Kodiak Ai Inc.
03/11/2026 | Press release | Distributed by Public on 03/11/2026 15:20
Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)
Management's Discussion and Analysis of Financial Condition and Results of Operations.
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.
For discussion related to our results of operations for the year ended December 31, 2024 and year-to-year comparison between the years ended December 31, 2024 and 2023, refer to the section titled "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF LEGACY KODIAK" in our Prospectus filed pursuant to Rule 424(b)(3) with the U.S. Securities and Exchange Commission (the "SEC") on August 29, 2025, which is hereby incorporated by reference herein. The following discussion and analysis of the financial condition and results of operations should be read together with our consolidated financial statements for the years ended December 31, 2025, 2024, and 2023, and the related notes included elsewhere in this Annual Report on Form 10-K (this "Annual Report").
Certain information contained in this discussion and analysis is also included elsewhere in this Annual Report, including information regarding our business plans and strategy, and includes forward-looking statements that involve risks and uncertainties. Actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed in the sections titled "Risk Factors" and "Cautionary Note Regarding Forward-Looking Statements" in this Annual Report.
Our investor relations website is located at https://investors.kodiak.ai. We use our investor relations website to post important information for investors, including news releases, analyst presentations, and supplemental financial information, and as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. Accordingly, investors should monitor our investor relations website, in addition to following press releases, SEC filings and public conference calls and webcasts. From time to time, we may also post information that could be deemed material on our social media channels, which are listed on our investor relations website, and investors are encouraged to review those sources as well. We have included our investor relations website as an inactive textual reference only. Except as specifically incorporated by reference into this Report, information on such website is not part of this Report.
Overview
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.
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 December 31, 2025, Kodiak Driver-powered vehicles have logged over 10,700 Cumulative Hours of Paid Driverless Operations and have delivered over 12,600 loads. In the defense industry, we believe the Kodiak Driver can support national security initiatives and critical government applications.
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.
Recent Developments
The Merger
On the Closing Date, AACT, a Delaware corporation, consummated a series of transactions that resulted in, among other things, the combination of AAC II Merger Sub, Inc., a wholly owned subsidiary of AACT ("Merger Sub"), and Legacy Kodiak pursuant to a definitive business combination agreement dated April 14, 2025 (the "BCA"). Pursuant to the terms of the BCA, Merger Sub merged with and into Legacy Kodiak, with Legacy Kodiak surviving the merger as a wholly owned subsidiary of AACT (the "Merger"). On the Closing Date, AACT changed its name from AACT to "Kodiak AI, Inc."
The Merger was accounted for as a reverse recapitalization, with Legacy Kodiak being the accounting acquirer and AACT being the acquired company for financial reporting purposes. As a result, Legacy Kodiak's financial statements for historical periods will be included in Kodiak's future periodic reports filed with the SEC.
We received $171.2 million cash proceeds from the reverse recapitalization and private investment from public equity financing related to the issuance of our Series A cumulative redeemable convertible preferred stock (the "Series A Preferred Stock"), net of transaction costs.
We will use the net proceeds from the Merger primarily to support our growth initiatives. We also expect to incur additional expenses as a public company for, among other things, incremental directors' and officers' liability insurance, director compensation and additional internal and external accounting, legal and administrative resources.
Key Factors Affecting our Results
We believe that our performance and future success depend on several factors that present significant opportunities for us but also pose risks and challenges, including those discussed below and in the section of this Annual Report titled "Risk Factors."
Evolution of Business Model
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 24,000 miles across the southern United States and demonstrate the viability of the Kodiak Driver across multiple operating domains.
Under our DaaS model, which we launched in December 2024 with Atlas, our customers own and operate Kodiak Driver-powered trucks, and Kodiak provides the autonomy system, regular software updates, systems integrations, remote monitoring and operational and remote support. Under the DaaS model, revenue is generated on a recurring subscription basis, either through a per-vehicle or a per-mile license fee structure, with mileage minimums, where applicable. The DaaS model is designed to scale efficiently, support diverse customer operations, and establish recurring revenue streams while helping minimize our capital expenditures.
