Ouster Reports Record Performance for Third Quarter 2024
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Ouster Reports Record Performance for Third Quarter 2024

Record revenue of $28 million, GAAP gross margin of 38%, and non-GAAP gross margin of 45%

SAN FRANCISCO — (BUSINESS WIRE) — November 7, 2024 — Ouster, Inc. (NYSE: OUST) (“Ouster” or the “Company”), a leading global provider of high-performance lidar sensors and software solutions for the automotive, industrial, robotics, and smart infrastructure industries, announced today financial results for the third quarter ended September 30, 2024.

Third Quarter 2024 Highlights

“I’m proud of our third quarter results, which set new record levels of revenue, gross margin, and adjusted EBITDA. Our customers continue to adopt our REV7 sensors to harness enhanced range, accuracy, and precision. More customers are moving into production, with robotics and smart infrastructure deals representing the largest wins during the quarter,” said Ouster CEO Angus Pacala. “The third quarter also reflected our focus on growing our software installed base. We achieved our highest level of software-attached sales to date, helping to enhance the efficiency and security of yard logistics and increase road safety around the world.”

Revenue in the third quarter was primarily driven by customers in the robotics and smart infrastructure verticals for use cases in perimeter security, mapping, and last mile delivery. GAAP gross margin improved by over 2400 basis points year over year and benefited from higher revenues, favorable product mix, and fewer costs related to inventory charges and purchase commitments. Non-GAAP gross margin increased to 45% compared to 33% in the third quarter of 2023. Non-GAAP gross margin excludes the impact of stock-based compensation expenses and certain other expenses outside of ordinary operations. During the quarter, Ouster repaid all outstanding balances on its revolving credit line utilizing cash on hand.

2024 Business Objective Updates

  1. Expand software solutions and grow the installed base
  2. Advance the development of digital lidar hardware
  3. Progress on the long-term financial framework

Expand software solutions and grow the installed base: In the third quarter, Ouster BlueCity achieved NEMA TS2 certification, the industry standard for safe traffic control, making it the first certified solution with Buy America(n) certified lidar. During the quarter, Ouster also integrated Ouster Gemini, its digital lidar perception platform, with Genetec Security Center, enabling customers to fuse lidar and video surveillance into a single interface for seamless security operations.

Advance the development of digital lidar hardware: During the third quarter, Ouster turned on its first “L4” powered OS sensor prototypes, which generated rich point clouds, achieving a major milestone in its next generation hardware. Development on the Company’s next generation “Chronos” chip remains on track. Both L4 and Chronos are expected to unlock new verticals while significantly enhancing the performance, reliability, and manufacturability of the Ouster product family.

Progress on the long-term financial framework: Ouster reached its target of 35-40% gross margin in the third quarter. The Company continues to execute on its path to profitability, and remains committed to deliver on its long-term framework of 30-50% annual revenue growth, keeping gross margin at 35-40%, and maintaining operating expenses at or below third quarter 2023 levels.

Fourth Quarter 2024 Outlook

For the fourth quarter of 2024, Ouster expects to achieve $29 million to $31 million in revenue.

Upcoming Investor Events

Ouster management will participate in the following upcoming investor events:

Conference Call Information

Ouster will host a conference call and live webcast for analysts and investors at 5:00 p.m. ET today, November 7, 2024 to discuss its financial results and business outlook. To access the call, please register at https://registrations.events/direct/Q4I934287818.

Upon registering, each participant will be provided with call details and a registrant ID. The webcast and related presentation materials will be accessible for at least 30 days on Ouster’s investor relations website at https://investors.ouster.com. A telephone replay of the call will be available 2 hours after the call ends, and can be accessed via phone through November 14, 2024 by dialing (800) 770-2030 from the U.S. or +1 (609) 800-9909 from outside the U.S. The conference I.D. number is 93428.

About Ouster

Ouster (NYSE: OUST) is a leading global provider of high-resolution scanning and solid-state lidar sensors and software solutions for the automotive, industrial, robotics, and smart infrastructure industries. Ouster is on a mission to build a safer and more sustainable future by offering affordable, high-performance sensors that drive mass adoption across a wide variety of applications. Ouster is headquartered in San Francisco, CA with offices in the Americas, Europe, and Asia-Pacific. For more information about our products, visit www.ouster.com, contact our sales team, or connect with us on X or LinkedIn.

