Kodiak Q4 2025 Earnings Call - On track for late 2026 long-haul driverless launch with 20 trucks deployed, ARM 84%

Operator: Thank you for standing by, and welcome to Kodiak’s fourth quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. To remove yourself from the queue, you may press star one one again. I would now like to hand the call over to Dan Goff, VP of External Affairs with the Safe Harbor. Please go ahead.

Dan Goff, VP of External Affairs, Kodiak: Thank you, and welcome to Kodiak’s fourth quarter 2025 earnings call. On the call today are Don Burnette, founder and Chief Executive Officer of Kodiak, and Surajit Datta, Chief Financial Officer of Kodiak. Our press release and an earnings presentation were issued earlier today and are posted on the investor relations section of our website. This call is being broadcast live via a webcast, and a replay will be available on our website after the call. Before we begin, I would like to remind you that during today’s call, Kodiak will be making forward-looking statements within the meaning of the federal securities laws about financial performance and future events, including our guidance for fiscal first quarter and full fiscal year 2026, as well as our long term goals. Actual events or results could differ materially.

Please refer to our SEC filings, including our most recent Form 10-Q and the Form 8-K filed with today’s press release for important risks and other factors that may cause our actual results to differ from those in our forward-looking statements. Additional information will also be set forth in our annual report on Form 10-K for the year ended December 31, 2025. We disclaim any obligation, except as required by law, to update or revise any financial or operational guidance and long-term goals or our other forward-looking statements, whether because of new information, future events, or otherwise. Any forward-looking statements made on this call speak only as of the date of this call. Further, in addition to discussing results that are calculated in accordance with generally accepted accounting principles, we also refer to certain non-GAAP financial measures.

For more detailed information on our non-GAAP financial disclosures, including reconciliations to most comparable GAAP measures, please refer to our earnings release, which can be found on our investor relations website. I will now turn the call over to Don. Please go ahead.

Don Burnette, Founder and Chief Executive Officer, Kodiak: Good afternoon, and thank you for joining us. Before I discuss Kodiak’s 2025 Q4 results, I want to frame the incredible long term opportunity for Kodiak. We believe Physical AI represents one of the most significant technology shifts in modern history. Physical AI is transforming how work gets done in the physical world, and self-driving is leading this transformation. Autonomous systems will increasingly power how goods and people move, how freight is delivered, and how packages reach people’s doorsteps. The Kodiak Driver is at the forefront of this revolution. Scale matters, and we are building the system to scale. The key to deploying Physical AI is harnessing the power of data center scale AI, and then optimizing it to run on low power compute that can fit on a range of form factors.

We’ve already solved that core challenge by building the Kodiak Driver to be a modular Physical AI platform that is commercialized today. The same core system that powers long-haul freight is built to extend into anything that moves, from cars to pickup trucks, buses, and delivery vans to even other form factors such as drones, construction equipment, and humanoids. While we remain focused on our core trucking strategy, this platform leverage has the potential to significantly expand our long-term addressable market. We are building toward deploying the Kodiak Driver on thousands of trucks within the next few years. Our commercial roadmap, manufacturing partnerships, and expansion strategy are aligned around that objective. As adoption increases across major freight corridors, autonomous trucks will move from limited deployments to everyday infrastructure.

I believe that in the coming years you will not be able to drive on any highway in the United States without encountering a Kodiak truck. Our objective is clear: removing humans from goods delivery with AI making every decision in real time. That future is not a distant concept. It’s beginning now. This quarter marked another step forward in deploying safe, scalable, fully driverless operations with no safety driver in the cab and no required human remote monitoring. As the physical AI revolution has accelerated, so has Kodiak, which has been fueled by our industry leading deployments. In 2025 alone, we advanced our core AI capabilities and expanded our product footprint at a pace that significantly exceeded what we achieved in prior years. That acceleration is translating directly into stronger reliability metrics, higher operational readiness, and increasing commercial confidence. Our execution priorities remain disciplined and measurable.

Safety performance, system reliability, commercial scaling, cost structure improvement, and capital efficiency. With accelerating technical progress and a clear path to scale deployment, Kodiak will continue to lead. That leadership is now translating into measurable results, which I would now like to discuss. 2025 was a monumental year for Kodiak. The fourth quarter was our first full quarter as a public company, and we delivered results that exceeded our expectations across all guided metrics, including truck deliveries and cash burn. We have made significant progress across product, commercialization, and partnerships entering 2026 with strong momentum. We remain on track for our long haul driverless launch in late 2026 and continue to execute against our initial 100 truck commitment with Atlas. Our continued progress extends well beyond West Texas’ Permian Basin, where our first driverless trucks are deployed.

