TuSimple Announces Third Quarter 2023 Results

Business Highlights

• Released the results of a fuel efficiency study in the U.S. comparing over 30,000 miles of autonomous and manually driven miles that resulted in efficiency gains of 11%.
• Continued to progress across multiple L4 use cases and testing capabilities in our APAC business performed in close collaboration with OEMs.

Financial Highlights

• Reported Loss from Operations of $248.6 million and AEBITDA loss of $191.8 million for the nine months ended September 30, 2023.
• Held $776.8 million of cash, equivalents, and investments as of September 30, 2023.

SAN DIEGO, Nov. 9, 2023 /PRNewswire/ -- TuSimple (Nasdaq: TSP) today reported results for the third quarter of 2023. TuSimple's quarterly financial results are available in the company's quarterly report on Form 10-Q filed with the Securities and Exchange Commission and on the company's investor relations website. For additional information and to view the company's latest investor presentation, please visit ir.tusimple.com.

"One year ago, I returned to TuSimple to lead the organization through a period of considerable change, both within our company and within our industry," said Cheng Lu, CEO at TuSimple. "The team never lost sight of our mission to strive to enable safe, fuel-efficient, and low-cost freight capacity by continuing to develop our L4 autonomous technology, hardware, and go-to-market strategy."

Business Update

Fuel Efficiency Study Highlights Cost Savings and Emission Reduction Opportunity

The company published the results of an in-depth study, analyzing more than 30,000 miles of U.S. highway driving, consisting of a roughly 50 – 50 split between manually driven and autonomously driven miles, and compared the fuel efficiency performance of the company's highly skilled and experienced professional drivers versus its autonomous driving system.

Our autonomy teams observed an overall 11% advantage in fuel efficiency versus manually driven trucks. The study went one step further than previous studies and broke down fuel economy by event types. While the study produced a ~6% fuel savings cruising at highway speeds, the data revealed significant fuel efficiency benefits during interactive events such as following a slow vehicle and front vehicle cut-ins, experiencing improvements of over 10% and 27%, respectively. We believe this efficiency is explained by the strong prediction, planning, and control technologies that TuSimple has built. These results highlight not only the financial benefit of using less fuel, but also the environmental impact of producing fewer emissions.

Financial Update

Gross loss

For the nine months ended September 30, 2023 ("YTD Q3 2023"), gross loss was $0.5 million, down 94% versus the nine months ended September 30, 2022 ("YTD Q3 2022"). This decline is consistent with the previously announced strategy to pause freight revenue operations in TuSimple's U.S. segment.

Restructuring expenses

During the fourth quarter of 2022 and first half of 2023 ("H1 2023"), TuSimple announced multiple restructuring plans to improve its cost structure, which included a reduction of the company's global workforce and asset impairments. While a majority of the plans' aggregate restructuring charges were recorded in the fourth quarter 2022, a significant portion of these restructuring plans were carried out in H1 2023. In connection with these plans, the company incurred charges of $11.2 million for YTD Q3 2023, which were recorded in R&D and SG&A expenses as follows: $7.9 million recorded in R&D and $3.3 million recorded in SG&A.

R&D expense

YTD Q3 2023 R&D expense was $164.4 million, down 34% versus YTD Q3 2022, primarily due to decreased employee compensation costs, including stock-based compensation ("SBC"), joint development costs, and R&D fleet operating costs resulting from the previously noted restructuring plans, partially offset by the restructuring charges. Q3 2023 R&D expense was $44.3 million, down 24% sequentially, primarily attributable to decreased employee compensation costs and R&D fleet operating costs as a result of the H1 2023 restructuring plans and restructuring charges recorded in Q2 2023.

SG&A expense

YTD Q3 2023 SG&A expense was $83.8 million, relatively flat versus YTD Q3 2022, primarily due to lower employee compensation costs, including SBC, from workforce reductions, and lower facility and office- related costs and marketing costs as a result of the previously noted restructuring plans, partially offset by increased legal and professional services costs related to ongoing litigation and investigations and the restructuring costs. Q3 2023 SG&A expense was $26.4 million, down 8% sequentially, primarily due to decreased facility and office-related costs resulting from the previously noted restructuring plans, partially offset by a benefit in Q2 2023 due to the reversal of accrued bonuses for employees impacted by the H1 2023 restructuring events.

SBC expense (included within R&D and SG&A expenses)

YTD Q3 2023 SBC expense was $38.5 million, down 49% versus YTD Q3 2022. The decrease was primarily driven by lower headcount and a reversal of SBC expense (i.e., a benefit) associated with the forfeiture of equity awards for employees that were impacted by the restructurings and a decrease in the market price of our stock versus the prior year. Q3 2023 SBC expense was $10.7 million, flat sequentially.

Cash & Investment position

TuSimple held $776.8 million of cash, cash equivalents, and short-term investments as of September 30, 2023. Interest income for YTD Q3 2023 was $28.9 million, up 266% versus YTD Q3 2022 due to an increase in the company's interest-bearing short-term investments and higher yields realized on the company's cash, cash equivalents, and investments due to the rising interest rate environment. Q3 2023 interest income was $9.3 million, down $0.4 million sequentially.