_________________________
1Adjusted EBITDA loss and non-GAAP gross margin are non-GAAP financial measures. See Non-GAAP Financial Measures for additional information and reconciliations of these measures to their respective most directly comparable financial measures calculated in accordance with U.S. GAAP.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are based upon current plans, estimates and expectations of management that are subject to various risks and uncertainties that could cause actual results to differ materially from such statements. The inclusion of forward-looking statements should not be regarded as a representation that such plans, estimates and expectations will be achieved. Words such as “anticipate,” “expect,” “project,” “intend,” “believe,” “may,” “will,” “should,” “plan,” “could,” “continue,” “target,” “contemplate,” “estimate,” “forecast,” “guidance,” “predict,” “possible,” “potential,” “pursue,” “likely,” and the negative of these terms and similar expressions are intended to identify forward-looking statements, though not all forward-looking statements use these words or expressions. All statements, other than statements of historical fact, including statements regarding Ouster’s revenue guidance for the fourth quarter of 2024; anticipated new product launches and developments; Ouster’s future results of operations and financial position; the anticipated timing and development of Ouster’s next generation hardware and software solutions; the execution against the Company’s product roadmap and demand for products; the Company’s path to profitability and long-term financial framework; industry and business trends; Ouster’s business objectives, plans, strategic partnerships, and market growth; Ouster’s competitive market position; and Ouster’s participation in upcoming events and presentations, all constitute forward-looking statements. All forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that we expected, including, but not limited to, risks related to Ouster’s limited operating history and history of losses; fluctuations in its operating results; the substantial research and development costs needed to develop and commercialize new products; its ability to maintain competitive average selling prices, high sales volumes and reduce product costs; competition in Ouster's industry; the negotiating power and product standards of its customers; the adoption of its products and the growth of the lidar market generally; product quality and liability risks; Ouster’s future capital needs and ability to secure additional capital on favorable terms or at all; its ability to manage growth, including growing the sales and marketing organization; risks related to international operations, including international manufacturing; cancellation or postponement of contracts or unsuccessful implementations; the Company's ability to manage its inventory; credit risk of customers; Ouster's ability to use tax attributes; Ouster’s dependence on key third party suppliers, in particular Benchmark Electronics, Inc., Fabrinet, and other suppliers; supply chain constraints and challenges; conditions in the industries the Company targets or the global economy; the ability of its lidar technology roadmap and new software solutions to catalyze growth; Ouster’s ability to recruit and retain key personnel; its ability to successfully integrate its business with Velodyne and achieve the anticipated benefits of the Velodyne merger; Ouster’s ability to adequately protect and enforce its intellectual property rights, including as it relates to Hesai Group; legal and regulatory risks; risks related to operating as a public company; and other important factors discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, as may be further updated from time to time in the Company’s other filings with the SEC. Readers are urged to consider these factors carefully and in the totality of the circumstances when evaluating these forward-looking statements, and not to place undue reliance on any of them. Any such forward-looking statements represent management’s reasonable estimates and beliefs as of the date of this press release. While Ouster may elect to update such forward-looking statements at some point in the future, it disclaims any obligation to do so, other than as may be required by law, even if subsequent events cause its views to change.

In addition, see information below concerning non-GAAP financial measures.

Non-GAAP Financial Measures

In addition to its results determined in accordance with generally accepted accounting principles in the United States (“GAAP”), Ouster believes the non‑GAAP measures of Non-GAAP Gross Margin and Adjusted EBITDA are useful in evaluating its operating performance. Ouster calculates Non-GAAP Gross Profit as gross profit (loss) excluding amortization of acquired intangibles, certain excess and obsolete expenses and losses on firm purchase commitments, and stock-based compensation expense. Non-GAAP Gross Margin is calculated as Non-GAAP Gross Profit divided by revenues. Ouster calculates Adjusted EBITDA as net loss excluding interest expense (income), net, other expense (income), net, stock-based compensation expense, provision for income tax expense, goodwill impairment charges, restructuring costs excluding stock-based compensation expense, certain excess and obsolete expenses and loss on firm purchase commitments, amortization of acquired intangibles, depreciation expense, certain litigation and litigation related expenses, merger and acquisition related expenses. Ouster believes that Non-GAAP Gross Profit, Non-GAAP Gross Margin, and Adjusted EBITDA may be helpful to investors because it provides consistency and comparability with past financial performance and may be helpful in comparison with other companies, some of which use similar non‑GAAP information to supplement their GAAP results. Adjusted EBITDA is also used by the Board and management as a performance metric for compensation purposes. The non-GAAP financial information is presented for supplemental informational purposes only, and should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from similarly titled non‑GAAP measures used by other companies. Reconciliation tables of the most comparable GAAP financial measures to the non-GAAP financial measures are included at the end of this press release.

