DevvStream

Ouster Announces Record Revenue and Margin for First Quarter 2024

09 May 2024
  • Record revenue of $26 million, up 51% year over year
  • GAAP gross margin of 29% and record non-GAAP gross margin of 36%

SAN FRANCISCO / May 09, 2024 / Business Wire / 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 three months ended March 31, 20241.

First Quarter 2024 Highlights

  • $26 million in revenue, up 51% year over year and 6% sequentially.
  • Shipped approximately 4,500 sensors for revenue.
  • GAAP gross margin of 29%, compared to (2%) in the first quarter of 2023 and 22% in the fourth quarter of 2023.
  • Non-GAAP gross margin2 of 36%, compared to 25% in the first quarter of 2023 and 35% in the fourth quarter of 2023.
  • Net loss of $24 million, compared to $177 million in the first quarter of 2023 and $39 million in the fourth quarter of 2023.
  • Adjusted EBITDA2 loss of $12 million, compared to $27 million in the first quarter of 2023 and $14 million in the fourth quarter of 2023.
  • Cash, cash equivalents, restricted cash, and short-term investments balance of $189 million as of March 31, 2024.

“Ouster continued its momentum into the first quarter after a strong 2023. We delivered revenue of $26 million and non-GAAP gross margin of 36%, both representing record levels. Alongside our strong operational results, we continued to advance the development of our next generation hardware products and software solutions,” said Ouster CEO Angus Pacala. “We are committed to achieving the goals we set for 2024 that aim to further extend Ouster’s competitive advantage and bring us closer to achieving profitability.”

Revenue growth in the first quarter was driven by large orders from customers in the robotics and automotive verticals, specifically for warehouse robotics, mapping, and autonomous vehicles. GAAP gross margin improved to 29% compared to (2%) in the first quarter of 2023, which was primarily driven by higher revenues, favorable product mix, lower manufacturing costs, and fewer costs related to inventory charges and purchase commitments. Non-GAAP gross margin increased to a record 36% compared to 25% in the first quarter of 2023. Non-GAAP gross margin excludes the impact of certain expenses outside of ordinary operations associated with the consolidation of product lines and outsourced manufacturing of Velodyne products.

_______________

1 The financial results for the three months ended March 31, 2023 are composed of Ouster standalone performance through February 10, 2023 and combined performance of Ouster and Velodyne for the remainder of the period. The results for the three months ended March 31, 2024 and December 31, 2023 reflect the combined performance of Ouster and Velodyne.

2 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.

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: During the first quarter, Ouster continued to expand its software solutions with a new deep learning model that increases accuracy and detection range. The Company also enhanced Ouster Gemini with the ability to more seamlessly integrate with leading video management system vendors, helping to accelerate adoption in the multi-billion dollar security industry. Ouster also recently collaborated with a recipient of the U.S. Department of Transportation SMART Grant to assist with improving pedestrian safety, near miss detection, traffic counting, and traffic flow analytics.

Advance the development of digital lidar hardware: Ouster continued to execute on its product roadmap in the first quarter. The Company introduced new firmware designed to improve the performance capabilities of its REV7 sensors, coinciding with heightened interest from AI and robotics customers. Ouster’s next generation “L4” custom silicon chip is taped out and is expected to bring significant improvements in performance, reliability, and manufacturability, along with safety certifications to the OS sensor family. The Company plans to integrate the Chronos chip into its final form factor, solid-state digital flash (“DF”) sensors in the next year.

Progress on the long-term financial framework: Ouster advanced on its long-term financial framework during the first quarter. With revenue growth of 51% year over year, GAAP gross margin of 29%, and operating expenses 14% below third quarter 2023 levels, Ouster is progressing on its path to profitability.

Second Quarter 2024 Outlook

For the second quarter of 2024, Ouster expects to achieve $26 million to $28 million in revenue.

