Kodiak AI, Inc.

Previous wording

Our management’s discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of our condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, expenses and related disclosures. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions and any such differences may be material.

Current wording

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

Previous wording

On September 24, 2025 (the "Closing Date" or "Closing"), Kodiak Robotics, Inc. (“Legacy Kodiak”) and Ares Acquisition Corporation II (“AACT”) consummated the merger transaction (the “Merger”) as contemplated by a definitive business combination agreement (the “BCA”) and AACT changed its name to Kodiak AI, Inc. (the “Company” or “Kodiak”). As a result, the financial statements of Legacy Kodiak are now the financial statements of Kodiak. The following discussion and analysis of the financial condition and results of operations should be read together with our condensed consolidated financial statements for the three and nine months ended September 30, 2025 and 2024, and the related notes included elsewhere in this Quarterly Report on Form 10-Q (this “Quarterly Report”) and Legacy Kodiak's audited financial statements, unaudited condensed financial statements, and the related notes incorporated by reference into the Company’s Form 8-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on September 30, 2025.

Current wording

On September 24, 2025 (the “Closing Date” or “Closing”), Kodiak Robotics, Inc. (“Legacy Kodiak”) and Ares Acquisition Corporation II (“AACT”) consummated the merger transaction (the “Merger”) and AACT changed its name to Kodiak AI, Inc. (the “Company” or “Kodiak”). As a result, the financial statements of Legacy Kodiak are now the financial statements of Kodiak.

Previous wording

Kodiak is a leading provider of artificial intelligence (“AI”)-powered autonomous vehicle (“AV”) technology that is addressing the needs of the long-haul trucking, industrial trucking, and defense industries. Our driverless solution can help address the critical problem of safely transporting goods in the face of unprecedented supply chain challenges. We believe that driverless trucks can enhance road safety, improve truck utilization, reduce costs, expand margins for fleet owners, alleviate supply chain pressures and create better jobs for truck drivers.

Current wording

Kodiak is a leading provider of physical AI, with a focus on AI-powered autonomous vehicle (“AV”) technology, that is designed to help tackle some of the toughest driving jobs. Our driverless solution can help address the critical problem of safely transporting goods in the face of unprecedented supply chain challenges. We believe that driverless trucks can enhance road safety, improve truck utilization, reduce costs, expand margins for fleet owners, alleviate supply chain pressures and create better jobs for truck drivers.

Previous wording

We serve customers in the long-haul trucking, industrial trucking, and defense industries. In December 2024, we launched our driverless solution, which we refer to as the Kodiak Driver. We believe the launch of the Kodiak Driver represents the first customer-owned and -operated driverless trucks in commercial service. In addition, our customers have utilized Kodiak-owned driverless trucks to deliver revenue generating loads across the southern United States. As of September 30, 2025, Kodiak Driver-powered vehicles have logged over 5,200 Cumulative Hours of Paid Driverless Operations and have delivered over 10,000 loads over 3,000,000 autonomous miles driven. In the defense industry, we believe the Kodiak Driver can support national security initiatives and critical government applications.

Current wording

We serve customers in the long-haul trucking, industrial trucking, and defense industries. In December 2024, we launched our driverless solution, which we refer to as the Kodiak Driver. We believe the launch of the Kodiak Driver represents the first customer-owned and -operated driverless trucks in commercial service. In addition, our customers have utilized Kodiak-owned driverless trucks to deliver revenue-generating loads across the southern United States. As of March 31, 2026, Kodiak Driver-powered vehicles have logged over 23,500 Cumulative Hours of Paid Driverless Operations and have delivered over 15,600 loads. In the defense industry, we believe the Kodiak Driver can support national security initiatives and critical government applications.

Previous wording

We expect to continue to operate using a Driver-as-a-Service (“DaaS”) business model, which launched in December 2024 with our partnership with Atlas Energy Solutions (“Atlas”), under which our customers will be provided with access to the Kodiak Driver on customer-owned and -operated vehicles. Under this model, we generate revenue through either a per-vehicle or per-mile license fee. This flexible approach is designed to align with our customers’ diverse operational models, while building predictable recurring revenue for us. By integrating the Kodiak Driver into customer-owned fleets, we expect to build an asset-light business that scales with our customers’ growth.