During the last quarter and early this year, we strengthened our ecosystem through collaborations with blue-chip companies like Bosch and Verizon. We secured a new contract with the U.S. Marine Corps and launched operations between Dallas and El Paso. Together, these milestones demonstrate growing market validation, expanding strategic relationships, and increasing confidence in our ability to deliver autonomous trucking at scale. Just over a year ago, we delivered the first ever driverless Class 8 trucks to a customer. On our third quarter call, we outlined a plan to expand the initial 2-truck deployment to mid to high teens by the end of year. I’m proud to say that we finished 2025 with 20 driverless trucks in our customers’ hands, which represents a 100% growth quarter-over-quarter. This represents the largest customer-owned driverless trucking deployment in the world.

We also remain the only company operating through an asset-light driver-as-a-service model, which generates multi-year recurring revenue, enabling us to scale faster with less capital. As of the end of 2025, those driverless trucks have collectively driven more than 10,700 revenue-generating hours with no one inside the cab. To put that into perspective, assuming an average highway speed of about 65 miles per hour, this would be equivalent to around 700,000 miles or nearly 30 trips around the planet. In addition, these trucks operate safely without continuous remote monitoring, a capability that is critical to achieving attractive unit economics and meaningful scale. Overall, as of the end of Q4, Kodiak’s autonomy system has delivered more than 12,600 loads, representing an 87% increase in loads delivered compared to year-end 2024.

These achievements reflect our focused development and disciplined capital-efficient execution that we believe will enable us to achieve profitability and free cash flow earlier as we scale. I want to underscore, scaling autonomous trucking is hard. None of these results magically appear overnight, and there are no shortcuts. As I’ve discussed before, AV trucking is not just about technology. To build and scale a Physical AI business, you need to execute across three distinct pillars: technology, safety, and product. In Q4, we made strong progress across each. I’ll begin with technology. As a reminder, the Kodiak Driver is a Physical AI-powered virtual driver that integrates with our modular vehicle-agnostic hardware to work seamlessly across different vehicle platforms and driving environments. Kodiak-powered vehicles operate around the clock in sun, rain, dust storms, and other inclement weather.

By operating without high-definition maps, our system can adapt in real time and perform reliably in complex, unstructured environments. This flexibility allows us to deploy the same technology across long haul, industrial, and defense applications, and in the future, into adjacent opportunities. In 2025, we accelerated our use of AI coding tools and are already recognizing efficiencies from the use of tools such as OpenAI Codex. These AI tools are accelerating our development process, allowing us to do even more with less. We are also executing rapidly on key technical milestones for our deployed driverless product. One great example is our progress on hauling non-standard trailer types. You may recall that in Q3, we added the ability to haul doubles or two trailers at the same time.

We recently became the first AV company to pull triple trailers, which, when combined with the tractor, weigh over 275,000 pounds or 137 tons and extend more than half the length of a football field. Hauling triples requires extreme precision and enables us to provide our industrial customers higher asset utilization and a more cost-effective solution. We also recently began hauling car trailers, another autonomous industry first. This achievement is only possible because of Kodiak’s unique sensor pod configuration. Mounting sensors on the top of the vehicle would interfere with the car trailers which extend over the cab. We believe that these advanced capabilities put us well ahead of the competition in terms of the range of customers that we can efficiently serve. Our deployment with Atlas in the Permian Basin is helping us to hone our technology in countless ways.

We’ve continued to refine the use of our AI safety agent, which allows the Kodiak Driver’s AI to identify rare scenarios that can be a challenge for more traditional perception techniques. This new feature allows us to better handle the long tail of complex edge cases and gives us further confidence as we move down the path towards long-haul driverless deployment. For example, the AI agent helped the Kodiak Driver to identify a dust tornado or dust devil in the middle of the road. We’ve also recently announced technology collaborations and made technology investments that we expect will accelerate our ability to scale and reduce AV hardware costs. Most notably, at CES in January, I had the pleasure of presenting our ambitious vision for industrializing and scaling the Kodiak Driver through our strategic collaboration with Bosch, one of the world’s leading automotive suppliers.

Together, Bosch and Kodiak are developing a next-generation redundant autonomous platform with integrated hardware, firmware, and software designed for automotive-grade reliability and manufacturing at scale with our partners at Roush and directly on the OEM factory floor. This partnership underscores our focus on developing Physical AI, not hardware, and enhances our ability to scale autonomous trucking. We also continue to focus on meaningfully reducing our hardware costs and are pursuing a comprehensive AV hardware cost-down strategy across multiple major initiatives. First, we recently embarked on a major engineering program designed to lower the cost of our bill of materials. This effort will continue over the course of 2026, is already bearing fruit, and we will have more to share in future quarters. Second, our cooperation with ecosystem partners Roush and Bosch helps enable us to manufacture at scale while sourcing multiple components from the same vendor.

