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Ouster Reports 40% Year over Year Revenue Growth Driven by Automation in Industrial and Robotics Sectors

04 August 2022

Ouster, Inc. (NYSE: OUST) (“Ouster” or the “Company”), a leading provider of high-resolution digital lidar sensors for the automotive, industrial, robotics, and smart infrastructure industries, announced financial results for the three months ended June 30, 2022.

Second Quarter 2022 Financial Highlights

  • $10.3 million in revenue, up 40% year over year.
  • 27% gross margins, compared to 26% in the second quarter of 2021.
  • Shipped 2,020 sensors in the second quarter, up 38% year over year.
  • Increased the number of Strategic Customer Agreements to 80, up from 72 in the prior quarter, collectively representing approximately $575 million in contracted revenue opportunity through 2026.1
  • Net loss decreased to $28 million, compared to $32 million in the second quarter of 2021.
  • Adjusted EBITDA loss2 increased to $23 million, compared to $14 million in the second quarter of 2021.

Ouster achieved its second highest revenue quarter, driven primarily by growth in the industrial and robotics verticals, predominantly from customers utilizing digital lidar for warehouse and port automation, off-highway mining and agriculture vehicles, construction robots, and drones for mapping and volumetric measurement. Sizeable orders in the automotive vertical, specifically for autonomous trucks, buses, and shuttles also meaningfully contributed to revenue in the second quarter followed by revenues from smart infrastructure deployments around the world. The Company delivered gross margins of 27%, down slightly from the first quarter of 2022 due to continued supply chain headwinds and efforts to avoid production and shipping delays.

Business Updates

Continued Customer Traction: In the second quarter, Ouster sold sensors to approximately 90 new customers3, and converted another 8 customers to multi-year SCAs with binding commitments, further expanding its contracted revenue opportunity to approximately $575 million through 2026.

Progressed Automotive Traction: Ouster Automotive continued to expand its traction with OEMs, Tier 1s, and AV companies, driven by strong demand for its solid-state Digital Flash (DF) A-sample sensors, which started shipping in the first month of the second quarter.

Strengthened Financial Position: Ouster continued to bolster its financial position through balance sheet initiatives, including a previously announced term loan facility of up to $50 million. In the second quarter, the Company drew $20 million on the term loan facility and raised approximately $15 million from sales of common stock through an at-the-market offering. Combined with initiatives to optimize spend and accelerate growth, the Company believes these actions will strengthen the business and provide the flexibility and liquidity to execute on its business plan.

“Ouster continues to capture share in a rapidly evolving market, increasing revenue by 40% over the second quarter of 2021,” said Ouster CEO Angus Pacala. “Our ability to deliver performant and cost-efficient products to customers on-time is a key differentiator. Our diversified strategy ensures that we are well-positioned to leverage automation trends across the industrialized economy, as more companies take steps to increase productivity, improve safety, and address ongoing labor shortages across their supply chains. The positive momentum we’re seeing from automakers following the release of our DF A-sample, coupled with upcoming product releases planned for later this year, position us to capture additional market share and continue to outpace the competition.”

2022 Outlook

Ouster revised its FY 2022 revenue guidance to $40 million to $55 million and reaffirmed its gross margin target of 25% to 30%.

While the fundamentals of Ouster’s business remain unchanged, ongoing macroeconomic pressures are impacting customer ramp timelines, resulting in a significant number of large deals being delayed or staggered over a longer period of time than previously anticipated.

“Ouster’s differentiated technology, backed by a leading cost structure and our multi-market approach, positions us to continue to win head-to-head commercial opportunities and gain market share across our four market verticals,” said Ouster CFO Anna Brunelle. “By revising our revenue guidance for this year and taking prudent financial measures to ensure access to capital in the current environment, we are better positioned to navigate headwinds, while simultaneously scaling the business to achieve industry-leading growth.”

Conference Call Information

Ouster will host a conference call and live webcast for analysts and investors at 5 p.m. EDT today, August 4, 2022, to discuss its financial results and business outlook. To access the call, please register at https://conferencingportals.com/event/xojjoxlp.

