Arrive AI Inc. Common Stock 2026 Q2 Earnings Call

Thank you. Hey, everyone. Dan O'Toole here. Thank you for joining us today. We're going to keep our prepared comments concise, so let's get right to it. I also want to say, why don't you ever see elephants hiding in trees? Because they're definitely not good at it. But I really want to say the elephant in the room is Arrive AI. We're seeing a huge uptick in big players wanting to explore deploying our technology, and that is what is really exciting. So, let's get this going. To start this morning, I'd like to welcome Piyush Fadke as Arrive AI's new CFO, Chief Financial Officer, effective August 17th. As detailed in this morning's press release, Piyush brings more than two decades of Wall Street experience, including senior capital markets roles at Bank of America, BTIG, and Jefferies before moving into public company CFO leadership.

That combination gives him a rare vantage point. He sat on the banking side structuring financing for growth companies, and he sat in the CFO seat managing the balance sheet and investor relationships that come with public company life. What stood out to me most is how aligned Piyush is with our vision for Arrive AI. He understands the scale of the opportunity in front of us in autonomous logistics, and he's just as focused as we are on translating this quarter's commercial traction into long-term shareholder value, which I will elaborate on shortly. We'll hear directly from him on future calls and in the investor conversations as we move forward. I also want to thank Todd Pepmeier for his contributions while here at Arrive AI. Now let's get into it.

What is driving the business forward, including real commercial traction, continued technology progress, and a clear opportunity ahead for Arrive AI. The prepared remarks you are about to hear will be delivered using the AI-generated versions of both mine and our Head of Commercialization's voice, Ian Geise. That is the same format that we have used in the past. For us, this reflects how we think about artificial intelligence as a practical tool that can improve efficiency, scalability, and communication, the same philosophy that drives our platform and autonomous logistics network. After the prepared remarks conclude, we will return to a live question and answer session of questions that were submitted ahead of this call. With that said, let us begin the prepared remarks. Thanks, everyone. This quarter, we want to spend less time talking about where we are headed in the abstract and more time talking about the deals and partnerships and the progression we have made over the past several months.

We expect to have more than a dozen AP3 Plus Arrive Points in stock and ready to ship by mid-September, representing our first wave of expanded availability and the solidification of our supply chain. Looking ahead, we are already developing the AP4, which is targeted for the first quarter of 2027 and will build on what AP3 Plus brings to the network. This is ideal timing to take advantage of the commercial traction we are seeing in the second half of the year. To walk through that in detail, I have asked Ian Geise, our Head of Commercialization, to join us today for the first time.

Ian leads our commercial pipeline, and he is going to provide you with an inside look at where things stand.

Thanks, Dan. It is easiest to think about our pipeline across three industries where we are seeing the strongest traction right now: healthcare, manufacturing, and specialty pharmacy delivery. In healthcare, Nexus AMR is pleased to partner with us to deliver end-to-end autonomous solutions for customers across multiple industries. The integration of Arrive AI's products into their automation portfolio enhances productivity and expands the value they deliver to healthcare organizations and other businesses facing persistent and growing labor challenges. Customers from around the world regularly visit the TechNexus Innovation Center, where they showcase best-in-class autonomous mobile robots and emerging technologies. Nexus is proud to feature Arrive AI's innovative solutions and has welcomed us as a key strategic partner. Hancock Regional Hospital remains our anchor healthcare deployment, and this quarter, Hancock expanded their network by adding an additional Arrive Point, enabling building-to-building movement.

This is a significant milestone since demand for building-to-building movement and secure exchange will be paramount in healthcare and large campus facilities. In manufacturing, we've partnered with DXC to bring our technology into large pharmaceutical manufacturing environments, facilities with a global footprint. Each spanning 500,000 sq ft or more, where moving product across the campus, including by drone for longer distances, is a real operational need. DXC's systems integration expertise also helps us plug into large enterprise customers faster than we could on our own. We've also announced a letter of intent with LifeSpan Pharmacy and CarDon & Associates to explore an autonomous drone pharmacy delivery program. We are also engaged in early-stage discussions with several Fortune 500 companies regarding potential pharmaceutical delivery opportunities. We're also seeing broader momentum with our autonomous delivery partners.

Avride, which builds autonomous delivery robots backed by one of the industry's longest-running autonomous driving programs, became the continuity partner for universities when Starship Technologies exited U.S. campus operations. By the end of this year, Avride expects to be operating on more than 20 campuses nationwide, working with Grubhub, Uber Eats, and major food service operators. What's next for Avride is more campuses, expanded city deployments, faster and more reliable service, and most importantly, where we fit in, creating partnerships across the ordering and logistics stack, so last-mile delivery becomes truly autonomous end-to-end. This mutual goal will be key as we identify potential partners. As of today, we have a growing number of commercialization conversations underway, and a meaningful subset of those have already progressed into second and third-round discussions. These later-stage conversations are with partners we believe are the most likely to move forward into formal agreements.

We're introducing this framing to give you a clearer view into the momentum we're seeing and our traction with potential partners. At the same time, we'll continue to only treat agreements as firm once they're signed, and we'll announce each finalized partnership individually as it's secured. We expect to keep building on this across healthcare, manufacturing, and specialty delivery in the coming quarters.

Thanks, Ian. On the financial side, given the very recent CFO transition, I will walk through the highlights for the second quarter results. Second quarter revenue was in line with Q1 at $14,700 for the quarter. Our recently announced expansion with Hancock Regional Hospital is expected to produce incremental revenue in the third and fourth quarters this year. Excluding revenue from a non-recurring consulting project in the year-ago quarter, revenue was up slightly year-over-year. Net loss for the second quarter was $14.1 million, compared to the $3.7 million net loss in the second quarter of 2025. However, the reported net loss includes $9.7 million in non-cash expenses related to the conversion of our outstanding notes. Excluding these non-cash expenses on a non-GAAP basis, net loss for the second quarter was $4.3 million.

Cash and liquid investments on hand were $5.1 million at June 30, an increase from $2.1 million in cash at December 31. Our current cash burn rate is approximately $1.1 million per month. During the quarter, we completed the filing of an S-3 registration statement for up to $100 million. We also finalized the terms of our at-the-market offering, or ATM offering, up to a maximum capacity of approximately $15 million. The amount and timing of sales under that agreement will be disclosed quarterly as required. In addition, we retain the available capacity of $19 million in future prepaid advances under our previous 2025 equity line facility. I also want to speak directly to something I know is on a lot of people's minds, our ability to keep funding this business going forward.

We continue to have real optionality in front of us right now on financing, and Piyush's capital markets background is already helping us sharpen how we think about those paths. Our current cash burn reflects deliberate investment in the team, technology, and infrastructure required to convert our commercial pipeline into scaled revenue, and we're being careful about which financing and operating decisions we make and when to do what's right for shareholders over the long term. At the same time, we are prudently managing operating and investment spend to drive growth while maintaining a disciplined focus on the balance sheet. I want to be direct about this. We are not in a position where we're at risk of running out of funds. We have options, and with Piyush's experience structuring financing for growth companies, we're working through them strategically and with real discipline.