Aurora Innovation, Inc. Quarterly report [Sections 13 or 15(d)]

Quarterly report [Sections 13 or 15(d)]

Derivative Liabilities

Derivative Liabilities

3 Months Ended

Mar. 31, 2025

Derivative Instruments and Hedging Activities Disclosure [Abstract]

The components of derivative liabilities measured at fair value on a recurring basis were as follows (in millions):


		As of
	Fair value level	March 31, 2025		December 31, 2024
Public warrants	Level 1	$	17	$	13
Private placement warrants	Level 2	12		9
Common stock warrants		29		22
Earnout share liabilities	Level 3	28		26
Total derivative liabilities		$	57	$	48

The public and private placement warrants are measured at fair value on a recurring basis. The public warrants were valued based on the closing price of the publicly traded instrument. The private placement warrants were valued using observable inputs for similar publicly traded instruments. Public warrants outstanding were 12 million as of March 31, 2025 and December 31, 2024. Private placement warrants outstanding were 9 million as of March 31, 2025 and December 31, 2024.

The earnout share liabilities are measured at fair value on a recurring basis utilizing a Monte Carlo simulation analysis. The expected volatility is determined based on a blended rate of our historical equity volatility as well as the historical equity volatility of comparable companies over a period that matches the expected term of the instrument. The risk-free interest rate is based on relevant U.S. treasury rates for a period that matches the expected term of the instrument. Earnout shares outstanding were 5 million as of March 31, 2025 and December 31, 2024.

The valuation inputs utilized in determining the earnout share liability were as follows:


	As of
	March 31, 2025		December 31, 2024
Risk-free interest rates	4.1	%	4.5	%
Expected term (in years)	6.6		6.8

Expected volatility	64.0	%	64.0	%

The components of change in fair value of derivative liabilities were as follows (in millions):


	Three Months Ended March 31,
	2025		2024
Common stock warrants	$	(7)	$	5
Earnout share liabilities	(2)		7
Change in fair value of derivative liabilities	$	(9)	$	12