Embark Technology, Inc.
Q4 2021 Earnings Call Transcript

Published: 17 Mar 2022

[Adam Fee:]

Thank you, operator. And thank you everyone for joining us today. Hosting the call with me are Co-Founder and CEO, Alex Rodrigues; and CFO, Richard Hawwa. Ahead of this call, Embark issued its fourth quarter press release and presentation which we will refer to today. These can be found on the Investor Relations section of our website at investors.embarktrucks.com. Please note that on this call, we’ll be making forward-looking statements based on current expectations and assumptions, which are subject to risks and uncertainties. These statements reflect our views only as of today, should not be relied upon as representative about views as of any subsequent date. And we undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. For further discussion of the material risks and other important factors that could affect our financial results, please refer to our filings with the SEC, including our registration statement on Form S-1 filed on November 24, 2021, and our Annual Report on Form 10-K to be filed in the near-term. In addition, during today’s call, we will discuss non-GAAP financial measures, which we believe are useful as supplemental measures of Embark’s performance. These non-GAAP measures should be considered in addition to, and not as a substitute for, or in isolation from GAAP results. You’ll find additional disclosures regarding the non-GAAP financial measures discussed on today’s call in our press release issued this afternoon and our filings with the SEC, each of which is posted on our website at investors.embarktrucks.com. The webcast of this call will be available on the Investor Relations section of our company website. With that, let me turn the call over to Alex.

[Alex Rodrigues:]

