Ouster Reports Strong Revenue and Margins for Second Quarter 2024

Revenue of $27 million, GAAP gross margin of 34%, and non-GAAP gross margin of 40%

Repaid all outstanding balance under revolving credit line, strengthening balance sheet

On-track to deliver on long-term financial framework and reach profitability

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 second quarter ended June 30, 2024.

Second Quarter 2024 Highlights

  • $27 million in revenue, up 39% year over year and 4% sequentially.
  • Shipped over 4,000 sensors for revenue.
  • GAAP gross margin of 34%, compared to 1% in the second quarter of 2023 and 29% in the first quarter of 2024.
  • Non-GAAP gross margin1 of 40%, compared to 26% in the second quarter of 2023 and 36% in the first quarter of 2024.
  • Net loss of $24 million, compared to $123 million in the second quarter of 2023 and $24 million in the first quarter of 2024.
  • Adjusted EBITDA1 loss of $11 million, compared to $24 million in the second quarter of 2023 and $12 million in the first quarter of 2024.
  • Cash, cash equivalents, restricted cash, and short-term investments balance of $186 million as of June 30, 2024.

"Our second quarter results showcase solid execution with GAAP gross margin increasing to 34%. Consistent with Ouster’s strategy of expanding into software solutions, we had one of our best quarters for software-attached sales powered by Ouster Gemini and Blue City. Alongside the continued improvement in our operating results, we have built one of the industry’s most resilient balance sheets and diversified business models,” said Ouster CEO Angus Pacala. “I am excited to see the use cases for lidar expand as the world turns to automation to solve an ever increasing number of modern challenges. With lidar adoption still in its infancy, we are just beginning to tap into our growth and I see a tremendous opportunity still in front of us. At the same time, we remain committed to our long-term financial framework and executing on our path to profitability.”

Revenue growth in the second quarter was primarily driven by large orders from customers in the smart infrastructure and robotics verticals, specifically for perimeter security, tolling, and mapping applications. GAAP gross margin improved by 500bps sequentially and benefited from higher revenues along with greater than expected tailwinds from favorable product mix and lower manufacturing costs. Non-GAAP gross margin increased to 40% compared to 26% in the second quarter of 2023. Non-GAAP gross margin excludes the impact of stock-based compensation expenses and certain other expenses outside of ordinary operations. Subsequent to the end of the second quarter, Ouster repaid all outstanding balance on its revolving credit line utilizing cash on hand.

________________________________________
(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.

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 second quarter, Ouster secured multiple deals to supply Ouster Gemini’s smart infrastructure software solution, including to one of the world’s largest consumer technology companies as well as a global telecommunications company. During the quarter, Ouster also improved movement detection for security customers, optimized software processing requirements, and enhanced its deep-learning perception model to support new use cases such as identifying unauthorized individuals tailgating into restricted areas.

Advance the development of digital lidar hardware: During the second quarter, Ouster taped out its automotive-grade, custom silicon “Chronos” chip. The Company expects to integrate Chronos into its solid-state, digital flash “DF” sensors in the next year. Development on the Company’s next generation custom silicon “L4” chip is advancing with validation testing underway. Both Chronos and L4 are expected to open up new verticals and bring significant improvements in performance, reliability, and manufacturability to the Ouster product family.

Progress on the long-term financial framework: Ouster is executing on its path to profitability and remains committed to deliver on its long-term framework of 30-50% annual revenue growth, expanding gross margins to 35-40%, and maintaining operating expenses at or below third quarter 2023 levels.

Third Quarter 2024 Outlook

For the third quarter of 2024, Ouster expects to achieve $27 million to $29 million in revenue.

Conference Call Information

Ouster will host a conference call and live webcast for analysts and investors at 5:00 p.m. ET today, August 13, 2024 to discuss its financial results and business outlook. To access the call, please register at https://registrations.events/direct/Q4I9342824.

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 August 27, 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 third 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; 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)
 
June 30,

2024
December 31,

2023
Assets
Current assets:
Cash and cash equivalents

$

52,687

 

$

50,991

 

Restricted cash, current

 

426

 

 

552

 

Short-term investments

 

131,557

 

 

139,158

 

Accounts receivable, net

 

14,343

 

 

14,577

 

Inventory

 

19,453

 

 

23,232

 

Prepaid expenses and other current assets

 

33,530

 

 

34,647

 

Total current assets

 

251,996

 

 

263,157

 

Property and equipment, net

 

9,445

 

 

10,228

 

Operating lease, right-of-use assets

 

16,822

 

 

18,561

 

Unbilled receivable, non-current portion

 

7,127

 

 

10,567

 