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 August 18, 2022. 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 building a safer and more sustainable future through its high-resolution digital lidar sensors for the automotive, industrial, smart infrastructure, and robotics industries. Ouster’s sensors offer an excellent combination of price and performance with the flexibility to span hundreds of use-cases and enable revolutionary autonomy across industries. With a global team and high-volume manufacturing, Ouster supports over 600 customers in over 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 “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding Ouster’s technological advancements, market opportunities, market growth expectations, potential pipeline of customers, strategic partnerships and outlook, its ability to meet its revenue goals and guidance, its strategy, and market positioning, effects of its near term bottom-up analysis and cost structure, sales pipeline, bookings and commercial expansion plans, anticipated product releases, and ability to drive near and long term revenue growth. Forward-looking statements give Ouster’s current expectations and projections relating to its financial condition, competitive position, financial position, future results of operations, plans, objectives, future orders whether binding or non-binding, and business. You may identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “aim”, “anticipate”, “estimate”, “expect”, “project”, “plan”, “forecast”, “intend”, “believe”, “may”, “will”, “should”, “can have”, “likely”, “guidance”, “continue”, “could”, “would”, “potentially”, “preliminary” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. 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 Ouster’s limited operating history and history of losses; the negotiating power and product standards of its customers; fluctuations in its operating results; supply chain constraints and challenges; cancellation or postponement of contracts or unsuccessful implementations; the adoption of its products and the growth of the lidar market generally; its 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 it operates; selection of its products for inclusion in target markets; its future capital needs and ability to secure additional capital on favorable terms or at all; its ability to use tax attributes; its dependence on key third party suppliers, in particular Benchmark Electronics, Inc., and manufacturers; its ability to maintain inventory and the risk of inventory write-downs; inaccurate forecasts of market growth; its ability to manage growth; the creditworthiness of its customers; risks related to acquisitions; risks related to international operations; risks of product delivery problems or defects; costs associated with product warranties; its ability to maintain competitive average selling prices or high sales volumes or reduce product costs; conditions in its customers’ industries; its ability to recruit and retain key personnel; its use of professional employer organizations; its ability to adequately protect and enforce its intellectual property rights; its ability to effectively respond to evolving regulations and standards; risks related to operating as a public company; risks related to the COVID-19 pandemic; risks related to certain of its warrants being accounted for as liabilities; and other important factors discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, as any such factors may be updated from time to time in the Company’s other filings with the Securities and Exchange Commission (the “SEC”), and in other reports the Company files with or furnishes to the SEC. 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 required by law, even if subsequent events cause its views to change.

The financials herein are unaudited and subject to the finalization of year-end audit procedures. In additional 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. 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 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.

1 "Strategic Customer Agreements” or “SCAs” establish a multi-year purchase and supply framework for Ouster and the customer, and include details about customer programs and applications where the customer intends to use Ouster products. SCAs also include multi-year non-binding customer forecasts (typically of three to five years in length) giving Ouster visibility to the customer's long-term purchasing requirements, mutually agreed upon pricing over the duration of the agreement, and in certain cases include multi-year binding purchase commitments. “Contracted revenue opportunity” represents the sum of both binding purchase commitments and non-binding forecasts. No assurances can be given that non-binding forecasts will mature into binding purchase commitments, or that any contracted revenue opportunity will result in revenue. No additional revenue opportunity beyond the customer’s actual forecast has been imputed.
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 "Customer” is defined as having purchased a sensor within the past twelve months ended June 30, 2022.