Thank you very much, Adam, and good afternoon, everyone. Given this is our inaugural earnings call as a public company, I’d like to begin by sharing some background on the business and how we are leading the way within the autonomous trucking industry. I’m going to begin on slide 3. Embark is the longest-running self-driving truck program in America. Our company from its founding six years ago is solely focused on the trucking market. And we believe this focus differentiates Embark, both in the way that we develop our technology stack and in the way that we go-to-market. We also believe that both aspects are equally important to commercializing at scale. We pride ourselves on developing our innovative purpose built self-driving technology in parallel with the operational and commercial side of the business. Our primary offering is the Embark Driver, our highly differentiated and advanced software stack. We deliver this soft software as a subscription service by partnering with leading carriers who will pay a per mile subscription fee for Embark Driver software, as well as a suite of supporting services. Most notably, these services include Guardian, Embark’s cloud-based dispatch and monitoring solution, which delivers 24/7 monitoring for the truck along with remote assist capabilities and over-the-air updates. We also provide carriers with access to the Embark Coverage Map. This is a nationwide network of sites between which carriers can dispatch Embark-equipped trucks. Within the Embark Coverage Map, there are sites to support both, the transfer point operating model and the direct to shipper model. In the transfer point model, carriers utilize existing drivers to handle the first and last mile, and pick up and drop off at transfer points near city industrial zones, where they can make that handoff. Under the direct to shipper model, carriers can move goods directly to and from shipper facilities, which have been mapped into the Embark Coverage Map. I want to highlight three areas of key differentiation that are important to the Embark story and the result of focusing solely on autonomous trucking since our inception. First, Embark has developed a proprietary and patent pending technology called Vision Map Fusion. This technology allows Embark’s trucks to update the maps in real time, which is critical when encountering situations like construction work zones, particularly when you’re on a two-lane highway and there are no alternative routes. This is different from other autonomy providers who rely on an alternative technology known as HD mapping, which is brittle and requires constant maintenance to reflect changes in highway conditions. Our technology stack reflects our focus on trucking, and we believe it’s much more practical for highway driving relative to urban driving. For example, in an urban setting, a robotaxi can simply take a different route, which is not a viable alternative for the highway and trucking use case. Second, we’ve developed the Embark Universal Interface. These are custom designed sensor and compute module that through a set of flexible interfaces are designed to be integrated with any of the major OEM platform. This modular integration approach is designed to enable our carrier partners to purchase Embark-equipped trucks from their preferred OEM. This approach is borne out of close collaboration with our carrier partners, who for decades have purchased trucks at multiple OEMs and have been deeply involved in specifying these trucks down to the brakes, steering, and even the type of engine. Our interface is designed to accommodate the multi-platform component level purchasing behavior that already exists in the trucking market and is highly differentiated from the monolithic platform development approach of the robotaxi industry. Thirdly, Embark has an asset-light business model where we focus on partnering with the major players in the trucking ecosystem, including carriers, shippers, real estate partners, and Tier-1 manufacturers. Unlike some of our competitors who are focused on owning trucks and developing their own fleet, Embark believes we can be in a position to more rapidly scale by building partnerships where we benefit from the skills, expertise, and purchasing power of our partners, resulting in a much more capital efficient business. As one example, Embark partners with some of the top carriers in the United States as our customers. And when you look at the top 100 carriers in the country, they spend approximately $15 billion per year on trucks. Critically, this asset-light business model also allows us to remain focused on our core competency, building world-class self-driving software for the trucking market. Moving on to slide 4, I’d like to briefly discuss the market opportunity. Embark is focused on the rapidly growing $730 billion U.S. truck freight industry, which is currently experiencing many well-known challenges, specifically driver shortages, diminished carrier margin due to rising labor and fuel costs, safety concerns, and increased pressure to expedite delivery times. We believe Embark Technology will address all of these challenges and more importantly will help driver quality of life by allowing drivers to primarily service local routes, and then return to their homes each evening. Additionally, Embark’s autonomous driving solution provides compelling economics for carrier partners, by enabling carriers to operate for longer hours with meaningfully higher estimated annual revenue per truck. Currently, trucks driven by humans are limited by Department of Transportation regulations to 11 hours of operation per day. Embark powered autonomous trucks have the potential to dramatically increase that daily driving time while improving delivery speed and increasing utilization. Also, it’s worth noting that one in five loads requested by a shipper today is rejected due to unavailable carrier capacity. We believe our technology will help unlock these supply chain challenges and provide more speed, certainty, and reliability for shippers in the future. Embark Technology will also address critical safety issues, as a majority of all motor vehicle accidents are caused by human error. Embark Trucks has a leading safety record among autonomous software developers, having driven over 1 million real world miles and