As we expand deployments under the DaaS model, we expect a shift in our cost structure to an asset-light business model. Historically, we primarily used Kodiak-owned trucks in our operations. We expect to continue to own and operate a limited fleet of trucks to support the continued development of the Kodiak Driver and continued business development efforts. In the near term, we expect our costs will continue to reflect the use of Kodiak-owned trucks. Over time, we expect customer-owned vehicles will represent a larger share of the deployed fleet, supporting a leaner, more capital-efficient and increasingly asset-light operating model. We also anticipate a shift in capital allocation, moving from an initial focus on technology development toward scaling operations. Future investments will increasingly focus on deployment growth and operational integration. As we grow, we expect to benefit from economies of scale driven by operational efficiencies and continued platform refinement.
Commercialization
We launched our DaaS business in December 2024 with Atlas, and as of December 31, 2025, have surpassed 10,700 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, the Middle East, and Canada.
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 December 31, 2025, Kodiak Driver-powered vehicles have delivered over 12,600 loads. We see our customer base as a competitive advantage with our existing customer base having an aggregate fleet size of over 125,000 trucks.1
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.
Kodiak's ability to achieve our scale goals, as well as profitability, depends on our ability to meet both technical and commercial milestones and the need to scale our deployments with existing customers and attract new customers. Delays in our deployment timelines could result in Kodiak failing to achieve revenue and profitability targets. We intend to pursue additional long-haul trucking, industrial trucking, and defense partnerships as we scale our DaaS business model. If our assumptions about our commercial or technical development are overly optimistic, or if we are unable to successfully commercialize the Kodiak Driver, we may fail to generate operating cash flow or achieve profitability. A failure to meet our technical or commercial milestones may lead to unanticipated delays or cost overruns, which could in turn adversely impact margins and cash flows.
Economies of Scale, Sales and Marketing, & Competition
We believe that our DaaS model, where we charge our customers a per-truck or per-mile license fee, will enable us to achieve strong margin profiles at scale. Our future performance will depend on our ability to both deliver these high margins, including both revenue expansion and cost control measures, as well as scale our deployments beyond Atlas to
1Transport Topics and Federal Motor Carrier Safety Administration Company Snapshot Report. Fleet size includes company-owned, lease-to-own and owner-operator tractors.
higher volumes. Our approach allows us to focus on developing our core Kodiak Driver technologies while leveraging third-party ecosystem partnerships to ensure capital efficiency.
As we scale our DaaS model, we aim to transition our customers away from delivering freight on Kodiak-owned and -operated trucks to customer-owned and -operated trucks. We anticipate achieving additional economies of scale as we grow our deployments. We expect that these economies of scale will come from both increased efficiency and component cost reductions, as both we and our suppliers improve production efficiency. Achievement of this scale depends on our ability to transition our PDP customers to the DaaS model within our expected time frame.
While we expect to achieve and maintain strong margins on the Kodiak Driver, additional competition in AV technologies may negatively impact pricing, margins, and market share. This may lead to pricing pressure and lower margins that negatively impact operating results. However, we believe our capital efficient approach gives us a competitive advantage in terms of ensuring margins and unit economics. If we do not generate the margins we expect upon commercialization of our DaaS model, we may be required to raise additional debt or equity capital, which may not be available on acceptable terms or at all.
Regulatory Landscape
While there is currently no comprehensive federal regulatory framework governing the deployment of driverless trucks, we are able to operate our driverless trucking business today under existing regulation and related guidance. Many states support driverless deployment either through legislation or regulatory guidance, though different states have different requirements, such as first responder interaction protocols and insurance standards, which create compliance complexities.
As the regulatory environment related to driverless technologies advances, our business will need to continue to evolve accordingly. For example, additional state-level requirements or new federal standards could require operational or technical adjustments. We proactively engage with policymakers and regulators to help ensure the regulatory frameworks support safe and scalable driverless deployment.
Global Economic Conditions
Unfavorable economic conditions in the United States and globally may adversely impact our business growth and operating results. Macroeconomic factors such as inflation, higher interest rates, tariffs, banking disruptions, geopolitical tensions and conflicts in Ukraine and the Middle East have contributed to increased economic uncertainty and market volatility. Recent policy actions by the U.S. Government, including changes to trade policy, tariffs on key imports and shifts in industrial and environmental regulations, may further impact global supply chains and business investment decisions. These effects may not be fully reflected in our financial performance until future periods. Additionally, adverse conditions could limit our ability to secure financing on acceptable terms, or at all. Ongoing geopolitical instability and related sanctions may further disrupt global financial markets, including in the United States, potentially resulting in a material impact on our operations.