Intangible assets, net

 

20,930

 

 

24,436

 

Restricted cash, non-current

 

1,092

 

 

1,091

 

Other non-current assets

 

2,463

 

 

2,703

 

Total assets

$

309,875

 

$

330,743

 

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable

$

4,490

 

$

3,545

 

Accrued and other current liabilities

 

48,506

 

 

58,166

 

Contract liabilities, current

 

13,812

 

 

12,885

 

Operating lease liability, current portion

 

7,263

 

 

7,096

 

Total current liabilities

 

74,071

 

 

81,692

 

Operating lease liability, non-current portion

 

16,239

 

 

18,827

 

Debt

 

43,973

 

 

43,975

 

Contract liabilities, non-current portion

 

3,487

 

 

4,967

 

Other non-current liabilities

 

1,495

 

 

1,610

 

Total liabilities

 

139,265

 

 

151,071

 

Commitments and contingencies
Stockholders’ equity:
Common stock

 

44

 

 

42

 

Additional paid-in capital

 

1,035,087

 

 

995,464

 

Accumulated deficit

 

(863,744

)

 

(816,026

)

Accumulated other comprehensive (loss) income

 

(777

)

 

192

 

Total stockholders’ equity

 

170,610

 

 

179,672

 

Total liabilities and stockholders’ equity

$

309,875

 

$

330,743

 

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

Ended March 31,
Six Months Ended June 30,

 

2024

 

 

2023

 

 

2024

 

 

2024

 

 

2023

 

Revenue

$

26,990

 

$

19,396

 

$

25,944

 

$

52,934

 

$

36,626

 

Cost of revenue

 

17,892

 

 

19,210

 

 

18,519

 

 

36,411

 

 

36,816

 

Gross profit (loss)

 

9,098

 

 

186

 

 

7,425

 

 

16,523

 

 

(190

)

Operating expenses:
Research and development

 

14,432

 

 

26,447

 

 

13,806

 

 

28,238

 

 

58,906

 

Sales and marketing

 

6,750

 

 

11,666

 

 

6,860

 

 

13,610

 

 

25,199

 

General and administrative

 

13,166

 

 

17,842

 

 

12,580

 

 

25,746

 

 

49,167

 

Goodwill impairment charges

 

 

 

67,266

 

 

 

 

 

 

166,675

 

Total operating expenses

 

34,348

 

 

123,221

 

 

33,246

 

 

67,594

 

 

299,947

 

Loss from operations

 

(25,250

)

 

(123,035

)

 

(25,821

)

 

(51,071

)

 

(300,137

)

Other income (expense):
Interest income

 

2,251

 

 

2,245

 

 

2,651

 

 

4,902

 

 

3,964

 

Interest expense

 

(740

)

 

(1,728

)

 

(741

)

 

(1,481

)

 

(3,397

)

Other income (expense), net

 

(7

)

 

(165

)

 

193

 

 

186

 

 

(111

)

Total other income, net

 

1,504

 

 

352

 

 

2,103

 

 

3,607

 

 

456

 

Loss before income taxes

 

(23,746

)

 

(122,683

)

 

(23,718

)

 

(47,464

)

 

(299,681

)

Provision for income tax expense

 

123

 

 

50

 

 

131

 

 

254

 

 

332

 

Net loss

$

(23,869

)

$

(122,733

)

$

(23,849

)

$

(47,718

)

$

(300,013

)

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

$

(45

)

$

(74

)

$

(459

)

$

(504

)

$

(24

)

Foreign currency translation adjustments

 

(293

)

 

23

 

 

(172

)

 

(465

)

 

(57

)

Total comprehensive loss

$

(24,207

)

$

(122,784

)

$

(24,480

)

$

(48,687

)

$

(300,094

)

Net loss per common share, basic and diluted

$

(0.53

)

$

(3.19

)

$

(0.55

)

$

(1.08

)

$

(8.84

)

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

 

44,737,769

 

 

38,448,241

 

 

43,454,127

 

 

44,077,383

 

 

33,937,505

 

OUSTER, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
 
Six Months Ended June 30,

 

2024

 

 

2023

 

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss

$

(47,718

)

$

(300,013

)

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

 

 

 

166,675

 

Depreciation and amortization

 

5,397

 

 

10,605

 

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

 

214

 

 

1,423

 

Stock-based compensation

 

20,099

 

 

38,246

 

Reduction of revenue related to stock warrant issued to customer

 

488

 

 

61

 

Amortization of right-of-use asset

 

2,391

 

 

2,012

 

Interest expense

 

 

 

889

 

Amortization of debt issuance costs and debt discount

 

 

 

125

 