done so without a single Department of Transportation reportable safety incident. All these factors create a very tangible need for our technology and a compelling business and commercial use case. Turning to our business updates on slide 5. I’d like to highlight several of our accomplishments since announcing our business combination with Northern Genesis last June. In October, we announced that carriers have placed an industry leading 14,200 reservations for Embark-equipped autonomous trucks, more than twice the nearest public competitor at the time of announcement. What makes the reservation announcement even more exciting is that all the carriers that were allowed to place reservations committed to investing today to prepare their operations for autonomous vehicles as part of our Partner Development Program. These reservations represent a major commitment from fleets that are deeply engaged with us, including many of the largest carriers in the country. This reservation process began with Embark’s detailed rollout plan across the Sunbelt, and then overlay granular lane and load level data from our carrier partners to plan for the conversion of lanes to autonomous based on factors such just lane length, frequency, and market volume density. Combined with insights from how our carrier partners operate trucks today, this allowed us to determine how they would actually deploy and roll out the Embark Driver technology within their fleet. And then, based on this final output, we were able to identify very specifically the number of Embark-equipped trucks a given carrier would deploy over the first five years of commercialization. Only then were carrier partners allowed to place a truck reservation, substantiated by this data driven analysis. This process requires significant coordination nation and collaboration with our partners, many hours of work and billions of miles of analysis. The result is a high-conviction member and associated lane level analysis, which allows us to confidently plan our commercial rollout, beginning in 2024 and to meet the significant scale demanded by our partners. We also continue to bolster our leadership team with industry veteran executives who have deep autonomous vehicle experience. A few key hires and promotions I’d like to highlight today. We recently announced the appointment of Stephen Houghton, as Embark’s Chief Operating Officer. Stephen brings two decades of leadership experience to the team, including six years of autonomous vehicle experience from Amazon and Cruise. Specifically Cruise, Stephen was responsible for scaling Cruise’s operations to more than 700 people. Jean-Baptiste Passot recently joined to lead our software engineering effort. Jean-Baptiste joined Embark after a decade at Brain Corp, where he oversaw nearly a 100 software engineers that deployed a fleet of tens of thousands of production grade robots. Jean-Baptiste holds a PhD in computational science and is responsible for more than 30 patents on a variety of robotic applications. The last key hire I’ll highlight here is the addition of Sam Loesche on the policy side. Sam served as a senior government affairs representative for the International Brotherhood of the Teamsters Union for over eight years before joining Embark, and brings over a decade of experience in technology, safety and labor policy at the federal and state level. Sam will further strengthen Embark’ longstanding relationships with interest group, unions, and federal policy makers to collectively deliver the safety, labor, and environmental benefits of autonomous trucking. We’re excited to have Sam on the team. We believe engaging with labor is critical to our goal of improving drivers’ lives and help advance our objective of bringing more and higher quality jobs to the industry. At Embark, we truly value our culture and the people we hire. I’m humbled and excited at the many industry veterans who are wanting to be a part of what we’re doing here at Embark. On the Coverage Map expansion, we’re excited to recently announce a strategic partnership with Alterra Property Group. Alterra is one of the largest and first real estate investment companies in the U.S. to focus on industrial outdoor storage properties. Alterra plans to use its national real estate portfolio and private equity funds together totaling over $1.5 billion, to identify sites that Embark uses transfer points in key freight markets. This partnership further highlights the work we’re undertaking today in advance of commercialization in 2024, and validates our asset-light strategy and ability to remain focused as a software-as-a-service business. Two other key highlights I’ll briefly touch on. First, as we announced earlier this year, we expect to demonstrate and provide key results from our snow testing by the end of this winter. I can say we’ve successfully completed testing with our truck in Montana, and we look forward to sharing the results and key learning on this in the very near-term. Additionally, and this is an important one for me personally, as part of our commitment to ESG, I’m forgoing my salary and bonus for 2022. And these amounts will be used to launch a grant program and fund a number of projects in STEM education beginning with a grant to The Afghan Girls Robotics Team, which I’m really excited about. Embark and I are focused on the long-term, and taking a zero dollar salary and bonus this year is a clear way of creating alignment with all of Embark shareholders and living out our values. Turning to slide 6. Those of you who followed the Embark story for many years have heard me talk repeatedly about avoiding unrealistic goals. Embark has consistently distinguished ourselves as a company that sets realistic expectations with the objective of exceeding them. We did that for five-plus years as a private company, and in 2021, I’m very proud that we’ve continued to build on that track record as a public company. From a technology perspective, we kept up our engineering velocity target of delivering two or more new capabilities from our capability roadmap in 2021, just as we had every year going back to 2017. On the commercial side, in our very first investor presentation in our path to going public, we outlined three key objectives that we expected to make major announcements on in the following 12 months