We expect this effort to provide benefits beyond just 2026. Further, we anticipate AV hardware, including sensors, compute, and actuation, to become further commoditized, making the incremental hardware costs associated with autonomy marginal. These efforts are critical as reduced hardware costs are a key driver to achieving profitability and generating positive free cash flow over time. Lastly, we have made key investments in our off-board infrastructure required for autonomous operations at scale. Our commercial connectivity agreement with Verizon is now enabling reliable connectivity through 5G and LTE, supporting remote assistance, over-the-air software updates, and centralized fleet management. This connectivity is foundational to our DaaS model, ensures our customers have full-time visibility into their autonomous fleet, and enables safe and reliable 24/7 autonomous operations. Moving on to the safety pillar, we continue to make meaningful progress toward closing our long-haul safety case.

Our Autonomy Readiness Measure rose to 84% as of February 2026. During Q4, we did much of the underlying functional safety work that allows us to validate the safety of key truck platform technologies, thereby demonstrating that technologies we developed for industrial driverless deployment are sufficiently robust for high-speed long-haul operations. In parallel, we established manufacturing, installation, and verification processes with our partners to support both our next-generation industrial and long-haul platforms. This work relied heavily on the operational insights we have gained from our full year of driverless operations with Atlas. One of the most exciting tools driving our safety case development is a new cutting-edge technology we call Breakpoint. Breakpoint, which we built leveraging AI, enables us to test the Kodiak Driver against millions of realistic scenario variations while intelligently searching for the most challenging conditions.

This enables our team to prioritize engineering workflow based on risk priority. Using Breakpoint, we have been able to preemptively discover and resolve extremely rare edge cases that we’ve not yet observed in our thousands of hours of real-world operations. This ability to precisely identify the focused work that we need to do to complete our safety case is a key contributor to our capital-efficient approach. Lastly, in February, we began testing at a new track, the American Center for Mobility Proving Ground in Southeast Michigan. The ACM Proving Ground is one of only a few tracks in the U.S. large enough to bring long-haul trucks up to highway speeds. Our structured testing at the track will allow us to evaluate rare scenarios under near real-world conditions at highway speeds.

This kind of testing is critical to us completing work on our initial long-haul safety case and launching in late 2026. Lastly, I would like to briefly discuss our progress across the product pillar, where our technology, safety case, and operations combined to give our customers a great experience. As I previously mentioned, we’ve completed a full year of real-world driverless operations with our customer, Atlas Energy Solutions, one of the largest and most sophisticated sand logistics providers in the Permian Basin. This has yielded tremendous benefits, including the ability to pressure test the core components of our autonomous driving platform, which are shared across different driving environments. This generates a flywheel effect, allowing us to leverage these features and our learnings across long-haul and defense deployments. We continue to learn from this relationship and deployment.

For example, the Kodiak Driver collects data that enables us to optimize predictive maintenance, which maximizes the uptime for our customers’ trucks, which they deeply care about. Lastly, we’ve gained significant insights in how to optimize daily operational decisions, how to train up and team with customers, how trucks should behave at launch and land, and how to optimize workflows. All these operational decisions have an outsized impact on throughput and are leverageable across verticals. We’ve put a lot of focus on predictable performance in these areas and built playbooks and processes that will help us continue to scale in the Permian and beyond. Turning to our commercial pipeline, we have made significant progress across all three verticals. I’d like to start with the long-haul vertical. As we discussed on our first earnings call, we’ve been delivering freight using our fleet since 2019.

We continue to scale these operations thoughtfully as customer demand and fleet capacity evolve. We’ve made significant commercial progress in long-haul operations over the last few months with active long-haul deployments with leading logistics companies, including J.B. Hunt, Werner, and Martin Brower. We also recently launched a new pilot with a major Fortune 500 private fleet hauling between Dallas and Houston. Today, we announced that we’ve launched a new route with Martin Brower, logistics partner to some of the world’s leading restaurant brands, between Dallas and El Paso. This additional route with Martin Brower brings our total weekly operational lanes to 8 and adds an additional route that stretches beyond a single hours of service. Our system’s independence from HD maps has allowed us to quickly and easily add this lane. This new route represents a core tenet of our strategy of increasing our penetration with our existing customers.

Our industry-leading customer base has an aggregate fleet size of over 125,000 trucks. This deep customer base means that even with moderate penetration into our current customer fleets, we will have all the demand that we can service in the coming years. I’d like to move on to defense, where we’ve made amazing progress over the last few months. We believe the policy environment is rapidly improving for dual-use physical AI developers like Kodiak. We’re already starting to see the benefits of the Pentagon’s increased focus on working with commercial first developers. In February, we onboarded Chet Gryczan, a leader with nearly 20 years of experience in the defense ground vehicle ecosystem, as our new Vice President and Managing Director of Defense to help us capture all these new opportunities.