OUSTER, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands, except share and per share data)
     
  June 30,
2022
December 31,
2021
Assets    
Current assets:    
Cash and cash equivalents

$

159,707

 

$

182,644

 

Restricted cash, current

 

977

 

 

977

 

Accounts receivable, net

 

9,382

 

 

10,723

 

Inventory

 

17,181

 

 

7,448

 

Prepaid expenses and other current assets

 

7,539

 

 

5,566

 

Total current assets

 

194,786

 

 

207,358

 

Property and equipment, net

 

8,393

 

 

10,054

 

Operating lease, right-of-use assets

 

14,369

 

 

15,156

 

Goodwill

 

51,151

 

 

51,076

 

Intangible assets, net

 

20,408

 

 

22,652

 

Restricted cash, non-current

 

1,088

 

 

1,035

 

Other non-current assets

 

355

 

 

371

 

Total assets

$

290,550

 

$

307,702

 

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

$

5,825

 

$

4,863

 

Accrued and other current liabilities

 

14,520

 

 

14,173

 

Operating lease liability, current portion

 

3,067

 

 

3,067

 

Total current liabilities

 

23,412

 

 

22,103

 

Operating lease liability, long-term portion

 

15,191

 

 

16,208

 

Warrant Liabilities

 

492

 

 

7,626

 

Debt

 

19,119

 

 

-

 

Other non-current liabilities

 

1,365

 

 

1,065

 

Total liabilities

 

59,579

 

 

47,002

 

Commitments and contingencies    
Redeemable convertible preferred stock

 

-

 

 

-

 

Stockholders’ equity (deficit):    
Common stock

 

18

 

 

17

 

Additional paid-in capital

 

594,800

 

 

564,045

 

Accumulated deficit

 

(363,753

)

 

(303,356

)

Accumulated other comprehensive loss

 

(94

)

 

(6

)

Total stockholders’ equity

 

230,971

 

 

260,700

 

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

$

290,550

 

$

307,702

 

     
OUSTER, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(unaudited)
(in thousands, except share and per share data)
         
  Three Months Ended June 30, Six Months Ended June 30,
 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Product revenue

$

10,329

 

$

7,360

 

$

18,887

 

$

13,971

 

Cost of product

 

7,547

 

 

5,465

 

 

13,514

 

 

10,333

 

Gross (loss) profit

 

2,782

 

 

1,895

 

 

5,373

 

 

3,638

 

Operating expenses:        
Research and development

 

15,893

 

 

6,474

 

 

31,799

 

 

11,186

 

Sales and marketing

 

7,563

 

 

4,614

 

 

14,653

 

 

8,040

 

General and administrative

 

12,515

 

 

12,197

 

 

26,298

 

 

22,104

 

Total operating expenses

 

35,971

 

 

23,285

 

 

72,750

 

 

41,330

 

Loss from operations

 

(33,189

)

 

(21,390

)

 

(67,377

)

 

(37,692

)

Other (expense) income:        
Interest income

 

344

 

 

139

 

 

498

 

 

140

 

Interest expense

 

(444

)

 

-

 

 

(444

)

 

(504

)

Other income (expense), net

 

5,326

 

 

(10,760

)

 

7,010

 

 

(14,912

)

Total other expense, net

 

5,226

 

 

(10,621

)

 

7,064

 

 

(15,276

)

Loss before income taxes

 

(27,963

)

 

(32,011

)

 

(60,313

)

 

(52,968

)

Provision for income tax expense

 

37

 

 

-

 

 

84

 

 

-

 

Net loss

$

(28,000

)

$

(32,011

)

$

(60,397

)

$

(52,968

)

Other comprehensive loss        
Foreign currency translation adjustments

$

(76

)

$

-

 

$

(88

)

$

-

 

Total comprehensive loss

$

(28,076

)

$

(32,011

)

$

(60,485

)

$

(52,968

)

Net loss per common share, basic and diluted

$

(0.16

)

$

(0.21

)

$

(0.35

)

$

(0.50

)

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

 

175,057,360

 

 

155,923,689

 

 

172,965,833

 

 

106,070,590

 

         
OUSTER, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
     
  Six months ended June 30,
 

 

2022

 

 

2021

 

CASH FLOWS FROM OPERATING ACTIVITIES    
Net loss

$

(60,397

)

$

(52,968

)

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

 

4,739

 

 

2,254

 

Stock-based compensation

 

16,869

 

 

11,410

 

Change in right-of-use asset

 

1,358

 

 

1,047

 

