Kodiak AI, Inc. Common Stock Q3 FY2025 earnings call

• Technology: In Q4, a new software release reduced remote assistance needs by 53%, used generative AI-based vision language models for perception, integrated NXP processors, and expanded partnership with ZF for redundant steering components. • Safety: Received highest VERA safety score among over 1,000 fleets in Nauto's network, with The Kodiak Driver scoring 100 in 3 out of 4 categories. • Product: Roush launched dedicated manufacturing line for upfitting trucks, strengthened OEM relationships, added ability to haul 2 trailers, and made regulatory progress including U.S. DOT waiver for warning beacons.

In the third quarter, revenue was $0.8 million, a 53% growth from the prior quarter, primarily driven by Driver-as-a-Service revenue from a 100% quarter-over-quarter increase in customer-owned and operated driverless trucks. There are 10 driverless trucks generating recurring revenue, a 100% increase over Q2. Cumulative paid driverless operations hours were over 5,200 (a 166% increase from Q2), over 3 million autonomous miles driven, and over 10,000 deliveries (a 21% increase from Q2).

• Q4 FY 2025 free cash flow expected to be negative $36M to $38M. • Expect to end 2025 with mid- to high teens customer-owned and operated driverless trucks. • Plan to provide more detailed guidance for fiscal year 2026 in Q4 2025 earnings call. • Capital needs driven by R&D, scaling industrial commercialization, and public company costs, partially offset by DaaS revenue growth.

• Regulatory uncertainties for autonomous trucking. • Government shutdown impacting defense contracting timelines. • Challenges in scaling autonomous operations across unstructured industrial and highway environments.

Q: Talk about the ZF partnership.

A: Primarily a supplier relationship, solidifies partnership as we scale solution into 2026.

Q: Surajit, on Q4 revenue annualized run rate?

A: Yes, could be close to $5 million range.

Q: Cash burn in Q3?

A: Q3 had high single-digit millions of onetime and public company costs, Q4 free cash flow expected negative $36M to $38M.

Q: Long-haul ARM measure and launch?

A: Need to get to 100% on readiness measure, shooting for second half of 2026, with granular timing to be provided closer to launch.

Q: Liquidity and capital needs?

A: Raised large capital in de-SPAC, confident in raising additional financing to support growth, opportunistically seeking financings to strengthen liquidity.

Q: Government vertical opportunities?

A: Defense vertical is large opportunity, Secretary of Defense emphasizes contested logistics, Kodiak has mature solution, stay tuned for updates.

Q: Adverse weather handling?

A: The Kodiak Driver has handled adverse weather in industrial launch, capabilities being validated for highway, encapsulated in safety case at 78% readiness.

Q: Partner feedback and customer adoption?

A: Customers excited, learning process with flywheel effect, progressing with industrial and highway deployments.

Q: Safety case sign-off and partnerships?

A: Need to close safety case, building trust with partners, platform agnostic approach allows flexibility in deployment.

Q: 78% long-haul ARM and OTA update?

A: No historical numbers to share, new software release reduced remote assistance by over 50% to drive efficiency and margin.