Current wording

We expect to continue to operate using a Driver-as-a-Service (“DaaS”) business model, which we launched in December 2024 in connection with our partnership with Atlas Energy Solutions (“Atlas”). Under our DaaS model, our customers are provided with access to the Kodiak Driver on customer-owned and -operated vehicles. Under this model, we generate revenue through either a per-vehicle or per-mile license fee. This flexible approach to pricing is designed to align with our customers’ diverse operational models, while generating predictable recurring revenue for us. By integrating the Kodiak Driver into customer-owned fleets, we expect to build an asset-light business that can scale with our customers’ growth.

Previous wording

Our business model has evolved and will continue to evolve in parallel with the growth of our business. Initially, our revenue was generated by transporting commercial freight using Kodiak-owned autonomous trucks and from our work with the U.S. Army. This approach allowed us to refine the Kodiak Driver, demonstrate commercial viability, grow our customer base and establish a freight network spanning nearly 23,000 miles across the southern United States and demonstrate the viability of the Kodiak Driver across multiple operating domains.

Current wording

Our business model has evolved and will continue to evolve in parallel with the growth of our business. Initially, our revenue was generated by transporting commercial freight using Kodiak-owned autonomous trucks and from our work with the U.S. Army. This approach allowed us to refine the Kodiak Driver, demonstrate commercial viability, grow our customer base and establish a freight network spanning approximately 25,000 miles across the southern United States and demonstrate the viability of the Kodiak Driver across multiple operating domains.

Previous wording

We launched our DaaS business in December 2024 with Atlas, and as of September 30, 2025, have surpassed 5,200 Cumulative Hours of Paid Driverless Operations. We anticipate scaling our deployment with Atlas over the course of 2025 and beyond. We are also exploring opportunities among additional customers that operate in remote, unstructured environments similar to the Permian Basin. Like Atlas, these customers face acute driver recruitment issues and 24/7 operational requirements, presenting attractive growth and profitability opportunities. We additionally see an opportunity to expand our work on unimproved roads internationally, in similarly-well suited markets such as Australia and Canada.

Current wording

We launched our DaaS business in December 2024 with Atlas, and as of March 31, 2026, have surpassed 23,500 Cumulative Hours of Paid Driverless Operations. We anticipate scaling our deployment with Atlas over the course of 2026 and beyond. We are also exploring opportunities among additional customers that operate in remote, unstructured environments similar to the Permian Basin. Like Atlas, these customers face acute driver recruitment issues and 24/7 operational requirements, presenting attractive growth and profitability opportunities. We additionally see an opportunity to expand our work on unimproved roads internationally, in similarly-well suited markets such as Australia, the Middle East, and Canada.

Previous wording

We also continue to prepare our long-haul trucking and industrial trucking customers for our DaaS business model through our Partner Deployment Program (“PDP”) as we work to expand our safety case to interstate highways and seek to grow in the over $900 billion U.S. trucking market.1 Inclusive of both our operations with Atlas and with our over-the-road customers, as of September 30, 2025, Kodiak Driver-powered vehicles have delivered over 10,000 loads over 3,000,000 autonomous miles driven. We see our customer base as a competitive advantage with: our existing customer base having an aggregate fleet size of approximately 119,000 trucks.2

Current wording

We also continue to prepare our long-haul trucking and industrial trucking customers for our DaaS business model through our Partner Deployment Program (“PDP”) as we work to expand our safety case to the long-haul trucking vertical. Inclusive of both our operations with Atlas and with our over-the-road customers, as of March 31, 2026, Kodiak Driver-powered vehicles have delivered over 15,600 loads.

Previous wording

We also see increasing tailwinds in the defense market, as defense modernization programs increasingly focus on upgrading vehicle fleets with advanced technologies. The U.S. Department of War (“DoW”) is increasingly prioritizing adapting commercial, off-the-shelf AI technologies for defense purposes, which creates opportunities for dual-use developers like Kodiak. Additionally, allied European nations are ramping up investment in ground vehicles in response to instability in the region.