Additionally, in February, we announced that we were awarded a contract with the U.S. Marine Corps to integrate the Kodiak Driver into the ROGUE-Fires carrier vehicle. This is an uncrewed ground platform designed to support distributed operations, expeditionary fires, and force projection in contested environments in the Indo-Pacific region. Of course, the ROGUE-Fires work leverages the same production-ready autonomy platform that underpins our core autonomous trucking business, reinforcing the strength and scalability of Kodiak’s approach across both commercial and defense markets. Kodiak was recently selected to participate in two high-profile U.S. Army demonstration events, the Army’s xTech Overwatch demonstration in Texas and the Defense Innovation Unit’s Project GILLMOR. For Project GILLMOR, a major autonomy experiment which focused on contested logistics in the Indo-Pacific, we were selected as one of just 12 companies chosen from more than 400 submissions.

These exercises highlight the growing demand within the Department of Defense for commercially developed autonomy solutions. For Project GILLMOR, Kodiak deployed our autonomous Ford F-150s to Hawaii, where we conducted operational demonstrations in support of the 25th Infantry Division, a key Army unit responsible for operations in INDOPACOM. The exercise provided soldiers the opportunity to interact directly with Kodiak’s autonomy technology in realistic operational conditions, demonstrating how our off-road autonomy system can enable distributed operations and more resilient logistics in complex terrain. These events underscore the military’s increasing interest in production-ready dual-use autonomous systems and reinforce Kodiak’s position as a flexible autonomy partner capable of supporting missions ranging from tactical mobility to large-scale logistics. Looking ahead, we see strong opportunities to extend our commercial long-haul trucking autonomy platform into defense logistics applications at scale.

Lastly, we continue to explore opportunities in the industrial trucking vertical, which includes oil and gas, mineral transportation, and logging transportation. Industrial trucking represents a promising opportunity for Kodiak, given that operators in remote industrial locations face even greater difficulties recruiting and retaining drivers than long-haul carriers. We continue to have productive conversations with major industrial trucking operators in the U.S. and also see significant opportunities abroad, specifically in Australia, Canada, and the Middle East. In summary, the experience we’ve gained over the past year of driverless operations has established a durable foundation for our next phase of growth. By running our system around the clock, we’ve built the technical maturity and organizational muscle memory required to scale. That experience compounds, each deployment benefiting from the capabilities and processes we’ve already developed. This positions us well as we prepare to launch driverless long-haul operations in late 2026.

Looking ahead, we will remain focused on disciplined execution, expanding driverless deployment in a way that is both safe and sustainable. I want to give a huge thanks to the team for executing at a high level as we scale this business. 2025 was a fantastic year, and we expect 2026 to be even stronger as we continue to accelerate our deployment and continue to deliver on our milestones. Now over to Surajit.

Surajit Datta, Chief Financial Officer, Kodiak: Thank you, Don, and good afternoon, everyone. I am pleased to share Kodiak’s financial results for the fourth quarter and full fiscal year 2025. 2025 was a transformative year for Kodiak, culminating in a strong Q4 that exceeded our expectations across all guided metrics. We continued to demonstrate disciplined execution, improved operating leverage, and continued to realize benefits of an asset-light business model. We ended Q4 FY 2025 with 20 customer-owned driverless trucks exceeding the mid- to high-teens range, which we had previously guided. This outperformance was driven by successful deployment with our existing industrial customer. Q4 revenue was $1.1 million, representing 37% quarter-over-quarter growth. This was primarily driven by an increase in driver-as-a-service revenue generated by 100% quarter-over-quarter growth in customer-owned driverless trucks. This performance underscores the strength of our business model.

As the Kodiak Driver is deployed, we benefit from scalable multi-year recurring revenue while continuing our historical discipline on capital requirements. GAAP operating loss for the fourth quarter was $39 million. non-GAAP operating loss for the quarter, which excludes stock-based compensation, totaled $30 million, primarily due to continued investment in R&D and operations support for our industrial deployment. We incurred capital expenditures of $10 million, primarily to purchase AV components that we deploy on our customers’ trucks. Turning to cash flow, we outperformed our guidance for Q4 with free cash flow of -$34 million, less than the -$36 million to -$38 million range, which we had previously provided.

This outperformance was driven by improved operating leverage and continued prudent spending and was partially offset by an increase in AV hardware CapEx. We ended 2025 with cash and cash equivalents and marketable securities of $121 million. This number includes increased liquidity from the debt refinancing, which we completed at the end of the fourth quarter. The successful financing upsized the facility to $30 million, lowered our interest rate and extended the maturity profile to early 2030. Importantly, this facility requires no principal repayments until 2028, providing improved liquidity and increased flexibility to operate and scale our business. For fiscal 2026, we expect free cash flow to be in the range of -$160 million to -$170 million.

The free cash flow burn is expected to be driven by capital expenditures to purchase AV hardware that we deploy on our customer’s trucks and R&D investments as we prepare to launch long haul driverless operations in late 2026. These investments are expected to be partially offset by increasing DAS revenue and ongoing improvements in AV hardware unit costs as we continue to be disciplined in our spending. For the first quarter of fiscal 2026, we expect to end the quarter with driverless trucks in the high 20s. Q1 FY 2026 free cash flow is expected to be in the range of -$36 million to -$38 million as we continue to invest in R&D, operations support and incur capital expenditures to purchase and deploy AV hardware. Based on our current operating plan, we have liquidity into Q4 of FY 2026.