AEBITDA loss

TuSimple's AEBITDA loss for YTD Q3 2023 was $191.8 million, down $63.9 million versus YTD Q3 2022. For Q3 2023, AEBITDA loss was $57.4 million, down $7.5 million sequentially. These trends are the net effect of TuSimple's segment performance as follows:

• U.S.: YTD Q3 2023 AEBITDA loss was $119.9 million, down $72.2 million versus YTD Q3 2022. Q3 2023 AEBITDA loss for the segment was $29.3 million, down $12.7 million sequentially. The segment's performance was mainly driven by decreased employee compensation costs, including SBC, and lower facility and office-related costs and marketing costs due to the restructurings, partially offset by increased allocated corporate legal costs related to ongoing litigation and investigations.
• APAC: YTD Q3 2023 AEBITDA loss was $71.9 million, up $8.3 million versus YTD Q3 2022. Q3 2023 AEBITDA loss was $28.1 million, up $5.2 million sequentially. These trends are primarily due to increased R&D expenses to expand operations in China and Japan to further develop L4 capabilities in the region and increased allocated corporate legal costs related to ongoing litigation and investigations. For YTD Q3 2023, the increase was partially offset by decreased joint development costs due to the timing of our joint development activities.

About TuSimple

TuSimple is a global autonomous driving technology company founded in 2015 in San Diego, California. TuSimple is working to develop a commercial-ready, fully autonomous (SAE Level 4) driving solution for long-haul heavy-duty trucks. TuSimple aims to transform the $4 trillion global truck freight industry through the company's leading AI technology, which is designed to make it possible for trucks to drive safely, autonomously, operate nearly continuously, and reduce fuel consumption by 10%+ relative to manually driven trucks. Global achievements include the world's first fully autonomous, 'driver-out' semi- truck run on open public roads in the U.S. and China, and development of the world's first Autonomous Freight Network. Visit us at www.tusimple.com.

Disclaimer

This press release and any accompanying documents contain forward looking statements. All statements other than statements of historical fact contained in this press release, including statements as to future results of operations and financial position, planned products and services, business strategy and plans, launch dates of products or services, the trajectory of our Driver Out Pilot Program, our timeline to commercialization, expected safety benefits of our autonomous semi trucks, objectives of management for future operations of TuSimple Holdings Inc. and its subsidiaries (the "Company", "we," "our," and "us"), market size and growth opportunities, competitive position and technological, and market trends, are forward looking statements. Forward looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. In some cases, you can identify forward looking statements by terms such as "will," "expect," "plan," "anticipate," "intend," "target," "project," "predict," "potential," "explore," or "continue" or the negative of these terms or other similar words. The Company has based these forward looking statements largely on its current expectations and assumptions and on information available as of the date of this letter. The Company assumes no obligation to update any forward looking statements after the date of this letter, except as required by law.

The forward looking statements contained in this press release and the accompanying documents are subject to known and unknown risks, uncertainties, assumptions, and other factors that may cause actual results or outcomes to be materially different from any future results or outcomes expressed or implied by the forward looking statements. These risks, uncertainties, assumptions, and other factors include, but are not limited to, those related to the Company's restructuring plan including potential cost-savings and impacts of workforce reductions, autonomous driving being an emerging technology, the development and testing of the Company's technologies and products, the Company's limited operating history in a new market, the regulations governing autonomous vehicles, changes in the Company's board of directors and senior management, the Company's dependence on its senior management team, the Company's reliance on third-party suppliers, the Company's potential product liability or warranty claims, the protection of the Company's intellectual property, the Company's involvement in securities class action litigation and in government or regulatory investigations, inquiries, and actions, and the Company's plan to seek strategic alternatives for its U.S. business. Moreover, the Company operates in a competitive and rapidly changing environment, and new risks may emerge from time to time. You should not put undue reliance on any forward looking statements. Forward looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved, if at all. It is not possible for the Company to predict all risks, nor can the Company assess the impact of all factors on its business or the markets in which it operates or the extent to which any factor, or combination of factors, may cause actual results or outcomes to differ materially from those contained in any forward looking statements the Company may make.

You should carefully consider the foregoing factors and the other risks and uncertainties described under the caption "Risk Factors'' in our annual report on Form 10-K for the year ended December 31, 2022 and in our other filings with the SEC. These SEC filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward looking statements. This press release also contains estimates, forecasts, and other statistical data relating to market size and growth and other industry data. These data involve several assumptions and limitations, and you are cautioned not to give undue weight to such estimates. The Company has not independently verified the statistical and other industry data generated by independent parties and contained in this press release and, accordingly, it cannot guarantee their accuracy or completeness. In addition, assumptions and estimates of the Company's future performance and the future performance of the markets in which the Company competes are necessarily subject to a high degree of uncertainty and risk due to a variety of factors. These and other factors could cause results or outcomes to differ materially from those expressed in the estimates.

Financial Statements and Reconciliations of GAAP to Non-GAAP metrics

See accompanying supplemental information. 

TuSimple Investor Relations Contact: TuSimple IR Team, [email protected]
TuSimple Media Contact: TuSimple PR Team, [email protected]

SOURCE TuSimple Holdings, Inc.