Current wording

We also see increasing tailwinds in the defense market, as defense modernization programs increasingly focus on upgrading vehicle fleets with advanced technologies. The U.S. Department of War (“DoW”) is increasingly prioritizing adapting commercial, off-the-shelf AI technologies for defense purposes, which creates opportunities for dual-use developers like Kodiak. Additionally, allied European nations are ramping up investment in autonomous ground vehicles in response to instability in the region.

Previous wording

In December 2024, we commenced tracking Cumulative Hours of Paid Driverless Operations following the initial delivery of the Kodiak Driver-powered trucks to Atlas. As of December 31, 2024, we had logged 17 Cumulative Hours of Paid Driverless Operations. As of September 30, 2025, we have surpassed 5,200 Cumulative Hours of Paid Driverless Operations.

Current wording

In December 2024, we commenced tracking Cumulative Hours of Paid Driverless Operations following the initial delivery of the Kodiak Driver-powered trucks to Atlas. As of March 31, 2026, we have surpassed 23,500 Cumulative Hours of Paid Driverless Operations.

Previous wording

This metric reflects commercial adoption, operational scaling and our ability to deliver autonomous vehicles capable of operating without a safety driver. As of September 30, 2025, our customers had 10 Customer-Owned Driverless Vehicles.

Current wording

This metric reflects commercial adoption, operational scaling and our ability to deliver autonomous vehicles capable of operating without a safety driver. As of March 31, 2026, our customers had 28 Customer-Owned Driverless Vehicles.

Previous wording

We generate revenues from: (i) providing DaaS to customers; (ii) delivering freight via Kodiak-owned autonomous trucks powered by the Kodiak Driver; and (iii) providing ground autonomy solutions to the U.S. Army. Defense contracts, and associated revenue, particularly those with the DoW and the U.S. Army, can be episodic in nature and difficult to predict from period-to-period. As we scale our DaaS business model beyond Atlas, we expect revenue under such arrangements to increase relative to our total revenues.

Current wording

We generate revenues from: (i) providing DaaS to customers; (ii) delivering freight via Kodiak-owned autonomous trucks powered by the Kodiak Driver; and (iii) providing ground autonomy solutions to the U.S. military. Defense contracts, and associated revenue, particularly those with the DoW and the U.S. Army, can be episodic in nature and difficult to predict from period-to-period. As we scale our DaaS business model beyond Atlas, we expect revenue under such arrangements to increase relative to our total revenues.

Previous wording

General and administrative costs consist primarily of personnel costs, facilities rent, insurance payments, fees for professional services, including external accounting and legal advisors, and other general and administrative expenses.

Current wording

General and administrative costs consist primarily of personnel costs, facilities rent, insurance, professional services (including external accounting and legal advisors), and other general and administrative costs.

Previous wording

Other (expenses) income consists primarily of (i) loss on issuance of our Series A cumulative redeemable convertible preferred stock, common stock, and common stock warrants; (ii) changes in fair value as a result of the remeasurement of our second lien loans, simple agreements for future equity (“SAFEs”), and redeemable convertible preferred stock warrant liabilities; (iii) interest income and other net, which includes income on our cash equivalents, net of transaction costs related to the reverse recapitalization; and (iv) interest expense incurred on our debt obligation.

Current wording

Other income (expenses) consists primarily of (i) changes in fair value as a result of the remeasurement of our common stock warrants, second lien loans, simple agreements for future equity (“SAFEs”), and redeemable convertible preferred stock warrant liabilities; (ii) interest income and other net, which includes income on our cash equivalents and marketable securities; and (iii) interest expense incurred on our debt obligations.

Previous wording

Revenues increased by $1.5 million, or 124%, to $2.7 million for the nine months ended September 30, 2025 from $1.2 million for the nine months ended September 30, 2024. The increase was primarily attributed to a $1.0 million increase in DaaS revenue, which commenced in December 2024, and a $0.5 million net increase related to contracts with the U.S. Army and freight delivery.