Upcoming Investor Events

Ouster management will participate in the following upcoming investor event:

  • Oppenheimer 9th Annual Emerging Growth Conference – Virtual, May 10th, 2024

Conference Call Information

Ouster will host a conference call and live webcast for analysts and investors at 5:00 p.m. ET today, May 9, 2024 to discuss its financial results and business outlook. To access the call, please register at https://registrations.events/direct/Q4I934282.

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 May 23, 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 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, visit www.ouster.com, or connect with us on X or LinkedIn.

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 second quarter of 2024; anticipated new product launches and developments; Ouster’s future results of operations, cash reserve 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; and Ouster’s competitive market position, 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; risks related to Ouster's indebtedness; 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 expenses. 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 expenses, certain excess and obsolete expenses and losses on firm purchase commitments, amortization of acquired intangible assets, depreciation expenses, certain litigation and litigation related expenses, merger and acquisition related expenses, gain on lease termination and other items. 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)
    
 

March 31,

2024

 

December 31,

2023

Assets   
Current assets:   
Cash and cash equivalents

$

48,270

 

 

$

50,991

 

Restricted cash, current

 

564

 

 

 

552

 

Short-term investments

 

139,546

 

 

 

139,158

 

Accounts receivable, net

 

12,220

 

 

 

14,577

 

Inventory

 

21,070

 

 

 

23,232

 

Prepaid expenses and other current assets

 

34,808

 

 

 

34,647

 

Total current assets

 

256,478

 

 

 

263,157

 

Property and equipment, net

 

10,513

 

 

 

10,228

 

Operating lease, right-of-use assets

 

17,411

 

 

 

18,561

 

Unbilled receivable, non-current portion

 

7,043

 

 

 

10,567

 

Intangible assets, net

 

22,592

 

 

 

24,436

 

Restricted cash, non-current

 

1,091

 

 

 

1,091

 

Other non-current assets

 

2,555

 

 

 

2,703

 

Total assets

$

317,683

 

 

$

330,743

 

Liabilities and stockholders’ equity   
Current liabilities:   
Accounts payable

$

6,122

 

 

$

3,545

 

Accrued and other current liabilities

 

56,375

 

 

 

58,166

 

Contract liabilities, current

 

13,429

 

 

 

12,885

 

Operating lease liability, current portion

 

7,153

 

 

 

7,096

 

Total current liabilities

 

83,079

 

 

 

81,692

 

Operating lease liability, non-current portion

 

17,278

 

 

 

18,827

 

Debt

 

43,973

 

 

 

43,975

 

Contract liabilities, non-current portion

 

4,483

 

 

 

4,967

 

Other non-current liabilities

 

1,638

 

 

 

1,610

 

Total liabilities

 

150,451

 

 

 

151,071

 

Commitments and contingencies   
Stockholders’ equity:   
Common stock

 

44

 

 

 

42

 

Additional paid-in capital

 

1,007,502

 

 

 

995,464

 

Accumulated deficit

 

(839,875

)

 

 

(816,026

)

Accumulated other comprehensive (loss) income

 

(439

)

 

 

192

 

Total stockholders’ equity

 

167,232

 

 

 

179,672

 

Total liabilities and stockholders’ equity

$

317,683

 

 

$

330,743

 

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

Three Months Ended

March 31,

 

Three Months Ended

December 31,

 

Three Months Ended

March 31,

 

2024

 

2023

 

2023

Revenue

$

25,944

 

 

$

24,444

 

 

$

17,230

 

Cost of product

 

18,519

 

 

 

19,033

 

 

 

17,606

 

Gross profit (loss)

 

7,425

 

 

 

5,411

 

 

 

(376

)

Operating expenses:     
Research and development

 

13,806

 

 

 

15,626

 

 

 

32,459

 

Sales and marketing

 

6,860

 

 

 

8,553

 

 

 

13,533

 

General and administrative

 

12,580

 

 

 

18,545

 

 

 

31,325

 

Goodwill impairment charges

 

 

 

 

 

 

 

99,409

 

Total operating expenses

 

33,246

 

 

 

42,724

 

 

 

176,726

 

Loss from operations

 

(25,821

)

 

 

(37,313

)

 

 

(177,102

)

Other income (expense):     
Interest income

 

2,651

 

 

 

2,579

 

 

 

1,719

 

Interest expense

 

(741

)

 

 

(4,081

)

 

 

(1,669

)

Other income, net

 

193

 

 

 

(6

)

 

 

54

 

Total other income, net

 

2,103

 

 

 

(1,508

)

 

 

104

 

Loss before income taxes

 

(23,718

)

 

 

(38,821

)

 

 

(176,998

)

Provision for income tax expense

 

131

 

 

 

174

 

 

 

282

 

Net loss

$

(23,849

)

 

$

(38,995

)

 

$

(177,280

)

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

$

(459

)

 

$

314

 

 

$

51

 

Foreign currency translation adjustments

$

(172

)

 

$

258

 

 

$

(81

)

Total comprehensive loss

$

(24,480

)

 

$

(38,423

)

 

$

(177,310

)

Net loss per common share, basic and diluted

$

(0.55

)

 

$

(0.95

)

 

$

(6.03

)

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

 

43,454,127

 

 

 

41,135,659

 

 

 

29,411,612

 

OUSTER, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
    
 Three Months Ended March 31,
 

2024

 

2023

CASH FLOWS FROM OPERATING ACTIVITIES   
Net loss

$

(23,849

)

 

$

(177,280

)

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

 

 

 

 

99,409

 

Depreciation and amortization

 

2,897

 

 

 

6,159

 

Loss on write-off of construction in progress and right-of-use asset impairment

 

 

 

 

1,423

 

Stock-based compensation

 

9,404

 

 

 

21,780

 

Reduction of revenue related to stock warrant issued to customer

 

195

 

 

 

 

Amortization of right-of-use asset

 

1,150

 

 

 

1,112

 

Interest expense

 

 

 

 

685

 

Amortization of debt issuance costs and debt discount

 

 

 

 

62

 

Accretion or amortization on short-term investments

 

(1,486

)

 

 

(805

)

Change in fair value of warrant liabilities

 

21

 

 

 

(106

)

Inventory write down

 

737

 

 

 

2,836

 

Provision (recovery of) for doubtful accounts

 

(208

)

 

 

445

 

Loss from disposal of property and equipment

 

 

 

 

145

 

Realized gain on available for sale securities

 

(275

)

 

 

 

Changes in operating assets and liabilities:   
Accounts receivable

 

6,089

 

 

 

(3,450

)

Inventory

 

1,425

 

 

 

(2,329

)

Prepaid expenses and other assets

 

(1,268

)

 

 

672

 

Accounts payable

 

2,636

 

 

 

5,488

 

Accrued and other liabilities

 

(1,758

)

 

 

(9,218

)

Contract liabilities

 

60

 

 

 

944

 

Operating lease liability

 

(1,492

)

 

 

(984

)

Net cash used in operating activities

 

(5,722

)

 

 

(53,012

)

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

 

 

 

 

168

 

Purchases of property and equipment

 

(1,382

)

 

 

(1,006

)

Purchase of short-term investments

 

(24,485

)

 

 

(5,003

)

Proceeds from sales of short-term investments

 

25,398

 

 

 

19,981

 

Cash and cash equivalents acquired in the Velodyne Merger

 

 

 

 

32,137

 

Net cash (used in) provided by investing activities

 

(469

)

 

 

46,277

 

CASH FLOWS FROM FINANCING ACTIVITIES   
Proceeds from exercise of stock options

 

109

 

 

 

18

 

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

 

3,587

 

 

 

 

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

 

(43

)

 

 

 

Net cash provided by financing activities

 

3,653

 

 

 

