KDK

Commercial Deployment Milestones

• Expanded the world's largest customer-owned driverless truck fleet to 35 total trucks (all operating with no human in the cab), an increase of 7 trucks from Q1 2026.
• As of Q2 end, the fleet has accumulated over 40,000 paid driverless hours, up 71% quarter-over-quarter and more than 20x year-over-year; cumulative freight loads delivered topped 20,000, up 32% quarter-over-quarter and 150% year-over-year.
• Expanded Atlas' industrial deployment to service two major loadout facilities across a wider Permian Basin geographic footprint, and Atlas now serves customer well sites solely with Kodiak driverless trucks.
• The first international pilot with West Fraser (a large global wood products company) is scheduled to kick off in Canada in the coming weeks, to test Kodiak's system for flatbed logging hauling.

Technology and Product Progress

• Launched the 7th generation (Gen 7) autonomous driving platform, which delivers 50% more compute power, a more compact form factor compatible with lower-cost day cab truck configurations, and a nearly 50% longer operational lifetime for sensor and compute components compared to prior generations.
• Achieved 91% autonomous readiness for the targeted end-of-year driverless long-haul launch as of July 2026, a 5-point increase in 3 months; all technically challenging, long-lead safety case claims have been closed, including work on redundant vehicle control systems and probabilistic risk assessment frameworks.
• Rolled out Breakpoint, an AI-powered simulation tool that executes over 1 million simulations per hour at less than 0.1 cents per simulation, allowing engineers to efficiently target rare, high-risk edge cases to speed up safety case completion.

Regulatory and Partnership Updates

• California DMV finalized new heavy-duty autonomous truck permitting regulations, creating a clear path to commercial deployment; Kodiak has already applied for a permit and expects approval in the coming weeks, enabling future coast-to-coast service.
• The U.S. House Transportation and Infrastructure Committee advanced the Build America 250 Act, which includes bipartisan federal framework language for safe autonomous truck deployment; Kodiak is confident this language will be included in the final surface transportation bill.
• Atlas selected Daimler Truck North America's Western Star platform for its fleet expansion, making Atlas the first customer to operate a driverless fleet across multiple OEM platforms, with upfit production already started by Roush.
• The defense vertical expanded its portfolio, including selection for Phase 2 of the Defense Innovation Unit's ROADS program, continued execution on the U.S. Marine Corps Rogue Fires program, and ongoing strategic collaboration with General Dynamics Land Systems for future contract opportunities.

Financial Performance

• Reported GAAP operating loss of $43.7 million, non-GAAP operating loss (excluding stock-based compensation) of $37.3 million, driven by continued R&D and commercialization investment.
• Capital expenditures totaled $3.9 million, primarily for AV hardware commitments, long-haul development, and commercial deployments.
• Free cash flow was negative $38 million, which outperformed the low end of prior guidance.
• Ended the quarter with $151 million in cash, cash equivalents, and marketable securities, providing sufficient flexibility for commercialization and disciplined capital allocation.

• Kodiak expects total driverless truck deployments to reach the high 30s by the end of Q3 2026. Deployment growth will be modest in Q3 due to platform transition validation work, with deployments expected to accelerate in Q4 2026.
• The company plans to deploy a similar number of driverless trucks in the second half of 2026 as it deployed in the first half of 2026, and remains on track to complete the initial 100-truck commitment with Atlas by the end of H1 2027.
• Q3 2026 free cash flow is expected to be between negative $39 million and negative $41 million, driven by continued investment in long-haul development and commercial deployment scaling.
• Full year 2026 free cash flow guidance has been narrowed from the prior range of negative $155 million to negative $165 million to an updated range of negative $155 million to negative $162 million, reflecting strong first half execution and continued disciplined capital allocation.
• Management reaffirms the target to launch commercial driverless long-haul operations by the end of 2026.