Key Operating Metrics
We monitor the following key operating metrics to help us evaluate our business, identify trends affecting our business, formulate business plans and financial projections and make strategic decisions.
Cumulative Hours of Paid Driverless Operations
We believe this metric is an important measure of the progress of the commercialization of our technology. We define Cumulative Hours of Paid Driverless Operations as the aggregate number of logged hours when the Kodiak Driver is actively engaged without a safety driver in the vehicle, and we are being paid by our customers.
This metric is critical to assessing the maturity, reliability and scalability of the Kodiak Driver. Growth in Cumulative Hours of Paid Driverless Operations indicates increasing driverless operational performance, customer adoption and commercial readiness.
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 December 31, 2025, we have surpassed 10,700 Cumulative Hours of Paid Driverless Operations.
Customer-Owned Driverless Vehicles
We believe that Customer-Owned Driverless Vehicles is an important measure of the unit growth rate of our business. We expect growth in this metric to signal customer adoption of our DaaS model and future revenue expansion. We define Customer-Owned Driverless Vehicles as the number of customer-owned driverless vehicles with a then-current license for the Kodiak Driver during the applicable period.
This metric reflects commercial adoption, operational scaling and our ability to deliver autonomous vehicles capable of operating without a safety driver. As of December 31, 2025, our customers had 20 Customer-Owned Driverless Vehicles.
Non-GAAP Financial Measures
In addition to our financial results determined in accordance with U.S. generally accepted accounting principles ("GAAP"), we consider certain non-GAAP measures, including the following, which we use to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that non-GAAP financial information, when taken collectively with the financial information presented in accordance with GAAP, may be helpful to investors because it provides consistency and comparability with past financial performance. However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool, and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP.
Other companies, including companies in our industry, may calculate similarly titled non-GAAP measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. In addition, the utility of free cash flow as a measure of our liquidity is limited as it does not represent the total increase or decrease in our cash balance for a given period.
Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures and not rely on any single financial measure to evaluate our business.
Non-GAAP Loss from Operations
We define non-GAAP loss from operations as GAAP loss from operations, excluding stock-based compensation expense. We use non-GAAP loss from operations as part of our overall assessment of our performance, including the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies, and to communicate with our board of directors concerning our financial performance. Stock-based compensation is a non-cash expense that varies in amount from period to period and is dependent on market forces that are often beyond our control. As a result, management excludes this item from internal operating forecasts and models. Management believes that non-GAAP measures adjusted for stock-based compensation provide investors with a basis to measure our performance against the performance of other companies without the variability created by stock-based compensation as a result of the variety of equity awards used by other companies and the varying methodologies and assumptions used.
The following provides a reconciliation from GAAP loss from operations to non-GAAP loss from operations, the most directly comparable financial measure stated in accordance with GAAP.
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Three Months Ended December 31,
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Year Ended
December 31,
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(in thousands)
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2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| GAAP loss from operations | $ | (38,710) | $ | (9,460) | $ | (112,625) | $ | (61,719) | |||||||||||||||
| Stock-based compensation | 8,946 | 1,563 | 19,082 | 5,550 | |||||||||||||||||||
| Non-GAAP loss from operations | $ | (29,764) | $ | (7,897) | $ | (93,543) | $ | (56,169) | |||||||||||||||
Free Cash Flow
We define free cash flow as net cash used in operating activities, which is its most directly comparable measure calculated in accordance with GAAP, less purchases of property and equipment. We believe free cash flow is a useful indicator of liquidity that provides our management, board of directors, and investors with information about our future ability to generate or use cash to enhance the strength of our balance sheet and further invest in our business and pursue potential strategic initiatives. The following provides a reconciliation from net cash used in operating activities to free cash flow.
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Three Months Ended December 31,
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Year Ended
December 31,
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(in thousands)
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2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| GAAP net cash used in operating activities | $ | (24,226) | $ | (14,737) | $ | (94,442) | $ | (50,961) | |||||||||||||||
| Purchases of property and equipment | (10,145) | (2,439) | (22,026) | (3,192) | |||||||||||||||||||
| Free cash flow | $ | (34,371) | $ | (17,176) | $ | (116,468) | $ | (54,153) | |||||||||||||||
Components of Results of Operations
Revenues
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.