18

 

Effect of exchange rates on cash and cash equivalents

 

(170

)

 

 

(79

)

Net decrease in cash, cash equivalents and restricted cash

 

(2,708

)

 

 

(6,796

)

Cash, cash equivalents and restricted cash at beginning of period

 

52,633

 

 

 

124,278

 

Cash, cash equivalents and restricted cash at end of period

$

49,925

 

 

$

117,482

 

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

Three Months Ended

March 31,

 

Three Months Ended

December 31,

 

Three Months Ended

March 31,

 

2024

 

2023

 

2023

GAAP net loss

$

(23,849

)

 

$

(38,995

)

 

$

(177,280

)

Interest expense (income), net

 

(1,910

)

 

 

1,502

 

 

 

(50

)

Other expense (income), net

 

(193

)

 

 

6

 

 

 

(54

)

Stock-based compensation(1)

 

9,404

 

 

 

11,107

 

 

 

21,780

 

Provision for income tax expense

 

131

 

 

 

174

 

 

 

282

 

Goodwill impairment charge

 

 

 

 

 

 

 

99,409

 

Restructuring costs, excluding stock-based compensation expense

 

 

 

 

 

 

 

12,635

 

Excess and obsolete expenses and loss on firm purchase commitments

 

572

 

 

 

1,732

 

 

 

3,630

 

Amortization of acquired intangibles(2)

 

1,754

 

 

 

1,757

 

 

 

1,511

 

Depreciation expense(2)

 

1,053

 

 

 

1,239

 

 

 

4,648

 

Litigation expenses(3)

 

1,296

 

 

 

7,383

 

 

 

537

 

Merger and acquisition related expenses(4)

 

 

 

 

 

 

 

6,058

 

Adjusted EBITDA

$

(11,743

)

 

$

(14,095

)

 

$

(26,893

)

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

Three Months Ended

March 31,

 

Three Months Ended

December 31,

 

Three Months Ended

March 31,

 

2024

 

2023

 

2023

Cost of revenue

$

913

 

 

$

856

 

 

$

774

 

Research and development

 

4,188

 

 

 

4,786

 

 

 

7,505

 

Sales and marketing

 

1,400

 

 

 

2,240

 

 

 

2,881

 

General and administrative

 

2,903

 

 

 

3,225

 

 

 

10,620

 

Total stock-based compensation

$

9,404

 

 

$

11,107

 

 

$

21,780

 

      
(2)Includes depreciation and amortization expense as follows:
      
 

Three Months Ended

March 31,

 

Three Months Ended

December 31,

 

Three Months Ended

March 31,

 

2024

 

2023

 

2023

Cost of revenue

$

1,100

 

 

$

1,180

 

 

$

1,750

 

Research and development

 

712

 

 

 

747

 

 

 

2,964

 

Sales and marketing

 

248

 

 

 

250

 

 

 

181

 

General and administrative

 

747

 

 

 

819

 

 

 

1,264

 

Total depreciation and amortization expense

$

2,807

 

 

$

2,996

 

 

$

6,159

 

      
(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

March 31,

 

Three Months Ended

December 31,

 

Three Months Ended

March 31,

 

2024

 

2023

 

2023

Gross (loss) profit on GAAP basis

$

7,425

 

 

$

5,411

 

 

$

(376

)

Stock-based compensation

 

913

 

 

 

856

 

 

 

774

 

Amortization of acquired intangible assets

 

464

 

 

 

517

 

 

 

249

 

Excess and obsolete expenses and loss on firm purchase commitments

 

572

 

 

 

1,732

 

 

 

3,630

 

Gross profit on non-GAAP basis

$

9,374

 

 

$

8,516

 

 

$

4,277

 

      
Gross margin on GAAP basis

 

29

%

 

 

22

%

 

 

(2

)%

Gross margin on non-GAAP basis

 

36

%

 

 

35

%

 

 

25

%

 

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