Kodiak operates across three core business verticals: 1) Driver-as-a-Service (DaaS) for long-haul commercial trucking: This is the company's primary growth segment, generating the majority of recurring revenue. Revenue in Q2 2026 grew 91% quarter-over-quarter to $3.5 million total, with ~$2.5 million from core DaaS (after excluding a $1 million one-time demonstration program contribution). 2) Industrial autonomous trucking: This segment leads current commercial deployments, centered on customer Atlas' sand delivery operations in the Permian Basin. As of Q2 end, the Atlas fleet held 35 Kodiak-equipped driverless trucks, which contributed meaningful recurring DaaS revenue and is on track to reach 100 total trucks by H1 2027. 3) Defense autonomous ground vehicles: This is an early-stage, high-potential segment that is purely additive to Kodiak's core commercial business. No material revenue was generated in Q2 2026, but the segment has a growing pipeline of contracted programs and partnership opportunities.

• Actual commercial deployment timelines and revenue growth from new long-haul, industrial, and defense opportunities may differ from forward-looking expectations, particularly for defense contracts where award timing and program size are highly unpredictable.
• Completing the remaining safety case claims for long-haul driverless operations and validating the new Gen 7 platform and new OEM truck platform could encounter unforeseen technical or operational delays that push back the end-of-year launch target.
• Federal and state autonomous trucking regulatory approval processes may progress slower than expected, delaying commercial deployment in key markets including interstate and California operations.
• Kodiak remains in a pre-scale growth phase, with ongoing operating losses and negative free cash flow that will continue for the foreseeable future as the company invests in R&D and commercialization.

Q: What is the deployment cadence for Atlas' 100-truck order, how will Gen 7 impact existing and new fleets, and what are Kodiak's California plans after applying for a permit?

A: Deployment of the new Western Star/Gen 7 platform will start small in Q3 2026, then ramp up through Q4 2026, Q1 2027, and Q2 2027 to hit the 100-truck target by H1 2027 end. No prior-generation platforms will be discontinued or retrofitted; all existing trucks remain in service and will be supported long-term, while all new trucks starting in Q3 will use Gen 7. Kodiak expects a California permit shortly, and while focused on Texas in the near term, the permit clears the way for future coast-to-coast long-haul operations, with existing customer interest in the market. Gen 7 is also a key step in Kodiak's strategy to drive down AV hardware costs through engineering efficiencies.

Q: What milestones can be expected for defense opportunities in the next 6-12 months, and what cost improvements does Gen 7 deliver, including benefits from the prior Bosch partnership?

A: Defense contract sizing and timing are highly unpredictable, so no specific guidance can be provided; defense is a long-term additive strategy to Kodiak's core commercial business, with strong progress on existing programs and growing partnership opportunities with major defense players like General Dynamics. The U.S. DoD's 2027 autonomous warfare budget is projected to grow dramatically from 2026 levels, which will benefit all autonomous providers including Kodiak as contracts are awarded. Gen 7 delivers low double-digit percentage reductions in AV hardware costs via engineering improvements; supply chain efficiencies from the Bosch partnership are still nascent, with full benefits expected to materialize in 2027 and beyond, with additional cost improvements coming from production scale.

Q: What remaining gating factors or open safety claims hold back reaching 100% readiness for long-haul driverless launch, and how does Kodiak's Breakpoint simulation technology improve development speed?

A: Most technically challenging, long-lead safety claims have already been closed, with only smaller remaining claims left to complete; management remains confident the safety case will be fully closed and launch will occur by the end of December 2026. Unlike traditional simulation that wastes resources on mundane, low-risk scenarios, Breakpoint uses AI to actively search for rare high-risk edge cases and near-miss scenarios, allowing Kodiak to focus development resources on the hardest test cases, close safety claims faster, and deliver a more robust system at lower cost.

Q: How did Kodiak achieve Gen 7 compatibility with day cab configurations while increasing compute power, and who captures the cost benefits of this configuration?

A: Kodiak re-engineered the Gen 7 form factor to move compute hardware from the rear of the cab into the vacant passenger seat area, addressing thermal, power, and space constraints to fit the smaller day cab footprint. The entire cost savings of the lower-priced day cab configuration are passed directly to customers, which improves their return on investment under Kodiak's Driver-as-a-Service model where customers own their trucks.