 
OUSTER, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands)
 

September 30,

2024

December 31,

2023

Assets
Current assets:
Cash and cash equivalents

$

44,388

 

$

50,991

 

Restricted cash, current

 

439

 

 

552

 

Short-term investments

 

107,045

 

 

139,158

 

Accounts receivable, net

 

18,412

 

 

14,577

 

Inventory

 

18,625

 

 

23,232

 

Prepaid expenses and other current assets

 

11,252

 

 

34,647

 

Total current assets

 

200,161

 

 

263,157

 

Property and equipment, net

 

8,836

 

 

10,228

 

Operating lease, right-of-use assets

 

15,607

 

 

18,561

 

Unbilled receivable, non-current portion

 

7,214

 

 

10,567

 

Intangible assets, net

 

19,172

 

 

24,436

 

Restricted cash, non-current

 

1,892

 

 

1,091

 

Other non-current assets

 

2,344

 

 

2,703

 

Total assets

$

255,226

 

$

330,743

 

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable

$

5,862

 

$

3,545

 

Accrued and other current liabilities

 

28,907

 

 

58,166

 

Contract liabilities, current

 

22,121

 

 

12,885

 

Operating lease liability, current portion

 

7,244

 

 

7,096

 

Total current liabilities

 

64,134

 

 

81,692

 

Operating lease liability, non-current portion

 

14,693

 

 

18,827

 

Debt

 

—

 

 

43,975

 

Contract liabilities, non-current portion

 

3,356

 

 

4,967

 

Other non-current liabilities

 

1,294

 

 

1,610

 

Total liabilities

 

83,477

 

 

151,071

 

Commitments and contingencies
Stockholders’ equity:
Common stock

 

47

 

 

42

 

Additional paid-in capital

 

1,061,180

 

 

995,464

 

Accumulated deficit

 

(889,334

)

 

(816,026

)

Accumulated other comprehensive (loss) income

 

(144

)

 

192

 

Total stockholders’ equity

 

171,749

 

 

179,672

 

Total liabilities and stockholders’ equity

$

255,226

 

$

330,743

 

 
OUSTER, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(unaudited)
(in thousands, except share and per share data)
     

Three Months Ended

September 30,

 

Three Months

Ended June 30,

 

Nine Months Ended

September 30,

 

2024

 

 

2023

 

 

 

2024

 

 

 

2024

 

 

2023

 

Revenue

$

28,075

 

$

22,209

 

 

$

26,990

 

 

$

81,009

 

$

58,835

 

Cost of revenue

 

17,321

 

 

19,116

 

 

 

17,892

 

 

 

53,732

 

 

55,932

 

Gross profit

 

10,754

 

 

3,093

 

 

 

9,098

 

 

 

27,277

 

 

2,903

 

Operating expenses:    
Research and development

 

15,127

 

 

16,678

 

 

 

14,432

 

 

 

43,365

 

 

75,584

 

Sales and marketing

 

7,197

 

 

7,887

 

 

 

6,750

 

 

 

20,807

 

 

33,086

 

General and administrative

 

15,938

 

 

14,270

 

 

 

13,166

 

 

 

41,684

 

 

63,437

 

Goodwill impairment charges

 

—

 

 

—

 

 

 

—

 

 

 

—

 

 

166,675

 

Total operating expenses

 

38,262

 

 

38,835

 

 

 

34,348

 

 

 

105,856

 

 

338,782

 

Loss from operations

 

(27,508

)

 

(35,742

)

 

 

(25,250

)

 

 

(78,579

)

 

(335,879

)

Other income (expense):    
Interest income

 

2,149

 

 

2,495

 

 

 

2,251

 

 

 

7,051

 

 

6,459

 

Interest expense

 

(342

)

 

(1,825

)

 

 

(740

)

 

 

(1,823

)

 

(5,222

)

Other income (expense), net

 

74

 

 

(13

)

 

 

(7

)

 

 

260

 

 

(124

)

Total other income, net

 

1,881

 

 

657

 

 

 

1,504

 

 

 

5,488

 

 

1,113

 

Loss before income taxes

 

(25,627

)

 

(35,085

)

 

 

(23,746

)

 

 

(73,091

)

 

(334,766

)

Provision for income tax expense (benefit)

 

(37

)

 

17

 

 

 

123

 

 

 

217

 

 

349

 

Net loss

$

(25,590

)

$

(35,102

)

 

$

(23,869

)

 

$

(73,308

)

$

(335,115

)

Other comprehensive income (loss)    
Changes in unrealized gain (loss) on available for sale securities