Operating Expenses
Our operating expenses consist of research and development, general and administrative, truck and freight operations and sales and marketing.
Research and Development
Research and development costs are expensed as incurred and consist primarily of personnel costs, hardware and electrical engineering prototyping, cloud computing and storage, third-party software licenses (including simulation), data labeling and third-party design services.
We expect our research and development expenses to continue to increase for the foreseeable future as we advance our innovation efforts, expand into new operational domains and enhance solutions leveraging our proprietary technology.
General and Administrative
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.
We expect our general and administrative expenses to continue to increase for the foreseeable future to support our additional headcount, driven by expanding operations and as a result of operating as a public company. These increased costs primarily relate to legal, audit, accounting, regulatory and tax-related services associated with maintaining compliance with exchange listing and SEC requirements, incremental director and officer insurance costs, investor and public relations costs and other expenses that we did not incur as a private company.
Truck and Freight Operations
Truck and freight operations costs consist primarily of personnel costs, truck-related operational costs and DaaS operational infrastructure costs, including remote and on-site support and the depreciation of deployed Kodiak Driver hardware.
We expect our truck and freight operations costs to continue to increase due to the expansion of our testing and deployment with new and existing customers and to support our geographic expansion.
Sales and Marketing
Sales and marketing costs consist primarily of personnel costs and sales-related, branding and public relations activities. We expect our sales and marketing expenses to continue to increase to support the expected growth in our commercial operations.
Other (Expenses) Income
Other (expenses) income consists primarily of (i) loss on issuance of our equity instruments associated with 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 and marketable securities, net of transaction costs related to the reverse recapitalization; and (iv) interest expense incurred on our debt obligations.
Results of Operations
Year Ended December 31, 2025 compared to Year Ended December 31, 2024
Our results of operations for the periods indicated are summarized in the table below (in thousands):
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Year Ended December 31,
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2025
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2024
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$ Change
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% Change
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| Revenues | $ | 3,797 | $ | 14,933 | $ | (11,136) | (75) | % | |||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Research and development | 50,157 | 43,436 | 6,721 | 15 | % | ||||||||||||||||||
| General and administrative | 36,741 | 20,999 | 15,742 | 75 | % | ||||||||||||||||||
| Truck and freight operations | 24,771 | 9,013 | 15,758 | 175 | % | ||||||||||||||||||
| Sales and marketing | 4,753 | 3,204 | 1,549 | 48 | % | ||||||||||||||||||
| Total operating expenses | 116,422 | 76,652 | 39,770 | 52 | % | ||||||||||||||||||
| Loss from operations | (112,625) | (61,719) | (50,906) | 82 | % | ||||||||||||||||||
| Other (expenses) income: | |||||||||||||||||||||||
| Interest expense | (4,096) | (4,951) | 855 | (17) | % | ||||||||||||||||||
| Interest income and other, net | (1,327) | 895 | (2,222) | (248) | % | ||||||||||||||||||
| Loss on issuance of equity instruments | (210,722) | - | (210,722) | N/M | |||||||||||||||||||
| Change in fair value of common stock warrants | (35,018) | - | (35,018) | N/M | |||||||||||||||||||
| Change in fair value of second lien loans | (24,387) | - | (24,387) | N/M | |||||||||||||||||||
| Change in fair value of simple agreements for future equity | (190,075) | (4,109) | (185,966) | N/M | |||||||||||||||||||
| Change in fair value of redeemable convertible preferred stock warrant liabilities | (7,272) | 426 | (7,698) | N/M | |||||||||||||||||||
| Total other expenses, net | (472,897) | (7,739) | (465,158) | N/M | |||||||||||||||||||
| Net loss before income taxes | $ | (585,522) | $ | (69,458) | $ | (516,064) | N/M | ||||||||||||||||
N/M = not meaningful
Revenues
Revenues decreased by $11.1 million, or 75%, to $3.8 million for the year ended December 31, 2025 from $14.9 million for the year ended December 31, 2024. The decrease was primarily attributed to a $12.3 million decrease related to contracts with the U.S. Army, and a $0.5 million decrease in freight delivery revenue. The decreases were partially offset by a $1.7 million increase in DaaS revenue.