[Richard Hawwa:]

Thank you, Alex. Turning in slide 12, let me highlight some of the key financial and operational metrics that support our business progress. First, we’re excited about the $245 million of net proceeds raised during the transaction to go public last year. Embark has developed a leading technology stack and industry-leading business partnerships in a highly capital efficient manner. And we believe this additional capital will continue to support the business going forward. By maintaining focus and discipline, we can deploy our resources efficiently and effectively. We believe our balance sheet is very robust given the operational and commercial goals and objectives that Alex just walk through, and further highlights why having clear and focused efforts is critical to maintaining capital efficiency? As we look at key financial and operational metrics, I want to really focus on several areas. First free cash flow spend is a metric we monitor very closely. For the fourth quarter of 2021, Embark had free cash flow spend of $34.2 million. And for the full-year 2021, we had free cash flow spend of $68.8 million. These are net of certain onetime cash expenditures related to transaction costs. It’s worth noting that Q4 reflects approximately $12.5 million of prepaid expenses and other working capital adjustments. So, if you look at Q4 without the impact of those adjustments, free cash spend is closer to $21.7 million for the quarter. These metrics are also net of onetime related transaction costs. As a pre-revenue company, we are very cognizant that every dollar we spend must have a clear and obvious use to advance us towards commercialization. While sometimes this focus could be to the detriment of marketing our story publicly, we believe that technology and what we’ve accomplished with our resources to date ultimately speaks for itself. To reiterate, we believe we have deployed a leading technology relative to our competitors with less capital because of our focus and discipline. Turning to full-year 2022 guidance. We expect free cash flow spend to be in the range of $125 million to $140 million. We believe our ability to develop a leading technology while being extremely capital efficient is a direct result of our focus, which helps ensure we continue to be prudent stewards of capital as we advance towards commercialization in 2024. As an AV company, we also don’t need to build a manufacturing stream facility or hard asset to have one sale. We’re able to continually evaluate the tradeoffs on where and how we deploy capital to ensure we are efficient with our resources. And most importantly, this enables us to ensure we remain focused on the main objective of commercializing our AV trucking technology at scale. To provide a bit more detail on the quarter and the year. Net loss was $76.4 million for the fourth quarter, and it was $124.2 million for the full year 2021. Adjusted EBITDA loss was $20.3 million for the fourth quarter, compared it to adjusted EBITDA loss of $6.1 million in the prior year period. Full year 2021 adjusted EBITDA loss was $53.5 million. These are net of one-time-related transaction costs. These figures include stock-based compensation expense of $44.2 million for the fourth quarter, and $47.6 million for the year 2021. For 2022, we expect stock-based compensation expense to be in the $70 million to $75 million range. It’s worth noting that approximately $10.6 million of this stock-based compensation expense is related to our Founders PSU grant. That does not begin to vest until our share price is at least $20, and then, the vesting schedule grows in five price increments up to a $100 per share, aligning our Founders’ interests with long term investors. Since it’s always a top question, I included some additional detail here just to dig into our filling. As of March 7, 2022, Embark had 450 million basic shares outstanding. You also see in the appendix, I included a summary of our share count for your benefit, which also summarizes the warrants we have outstanding that remain out of the money today. Lastly, a few key operational metrics I want to highlight. At year end, we had 18 trucks in our testing fleet, and we believe we are highly efficient in the way we utilize these assets, which allows us to have very robust road testing. We had 235 employees at year end of which 171 are related to our R&D organization. Lastly, and certainly most importantly, we continue to be excited about our safety record. We have had zero DOT reportable incidents or failed inspections through 2021. Moving to slide 13, I want to provide an update on our business prospects and the financial framework which you can evaluate Embark. Before I get into the details, I would like to reiterate the criticality of the preparation we are conducting today with our partners to both inform our assumptions and our expectations regarding ultimately realizing them. We are preparing our carrier partners networks today, uncovering the operational, organizational, and technological friction points that slow deployments, and then smoothing them out. We are continuing to learn where the technology makes sense and where it does not, and building deployment plans against these shared perspectives. Given this unique perspective that Embark has been able to develop, we believe there are two ways to credibly evaluate this framework, top down and bottoms up. From a top down perspective, we’ve taken a set of assumptions around the total addressable market, and then distilled this down into the lanes that we believe are economically viable for autonomous trucking. Lastly, we have further filtered this funnel to the operational design domains where we believe our technology will be viable in the near future. This is our serviceable market. From a bottoms up perspective, we are looking at our partners today to understand their current size, ability to scale autonomous trucking across their networks, available buying power, et cetera. Today, our carrier partners drive roughly 3 billion miles annually and have 38,000 trucks under management. And this is achieved under the constraints of human driver hiring and hours of service. The 14,200 truck reservations that these fleets have place represent nearly 10 billion miles over the entire life cycle of the reservations. Additionally, these reservations are backed by deep network analysis as Alex explained earlier. And it’s yet another proof point on the depth of the work and analysis we conduct as part of our Partner Development Program to inform our overall framework. As we progress towards commercialization, we look forward to refine the connective tissue from the top down and bottoms up frameworks to provide a high fidelity view of our scaling plan. With that, I’ll turn it back to Alex for closing remarks.