Current wording

Revenues increased by $0.4 million, or 24%, to $1.8 million for the three months ended March 31, 2026 from $1.5 million for the three months ended March 31, 2025. The increase was primarily attributed to a $1.3 million increase in DaaS revenue, partially offset by a $1.0 million decrease related to our contract with the U.S. Army.

Previous wording

Research and development expenses increased by $6.5 million, or 22%, to $35.8 million for the nine months ended September 30, 2025 from $29.3 million for the nine months ended September 30, 2024. The increase was primarily attributable to an increased investment of $2.5 million in software tools to support our artificial intelligence and machine learning initiatives, $2.4 million of higher headcount-related expenses, and $2.2 million related to the timing of costs recognized pursuant to our contract with the U.S Army. These costs were offset by a decrease of $1.3 million in prototyping hardware spend.

Current wording

Research and development expenses increased by $7.4 million, or 73%, to $17.6 million for the three months ended March 31, 2026 from $10.1 million for the three months ended March 31, 2025. The increase was primarily attributable to $5.1 million of higher headcount-related expenses, as well as an increased investment of $1.5 million in software and other tools to support our artificial intelligence and machine learning initiatives.

Previous wording

General and administrative expenses increased by $4.0 million, or 78%, to $9.2 million for the three months ended September 30, 2025 from $5.1 million for the three months ended September 30, 2024. The increase was primarily attributable to $2.9 million of higher headcount-related expenses and an increase of $1.1 million in expenses related to legal, accounting and other professional services, incurred primarily related to going public.

Current wording

General and administrative expenses increased by $7.3 million, or 142%, to $12.4 million for the three months ended March 31, 2026 from $5.1 million for the three months ended March 31, 2025. The increase was primarily attributable to $4.6 million of higher headcount-related expenses, as well as an increase of $2.0 million in costs incurred for legal, accounting and other professional services, primarily associated with becoming a public company.

Previous wording

Truck and freight operations expenses increased by $4.5 million, or 216%, to $6.6 million for the three months ended September 30, 2025 from $2.1 million for the three months ended September 30, 2024. The increase was primarily attributable to $2.6 million of higher headcount-related expenses and $1.8 million in increased operational infrastructure costs, both of which were incurred to support DaaS operations.

Current wording

Truck and freight operations expenses increased by $4.3 million, or 107%, to $8.3 million for the three months ended March 31, 2026 from $4.0 million for the three months ended March 31, 2025. The increase was primarily attributable to $2.3 million of higher headcount-related expenses, as well as an increase of $2.0 million in operational infrastructure costs, both of which were to support DaaS operations and development related to our over-the-road launch.

Previous wording

For the nine months ended September 30, 2025, we incurred a net loss of $511.8 million. We expect to incur additional losses and increased expenses in future periods as we continue to scale our business, invest in research and development efforts, increase employee headcount and incur additional expenses associated with being a public company.

Current wording

For the three months ended March 31, 2026, we incurred a $37.9 million loss from operations. We expect to incur additional losses and increased expenses in future periods as we continue to scale our business, invest in research and development efforts, increase employee headcount and incur additional expenses associated with being a public company.

Previous wording

As of September 30, 2025, we had cash and cash equivalents of $146.2 million and debt, current portion of $22.1 million. We do not anticipate that such cash and cash equivalents will be sufficient to meet our capital requirements for at least one year from the filing date of this Quarterly Report under our current operating plan. We expect to seek additional funding through debt or equity offerings, which may result in substantial dilution or restrictive covenants, to fund our operating plan. If we do not generate sufficient cash to fund our operating plan, we may also adjust our operating plan to lower our anticipated research and development initiatives, reduce our growth plans or liquidate our assets, among other things. To the extent any or all of these events were to occur, our business, operating results, financial condition and prospects may be materially and adversely affected.

Current wording

We do not anticipate our cash and cash equivalents and marketable securities, together with the proceeds from the PIPE Transaction, will be sufficient to meet our capital requirements for at least one year from the filing date of this Quarterly Report under our current operating plan. Inclusive of the expected net proceeds from the PIPE Transaction, we expect to be able to fund our business plan into the second quarter of 2027. We expect to seek additional funding through debt or equity offerings, including in the near term in the form of issuing equity and equity-linked securities and incurring additional indebtedness, which may result in substantial dilution or restrictive covenants, to fund our operating plan. If we do not generate sufficient cash to fund our operating plan, we may also adjust our operating plan to lower our anticipated research and development initiatives, reduce our growth plans or liquidate our assets, among other things. To the extent any or all of these events were to occur, our business, operating results, financial condition and prospects may be materially and adversely affected.

Previous wording

We may receive up to $670.5 million from the exercise in full of all of our outstanding warrants for cash based on the exercise price, or $518.2 million if the exercise prices of the warrants are reduced to the lowest price currently contemplated thereunder. The current exercise price of the publicly traded and privately issued warrants is $9.28 per share, and the initial exercise price of the warrants to purchase common stock issued in connection with the reverse recapitalization is $12.00 per share. The closing price of our common stock on Nasdaq on November 10, 2025 was $7.98 per share. The likelihood that warrant holders will exercise the warrants and any cash proceeds that we would receive is dependent upon the market price of our common stock. To the extent the market price for our common stock is less than the then-effective exercise price per share of any warrants, holders of such warrants will be unlikely to exercise such warrants.

Current wording

After giving effect to the PIPE Transaction, as of May 8, 2026, we may receive up to $606.8 million from the full cash exercise of all of our outstanding warrants. The likelihood that warrant holders will exercise the warrants and any cash proceeds that we would receive is dependent upon the market price of our common stock. To the extent the market price for our common stock is less than the then-effective exercise price per share of any warrants, holders of such warrants will be unlikely to exercise such warrants.

Previous wording

$190.1 million in the change in fair value of SAFEs, $23.9 million in the change in fair value of second lien loans, $10.1 million in stock-based compensation, $7.3 million in the change in fair value of redeemable convertible preferred stock warrant liabilities, $3.2 million transaction costs allocated to warrant liabilities, $2.1 million in depreciation and amortization, and $1.4 million in non-cash lease expense. The change in our operating assets and liabilities was primarily due to a $4.8 million decrease in our accounts payable and accrued expenses and other current liabilities due to the timing of payments and a $2.6 million increase in our prepaid expenses and other current assets primarily due to the timing of payments, and $1.4 million decrease in operating lease liabilities, partially offset by a $0.6 million decrease in account receivable primarily related to our contract with Atlas.

Current wording

Net cash used in operating activities for the three months ended March 31, 2026 was $29.5 million and consisted of a $56.4 million change in non-cash adjustments, partially offset by net income of $26.5 million and a $0.4 million change in our operating assets and liabilities. Non-cash adjustments primarily consisted of a $64.7 million change in the fair value of common stock warrants and a $0.4 million accretion of discount on marketable securities, partially offset by $6.0 million in stock-based compensation, $1.4 million in depreciation and amortization, $0.5 million in the change in fair value of second lien loans, and $0.5 million in non-cash lease expense. The change in our operating assets and liabilities was primarily due to a $0.6 million decrease in our prepaid expenses and other current assets and a $0.4 million decrease in our accounts receivable primarily due to the timing of payments, partially offset by a $0.5 million decrease in operating lease liabilities, and a $0.2 million net decrease in our accounts payable and accrued expenses and other current liabilities due to the timing of payments.

Previous wording

Net cash used in operating activities for the nine months ended September 30, 2024 was $36.2 million and consisted of a net loss of $55.1 million, partially offset by a $9.6 million change in our operating assets and liabilities and $9.3 million in non-cash adjustments. Non-cash adjustments primarily consisted of $4.0 million in stock-based compensation, $3.6 million in depreciation and amortization and $1.7 million in non-cash lease expense. The change in our operating assets and liabilities was primarily due to an increase of $14.2 million in our accounts payable and accrued expenses and other current liabilities due to the timing of payments, partially offset by a $3.4 million increase in prepaid expenses and other current assets due to timing of payments and a $1.6 million decrease in operating lease liabilities.

