Ouster Reports Record Performance for Third Quarter 2024

Business Wire 7-Nov-2024 4:05 PM

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

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

• $28 million in revenue, up 26% year over year and 4% sequentially.
• Shipped over 3,900 sensors for revenue.
• GAAP gross margin of 38%, compared to 14% in the third quarter of 2023 and 34% in the second quarter of 2024.
• Non-GAAP gross margin¹ of 45%, compared to 33% in the third quarter of 2023 and 40% in the second quarter of 2024.
• Net loss of $26 million, compared to $35 million in the third quarter of 2023 and $24 million in the second quarter of 2024.
• Adjusted EBITDA¹ loss of $10 million, compared to $18 million in the third quarter of 2023 and $11 million in the second quarter of 2024.
• Repaid all outstanding balances under revolving credit line utilizing cash on hand.
• Cash, cash equivalents, restricted cash, and short-term investments balance of $154 million as of September 30, 2024.

"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:

• Craig-Hallum Alpha Select Conference - New York City, November 19th, 2024
• ROTH Technology Conference - New York City, November 20th, 2024
• Wolfe Research Small and Mid-Cap Conference - Virtual, December 5th, 2024
• Northland Growth Conference 2024 - Virtual, December 12th, 2024

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.

^{_________________________ 1}Adjusted 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.

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