeds received from the Private Placement and Public Offering.

Contractual Obligations, Commitments and Contingencies

3 unchanged sentences

No material losses were recorded in the twelve months ended December 31, 2025, 2024 and 2023.

The Company has entered into a contract for cloud hosting services under which non-cancelable future minimum payments as of December 31, 2024 are:

$64 million for 2025, $38 million for 2026, $0 million for 2027, and $0 million for 2028.

The Company has non-cancelable future minimum payments as of December 31, 2025 of:

$79 million for 2026 and $13 million for 2027.

Commitments under operating lease contracts are detailed within Note 8 – Leases to our consolidated financial statements included elsewhere in this Annual Report.

6 unchanged sentences

Acquisition Related Intangible Assets

Acquired intangible assets primarily consist of in-process research and development (“IPR&D”) from the Company’s historical acquisitions.

IPR&D assets are reviewed for impairment considerations annually on December 31, or whenever events or circumstances indicate that the carrying amounts may not be recoverable.

Acquired intangible assets primarily consist of developed technology from the Company’s historical acquisitions.

These assets were in-process research and development (“IPR&D”) until the assets were placed into service during the three months ended June 30, 2025.

Acquired intangible assets are reviewed for impairment considerations whenever events or circumstances indicate that the carrying amounts may not be recoverable.

If indicators of impairment exist, the Company calculates the value of the assets with significant estimates and assumptions utilized in the valuation of certain intangible assets include, but are not limited to, estimated replacement cost, profit margin, opportunity cost, useful lives, and discount rates.

Estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.

Valuation of Goodwill

Goodwill represents the excess purchase consideration of acquired businesses over the estimated fair value of the net assets acquired.

Goodwill is not amortized but is evaluated for impairment annually on December 31, or whenever events or circumstances indicate that the carrying amount may not be recoverable.

If the carrying amount of goodwill exceeds its fair value, an impairment loss is recognized for any excess of the carrying amount of goodwill over its implied fair value.

During the second and fourth quarters of 2022, the market price of the Company’s Class A common stock and its market capitalization declined significantly.

As a result, the Company determined that triggering events had occurred and goodwill impairment assessments were performed.

The Company utilized a market approach valuation method utilizing the observable market price of the Company’s Class A common stock as it represented the best evidence of the fair value of its reporting unit.

Based on the results of the goodwill impairment assessment, the Company recognized a $1,114 million goodwill impairment during the twelve months ended December 31, 2022.

The carrying value of goodwill was $- as of December 31, 2024 and December 31, 2023.

Valuation of Derivative Liabilities

2 unchanged sentences

The Monte Carlo simulation analysis is dependent upon management estimates and assumptions, primarily related to expected volatility and risk-free interest rates.

The expected volatility is determined based on a blended rate of our historical volatility as well as the historical equity volatility of comparable companies over a period that matches the expected term of the instrument.

The expected volatility is determined based on our historical volatility as well as the historical equity volatility of comparable companies over a period that matches the expected term of the instrument.

The risk-free interest rate is based on relevant U.S.

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis