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Ouster Achieves 2022 Guidance, Reporting 22% Full Year Revenue Growth

23 March 2023
  • $41 million in revenue with 27% gross margins in 2022
  • Secured company record $70 million in bookings in 2022
  • Shipped new REV7 sensors with double the range to 29 customers in the fourth quarter 2022
  • Completed merger of equals with Velodyne in February 2023 to strengthen financial position

SAN FRANCISCO / Mar 23, 2023 / Business Wire / Ouster, Inc. (NYSE: OUST) (“Ouster” or the “Company”), a leading provider of high-performance lidar sensors for the automotive, industrial, robotics, and smart infrastructure industries, announced financial results for the year end and three months ended December 31, 2022.

Fourth Quarter 2022 Highlights1

  • $11 million in revenue, down 8% year over year.
  • 17% gross margins, compared to 30% in fourth quarter 2021.
  • Shipped a record of over 2,950 sensors for revenue in the fourth quarter, up 23% year over year.
  • Net loss increased to $42 million in the fourth quarter of 2022, compared to $28 million in the fourth quarter of 2021.
  • Adjusted EBITDA2 loss decreased to $23 million, compared to a loss of $24 million in the fourth quarter of 2021.

Full Year 2022 Financial Highlights1

  • Achieved 2022 guidance with $41 million in revenue and 27% gross margins.
  • Booked $70 million in business with new and existing customers in 2022.
  • Shipped over 8,650 sensors for revenue in 2022, totaling over 18,500 sensors shipped to date.
  • Net loss increased to $139 million in 2022, compared to $94 million in 2021.
  • Adjusted EBITDA1 loss of $93 million in 2022, compared to a loss of $67 million3 in 2021.

Ouster’s fourth quarter revenue was driven primarily by growth in the industrial and robotics verticals, which accounted for 62% of revenues in the quarter. This included substantial orders from customers for port automation, material handling vehicles, and warehouse automation applications.

Lower fourth quarter gross margins were primarily driven by some large unit volume sales to certain customers with lower average selling prices, as well as higher expenses associated with the manufacturing transition to the REV7 sensor platform. However, Ouster expects to deliver higher margins over time as it completes the Velodyne integration and increases shipments of the REV7 sensors.

1 Financial highlights only reference Ouster standalone financials results.
2 Adjusted EBITDA loss is a non-GAAP financial measure. See Non-GAAP Financial Measures for additional information and a reconciliation to Net loss, the most directly comparable financial measure calculated in accordance with U.S. GAAP.
3 Prior periods have been adjusted to conform to current year presentation.

Ouster achieved its 2022 revised guidance targets, delivering $41 million in revenue and delivered industry-leading 27% gross margins. Across its target markets in 2022, Ouster saw the most traction in the industrial and robotics verticals, with 35% and 34% of sensors shipped in 2022, respectively, due to continued demand for automation across the supply chain. The automotive vertical accounted for 22% of sensors shipped for robotaxis, robotrucking, shuttles and buses in 2022. Finally, 9% of sensors were shipped to customers in the smart infrastructure vertical in 2022. Ouster also doubled its smart infrastructure programs with 213 awarded projects in 2022, up 94% year-over-year, for digital lidar for intelligent transportation systems, crowd analytics, and security applications.

Business Updates

Merger: Ouster completed the merger with Velodyne on February 10, 2023, which will drive cost synergies and value creation for the combined company. The Company remains on track to exceed previously projected annualized cost synergies of $75 million within 9 months. The synergy estimate is baselined against the standalone cost structures of the two companies, as of the third quarter 2022. Following the completion of the merger, Ouster immediately took steps to significantly reduce costs. By the end of the first quarter of 2023, the Company expects to reduce approximately $50 million in annual run-rate costs, which will result in one-time cash costs of approximately $12 million to 14 million4, to complete the first stage of integration. As of December 31, 2022, the combined cash, cash equivalent and short-term investments balance was approximately $315 million.

Execution on Product Roadmap: Ouster continued to execute on its product roadmap, dominated by the October 2022 launch of its new REV7 OS digital lidar sensors powered by its next-generation L3 chip, which are designed to deliver dramatic performance gains for customers. This included shipments to 29 customers who purchased the first units of the new REV7 sensors. During the second half of 2022, the Company also provided early access to Ouster Gemini, its cloud-backed digital lidar perception platform for smart infrastructure applications, closing deals with more than 10 companies before broadly releasing the software in January 2023. Following the merger, Ouster also now offers certain Velodyne Lidar sensors as well as BlueCity software, a turnkey lidar-based solution for intelligent transportation systems with over 100 active deployments in 2022.

