tuSimple(TSP) - 2023 Q2 - Quarterly Report

Revenue and Cost - Revenue for the three months ended June 30, 2023, decreased by $2.5 million, or 96%, compared to the same period in 2022, primarily due to reduced volume of orders and loads in the U.S. segment [105]. - Revenue for the six months ended June 30, 2023, decreased by $4.6 million, or 94%, compared to the same period in 2022, in line with the revised strategy to pause freight revenue operations in the U.S. segment [106]. - Cost of revenue for the three months ended June 30, 2023, decreased by $5.5 million, or 96%, compared to the same period in 2022, consistent with the strategy to pause freight revenue operations [108]. - Cost of revenue for the six months ended June 30, 2023, decreased by $9.1 million, or 92%, compared to the same period in 2022, reflecting the same operational strategy [109]. Research and Development (R&D) Expenses - Research and Development (R&D) expenses for the three months ended June 30, 2023, totaled $58.5 million, a decrease of $27.0 million, or 32%, compared to the same period in 2022 [113]. - R&D expenses in the U.S. for the three months ended June 30, 2023, decreased by $27.2 million, or 42%, primarily due to restructuring efforts [114]. - R&D expenses increased by $1.1 million, or 3%, in the six months ended June 30, 2023, primarily due to expansion in China and Japan for L4 capabilities [116]. Operating Expenses and Net Loss - Total operating expenses for the three months ended June 30, 2023, were $87.2 million, down from $107.5 million in the same period in 2022 [102]. - The net loss for the three months ended June 30, 2023, was $78.0 million, compared to a net loss of $108.6 million in the same period in 2022 [102]. - The company has implemented restructuring plans, including a 25% reduction in workforce in December 2022 and a 30% reduction in May 2023, to align costs with strategic priorities [110]. SG&A Expenses - SG&A expenses in the U.S. rose by $4.7 million, or 27%, in Q2 2023, mainly due to increased legal and professional services costs [118]. - SG&A expenses in APAC increased by $2.1 million, or 42%, in Q2 2023, attributed to higher legal and professional services costs [119]. Financial Performance - Interest income surged by $7.8 million, or 411%, in Q2 2023, driven by earnings from money market funds and short-term investments [122]. - Adjusted EBITDA improved by 22% in Q2 2023, with a loss of $64.9 million compared to a loss of $82.7 million in Q2 2022 [124]. Cash and Investments - Total cash and cash equivalents as of June 30, 2023, were $314.7 million, with $519.2 million in short-term investments [132]. - Net cash used in operating activities decreased from $176.7 million in H1 2022 to $157.8 million in H1 2023, reflecting restructuring efforts [135]. - Net cash used in investing activities increased significantly to $141.3 million in H1 2023, primarily due to investments in marketable securities [136]. - Future capital requirements may necessitate additional equity or debt financing, potentially diluting existing stockholders' interests [133]. - Future minimum lease payments for operating leases amounted to $54.9 million as of June 30, 2023 [138]. Investment Portfolio - As of June 30, 2023, the company had cash and cash equivalents of $314.7 million and short-term investments of $519.2 million [144]. - The investment portfolio primarily consists of cash deposits, money market funds, commercial paper, U.S. government and agency securities, and investment-grade corporate debt securities [144]. - The company aims to preserve capital and meet liquidity requirements without significantly increasing risk through its investment activities [144]. - Investments are primarily in highly-liquid, investment-grade debt securities, with limited credit exposure to any single issuer [144]. - The company does not engage in trading or speculative investments and has not used derivative financial instruments for interest rate risk management [144]. - The fair value of the investment portfolio is relatively insensitive to interest rate fluctuations due to the short maturities of cash equivalents and marketable securities [144]. - A hypothetical 100 basis point increase in interest rates would not materially impact the fair value of the investment portfolio as of June 30, 2023 [144]. Autonomous Freight Network - The Autonomous Freight Network (AFN) is in early development stages, aiming to provide autonomous freight capacity as a service through two service models based on user needs [89].