Research and Development
Research and development expenses increased by $6.7 million, or 15%, to $50.2 million for the year ended December 31, 2025 from $43.4 million for the year ended December 31, 2024. The increase was primarily attributable to $4.7 million of higher headcount-related expenses, an increased investment of $3.0 million in software and other tools to support our artificial intelligence and machine learning initiatives. These increases were partially offset by a $1.0 million decrease related to the timing of costs recognized pursuant to our contract with the U.S Army.
General and Administrative
General and administrative expenses increased by $15.7 million, or 75%, to $36.7 million for the year ended December 31, 2025 from $21.0 million for the year ended December 31, 2024. The increase was primarily attributable to $11.2 million of higher headcount-related expenses, which included $3.0 million in stock-based compensation expense associated with the modification of stock option awards in connection with the departure of a company officer for the year ended December 31, 2025. The increase was also driven by an increase of $5.5 million in costs incurred for legal, accounting and other professional services, primarily associated with becoming a public company. These increases were partially offset by reduced facility-related costs of $2.0 million primarily driven by lower leasehold improvements amortization due to assets that became fully amortized for the year ended December 31, 2024.
Truck and Freight Operations
Truck and freight operations expenses increased by $15.8 million, or 175%, to $24.8 million for the year ended December 31, 2025 from $9.0 million for the year ended December 31, 2024. The increase was primarily attributable to $10.0 million of higher headcount-related expenses and $5.0 million in increased operational infrastructure costs, both of which were incurred to support DaaS operations.
Sales and Marketing
Sales and marketing expenses increased by $1.5 million, or 48%, to $4.8 million for the year ended December 31, 2025 from $3.2 million for the year ended December 31, 2024. The increase was primarily attributable to higher headcount-related expenses.
Other (Expenses) Income
Other expenses, net increased by $465.2 million to $472.9 million for the year ended December 31, 2025 from $7.7 million for the year ended December 31, 2024. The increase was primarily attributable to the aggregate loss of $210.7 million on issuance of Series A cumulative redeemable convertible preferred stock, common stock, and common stock warrants. In addition, the change included an increase in expenses driven by the changes in fair value as a result of remeasurement of SAFEs of $186.0 million, common stock warrants of $35.0 million, second lien loans of $24.4 million, and redeemable convertible preferred stock warrant liabilities of $7.7 million for the year ended December 31, 2025 compared to the year ended December 31, 2024. Furthermore, we recognized a $3.2 million loss attributable to transaction costs related to the reverse recapitalization, offset in part by $1.3 million interest income within interest income and other, net during the year ended December 31, 2025.
Liquidity and Capital Resources
Sources of Liquidity
Liquidity describes the ability of a company to generate sufficient cash flows to meet the cash requirements of its business operations, including working capital needs, debt service, acquisitions, contractual obligations and other commitments. We assess liquidity in terms of our cash flows from operations and their sufficiency to fund our operating and investing activities.
For the year ended December 31, 2025, we incurred a net loss of $585.5 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.
As of December 31, 2025, we had cash and cash equivalents and marketable securities totaling $120.7 million, and short-term debt obligations totaled $11.9 million consisting of current portion of debt and second lien loans. We do not anticipate that such cash and cash equivalents and marketable securities will be sufficient to meet our capital requirements for at least one year from the filing date of this Annual Report under our current operating plan. We expect our current cash and cash equivalents and marketable securities to fund our business plan into the fourth quarter of 2026. 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.
As of December 31, 2025, we may receive up to $670.4 million from the exercise in full of all of our outstanding warrants for cash based on the exercise price, or $518.1 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 $12.00 per share. The likelihood that warrant holders will exercise the warrants and any cash proceeds that we would receive is dependent upon the market price of our common stock. To the extent the market price for our common stock is less than the then-effective exercise price per share of any warrants, holders of such warrants will be unlikely to exercise such warrants.
