Full Transcript: Kodiak AI Q2 2026 Earnings Call

Kodiak AI (NASDAQ: KDK ) held its second-quarter earnings conference call on Thursday. Below is the complete transcript from the call. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

5 million, marking a 91% quarter-over-quarter increase, primarily driven by expansion in Driver-as-a-Service revenue. The company expanded its driverless truck fleet to 35, achieving over 40,000 paid driverless hours and delivering more than 300,000 tons of freight, showing substantial operational progress. Strategic initiatives include the deployment of the Gen 7 platform, enhancing efficiency and reliability, and targeting a long-haul driverless launch by year-end with a 91% autonomy readiness measure.

Operational highlights featured a partnership expansion with Atlas and the initiation of an international pilot with West Fraser in Canada, aiming to demonstrate AI capabilities in logging operations. S. Marine Corps, though the exact financial impact remains uncertain. Financial guidance for Q3 2026 includes an increase in driverless truck deployments to the high 30s and a free cash flow forecast of negative $39 million to $41 million, reflecting ongoing investments in long-haul readiness.

Regulatory developments are positive, with California's DMV extending autonomous vehicle permits to heavy-duty trucks, paving the way for future coast-to-coast operations. Full Transcript OPERATOR Good day, and welcome to the Kodiak AI second quarter 2026 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero.

After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone, and to withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Mr.

Steve Fillison, Senior Manager, Investor Relations. Please go ahead. Steve Philistine, Senior Manager, Investor Relations Good afternoon, and thank you for joining Kodiak AI's second quarter 2026 earnings call. I am Steve Philistine, Senior Manager, Investor Relations.

Joining me today are Don Brunette, Founder and Chief Executive Officer, and Roger Dada, Chief Financial Officer. Earlier today we issued our earnings release and posted our earnings presentation, both of which are available under the Investor Relations section of our website. Before we begin, please note that today's discussion will contain forward-looking statements regarding our business, financial performance, outlook, and future operating plans. Actual results may differ materially from those discussed today.

Please refer to our earnings materials and SEC filings for a discussion of factors that could cause actual results to differ. Any forward-looking statements that we make on this call speak only as of the date of this call, and we disclaim any obligation to update any forward-looking statements, except as required by law. We will also discuss certain non-GAAP financial measures. Information regarding our non-GAAP financial measures, including reconciliations to the most directly comparable GAAP measures, can be found in our earnings release and supplemental materials available on our Investor Relations website.

With that, I'll turn the call over to Don. Surajit, CFO Thank you, Don, and good afternoon, everyone. I'm pleased to share Kodiak AI's financial results for the second quarter of fiscal year 2026. We delivered another strong quarter of both operational and financial performance, successfully executing against our strategic priorities while expanding driverless deployments, growing recurring revenue, and maintaining disciplined spending.

We ended Q2 FY 2026 with 35 driverless trucks, in line with our expectations and up from 28 in the prior quarter. As we continue to expand deployments with Atlas, these trucks continue to operate commercially without anyone in the cab and are fully integrated into our customers' day-to-day fleet operations. 5 million, representing 91% quarter-over-quarter growth. The revenue increase was primarily driven by continued expansion of Driver-as-a-Service revenue and also benefited from a one-time revenue contribution of slightly over $1 million from our autonomous trucking demonstration program with DriveOhio.

Excluding this demonstration revenue, our underlying Driver-as-a-Service business continued to deliver strong sequential growth driven by growing commercial deployments. 7 million. 3 million, primarily reflecting continued investment in research and development and operational support. 9 million, primarily related to AV hardware commitments, long-haul development, and continued commercial deployments.

Turning to cash flow, Q2 free cash flow was negative $38 million, outperforming the low end of our guidance range. Our spending during the quarter primarily reflected continued investment in commercialization expansion initiatives designed to reduce the cost of Kodiak Driver over time and further the development of our long-haul driverless capabilities, partially offset by continued increase in revenue. We ended Q2 with cash, cash equivalents, and marketable securities of $151 million, providing us with the financial flexibility to continue executing our commercialization strategy while maintaining a disciplined approach to capital allocation.

Turning to guidance for the third quarter of fiscal 2026, we expect driverless truck deployments to increase to the high 30s. During the quarter, we will begin transitioning the ATLAS driverless build to the new OEM truck platform, consistent with our customer's fleet strategy. The transition further demonstrates the flexibility of the Kodiak Driver to operate seamlessly across OEM platforms and expands our opportunity to scale future customer deployments and increases the breadth of our customer base.