[Alex Rodrigues:]

Thank you, Richard. I’d like to conclude on slide 14 by thanking our partners and customers, our employees for all of their hard work and our investors for their continued long-term support. I want to finish with one final observation. When we look at the broader mobility landscape, we believe that autonomy is the most attractive opportunity in the near to medium-term. There are less players relative to other sub-segment and the financial profile is materially more attractive. Within autonomy, we believe the trucking application is the most obvious and practical use case, given the size of the market and the constraints our technology will unlock in the industry. Embark has been solely focused on the self-driving truck problem from the beginning over six years ago. And we’re excited to see the leading technology and clear go-to-market strategy that we’ve developed over many years, intersecting with the most compelling opportunity in the mobility space today. With that, we’ll open the call to Q&A.

[Operator:]

Our first question comes the line of Chris Wetherbee with Citigroup.

[Chris Wetherbee:]

Hey. Thanks and good afternoon, guys. Maybe we could start with the Truck Transfer Program. Why don’t you give us sense of what you thought -- maybe what the progress might look like this year in terms of timing of getting the trucks from the OEM or upfitting them, getting them to Knight-Swift? And then, do you think that this opens the door for other potential participates in the program? Do you think you could see other carriers sign up over the course of this year, maybe about you could scale that over time?

[Alex Rodrigues:]

Yes. The expectations for this program as we sort laid out in the presentation, we’re expecting to have the first set of trucks over to Knight-Swift running in their day to day operations before the end of the year. As far as the intermediate milestones, obviously a bunch of those things are going to all need to take place between now and then. We’ll look forward to giving you the updates as they come along. But we just feel sort of a pretty clear end state as to where we’re driving and we’re excited to provide some updates. In terms of how we see this expanding, I think we see it expanding potentially in two directions. One will be continuing to increase the set of features that these trucks are actually equipped with. So, adding more and more of the features from our level four system to give a more sophisticated experience in inside the fleet. And then, on the other side, as you mentioned, I think this is an exciting program that we see the potential and demand for -- significantly more than just Knight-Swift and that’s something that we’re definitely evaluating.

[Chris Wetherbee:]

And then, on the five remaining milestones that you’re working on, I think you have two of them highlighted in the 2022 block. So, I guess, I wanted -- you gave us a little bit of color on the emergency vehicle interactions. You have evasive maneuvers as the next one, beyond that. Anyway for us to think about the timing of those as we go through the year? Obviously, a lot of the stuff that we’re going to be asking is about sort of measuring your progress against some of your big milestones and ultimately working towards those goals in the out year. So, is any help in terms of how we should be thinking about that process?

[Alex Rodrigues:]

Yes. I think, once the webcast comes out -- if you have the slides in front of you, taking a look at slide 8, there’s essentially a lot more detail there than sort of what I on the call. We talk through both, the timing, so those two -- the first in Q2, the second one in the back part of the year, as well as the timings of the remaining milestone kind of little bit more about what that includes and why we think those are important.

[Richard Hawwa:]

Okay. Evasive maneuvers is I know this is 2022. So, I guess that’s certainly year end is the way to think about it?

[Alex Rodrigues:]

Yes. And then the other -- 2023.

[Chris Wetherbee:]

Understood. Thank you. And the last question for me. I just want to get a sense of sort of cash burn. Richard, you walked us through that. I appreciate it. Thoughts on your cash profiles that you have today, and then if you feel good out the rate of cash burn to kind of get you to commercialization here?

[Richard Hawwa:]

Yes. Chris, let me just walk you through our balance sheet today and where we are. At year-end we have approximately $265 million of cash on our balance sheet. And we have ample runway to execute on the set of initiatives we just outlined for 2022. As we’ve talked about being AV company, we always have flexibility in our plan to define and refine these key initiatives, key partners and the number of resources required to execute upon them.

[Chris Wetherbee:]

So, I guess, that sort of means you feel good about where you are.

[Richard Hawwa:]

We feel good where we are today.

[Operator:]

Our next question comes from the line of George Gianarikas with Baird. You may proceed with your question.

[George Gianarikas:]

Hey guys. Good afternoon. Thanks for taking my question. So, maybe to start. Could you talk about any momentum you’ve seen in conversations with potential partners in your ecosystem, given the current state of affairs supply chain or -- and trucking shortages? Any incremental insights you could show would be much appreciated.