Cash Flows
Year Ended December 31, 2025 compared to Year Ended December 31, 2024
Our cash flows for the periods indicated are summarized in the table below (in thousands):
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
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Net cash (used in) provided by:
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|||||||||||
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Operating activities
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$ | (94,442) | $ | (50,961) | |||||||
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Investing activities
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(91,432) | (3,212) | |||||||||
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Financing activities
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219,926 | 43,126 | |||||||||
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Net change in cash and cash equivalents and restricted cash
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$ | 34,052 | $ | (11,047) | |||||||
Operating Activities
Net cash used in operating activities for the year ended December 31, 2025 was $94.4 million and consisted of a net loss of $585.5 million and a $4.4 million change in our operating assets and liabilities, partially offset by $495.5 million in non-cash adjustments. Non-cash adjustments primarily consisted of an aggregate loss of $210.7 million on issuance of Series A cumulative redeemable convertible preferred stock, common stock, and common stock warrants,
$190.1 million in the change in fair value of SAFEs, $35.0 million in the change in fair value of common stock warrants, $24.4 million in the change in fair value of second lien loans, $19.1 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, $3.2 million in depreciation and amortization, and $1.9 million in non-cash lease expense. The change in our operating assets and liabilities was primarily due to a $2.2 million increase in our prepaid expenses and other current assets primarily due to the timing of payments, $1.9 million decrease in operating lease liabilities, and a $1.1 million decrease in our accounts payable and accrued expenses and other current liabilities due to the timing of payments.
Net cash used in operating activities for the year ended December 31, 2024 was $51.0 million and consisted of a net loss of $69.5 million, partially offset by a $16.1 million in non-cash adjustments, and a $2.4 million change in our operating assets and liabilities. Non-cash adjustments primarily consisted of $5.6 million in stock-based compensation, $4.6 million in depreciation and amortization, $4.1 million in change in fair value of SAFEs, and $1.8 million in non-cash lease expense. The change in our operating assets and liabilities was primarily due to an increase of $5.1 million in our
accrued expenses and other current liabilities due to the timing of payments, partially offset by a $1.8 million decrease in operating lease liabilities, and a $1.0 million increase in our account receivables due to timing.
Investing Activities
Net cash used in investing activities for the year ended December 31, 2025 was $91.4 million, consisting of $69.4 million in purchase of marketable securities and $22.0 million in purchases of property and equipment.
Net cash used in investing activities for the year ended December 31, 2024 was $3.2 million and primarily related to purchases of property and equipment.
Financing Activities
Net cash provided by financing activities for the year ended December 31, 2025 was $219.9 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, $29.7 million in proceeds from issuance of debt, net of issuance costs, $26.2 million in proceeds from the reverse recapitalization, net of transaction costs, $23.7 million in proceeds from the issuance of SAFEs, and $1.4 million from exercise of stock options, partially offset by $33.4 million for the repayment of debt obligations and $16.6 million payments for deferred offering costs.
Net cash provided by financing activities for the year ended December 31, 2024 was $43.1 million and primarily consisted of $45.2 million in proceeds from the issuance of SAFEs, partially offset by $2.2 million for the repayment of debt obligations.
Contractual Obligations and Other Commitments
Debt Agreements
2025 Second Lien Credit Facility
Concurrent with the execution of the BCA in April 2025, we entered into a Second Lien Loan and Security Agreement. Certain institutional and accredited investors committed to providing bridge financing in the form of secured convertible notes, which was subsequently amended to extend the deadline to fund the delayed draw second lien loans and to include additional investors. Prior to the Closing, $53.9 million had been funded, including $10.0 million from the exchange of a SAFE from an affiliate of AACT (the "Exchanged SAFE Loan"). The second lien loans carry a prime plus 9.00% per annum interest rate, subject to a minimum rate of 13.75%, which interest is paid in kind and capitalized and mature on October 1, 2026. In March 2026, we amended the Second Lien Loan and Security Agreement to make certain conforming changes on account of us becoming a public company and to join Kodiak AI, Inc. as a borrower. Other than the Exchanged SAFE Loan, borrowings under the Second Lien Loan and Security Agreement automatically converted immediately prior to the consummation of the Merger into Legacy Kodiak common stock, which subsequently converted into shares of our common stock. As such, as of December 31, 2025, the $10.0 million Exchanged SAFE Loan remains outstanding.
Promissory Notes
From April through August 2025, we issued secured promissory notes with respect to our reimbursement obligations to AACT and the Sponsor, which were secured under the Second Lien Loan and Security Agreement. At the Closing, the aggregate outstanding principal amount of the promissory notes was $4.9 million, which was paid in full. As such, no amounts remain outstanding under such promissory notes as of December 31, 2025.