As we initiate this transition, we expect more modest driverless truck additions during the third quarter while we integrate the new truck platform into commercial service with the customer. The deployments are expected to accelerate in the fourth quarter as we continue scaling deliveries. We expect third quarter free cash flow of negative $39 million to negative $41 million, primarily driven by continued investment in long-haul driverless testing and development and growing commercial deployment activities.

In addition, we are narrowing our full-year 2026 free cash flow guidance to negative $155 million to negative $162 million, compared with our previous range of negative $155 million to negative $165 million. This updated guidance reflects our strong first-half execution and our continued focus on disciplined capital allocation. We believe our continued commercial deployments, progress toward our long-haul launch, and disciplined financial execution position Kodiak AI well for its next phase of growth. Operator, we are now ready to take questions.

OPERATOR Thank you. We will now begin the question-and-answer session. To ask a question, you may press star then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys.

If at any time your question has been addressed and you would like to withdraw your question, please press star then two. We ask that you please limit yourself to one question and one follow-up. And our first question for today will come from Andres Shepherd with Cantor Fitzgerald. Please go ahead.

Andres Shepherd, Analyst at Cantor Fitzgerald Hey everyone, good afternoon. Congratulations on the quarter and all the great progress, and thank you so much for taking our questions. Don, I just wanted to maybe touch on the cadence for ATLAS. So I think in the prepared remarks you gave us a sense of kind of Q3 deployments.

You reaffirmed that you're on track for the entire deployment by middle of next year. Just trying to break that out a little bit further. Any more cadence or granularity you can give us—how should we think about Q4 and then the cadence for next year? Thank you.

Don Burnette, CEO Yeah, thanks, Andres. Yeah, I think we said it in the remarks, right. We're steadily ramping up the new platform. There's obviously a lot of work and validation that goes into bringing a new platform up to driverless-level quality.

And this is something that we've been working on for the last little while, and we're excited to finally be deploying that new platform here in Q3. So as we said before, we're going to start small with a Q3 deployment on the new platform and then we're going to quickly start to ramp up through Q4, Q1, and Q2 as we get to the final hundred. I don't have anything more to add other than we plan to deploy a similar number in the second half of the year as we did in the first half of the year. Andres Shepherd, Analyst at Cantor Fitzgerald Okay, that's very helpful, appreciate it.

And maybe just a quick follow-up, maybe a two-part question—with the launch of the Gen 7 hardware, what does that do to the scale? Any opportunities to accelerate that? How are you then thinking about your fleet? Are you going to perhaps discontinue some of the previous hardware and just move over to the Gen 7?

Just trying to understand how you're thinking about that. And then the last one real quick is I see that you applied for the California autonomous permit. So how are you thinking about opportunities in California as well? Thank you.

Don Burnette, CEO Yeah, sure. So we don't have any plans to discontinue the usage of our previous-generation platform. It's out there working day in, day out, 24/7 for our customer today, and we built that system to be incredibly reliable, and it's really been showing the quality that we put into it. That was a program that we developed over several years and it's still going plenty strong, and we will continue to support that platform for the coming years and ultimately the lifetime of those trucks.

So we don't plan to go back and retrofit, so to speak, a Gen 7 on previous platforms, but all new trucks that we deliver starting in Q3 will have the new Gen 7 platform with all of the upgrades and improvements in efficiency, horsepower, compute power, space savings, reliability, et cetera, that we had mentioned before. And then in terms of California, we're really excited about where California stands. We await the permit, as we said in the remarks, coming soon. We're excited that that opens up coast-to-coast potential operations for our long-haul release.

You know, we are focused on the Texas area for the next several quarters, but ultimately we do believe that the longest of long-haul routes are the ones that are the most impactful for our customers. And of course we're already talking to many customers in California who are excited to take advantage of the safety benefits that the Kodiak Driver offers. Surajit, CFO Andres, just to add to what Don mentioned about the Gen 7—in earlier conversations, in our earlier earnings calls we have mentioned we're taking steps to enhance the efficiencies of the AV hardware stack.

This is one of those steps in that direction as we try to drive down our AV hardware costs by increasing efficiencies and productivity. So this is one of the steps in that direction as we will continue to drive down the AV hardware costs. Andres Shepherd, Analyst at Cantor Fitzgerald Excellent. Thank you both very much.

Congrats again on the quarter. Lots to look forward to. We'll pass it on. OPERATOR Thank you.

The next question will come from Itay Michaeli with TD Cowen. Please go ahead. Itay Michaeli, Analyst at TD Cowen Great, thanks. Hi everyone.