“Ouster made huge strides throughout 2022, from the release of our first A-samples for the solid-state DF series to the launch of our REV7 OS sensors, making us more competitive across the board. We also built our first subscription software, Ouster Gemini, for smart infrastructure applications, which will expand the opportunities for digital lidar,” said Ouster CEO Angus Pacala. “Further, we recently completed our merger with Velodyne, bolstering our financial position and amplifying our product portfolio with new hardware and software solutions, which we anticipate will further expand our serviceable market and catalyze growth across the business in 2023.”

First Quarter 2023 Outlook

For the first quarter 2023, Ouster expects to achieve $15 million to 17 million in revenue.5

_____________________

4 Excluding stock-based compensation expenses.
5 Excludes revenues from Velodyne products prior to the merger on February 10, 2023.

Conference Call Information

Ouster will host a conference call and live webcast for analysts and investors at 5:00 p.m. EDT today, March 23, 2023 to discuss its financial results and business outlook. To access the call, please register at https://conferencingportals.com/event/ERDXYEAl.

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 telephonic replay of the conference call will be available through April 6, 2023. To access the replay, please dial (800) 770-2030 from the U.S. or (647) 362-9199 from outside the U.S. and enter the conference ID number: 93428.

About Ouster

Ouster (NYSE: OUST) is a leading global provider of high-resolution scanning and solid-state digital lidar sensors, Velodyne 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. With a global team and high-volume manufacturing, Ouster supports over 850 customers in approximately 50 countries. Ouster is headquartered in San Francisco, CA with offices in the Americas, Europe, Asia-Pacific, and the Middle East. For more information, visit www.ouster.com, or connect with us on Twitter or LinkedIn.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We intend 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,” “may,” “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 historical facts, including statements regarding Ouster’s ability to meet its revenue goals and guidance; the anticipated benefits of and costs associated with the Velodyne merger; the expectations surrounding the Velodyne merger and its ability to grow the Company’s sales and bolster the Company’s financial position; its expected contractual obligations and capital expenditures; the capabilities of its products; anticipated new product launches; its future results of operations and financial position; industry and business trends; its business strategy, plans, strategic partnerships, market growth and its objectives for future operations; and its strategic market position as it relates to its competitors within the industry 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; the negotiating power and product standards of its customers; fluctuations in its operating results; its ability to successfully integrate its business with Velodyne and achieve the anticipated benefits of the Velodyne merger; supply chain constraints and challenges; cancellation or postponement of contracts or unsuccessful implementations; the ability of its lidar technology roadmap and new software solutions to catalyze growth; the adoption of its products and the growth of the lidar market generally; Ouster’s ability to grow its sales and marketing organization; substantial research and development costs needed to develop and commercialize new products; the competitive environment in which Ouster operates; selection of Ouster’s products for inclusion in target markets; Ouster’s future capital needs and ability to secure additional capital on favorable terms or at all; its ability to use tax attributes; Ouster’s dependence on key third party suppliers, in particular Benchmark Electronics, Inc., Fabrinet USA Inc., and other suppliers; Ouster’s ability to maintain inventory and the risk of inventory write-downs; inaccurate forecasts of market growth; Ouster’s ability to manage growth; the creditworthiness of Ouster’s customers; risks related to acquisitions; risks related to international operations; risks of product delivery problems or defects; costs associated with product warranties; Ouster’s ability to maintain competitive average selling prices or high sales volumes or reduce product costs; conditions in its customers’ industries; Ouster’s ability to recruit and retain key personnel; Ouster’s ability to adequately protect and enforce its intellectual property rights; Ouster’s ability to effectively respond to evolving regulations and standards; 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, 2022, that are 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 measure of Adjusted EBITDA is useful in evaluating its operating performance. The calculation of Adjusted EBITDA for this reporting period does not include litigation expenses. 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, depreciation and amortization, litigation and litigation related expenses and other non-recurring expenses. Ouster believes that 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. 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, except share and per share data)

 

December 31,

 

 

2022

 

 

 

2021

 

Assets   
Current assets:   
Cash and cash equivalents

$

122,932

 

 

$

182,644

 

Restricted cash, current

 

257

 

 

 

977

 

Accounts receivable, net

 

11,233

 

 

 

10,723

 

Inventory

 

19,533

 

 

 

7,448

 

Prepaid expenses and other current assets

 

8,543

 

 

 

5,566

 

Total current assets

 

162,498

 

 

 

207,358

 

Property and equipment, net

 

9,695

 

 

 

10,054

 

Operating lease, right-of-use assets

 

12,997

 

 

 

15,156

 

Goodwill

 

51,152

 

 

 

51,076

 

Intangible assets, net

 

18,165

 

 

 

22,652

 

Restricted cash, non-current

 

1,089

 

 

 

1,035

 

Other non-current assets

 

541

 

 

 

371

 

Total assets

$

256,137

 

 

$

307,702

 

Liabilities, redeemable convertible preferred stock and stockholders’ equity   
Current liabilities:   
Accounts payable