2025 Credit Facility
In September 2022, we entered into a venture loan and security agreement (the "2022 Credit Facility") with an affiliate of Horizon Technology Finance Corporation to borrow secured term loans of up to an aggregate principal amount of $30.0 million. In December 2025, the 2022 Credit Facility was amended to increase our available borrowings and extend the maturity date (the "2025 Credit Facility"). The 2025 Credit Facility provided for borrowings in secured term loans up to an aggregate principal amount of $30.0 million, which was drawn in full upon execution. The proceeds (i) were used to
repay existing indebtedness under the 2022 Credit Facility related to the outstanding principal balance of $15.0 million and the final repayment fee of $1.2 million and (ii) will be used for working capital and general corporate purposes.
As of December 31, 2025, we had outstanding term loans under the 2025 Credit Facility in an aggregate principal amount of $30.0 million. Borrowings under the 2025 Credit Facility mature in January 2030 and provide for interest-only payments from February 1, 2026 to July 1, 2028. Consecutive payments of principal and interest are due beginning on August 1, 2028 once the interest-only period elapses. Outstanding loans bear interest that is payable monthly at 3.50% plus the greater of (i) 6.50% and (ii) the prime rate. A final payment of $1.2 million is due upon the earlier of prepayment or maturity of the debt.
2022 Equipment Financing
In July 2022, we entered into a financing agreement with a lender, Western Alliance Equipment Finance, LLC, to borrow up to $10.0 million as secured equipment line advances (the "2022 Equipment Facility"). As of December 31, 2025, we had outstanding debt under the 2022 Equipment Facility in an aggregate principal amount of $1.9 million at an interest rate ranging from approximately 6.0% to 7.0%, of which $1.1 million is due within one year. The 2022 Equipment Facility matures on March 1, 2028.
Each of our credit facilities contains a number of customary affirmative and negative covenants. Among other things, those covenants limit or restrict our ability to: incur additional indebtedness, including guaranty obligations; incur liens; engage in mergers, consolidations, liquidations and dissolutions; sell assets; pay dividends and make other payments in respect of capital stock; make acquisitions, investments, loans and advances; make payments on or modify the terms of certain existing indebtedness; engage in certain transactions with affiliates; enter into negative pledge clauses with respect to our intellectual property; and change our line of business, in each case, subject to certain limited exceptions. As of December 31, 2025, we were in compliance with all covenants under our debt agreements.
See Note 8 to our consolidated financial statements included in Part II, Item 8 of this Annual Report for additional information regarding our debt agreements.
Other Commitments
Our other cash requirements greater than a one-year period as of December 31, 2025 were related to leases and certain purchase commitments with our service providers.
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 December 31, 2025, the total undiscounted future lease payments under our operating leases were $7.1 million.
We may enter into purchase commitments with our service providers. As of December 31, 2025, the total purchase commitments under such vendor agreements were $7.4 million.
See Note 7 and Note 10 in our consolidated financial statements included in Part II, Item 8 of this Annual Report for additional information regarding our leases and other commitments, respectively.
Emerging Growth Company Status
We are an "emerging growth company," as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies." These include not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.
In addition, Section 107 of the JOBS Act also provides that an "emerging growth company" can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an "emerging growth company" can delay the adoption of certain accounting
standards until those standards would otherwise apply to private companies. We intend to continue to take advantage of the benefits of this extended transition period.
We expect to remain an emerging growth company until the earlier of (1) the last day of the year (i) following April 4, 2028, which is the fifth anniversary of the effective date of AACT's IPO registration statement, (ii) in which we have total annual gross revenue of at least $1.235 billion, or (iii) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates equals or exceeds $700.0 million as of the prior June 30, or (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.
We had elected to use the extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. The JOBS Act does not preclude an emerging growth company from adopting a new or revised accounting standard earlier than the time that such standard applies to private companies. We expect to continue to use the extended transition period for any other new or revised accounting standards during the period in which we remain an emerging growth company.
Critical Accounting Estimates
Our management's discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of our 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.
We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management's judgments and estimates.
