Aurora Innovation, Inc. (AUR) Earnings & Analysis

Latest quarter

Aurora Innovation reported Q3 FY2026 revenue of $3.0 million, below the $3.2 million consensus. Adjusted EPS of −$0.12 matched the consensus.

Revenue rose from $1.0 million a year earlier. Aurora attributed the increase primarily to greater utilization, geographic expansion and higher fuel surcharges. CFO David Maday said revenue came from commercial loads carried both without a driver and with a vehicle operator supervising.

Aurora’s gross margin was −166.7%, compared with −500.0% a year earlier. Its filing said cost of revenue rose to $8 million from $6 million, primarily because personnel and fuel expenses increased as utilization and geographic coverage expanded. Research and development expenses rose to $203 million from $179 million, driven partly by personnel, hardware development and cloud computing costs.

The company reported diluted EPS of −$0.12, compared with −$0.11 a year earlier. Free cash flow was −$206.0 million, versus −$157.0 million a year earlier; Maday said Aurora ended the quarter with over $1 billion in cash and short-term investments.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

CEO Chris Urmson said Aurora’s initial production ramp encountered material availability, component quality and end-of-line testing issues. Asked about the bottlenecks, he said some complex components had to be sourced from alternative suppliers, contributing to an approximately six-week delay.

CFO David Maday said the component changes were not primarily a cost issue and did not affect gross margin. Asked about the ramp, he said Aurora had started a second production line at Roush and that Aurora Driver kit supply was ahead of truck builds.

On demand, Urmson said the initial 200 trucks were fully contracted and the transportation-service fleet, which Aurora expects to cap at about 500 trucks, was nearly fully allocated. He said Aurora had announced memorandums of understanding covering 1,000 Driver as a Service trucks over 2027 and 2028. Under that model, customers would own and operate the trucks while paying for Aurora’s driving service.

Urmson said Charger Logistics planned to own and operate 500 Driver as a Service trucks under a memorandum of understanding, with deliveries expected in 2027 and 2028. Maday said pricing and volumes had already been aligned in the memorandums; remaining contract work included servicing responsibilities and what happens to trucks at the end of their lives. Asked about backlog, Urmson said it was not the right time to discuss it and preferred to describe demand through memorandums whose core terms had been negotiated.

Maday said most of the expected increase in spending was associated with fleet expansion, including buying kits and components and increasing production capacity. He expected some additional administrative infrastructure as Aurora deploys more trucks. Urmson also said Aurora wanted its driver available across vehicle manufacturers’ platforms and was working with Volvo, PACCAR and International.

Guidance

Aurora lowered its FY2026 revenue outlook to approximately $9 million, reflecting a production ramp about six weeks behind its prior plan. Maday said Aurora now anticipates exceeding 200 driverless trucks by the end of February 2027; on the prior-quarter call, he had expected more than 200 in operation at the end of 2026.

Urmson said Aurora now expects a production rate of 20 trucks per week in early December. On the prior-quarter call, he had expected Roush to reach an annual run rate of 1,000 trucks in October.