Interest expense

 

402

 

 

36

 

Amortization of debt issuance costs and debt discount

 

42

 

 

250

 

Change in fair value of warrant liabilities

 

(7,134

)

 

14,898

 

Inventory write down

 

447

 

 

144

 

Gain from disposal of property and equipment

 

(100

)

 

-

 

Changes in operating assets and liabilities:    
Accounts receivable

 

1,341

 

 

(2,344

)

Inventory

 

(10,180

)

 

(48

)

Prepaid expenses and other assets

 

(1,957

)

 

(37

)

Accounts payable

 

1,094

 

 

(3,317

)

Accrued and other liabilities

 

(329

)

 

1,692

 

Operating lease liability

 

(1,588

)

 

(1,363

)

Net cash used in operating activities

 

(55,393

)

 

(28,346

)

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

 

275

 

 

-

 

Purchases of property and equipment

 

(1,277

)

 

(659

)

Net cash used in investing activities

 

(1,002

)

 

(659

)

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

 

-

 

 

291,454

 

Payment of offering costs

 

-

 

 

(27,124

)

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

 

(43

)

 

(43

)

Proceeds from exercise of stock options

 

252

 

 

504

 

Proceeds from borrowings, net of debt discount and issuance costs

 

19,077

 

 

-

 

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

 

14,568

 

 

-

 

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

 

(196

)

 

-

 

Taxes paid related to net share settlement of restricted stock awards

 

(59

)

 

-

 

Net cash provided by financing activities

 

33,599

 

 

257,791

 

Effect of exchange rates on cash and cash equivalents

 

(88

)

 

-

 

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

 

(22,884

)

 

228,786

 

Cash, cash equivalents and restricted cash at beginning of period

 

184,656

 

 

12,642

 

Cash, cash equivalents and restricted cash at end of period

$

161,772

 

$

241,428

 

     
OUSTER, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(unaudited)
(in thousands)
         
  Three Months Ended June 30, Six Months Ended June 30,
 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

GAAP net loss

$

(28,000

)

$

(32,011

)

$

(60,397

)

$

(52,968

)

Interest expense (income), net

 

100

 

 

(139

)

 

(54

)

 

364

 

Other expense (income), net

 

(5,326

)

 

10,760

 

 

(7,010

)

 

14,912

 

Stock-based compensation(1)

 

8,119

 

 

6,154

 

 

16,869

 

 

11,410

 

Provision for income tax expense

 

37

 

 

-

 

 

84

 

 

-

 

Non-GAAP operating loss

 

(25,070

)

 

(15,236

)

 

(50,508

)

 

(26,282

)

Depreciation and amortization expense(2)

 

2,354

 

 

1,160

 

 

4,739

 

 

2,254

 

Adjusted EBITDA

$

(22,716

)

$

(14,076

)

$

(45,769

)

$

(24,028

)

         
(1)Includes stock-based compensation expense as follows:        
  Three Months Ended June 30, Six Months Ended June 30,
 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Cost of revenue

$

146

 

$

133

 

$

365

 

$

251

 

Research and development

 

3,806

 

 

1,321

 

 

7,566

 

 

2,242

 

Sales and marketing

 

1,839

 

 

719

 

 

3,362

 

 

985

 

General and administrative

 

2,328

 

 

3,981

 

 

5,576

 

 

7,932

 

Total stock-based compensation

$

8,119

 

$

6,154

 

$

16,869

 

$

11,410

 

         
         
(2)Includes depreciation and amortization expense as follows:        
         
  Three Months Ended June 30, Six Months Ended June 30,
 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Cost of revenue

$

309

 

$

275

 

$

593

 

$

678

 

Research and development

 

823

 

 

231

 

 

1,710

 

 

350

 

Sales and marketing

 

75

 

 

-

 

 

150

 

 

-

 

General and administrative

 

1,146

 

 

654

 

 

2,286

 

 

1,226

 

Total depreciation and amortization expense

$

2,354

 

$

1,160

 

$

4,739

 

$

2,254

 

         

 

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