Revenue Recognition
We generate revenue from licensing the Kodiak Driver to its customers under its DaaS model, the delivery of freight via its own Kodiak Driver-powered trucks and the provision of services to the U.S. military to automate ground vehicles. We recognize revenue when customers obtain control of promised goods or services in an amount that reflects the consideration it expects to receive for those goods or services. We apply the following five-step revenue recognition model in accounting for its revenue arrangements:
•identification of the contract, or contracts, with a customer;
•identification of the performance obligations in the contract;
•determination of the transaction price;
•allocation of the transaction price to the performance obligations in the contract; and
•recognition of revenue when, or as, the performance obligations are satisfied.
Our performance obligations for our initial revenues have primarily been satisfied upon a point in time when control is transferred to our customers.
Our management may be required to exercise considerable judgment in estimating revenue to be recognized. Judgment is required in identifying performance obligations and whether there are multiple promises that should be a combined performance obligation. Generally, our performance obligations consist of either a single distinct good or service, or a combination of goods or services that are bundled together and accounted for as a single performance obligation when they are not separately identifiable. Additionally, evaluating how control is transferred, when or as performance obligations are satisfied can require significant judgment.
Stock-based Compensation
We estimate the fair value of stock options granted under our equity incentive plan on the grant date using the Black-Scholes option pricing model, which requires us to make a number of assumptions. See Note 14 of our consolidated financial statements included in Part II, Item 8 of this report for a complete discussion of our stock-based compensation plans. The grant-date fair value of stock-based awards is generally recognized on a straight-line basis over the requisite service period, which is generally the vesting period of the awards.
The Black-Scholes option pricing model requires the use of subjective assumptions to determine the fair value of stock-based awards including:
•Fair Value of Common Stock - Prior to the Merger, there had been no public market for our common stock. Therefore, management and/or the board of directors had historically determined the fair market value of our common stock at the time of grant by considering a number of objective and subjective factors, including valuations of comparable companies, sales of redeemable convertible preferred stock to unrelated third parties, operating and financial performance, lack of liquidity of capital stock and general and industry-specific economic outlook, among other factors.
•Expected Term- The expected term represents the period that our stock-based awards are expected to be outstanding and is determined using the simplified method. The simplified method calculates the expected term as the average of the time-to-vesting and the contractual life of the award.
•Expected Volatility - As there is limited trading history for our common stock, expected volatility is determined based on the average volatility of comparable publicly traded companies over a period equal to the expected term assumption. Comparable companies are chosen based on their similar size, stage in the life cycle or industry.
•Risk-Free Interest Rate- The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of award.
•Expected Dividend - The expected dividend yield assumption is zero as we have never paid and have no plans to pay dividends on our common stock in the foreseeable future.
These assumptions involve inherent uncertainties and the application of significant judgment. As a result, if factors or expected outcomes change and we use significantly different assumptions or estimates, our stock-based compensation expense could be materially different.
Valuation of Financial Instruments
We have issued certain financial instruments, such as second lien loans, SAFEs, redeemable convertible preferred stock warrant liabilities, and common stock warrant liabilities that require (i) a higher degree of judgment in estimating their fair values as of each reporting period and (ii) the use of valuation models that are dependent on management estimates and assumptions, primarily related to expected volatility, expected term, probabilities of triggering events, discount rates and risk-free interest rates. Generally, expected volatility is determined based on the historical equity volatility of comparable companies over a period that matches the expected term of the instrument. The expected term is based on the contractual term or management's best estimate based on the timing of certain events. The probability of a triggering event is based on management's best estimate of the events occurring. The discount interest rate is generally based on the rate implied by the transaction as well as comparable companies and the risk-free interest rate is based on relevant U.S. Treasury rates for a period that matches the expected term of the instrument. If actual results are not consistent with our estimates or assumptions, the valuations underlying the issued financial instruments could be materially different.
Recent Accounting Pronouncements
See Note 2 of our consolidated financial statements included in Part II, Item 8 of this Annual Report for more information about recent accounting pronouncements that may potentially have an impact on our financial position, results of operations or cash flows.
One Big Beautiful Bill Act
In July 2025, the One Big Beautiful Bill Act ("OBBBA") was signed into law. The Company evaluated the potential impact of the OBBBA legislation on its financial position, results of operations and cash flows. However, due to the Company's taxable loss position and valuation allowance on its deferred tax assets, the OBBBA did not have a material impact on its financial statements.
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