[Alex Rodrigues:]

Yes. I think, we’ve definitely seen the focus on the trucking industry from shippers, and then the focus on sustainability from carriers that certainly come a lot sharper in the last quarter. I think that the two things that we’re hearing in our conversations is one with oil at close to all-time highs and that potentially being a long-term thing. Suddenly the focus on that, 10%-plus fuel efficiency improvement the driverless can enable is pretty significant. And then this one’s maybe been going on for more or like six or nine months. But, when you look at the impact of the supply chain crisis and the shortage of truck drivers, we’re really seeing that demand driving for how can we improve, not just today’s logistic, but really the long term demographic profile, which is the underlying cause of this problem.

[George Gianarikas:]

Got it. And maybe to focus on the technology piece, one of your competitors recently talked about co-developing and ADC within Nvidia, and you’ve taken a little bit of a different approach. I’m curious as to why you think getting a little bit more deeply embedded with some of your semiconductor or component partners is not essential that you can sort of allow the market to come to you as opposed to addressing these concerns directly?

[Alex Rodrigues:]

Yes. I think, first off, I want to say that we work pretty closely with Nvidia. We think they make absolutely great hardware. And that’s the reason that we trust them to be a pretty significant partner in the technology development that we’re doing. I think the tradeoffs in our minds is really about whether or not you want to in-house hardware development or pieces of the stack. And I think what we’ve seen, and certainly if you look at Embark historically, we’re a very-focused company, and we’ve talked consistently about how that drives capital efficiency. I think what’s clear from our perspective is that if you’re going to choose between investing in proprietary hardware versus investing in better software, that software investment paired with really great partnerships is going to be the way to go. We’ve seen this in the past for us, when we think about the LIDAR space, for example, where Embark has partnered with Luminar. We’ve invested very heavily in building best-in-class LIDAR classification, machine learning software. And the benefit of this approach, whether that’s in LIDAR or it’s in compute, is that -- if someone’s making hardware, they then need to be on the hook for every incremental scale-up or improvement of that system. Whereas if Embark investing in setting great software, and today we have a hardware platform through our work with Nvidia video that’s best-in-class and that our software is able to run within, that’s a great outcome. If our investment brings the compute to a point where it runs within the computer, that is something that we can continue to benefit from over the long term.

[George Gianarikas:]

And one more, if I may, just in terms of the milestones you’ve set for ‘22 and ‘23. And I think the slide deck is great. You guys did a really good job of laying out exactly what we should expect. There’s not a drive route test in there, like, why is that not something that you feel like you need to prove out your product and to begin to roll out in ‘24?

[Alex Rodrigues:]

Yes. I think, when we look at the capabilities of the system, our focus is really on making sure that we have a complete and commercially viable system, and then ultimately handing that to our carrier partners in a way that they feel is safe incredible. And obviously, the end state here is running the truck without a driver. But, our view is that doing that on a partial set of capabilities, one that’s not yet commercially ready is a distraction from the real engineering work that we need to be doing. And we’re doing all of our system validation in parallel, such that as we’re doing each capability, that reliability work is being done alongside. But I think, we really want to see something that’s ready to go to market with capabilities like emergency vehicle interaction before we start hanging it over to carriers without a driver.

[Operator:]

Our next question comes from the line of Todd Fowler with KeyBanc Capital Markets.

[Todd Fowler:]

Hey, great. Alex, Richard, congratulations on the first quarter as a public company. I guess, I agree with the last comment, the slide deck here is pretty helpful. Alex, I wanted to ask on slide 10 kind of on the commercial milestones that you’re looking at. Do you view these as kind of being in order, or from a priority standpoint that the most important is the Truck Transfer Program, and then kind moving through those 1, 2, 3, and 4, or you think about the commercial milestones? Is there something that’s -- you view as kind of more important on the road to commercialization?

[Alex Rodrigues:]

Yes. I would say, really the first two here are the ones that we think are going to be certainly the most differentiated as you look to what we’re doing in 2022. And so, I really look at the Truck Transfer Program where we’re going to be the first player to actually be putting trucks into real fleet, which I think is a huge step on the commercial side. And then, the rollout of our partner-based transfer hub network in the Sunbelt that really lays the groundwork for being able to do this at scale with our carrier partners. So, I think those are the two biggest and certainly of course, where we’ll be working on all for.