$

8,798

 

 

$

4,863

 

Accrued and other current liabilities

 

17,473

 

 

 

14,173

 

Operating lease liability, current portion

 

3,221

 

 

 

3,067

 

Total current liabilities

 

29,492

 

 

 

22,103

 

Operating lease liability, long-term portion

 

13,400

 

 

 

16,208

 

Warrant Liabilities

 

180

 

 

 

7,626

 

Debt

 

39,574

 

 

 

 

Other non-current liabilities

 

1,872

 

 

 

1,065

 

Total liabilities

 

84,518

 

 

 

47,002

 

Commitments and contingencies   
Redeemable convertible preferred stock

 

 

 

 

 

Stockholders’ equity:   
Common stock

 

19

 

 

 

17

 

Additional paid-in capital

 

613,665

 

 

 

564,045

 

Accumulated deficit

 

(441,916

)

 

 

(303,356

)

Accumulated other comprehensive loss

 

(149

)

 

 

(6

)

Total stockholders’ equity

 

171,619

 

 

 

260,700

 

Total liabilities, redeemable convertible preferred stock, and stockholders’ equity

$

256,137

 

 

$

307,702

 

OUSTER, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(unaudited)

(in thousands, except share and per share data)

 

 

 

 

 

 

 

 

 

Three Months Ended December 31,

 

Year Ended December 31,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Product revenue

$

10,938

 

 

$

11,852

 

 

$

41,029

 

 

$

33,578

 

Cost of revenue

 

9,097

 

 

 

8,280

 

 

 

30,099

 

 

 

24,492

 

Gross profit

 

1,841

 

 

 

3,572

 

 

 

10,930

 

 

 

9,086

 

Operating expenses:       
Research and development

 

15,306

 

 

 

15,003

 

 

 

64,317

 

 

 

34,579

 

Sales and marketing

 

7,639

 

 

 

7,481

 

 

 

30,833

 

 

 

22,258

 

General and administrative

 

20,897

 

 

 

15,782

 

 

 

61,203

 

 

 

51,959

 

Total operating expenses

 

43,842

 

 

 

38,266

 

 

 

156,353

 

 

 

108,796

 

Loss from operations

 

(42,001

)

 

 

(34,694

)

 

 

(145,423

)

 

 

(99,710

)

Other (expense) income:       
Interest income

 

977

 

 

 

166

 

 

 

2,208

 

 

 

471

 

Interest expense

 

(1,551

)

 

 

 

 

 

(2,694

)

 

 

(504

)

Other income (expense), net

 

583

 

 

 

3,390

 

 

 

7,654

 

 

 

2,968

 

Total other income (expense), net

 

9

 

 

 

3,556

 

 

 

7,168

 

 

 

2,935

 

Loss before income taxes

 

(41,992

)

 

 

(31,138

)

 

 

(138,255

)

 

 

(96,775

)

Provision (benefit from) for income tax expense

 

184

 

 

 

(2,794

)

 

 

305

 

 

 

(2,794

)

Net loss

$

(42,176

)

 

$

(28,344

)

 

$

(138,560

)

 

$

(93,981

)

Other comprehensive loss       
Foreign currency translation adjustments

$

32

 

 

$

(6

)

 

$

(143

)

 

$

(6

)

Total comprehensive loss

$

(42,144

)

 

$

(28,350

)

 

$

(138,703

)

 

$

(93,987

)

Net loss per common share, basic and diluted

$

(0.23

)

 

$

(0.17

)

 

$

(0.78

)

 

$

(0.70

)

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

 

184,237,953

 

 

 

165,853,915

 

 

 

177,923,156

 

 

 

133,917,571

 

OUSTER, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)

 

 

 

 

 

For the Years ended December 31,

 

 

2022

 

 

 

2021

 

CASH FLOWS FROM OPERATING ACTIVITIES   
Net loss

$

(138,560

)

 

$

(93,981

)

Adjustments to reconcile net loss to net cash used in operating activities:   
Depreciation and amortization

 

9,456

 

 

 

5,477

 

Stock-based compensation

 

33,321

 

 

 

25,363

 

Deferred income taxes

 

 

 

 

(2,477

)

Change in right-of-use asset

 

2,730

 

 

 

2,180

 

Interest expense

 

799

 

 

 

36

 

Amortization of debt issuance costs and debt discount

 

160

 

 

 

250

 

Change in fair value of warrant liabilities

 

(7,446

)

 

 

(2,947

)

Inventory write down

 

1,600

 

 

 

808

 

Provision for doubtful accounts

 

346

 

 

 

379

 

Loss from disposal of property and equipment

 

430

 

 

 

 

Changes in operating assets and liabilities:   
Accounts receivable

 

(856

)

 

 

(8,007

)

Inventory

 

(13,684

)

 

 

(3,440

)