We continue to be focused on strengthening our liquidity and supporting the next phase of growth, particularly as we build our customer pipeline and launch driverless commercial long haul operations in late 2026. As previously stated, we will continue to be disciplined and opportunistic regarding financing options with respect to timing and market conditions. In summary, Q4 marked a strong finish to 2025. We delivered strong revenue growth, exceeded our truck deployment and free cash flow guidance, and maintained a disciplined approach to capital allocation. Our financial priorities remain unchanged. Grow high quality recurring DAS revenue. Invest prudently in R&D, including safety validation and verification to support long haul driverless operations. Drive down AV unit hardware costs. Improve operating leverage through scale and efficiency. Raise capital to maintain a strong balance sheet.

We are entering 2026 with momentum, a clear execution plan and a capital efficient business model designed to scale, drive towards profitability and generate free cash flow over time. Operator, please open the line for questions.

Operator: As a reminder, to ask a question, you will need to press star one one on your telephone. To remove yourself from the queue, you may press star one one again. We ask that you limit yourself to one question and one follow-up to allow everyone the opportunity to participate. Please stand by while we compile the Q&A roster. Our first question comes from the line of Andres Sheppard of Cantor Fitzgerald. Your line is open, Andres.

Anand Sheppard, Analyst, Cantor Fitzgerald: Hey, guys. This is Anand on for Andres. Congrats on the quarter and thanks for taking our questions. I was wondering what the pathway towards long haul launch this year looks like and maybe what are the milestones you’re looking at to get there as we’re focused on the Autonomy Readiness Measure as you ramp up to reach that point.

Surajit Datta, Chief Financial Officer, Kodiak: Oh, thanks, Anand. Well, as we’ve discussed and described previously, the safety case framework consists of a series of claims, and those claims pertain to various aspects of the Kodiak Driver, be it hardware reliability, functional safety, performance of intended functions, handling of various scenarios and cases that we encounter on the roadway. Really it’s a kind of a mechanical process of testing in simulation, testing in the real world, testing on test tracks that allow us to close those claims over time. I think we laid great foundation work in Q4, as we said, during the prepared remarks for a lot of the infrastructure work that we need to do. Now it is just really a kind of turning the crank process to close the remaining claims in the safety case.

There are no specific kind of feature milestones, if you will, if that’s what you’re looking for, that remain for us to complete that process. I’ll just remind you that this is something that we’ve already gone through multiple times with our industrial launch. We are already driving vehicles with nobody in the cab on a day in and day out basis across various weather conditions and various environmental conditions as well. We need to simply bring in the additional scenarios and cases that we encounter at higher speeds. We need to effectively check the box to ensure that

Don Burnette, Founder and Chief Executive Officer, Kodiak: All of the performance that we expect to be there is actually there. You should really think about closing the safety case as a testing framework as opposed to a feature development or implementation framework. This is a very manual and tedious process because as you can imagine, there’s lots of scenarios to close, and there’s lots of I’s to dot and T’s to cross. You know, we’ll continue to update you throughout the year on our progress towards that. As we said in the remarks, we remain confident in our timeline that we’ve set out, and we’re looking forward to the launch later this year.

Anand Sheppard, Analyst, Cantor Fitzgerald: Got it. Appreciate the color. As a quick follow-up, I wanted to touch a little bit on defense, you know, with the recent ROGUE-Fires contract with the military and demos with the Pentagon. I was wondering if you could talk to us a little on how we should see the near-term opportunities with the Army or DoD and what type of contracts maybe we can focus on materializing or if you can quantify this opportunity a little bit further for us.

Don Burnette, Founder and Chief Executive Officer, Kodiak: Sure. Thanks for the question. Yeah. I mean, we’re really excited about defense. Hopefully, that came across in the remarks, and I’ll just reiterate that here. We’ve been talking about the exciting opportunities within the defense space for the last several years. As you can imagine, the rhetoric is heating up. Congress and the Department of Defense have made it very clear that they want to field more technology from commercially mature companies, and that’s certainly something that Kodiak delivers on the autonomy side, uniquely so, might I add. We do see an increase in partnerships and contracts being awarded in the future. The ROGUE-Fires contract was a really exciting one because it brings in a new branch of the military.

Previously, we’ve worked with the Air Force and the Army, and now we’re getting to demonstrate the great capabilities of the Kodiak Driver to the Marine Corps. As we broaden our experience, broaden our demonstration footprint, we are gonna see more and more traction towards defense. As we’ve stated in the past, it’s very difficult to give timelines or any kind of guidance towards defense or defense contracts, and so we’re not prepared to do that today. That being said, we do expect these relationships and opportunities to accelerate throughout 2026, and we’re very excited about the opportunity within defense more broadly.

