tuSimple(TSP) - 2023 Q3 - Quarterly Report

Revenue Performance - Revenue for the three months ended September 30, 2023, was $0, a decrease of 100% compared to $2.653 million in the same period in 2022, reflecting the company's revised strategy to pause freight revenue operations in the U.S. segment [101]. - For the nine months ended September 30, 2023, revenue decreased by $7.2 million, or 96%, to $307,000 compared to $7.511 million in the same period in 2022, primarily due to reduced volume of orders and loads [102]. Cost and Expenses - Cost of revenue for the three months ended September 30, 2023, was $0, a decrease of 100% from $5.436 million in the same period in 2022, consistent with the pause in freight revenue operations [103]. - Total operating expenses for the three months ended September 30, 2023, were $70.657 million, down 39% from $116.050 million in the same period in 2022 [100]. - Research and Development (R&D) expenses decreased by $40.4 million, or 67%, in the three months ended September 30, 2023, compared to the same period in 2022, primarily due to restructuring efforts [108]. - U.S. SG&A expenses decreased by $7.9 million, or 30%, in Q3 2023 compared to Q3 2022, primarily due to restructuring efforts [113]. - APAC SG&A expenses increased by $3.1 million, or 58%, in Q3 2023 compared to Q3 2022, mainly due to increased legal and professional services costs [114]. Operational Efficiency - Total Adjusted EBITDA for Q3 2023 was $(57.4) million, a 38% improvement from $(92.8) million in Q3 2022 [120]. - Loss from operations decreased by $48.2 million, or 41%, in Q3 2023 compared to Q3 2022, reflecting improved operational efficiency [121]. Cash and Investments - Cash and cash equivalents as of September 30, 2023, were $249.2 million, with an additional $526.0 million in short-term investments [126]. - Net cash used in operating activities decreased from $256.0 million in the first nine months of 2022 to $217.9 million in 2023 [129]. - Net cash used in investing activities decreased from $210.1 million in the first nine months of 2022 to $147.7 million in 2023 [130]. - Company anticipates that existing cash and cash equivalents will be sufficient to meet cash needs for at least the next 12 months [126]. - As of September 30, 2023, the company had cash and cash equivalents of $249.2 million and short-term investments of $526.0 million [138]. - 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 [138]. - The company's investment activities aim to preserve capital and meet liquidity requirements without significantly increasing risk [138]. - Investments are primarily in highly-liquid, investment-grade debt securities, with limited credit exposure to any one issuer [138]. - The company does not engage in trading or speculative investments and has not used derivative financial instruments for interest rate risk management [138]. - 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 [138]. - A hypothetical 100 basis point increase in interest rates would not materially impact the fair value of the investment portfolio as of September 30, 2023 [138]. Strategic Initiatives - The company has implemented multiple restructuring plans, including a 25% reduction of the total workforce in December 2022 and a 30% reduction in May 2023, to align with strategic priorities [105]. - The company operated approximately 70 L4 autonomous semi-trucks, with 35 in the U.S. and 35 in APAC, in Driver-In mode with a safety driver and safety engineer [91]. - 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 [87]. Interest Income - Interest income for the three months ended September 30, 2023, was $9.298 million, an increase from $5.545 million in the same period in 2022 [100]. - Interest income rose by $3.8 million, or 68%, in Q3 2023 compared to Q3 2022, attributed to an increase in interest-bearing short-term investments [116].