Prepaid expenses and other assets

 

(3,148

)

 

 

350

 

Accounts payable

 

4,191

 

 

 

(2,442

)

Accrued and other liabilities

 

3,196

 

 

 

9,060

 

Operating lease liability

 

(3,225

)

 

 

(1,670

)

Net cash used in operating activities

 

(110,690

)

 

 

(71,061

)

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

 

275

 

 

 

 

Purchases of property and equipment

 

(5,422

)

 

 

(4,283

)

Acquisition, net of cash acquired

 

 

 

 

(10,946

)

Net cash used in investing activities

 

(5,147

)

 

 

(15,229

)

CASH FLOWS FROM FINANCING ACTIVITIES   
Proceeds from the merger and private offering

 

 

 

 

291,442

 

Payment of offering costs

 

 

 

 

(26,620

)

Repayment of debt

 

 

 

 

(7,000

)

Proceeds from issuance of promissory notes to related parties

 

 

 

 

5,000

 

Repayment of promissory notes to related parties

 

 

 

 

(5,000

)

Repurchase of common stock

 

(45

)

 

 

(45

)

Proceeds from exercise of stock options

 

470

 

 

 

526

 

Proceeds from ESPP purchase

 

378

 

 

 

 

Proceeds from exercise of warrants

 

 

 

 

1

 

Proceeds from issuance of redeemable convertible preferred stock, net off issuance cost of $265

 

 

 

 

 

Proceeds from borrowings, net of debt discount and issuance costs

 

39,077

 

 

 

 

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

 

16,322

 

 

 

 

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

 

(541

)

 

 

 

Taxes paid related to net share settlement of restricted stock units

 

(59

)

 

 

 

Net cash provided by financing activities

 

55,602

 

 

 

258,304

 

Effect of exchange rates on cash and cash equivalents

 

(143

)

 

 

 

Net increase (decrease) in cash, cash equivalents and restricted cash

 

(60,378

)

 

 

172,014

 

Cash, cash equivalents and restricted cash at beginning of year

 

184,656

 

 

 

12,642

 

Cash, cash equivalents and restricted cash at end of year

$

124,278

 

 

$

184,656

 

OUSTER, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(unaudited)

(in thousands)

 

 

 

 

 

 

 

 

 

Three Months Ended December 31,

 

Year Ended December 31,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

GAAP net loss

$

(42,176

)

 

$

(28,344

)

 

$

(138,560

)

 

$

(93,981

)

Interest expense (income), net

 

574

 

 

 

(166

)

 

 

486

 

 

 

33

 

Other (income), net

 

(583

)

 

 

(3,390

)

 

 

(7,654

)

 

 

(2,968

)

Stock-based compensation(1)

 

7,997

 

 

 

6,806

 

 

 

33,321

 

 

 

25,363

 

Provision for income tax expense

 

184

 

 

 

(2,794

)

 

 

305

 

 

 

(2,794

)

Depreciation and amortization expense(2)

 

2,386

 

 

 

2,049

 

 

 

9,456

 

 

 

5,477

 

Litigation expenses(3)

 

1,484

 

 

 

85

 

 

 

3,200

 

 

 

585

 

Non-recurring acquisition expense(4)

 

6,950

 

 

 

1,535

 

 

 

6,950

 

 

 

1,535

 

Adjusted EBITDA

$

(23,184

)

 

$

(24,219

)

 

$

(92,496

)

 

$

(66,750

)

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

Three Months Ended December 31,

 

Year Ended December 31,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 
Cost of revenue

$

213

  

$

180

  

$

783

  

$

637

 
Research and development

 

3,363

  

 

2,935

  

 

14,611

  

 

7,240

 
Sales and marketing

 

1,789

  

 

1,122

  

 

7,065

  

 

3,823

 
General and administrative

 

2,632

  

 

2,569

  

 

10,862

  

 

13,663

 
Total stock-based compensation

$

7,997

  

$

6,806

  

$

33,321

  

$

25,363

 
(2)Includes depreciation and amortization expense as follows:
 

Three Months Ended December 31,

 

Year Ended December 31,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 
Cost of revenue

$

322

  

$

247

  

$

1,142

  

$

1,179

 
Research and development

 

867

  

 

441

  

 

3,466

  

 

1,079

 
Sales and marketing

 

78

  

 

  

 

303

  

 

 
General and administrative

 

1,119

  

 

1,361

  

 

4,545

  

 

3,219

 
Total depreciation and amortization expense

$

2,386

  

$

2,049

  

$

9,456

  

$

5,477

 
(3)Litigation expenses and litigation-related expenses outside of the Company’s ordinary business operations  
(4)Non-recurring acquisition expense represents transaction costs for the Velodyne Lidar, Inc. and Sense Photonics, Inc. mergers which include legal and accounting professional service fees.

 

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