$

298

 

$

63

 

 

$

(45

)

 

$

(206

)

$

40

 

Foreign currency translation adjustments

 

335

 

 

(213

)

 

 

(293

)

 

 

(130

)

 

(271

)

Total comprehensive loss

$

(24,957

)

$

(35,252

)

 

$

(24,207

)

 

$

(73,644

)

$

(335,346

)

Net loss per common share, basic and diluted

$

(0.54

)

$

(0.89

)

 

$

(0.53

)

 

$

(1.62

)

$

(9.39

)

Weighted-average shares used to compute basic and diluted net loss per share

 

47,684,363

 

 

39,228,118

 

 

 

44,737,769

 

 

 

45,287,763

 

 

35,670,408

 

     
OUSTER, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
 

Nine Months Ended September 30,

 

2024

 

 

2023

 

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss

$

(73,308

)

$

(335,115

)

Adjustments to reconcile net loss to net cash used in operating activities:
Goodwill impairment charges

 

—

 

 

166,675

 

Depreciation and amortization

 

7,843

 

 

14,290

 

Loss on write-off and disposal of property and equipment and right-of-use asset impairment

 

468

 

 

1,175

 

Gain on lease termination

 

—

 

 

(807

)

Stock-based compensation

 

31,618

 

 

46,618

 

Reduction of revenue related to stock warrant issued to customer

 

861

 

 

288

 

Amortization of right-of-use asset

 

3,606

 

 

3,268

 

Interest expense

 

—

 

 

1,112

 

Amortization of debt issuance costs and debt discount

 

—

 

 

190

 

Accretion or amortization on short-term investments

 

(4,239

)

 

(3,303

)

Change in fair value of warrant liabilities

 

(191

)

 

(67

)

Inventory write down

 

756

 

 

8,223

 

Provision (recovery of) for doubtful accounts

 

(894

)

 

1,015

 

Realized gain on available for sale securities

 

(275

)

 

—

 

Changes in operating assets and liabilities:
Accounts receivable

 

412

 

 

4,498

 

Inventory

 

3,851

 

 

(4,474

)

Prepaid expenses and other assets

 

22,499

 

 

676

 

Accounts payable

 

2,338

 

 

(4,112

)

Accrued and other liabilities

 

(29,466

)

 

(10,229

)

Contract liabilities

 

7,625

 

 

410

 

Operating lease liability

 

(4,637

)

 

(4,034

)

Net cash used in operating activities

 

(31,133

)

 

(113,703

)

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property and equipment

 

668

 

 

560

 

Purchases of property and equipment

 

(2,307

)

 

(2,633

)

Purchase of short-term investments

 

(85,585

)

 

(82,021

)

Proceeds from sales of short-term investments

 

122,082

 

 

115,481

 

Cash and cash equivalents acquired in the Velodyne Merger

 

—

 

 

32,137

 

Net cash provided by investing activities

 

34,858

 

 

63,524

 

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from ESPP purchase

 

781

 

 

310

 

Proceeds from exercise of stock options

 

170

 

 

243

 

Repayment of borrowings

 

(43,975

)

 

—

 

Proceeds from the issuance of common stock under at-the-market offering, net of commissions and fees

 

33,792

 

 

2,936

 

At-the-market offering costs for the issuance of common stock

 

(202

)

 

(104

)

Net cash (used) provided by financing activities

 

(9,434

)

 

3,385

 

Effect of exchange rates on cash and cash equivalents

 

(206

)

 

(269

)

Net decrease in cash, cash equivalents and restricted cash

 

(5,915

)

 

(47,063

)

Cash, cash equivalents and restricted cash at beginning of period

 

52,634

 

 

124,278

 

Cash, cash equivalents and restricted cash at end of period

$

46,719

 

$

77,215

 

 
OUSTER, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(unaudited)
(in thousands)
     

Three Months Ended

September 30,

 

Three Months

Ended June 30,

 

Nine Months Ended

September 30,

 

2024

 

 

2023

 

 

 

2024

 

 

 

2024

 

 

2023

 

GAAP net loss

$

(25,590

)

$

(35,102

)

 

$

(23,869

)

 

$

(73,308

)

$

(335,115

)

Interest income, net

 

(1,807

)

 

(670

)

 

 

(1,511

)

 

 

(5,228

)

 

(1,237

)

Other expense (income), net

 

(74

)

 

13

 

 

 

7

 

 

 

(260

)

 

124

 

Stock-based compensation(1)

 

11,519

 

 

8,372

 

 

 

10,695

 