Anand Sheppard, Analyst, Cantor Fitzgerald: Got it. Thanks again for all the color. Congrats on all the progress. Exciting stuff. I’ll pass it on.

Operator: Thank you. Our next question comes from the line of Mike Latimore of Northland Capital Markets. Your question please, Mike.

Mike Latimore, Analyst, Northland Capital Markets: Yeah, thanks. Congrats on getting to 20 vehicles there. That’s great. You know, you need to get to 100% on the ARM metric before you launch on highway long haul. I guess, is there a definitive lag timeframe between, you know, getting to 100% and then being able to commercially launch, or can you kinda do it simultaneously? Just trying to get a sense of the timeframe between once you get to that metric, and then the time to launch.

Don Burnette, Founder and Chief Executive Officer, Kodiak: Yeah. I don’t wanna split hairs, and you know, talk about, you know, minutes, hours, days, et cetera.

Mike Latimore, Analyst, Northland Capital Markets: Mm-hmm.

Don Burnette, Founder and Chief Executive Officer, Kodiak: Effectively, yes, getting to 100% by our definition and our metric means that we are definitively ready to launch, and so you can think about those happening effectively in parallel.

Mike Latimore, Analyst, Northland Capital Markets: No problem. Yeah. On the 20 vehicles, live vehicles, active vehicles, what is the exit ARR rate on those?

Surajit Datta, Chief Financial Officer, Kodiak: Yeah. Hi, Mike. Thanks for the question. We are not specifically guiding on ARR. However, we are exiting 2025 with approximately mid-single-digit millions of annualized recurring SaaS revenue.

Mike Latimore, Analyst, Northland Capital Markets: Okay.

Surajit Datta, Chief Financial Officer, Kodiak: That’s not factoring any other revenues from Kodiak Express or any upside from defense.

Mike Latimore, Analyst, Northland Capital Markets: Got it. The pricing that you’ve envisioned is holding as expected?

Surajit Datta, Chief Financial Officer, Kodiak: Yeah, we’re not gonna comment specifically on pricing of specific contracts.

Mike Latimore, Analyst, Northland Capital Markets: Mm-hmm.

Surajit Datta, Chief Financial Officer, Kodiak: We are still executing as per our prior plan.

Mike Latimore, Analyst, Northland Capital Markets: Okay. Very good. Thank you.

Surajit Datta, Chief Financial Officer, Kodiak: Thanks, Mike.

Don Burnette, Founder and Chief Executive Officer, Kodiak: Thanks, Mike.

Operator: Thank you. Our next question comes from the line of Itay Michaeli of TD Cowen. Your line is open, Itay.

Itay Michaeli, Analyst, TD Cowen: Great. Thank you. Hi, everybody. Just a first question. As you’ve expanded the driverless trucks and the hours of paid driverless operations, I’m curious whether the ODD has also expanded. Are the trucks doing kinda new, different routes, more complex? And maybe just also just talk about any kinda rates of remote assistance and interventions, things of that nature as well.

Don Burnette, Founder and Chief Executive Officer, Kodiak: Yeah. Thanks, Itay. Yes, absolutely. It has expanded. I mean, you have to remember for us, these are trucks owned and operated by the customer. We don’t control the trucks. We don’t determine where they operate. We don’t tell the customer where they can operate these vehicles. They choose the routes. They choose their operations. You know, the Permian is a 75,000 sq mi area. Obviously, Atlas being one of the more sophisticated operators in the region, they utilize a conveyor belt called the Dune Express in order to move sand from the mine into some of the polygon regions that are most attractive to their customers. They use trucks to carry from the endpoint of the conveyor belts to the end well sites.

Those well sites might be 10, 20, even 40 miles away, and they change all the time. Every couple of weeks, the routes are changing. There’s new routes. The sites are only used for a handful of weeks at a time. It could be anywhere from 2-4 weeks for a well site to be in operation. The routes are continuously changing. Some routes are more difficult functionally than others. Yes, the ODD continues to shift on a regular basis for us. We’re serving multiple well sites with our vehicles, and some routes are incredibly narrow. I would say the most difficult part of operating in the Permian is the complexity of the terrain in terms of the bumpiness, the amount of potholes, the unevenness.

It’s just very harsh on the hardware, it’s very harsh on the vehicles. The narrow lanes is what makes it very difficult because these are bi-directional lanes with lots of traffic. Passing other vehicles in close proximity on a regular basis where you’re just kind of going back and forth all day can be very challenging. For narrow lanes, that’s where the ODD is, I would say, most difficult. Then you throw weather on top of that, and that adds additional complication. Yes, as we expand, we obviously see new things, see new challenges, and increase the diversity of which the system has operated. In terms of, you know, disengagement metrics, there are no disengagements for a driverless vehicle. There’s nobody there to disengage.