[Todd Fowler:]

And then also, I know you’ve done a good job in talking about the reason why being platform agnostic makes sense, certainly the way the carriers purchase trucks currently. Can you help us think about you as you get closer to commercialization, how you see the retrofit moving into the install process with the OEMs? And maybe a little bit of color around the conversation that you’re having to have trucks equipped with hardware to run your software as you get closer to commercialization? Yes, absolutely. I think maybe two thoughts on the manufacturing side. It’s our view that by having a platform agnostic approach, we’re able to really meaningfully burn down the manufacturing risk. I think some people have sort of asked the question, it doesn’t just add risk to the system. And I think actually from our view, the riskier thing to do would be relying on a single OEM development timeline as a single point of failure on the Company’s business model. And we see building something that’s platform agnostic and therefore allows us to diversify in the same way that our carrier partners want to diversify across the different OEM platforms. It’s something that really helps bring down risk and give us confidence and certainty about our ability to deliver on time, because it puts more things within our control. And I think we’re continuing to see progress towards showing that be really successful. So, I mentioned a little bit the Truck Transfer Program work that we’re doing, it’s actually not going to be based on a platform that Embark has integrated to in the past, instead it’s going to be based on the Kenworth’s T680 platform, which is a nice way to -- nice way to -- taking existing trucks out of that order, that are going to be outfitted. We’ve been working with them, with their contacts at the OEM, and we feel very good about that in install process and being able to deliver those trucks in exactly the way that we sort of targeted, and based on some of the partnerships and the development work we’ve been doing over the last couple years.

[Todd Fowler:]

Got it. That makes a ton of sense. That’s helpful, Alex. Richard, a couple for you. Just on the cash, the free cash burn guidance for this year, the $125 million to the $140 million. Can you, I guess, help us think about a couple of things. I mean, the split between R&D and G&A, how that kind of breaks out? And then what’s your expectation from a cadence standpoint? I mean, based on where you were in the fourth quarter, if we adjust for the prepaid, it feels like that that’s going ramp as we move through the year on a quarterly basis. Is that the right way to think about the quarterly cadence of cash burn?

[Richard Hawwa:]

Yes, Todd. Certainly, as we grow, it will certainly ramp quarter-over-quarter. Obviously, we continue to monitor, as I mentioned, the trade-offs, the resources, and where we deploy them against our initiatives and objectives. On your first question split, we don’t provide that detail. But I think as we’ve said before we are an engineering led organization. And when you think about where that spend is, it goes towards people. And when you think about where those people are, they’re typically in engineering. So, it’s a significant chunk of where that spend will go.

[Todd Fowler:]

Got it. Okay. That makes sense. And then, just the last one for me. I know in the financial projections that you guys laid out, in 2024, there’s a substantial amount of revenue that you had kind of in your forecast and building into to ‘25. Can you help us think about, I mean, the timing of when revenue’s going to start to materialize? It doesn’t seem like it’s going to be something that we see in ‘22. Is it something that starts to come in, in ‘23 and then it’s a big ramp into ‘24 or just how do we think about kind of the revenue cadence as you move through the milestones? Thanks for the time.

[Richard Hawwa:]

Yes. So, nothing’s changed from what we previously said at this point, Todd. I think, what we have provided is a framework of how we think about where that looks based on a top down and bottoms up approach. What I would say is the ability to generate I would say a nominal amount of revenue moving goods between now, we don’t see a benefit until we’re prepared to commercialize at scale in 2024. And that’s how we’ve designed at least the way that we test and how our engineering team works and how we utilize our fleet.

[Operator:]

Ladies and gentlemen, we have reached the end of today’s question-and-answer session. I would like to turn this call back over to Mr. Alex Rodrigues for closing remarks.

[Alex Rodrigues:]

Awesome. Thanks everybody for joining us. It’s great first earnings call, lot of good questions, and we’re looking forward to doing this with you guys more often, and updating all on our progress over the course of the year.

[Operator:]

This concludes today’s conference. You may disconnect your lines at this time. Thank you for your participation. Enjoy the rest of your day.