Current wording

Net cash used in operating activities for the three months ended March 31, 2025 was $16.5 million and consisted of a net loss of $128.2 million and a $26 thousand change in our operating assets and liabilities, partially offset by $111.7 million in non-cash adjustments. Non-cash adjustments primarily consisted of $108.4 million increase in the fair value of SAFEs, $1.9 million in stock-based compensation, $0.5 million in depreciation and amortization, and $0.4 million in non-cash lease expense. The change in our operating assets and liabilities was primarily due to a $0.8 million net decrease in our accounts payable and accrued expenses and other current liabilities due to the timing of payments and a $0.4 million decrease in operating lease liabilities, partially offset by a $1.1 million decrease in account receivables related to our contract with the U.S. Army.

Previous wording

Net cash used in investing activities for the nine months ended September 30, 2025 was $11.9 million and related to purchases of property and equipment.

Current wording

Net cash used in investing activities for the three months ended March 31, 2025 was $2.3 million related to purchases of property and equipment.

Previous wording

Net cash provided by financing activities for the nine months ended September 30, 2025 was $211.6 million and consisted of $145.0 million in proceeds from the Series A Preferred Stock, $43.9 million in proceeds from the issuance of second lien loans, $26.2 million in proceeds from the reverse recapitalization, net of transaction costs, $23.7 million in proceeds from the issuance of SAFEs, and $1.2 million from exercise of stock options, partially offset by $16.6 million payments for deferred offering costs and $11.8 million for the repayment of debt obligations.

Current wording

Net cash provided by financing activities for the three months ended March 31, 2026 was $4.2 million and consisted of $3.6 million in proceeds from the exercise of common stock warrants and $1.0 million in proceeds from the exercise of stock options, partially offset by $0.4 million for the repayment of debt obligations.

Previous wording

Net cash provided by financing activities for the nine months ended September 30, 2024 was $42.4 million and primarily consisted of $44.1 million in proceeds from the issuance of SAFEs, partially offset by $1.7 million for the repayment of debt obligations.

Current wording

Net cash provided by financing activities for the three months ended March 31, 2025 was $19.8 million and primarily consisted of $21.7 million in proceeds from the issuance of SAFEs and $0.4 million in proceeds from the exercise of stock options, partially offset by $2.2 million for the repayment of debt obligations.

Previous wording

See Note 6 to our unaudited condensed financial statements included in Part I, Item 1 of this Quarterly Report for additional information regarding our debt agreements.

Current wording

See Note 7 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report for additional information regarding our debt agreements.

Previous wording

Our other cash requirements greater than a one-year period as of September 30, 2025 were related to leases and certain purchase commitments with our service providers.

Current wording

Our other cash requirements as of March 31, 2026 were related to leases and certain purchase commitments with our service providers.

Previous wording

Our operating lease arrangements are related to facilities located in Mountain View, California, as well as in Lancaster and Odessa, Texas, under non-cancellable agreements expiring at various dates through 2031. As of September 30, 2025, the total undiscounted future lease payments under our operating leases were $8.0 million.

Current wording

Our operating lease arrangements are related to facilities located in Mountain View, California, as well as in Lancaster and Odessa, Texas, under non-cancellable agreements expiring at various dates through 2031. As of March 31, 2026, the total undiscounted future lease payments under our operating leases were $6.4 million, of which $1.9 million is due within one year.

Previous wording

We may enter into purchase commitments with our service providers. As of September 30, 2025, the total purchase commitments under such vendor agreements were $9.3 million.

Current wording

We may enter into purchase commitments with our service providers. As of March 31, 2026, the total purchase commitments under such vendor agreements were $9.1 million, of which $5.5 million is due within one year.

Previous wording

See Note 8 in our unaudited condensed financial statements included in Part I, Item 1 of this Quarterly Report for additional information regarding our other commitments.

Current wording

See Note 8 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report for additional information regarding our other commitments.