I hope that is clear. In terms of, like, remote assistance usage, we haven’t publicly disclosed specific usage numbers. That being said, the primary use of remote assistance for the Kodiak system is in and around pickup and drop-off locations where you have really nuanced, fine control. You know, you need really nuanced fine control of the vehicles in an environment that is changing constantly, and that’s primarily where the customer generally requests assistance for these vehicles.

Itay Michaeli, Analyst, TD Cowen: That’s very helpful, Don. Then just as a follow-up, I’m hoping just to go a bit more into the roadmap for the Bosch collaboration and maybe how we should think about the opportunity over time for you to generate some future BOM savings and kind of other efficiencies from that important partnership.

Don Burnette, Founder and Chief Executive Officer, Kodiak: Yeah. Thanks for that question. This is a really exciting announcement for Kodiak. Obviously, CES was a really great event for us. Bosch being a fantastic partner, we’re already in deep collaboration working with them on future generations of the Kodiak Driver, where we believe we can bring additional efficiencies, through single supplier and mature supplier relationships like Bosch. We haven’t provided any specific references to, you know, costs or, timelines for that work. You know, we definitely look forward to continuing on, our public disclosure with Bosch at future, you know, future events and we’ll have more to say later on.

Itay Michaeli, Analyst, TD Cowen: Awesome. That’s very helpful.

Surajit Datta, Chief Financial Officer, Kodiak: Hey, this is Surajit. Just to add on to what Don mentioned. You know, Bosch is part of our scaling and driving down BOM cost strategy. As Don mentioned in his prepared remarks, we are executing on three levers, I would say. We have made some engineering design enhancements, which are already yielding some savings results. Second, as we increase the scale of the production, that’ll drive cost optimization. Bosch and Roush, they fit in our overall go-global supply chain organization. Obviously, Roush fits in from providing high-quality assembly and Bosch from being able to manufacture at scale and source multiple components from the same vendor. That would allow us to drive down BOM cost materially over time.

Itay Michaeli, Analyst, TD Cowen: Terrific. That’s very helpful. Thank you.

Don Burnette, Founder and Chief Executive Officer, Kodiak: Thanks.

Operator: Thank you. Our next question comes from the line of James McRae of Chardan Capital Markets. Your line is open, James.

James McRae, Analyst, Chardan Capital Markets: Thank you. Good afternoon. Regarding the activity with Atlas. Prior to recent events, the oil prices and the Baker Hughes rig count were declining. I’m curious if that has had an impact on the deployment schedule with Atlas. Is 100 trucks still a viable goal with them?

Don Burnette, Founder and Chief Executive Officer, Kodiak: Yeah. Jim, thanks for the question. You know, we remain committed to delivering the remaining 80 trucks on that initial 100 truck order over the next few quarters. The timing of those deliveries will largely be aligned with you know, the customer’s fleet planning and deployment schedule. We do expect the rollout to be back-end weighted in the year, and we’ll continue to work closely with the customer to ensure that the trucks are integrated efficiently into their operations as necessary. As you know, the oil market is somewhat cyclical and fluctuations do occur. Of course, things are changing literally by the day. At the same time, at the scales that we’re talking about, you know, our trucks are not materially affected by those types of fluctuations.

You know, we remain committed to the 80 trucks on the customer’s fleet planning deployment schedule.

James McRae, Analyst, Chardan Capital Markets: Great. That’s helpful. as far as other industrial customers announced this year, is that a high likelihood? Is that a moderate possibility? Can you kind of frame the potential for other industrial customer announcements this year?

Don Burnette, Founder and Chief Executive Officer, Kodiak: Thanks for that question. I mean, the pipeline. What I can say is that the pipeline is very strong, and we’re talking to customers all over the world. As we mentioned in the prepared remarks, there’s a strong pipeline in Australia. Obviously, the mineral resource industry there is one that fits our model perfectly because it’s extremely remote, very difficult to find labor. That labor is incredibly expensive, and these are operations that run effectively continuously in remote regions. This is definitely an area where we’re interested in expanding. Please understand that the complications with going to Australia is not trivial. We’re working through the logistics there.

Of course, the Middle East is very top of mind for us and others at the moment, both from a defense perspective but also from an industrial perspective. We’re talking to several folks in that region and, you know, we’ll have more to announce when the time is right.

James McRae, Analyst, Chardan Capital Markets: Okay. Very good. Thank you.

Operator: Thank you. Our next question comes from the line of Walter Piecyk of LightShed. Your line is open, Walter.

Walter Piecyk, Analyst, LightShed: Thank you. Hey, Don, first I’m gonna flex ’cause I’m doing this question from the back of a Tesla Robotaxi. Unfortunately, I have the safety attendant in this one. I have not gotten one without a safety attendant, so all the time. For you guys, I just want to follow up on the Bosch question. Is there any issue in terms of exclusivity in terms of you guys, you know, obviously, there’s another company out there that has shifted to upfitting themselves. Do you get kind of first dibs on this stuff?