 

 

31,618

 

 

46,618

 

Provision for income tax (benefit) expense

 

(37

)

 

17

 

 

 

123

 

 

 

217

 

 

349

 

Goodwill impairment charge

 

—

 

 

—

 

 

 

—

 

 

 

—

 

 

166,675

 

Restructuring costs, excluding stock-based compensation expense

 

—

 

 

—

 

 

 

—

 

 

 

—

 

 

15,977

 

Excess and obsolete expenses and loss on firm purchase commitments

 

—

 

 

3,187

 

 

 

—

 

 

 

572

 

 

10,567

 

Amortization of acquired intangibles(2)

 

1,759

 

 

1,759

 

 

 

1,661

 

 

 

5,174

 

 

4,972

 

Depreciation expense(2)

 

687

 

 

1,739

 

 

 

839

 

 

 

2,579

 

 

9,131

 

Litigation expenses(3)

 

4,221

 

 

3,536

 

 

 

1,636

 

 

 

7,153

 

 

7,437

 

Merger and acquisition related expenses(4)

 

—

 

 

—

 

 

 

—

 

 

 

—

 

 

6,058

 

Other items

 

(513

)

 

(1,256

)

 

 

(114

)

 

 

(627

)

 

(1,256

)

Adjusted EBITDA

$

(9,835

)

$

(18,405

)

 

$

(10,533

)

 

$

(32,111

)

$

(69,699

)

     
(1)Includes stock-based compensation expense as follows:

Three Months Ended

September 30,

 

Three Months

Ended June 30,

 

Nine Months Ended

September 30,

 

2024

 

 

2023

 

 

 

2024

 

 

 

2024

 

 

2023

 

Cost of revenue

$

1,345

 

$

570

 

 

$

1,210

 

 

$

3,468

 

$

1,998

 

Research and development

 

5,241

 

 

4,056

 

 

 

4,650

 

 

 

14,079

 

 

19,765

 

Sales and marketing

 

1,308

 

 

1,345

 

 

 

1,492

 

 

 

4,200

 

 

7,726

 

General and administrative

 

3,625

 

 

2,401

 

 

 

3,343

 

 

 

9,871

 

 

17,129

 

Total stock-based compensation

$

11,519

 

$

8,372

 

 

$

10,695

 

 

$

31,618

 

$

46,618

 

     
(2)Includes depreciation and amortization expense as follows:

Three Months Ended

September 30,

 

Three Months

Ended June 30,

 

Nine Months Ended

September 30,

 

2024

 

 

2023

 

 

 

2024

 

 

 

2024

 

 

2023

 

Cost of revenue

$

971

 

$

1,156

 

 

$

999

 

 

$

3,070

 

$

4,678

 

Research and development

 

634

 

 

740

 

 

 

670

 

 

 

2,016

 

 

4,596

 

Sales and marketing

 

250

 

 

250

 

 

 

249

 

 

 

747

 

 

690

 

General and administrative

 

591

 

 

1,352

 

 

 

582

 

 

 

1,920

 

 

4,139

 

Total depreciation and amortization expense

$

2,446

 

$

3,498

 

 

$

2,500

 

 

$

7,753

 

$

14,103

 

     
(3)Litigation expenses and litigation-related expenses outside of the Company’s ordinary business operations
(4)Merger and acquisition related expenses represent transaction costs for the Velodyne Merger which include legal and accounting professional service fees
     

Three Months Ended

September 30,

 

Three Months

Ended June 30,

 

Nine Months Ended

September 30,

 

2024

 

 

2023

 

 

 

2024

 

 

 

2024

 

 

2023

 

Gross profit on GAAP basis

$

10,754

 

$

3,093

 

 

$

9,098

 

 

$

27,277

 

$

2,903

 

Stock-based compensation

 

1,345

 

 

570

 

 

 

1,210

 

 

 

3,468

 

 

1,998

 

Amortization of acquired intangible assets

 

467

 

 

467

 

 

 

371

 

 

 

1,302

 

 

1,127

 

Excess and obsolete expenses and loss on firm purchase commitments

 

—

 

 

3,187

 

 

 

—

 

 

 

572

 

 

10,567

 

Gross profit on non-GAAP basis

$

12,566

 

$

7,317

 

 

$

10,679

 

 

$

32,619

 

$

16,595

 

     
Gross margin on GAAP basis

 

38

%

 

14

%

 

 

34

%

 

 

34

%

 

5

%

Gross margin on non-GAAP basis

 

45

%

 

33

%

 

 

40

%

 

 

40

%

 

28

%

 


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