First, Don, maybe just to go back to the defense opportunities you talked about in the prepared remarks—just curious, one, what kind of milestones should we be expecting in the next maybe six to 12 months? And second, how to size the opportunity for Kodiak AI over the next few years? Don Burnette, CEO Yeah, our bullishness on defense continues to be really strong as it has been in the previous quarters. That being said, visibility into the sizing of these programs, the availability, and when they ultimately come is very difficult to predict.

And so we continue to be fairly cautious in giving any suggestive guidance around what the sizing of these programs look like. I think from our perspective, we see defense as a long-term strategy for the company, and we're excited to partake in programs that are available to us in the ever-evolving landscape of ground-based autonomy for military purposes. We're making great progress on the programs that we are a part of and, as I said in the remarks, with our partner General Dynamics Land Systems and others, we're looking forward to applying to additional programs as they come down the line.

But I can't give any specifics on the scoping or size or expectation in terms of timing of when those will land or when those revenues will come in. We kind of look at that as purely additive to our core business in deploying our industrial and ultimately long-haul vehicles starting in 2027. And so we don't have anything more specific to add to that. That's helpful.

Itay Michaeli, Analyst at TD Cowen And as a follow-up, going back to Gen 7: one, any way to quantify the impact from cost or unit economics as you scale the new platform? And does this incorporate any of the benefits from the Bosch development that was announced earlier in the year? Surajit, CFO Yeah, it is. So the Gen 7 platform is part of all our initial initiatives in engineering to enhance design enhancements.

And while we can't get into specifics, we can say we are starting to cross into double digits of benefits from these pieces of the hardware as we go along, and we are continuing to make those investments. If you think about our overall how to drive the AV hardware stack strategy, there are three drivers. One is obviously the engineering enhancements, including the Gen 7 platform, and there are a few other things we are working on. The second is how we get greater efficiencies through a global supply chain organization.

That's part of the Bosch you are referring to—that's still nascent. We have started developing prototypes with them and we'll start seeing more of those benefits into 2027 and beyond. And the last piece will be just the scale of production, which will drive more cost optimization. And just going back to defense also, you know, we wanted to remind—we had talked about it in the last earnings call—the Pentagon budget for the Defense Autonomous Warfare Group, I think the preliminary numbers being talked about are $50 billion for 2027 compared to $225 million for 2026.

So we believe this will benefit all players like us as we ramp into 2027 and beyond as these contracts get allocated out. Itay Michaeli, Analyst at TD Cowen Terrific. That's all very helpful. Thanks everyone.

OPERATOR The next question will come from Jim McIlroy with Chardan. Please go ahead. Jim McIlroy, Analyst at Chardan Thank you. Good afternoon.

Atlas, on their call when they talked about the deployment of the 100 trucks, it kind of sounded like some of these trucks were going to be on the road, or that it seemed like they were assuming that the long-haul case would be—the safety case would be—complete and that's where some of The trucks would be deployed. Is that correct? Are some of these trucks in this 100-truck order contemplated to be used on-road? Don Burnette, CEO Well, I think the important thing to remember about Atlas is that they own and control these trucks.

So ultimately how and where they operate the trucks, which zones and which regions of the Permian, out of what loadout zones and what well sites to deliver to, is ultimately their decision. We are working to close out our safety case for highway or long-haul operations by the end of this year. At which point, once we've approved a given operational domain for driverless operations, then of course it's our customer's discretion as to whether or not they want to use the trucks in that mode or otherwise. And so we are working with them on geographic expansion.

I think they talked about that. We're excited to continue geographic expansion. We've already begun expanding broadly throughout the Permian. That includes additional types of roads.

But this is ultimately their decision as to how they operate the trucks and where they want to utilize them. Jim McIlroy, Analyst at Chardan Got it. Thank you. And on West Fraser, can you remind us again how long you think that demo or test might last, and then the timeframe to decision after the demo is complete.

Yes. Don Burnette, CEO Yeah, Jim. So we expect the pilot to start in the next few weeks, and it will last for a few weeks in Q3. And that could set up a decision and discussions with West Fraser on potential contractual agreement over the next few months.

Jim McIlroy, Analyst at Chardan Great, thank you. OPERATOR The next question will come from Ryan Sigdal with Craig-Hallum Capital Group. Please go ahead. Ryan Sigdal, Analyst at Craig-Hallum Hey, good afternoon.

Don, Steve, in the Gen 7 hardware platform you see 50% greater operational lifetime versus prior generations. Are you willing to quantify what the previous generation was before and then I guess what this one implies?