You know, I guess if there’s you know anything that’s you know if you have the cost-saving opportunities that are built into the production grade integration, like sensor suite optimization or compute platform, is that stuff that you guys keep to yourselves or that they can sell to others at the same time?

Don Burnette, Founder and Chief Executive Officer, Kodiak: One of the great things about the relationship with Bosch. There is no exclusivity, as you mentioned. However, we you know we think that there’s strength in the industry by providing companies like Bosch with you know guidance and experience really when it comes to developing these systems. As we mentioned in the release with Bosch, this is not exclusive to only our upfit model with our integration partner in Roush, but this is also a system that can be deployed to OEMs for line-side integration. That I think is something that we’re very excited about. This is a very close collaboration. It doesn’t imply exclusivity, and so in theory, others you know could have access to the technologies that we’re working on.

you know, we think this is a rising tides raises all boats type of situation, and we’re excited to work with one of the largest automotive suppliers in the world on a technology that we think is fundamental to scaling our business. We think that this is a pure upside in working with Bosch, and it’s not exclusive to either upfit or OEMs. This is really a works for all situations type of collaboration.

Walter Piecyk, Analyst, LightShed: Got it. First off, back on the $13 million-$14 million, whatever it is, R&D. Obviously, super lean, but at 85%, like, I guess the question is, for that last 15%, you know, I guess, you know, one of the bear case you could throw out there is like, "Oh, it’s easy to get to 85%." Maybe it is, maybe it isn’t. That last 15%, we’re gonna see a massive ramp in R&D, OpEx, whatever it is. Can you kinda address those concerns to the extent they’re out there in terms of increased capital intensity to get 85% up to the point where you can really get this thing going?

Don Burnette, Founder and Chief Executive Officer, Kodiak: I’ll say a few things, and then I’ll hand it over to Suraj on more of the financials. I think it’s a very good point that you bring up. I think this is something that we’re incredibly proud of, being a capital efficient, lean company. We always have been. That’s in our DNA, and it has been for the eight years that Kodiak has been in existence. We don’t expect that to change. A couple things I think that are worth mentioning, as I mentioned in my remarks, AI is really accelerating progress when it comes to development, right? This is happening around the industry, but Kodiak has fully embraced the use of AI and generative AI tools for coding and you know, process assistant.

What we’re seeing is the ability to accelerate a lot of the work that would have otherwise taken significantly more resources on the R&D side, and we can get that done much more capital-efficiently than we would have been able to otherwise. We’ve been seeing the fruits of that over the last several quarters, right? That’s not something that’s just gonna turn on this year. Obviously, as those models become more powerful, you will see a rapid acceleration in our ability to make progress at a much lower cost. The second piece I would say is that, we did mention the expected free cash flow on a yearly basis, and so we don’t fundamentally expect that to increase significantly.

Maybe I’ll turn it over to Suraj to address that.

Walter Piecyk, Analyst, LightShed: Don, before you turn it over to him, just a quick follow-up from there. As you know, the AI helps you now versus what it was before. Can you put a timeline on that? ’Cause obviously, like, there seems to be an acceleration obviously happening in autonomy right now because of AI. How long ago was it that if someone was developing AI, they wouldn’t have had that benefit? So they wouldn’t have had that getting from 85%-95% at a much more efficient price. Was that, like one or two years ago, five years ago, how recent has the evolution of AI really helped the development costs for a company like your, like yours?

Don Burnette, Founder and Chief Executive Officer, Kodiak: I would say that’s within the last year. If you look at the last, you know, early 2025, these technologies were just starting to take hold. People didn’t really understand them well. We didn’t really understand how to use them effectively at large scale. You know, for large scale development. It’s important to distinguish between, you know, a solo person at their computer working on some code versus an entire repo that’s read and understood by an organization. You have to use the tools a little bit more carefully, and it’s taken some time to figure that out. Once you have, they’ve really come of age, and they’re a rapid accelerant of progress.

Yeah, in the last 2 quarters, I would say last 6 months, you’ve really seen an acceleration in that development, and I think that acceleration will continue throughout 2026.

Walter Piecyk, Analyst, LightShed: Awesome. Thank you.

Surajit Datta, Chief Financial Officer, Kodiak: Hey, Walt. This is Raj here. Just on the question of investments. As Don mentioned earlier, most of our incremental R&D investments to get to long haul is mostly on safety validation and systems. That will require some incremental investment, but we expect most of that to be offset by the increasing revenue we are getting from our industrial customer as we deploy more trucks. That’s I think our beauty of our model, being able to operate across three verticals. We are able to leverage the other verticals to offset some of the increased expenses in those areas.

Walter Piecyk, Analyst, LightShed: Thank you.

Don Burnette, Founder and Chief Executive Officer, Kodiak: Thanks, Walt.

Operator: Thank you. Ladies and gentlemen, that is all the time we have for questions, and that does also conclude today’s conference call. Thank you for participating. You may now disconnect.