Accretion or amortization on short-term investments

 

(2,933

)

 

(2,097

)

Change in fair value of warrant liabilities

 

27

 

 

(126

)

Inventory write down

 

742

 

 

5,065

 

Provision (recovery of) for doubtful accounts

 

(241

)

 

541

 

Gain from disposal of property and equipment

 

(114

)

 

(248

)

Realized gain on available for sale securities

 

(275

)

 

 

Changes in operating assets and liabilities:
Accounts receivable

 

3,915

 

 

3,420

 

Inventory

 

3,037

 

 

(3,644

)

Prepaid expenses and other assets

 

101

 

 

(1,126

)

Accounts payable

 

958

 

 

(1,741

)

Accrued and other liabilities

 

(9,830

)

 

(4,779

)

Contract liabilities

 

(553

)

 

759

 

Operating lease liability

 

(3,071

)

 

(2,525

)

Net cash used in operating activities

 

(27,366

)

 

(86,478

)

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

 

502

 

 

560

 

Purchases of property and equipment

 

(1,741

)

 

(1,973

)

Purchase of short-term investments

 

(49,720

)

 

(48,554

)

Proceeds from sales of short-term investments

 

60,028

 

 

72,481

 

Cash and cash equivalents acquired in the Velodyne Merger

 

 

 

32,137

 

Net cash provided by investing activities

 

9,069

 

 

54,651

 

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from ESPP purchase

 

781

 

 

310

 

Proceeds from exercise of stock options

 

151

 

 

150

 

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

 

19,498

 

 

 

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

 

(95

)

 

 

Net cash provided by financing activities

 

20,335

 

 

460

 

Effect of exchange rates on cash and cash equivalents

 

(467

)

 

(56

)

Net decrease in cash, cash equivalents and restricted cash

 

1,571

 

 

(31,423

)

Cash, cash equivalents and restricted cash at beginning of period

 

52,634

 

 

124,278

 

Cash, cash equivalents and restricted cash at end of period

$

54,205

 

$

92,855

 

OUSTER, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(unaudited)
(in thousands)
 
Three Months Ended June 30, Three Months Ended March 31, Six Months Ended June 30,

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

GAAP net loss

$

(23,869

)

$

(122,733

)

$

(23,849

)

$

(177,280

)

$

(47,718

)

$

(300,013

)

Interest expense (income), net

 

(1,511

)

 

(517

)

 

(1,910

)

 

(50

)

 

(3,421

)

 

(567

)

Other expense (income), net

 

7

 

 

165

 

 

(193

)

 

(54

)

 

(186

)

 

111

 

Stock-based compensation(1)

 

10,695

 

 

16,466

 

 

9,404

 

 

21,780

 

 

20,099

 

 

38,246

 

Provision for income tax expense

 

123

 

 

50

 

 

131

 

 

282

 

 

254

 

 

332

 

Goodwill impairment charge

 

 

 

67,266

 

 

 

 

99,409

 

 

 

 

166,675

 

Restructuring costs, excluding stock-based compensation expense

 

 

 

3,342

 

 

 

 

12,635

 

 

 

 

15,977

 

Excess and obsolete expenses and loss on firm purchase commitments

 

 

 

3,750

 

 

572

 

 

3,630

 

 

572

 

 

7,380

 

Amortization of acquired intangibles(2)

 

1,661

 

 

1,702

 

 

1,754

 

 

1,511

 

 

3,415

 

 

3,213

 

Depreciation expense(2)

 

839

 

 

2,744

 

 

1,053

 

 

4,648

 

 

1,892

 

 

7,392

 

Litigation expenses(3)

 

1,636

 

 

3,364

 

 

1,296

 

 

537

 

 

2,932

 

 

3,901

 

Merger and acquisition related expenses(4)

 

 

 

 

 

 

 

6,058

 

 

 

 

6,058

 

Other items

 

(114

)

 

 

 

 

 

 

 

(114

)

 

 

Adjusted EBITDA

$

(10,533

)

$

(24,401

)

$

(11,743

)

$

(26,893

)

$

(22,276

)

$

(51,294

)

 
(1)Includes stock-based compensation expense as follows:
Three Months Ended June 30, Three Months Ended March 31, Six Months Ended June 30,

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Cost of revenue

$

1,210

 

$

654

 

$

913

 

$

774

 

$

2,123

 

$

1,428

 

Research and development

 

4,650

 

 

8,204

 

 

4,188

 

 

7,505

 

 

8,838

 

 

15,709

 

Sales and marketing

 

1,492

 

 

3,500

 

 

1,400

 

 

2,881

 

 

2,892

 

 

6,381

 

General and administrative

 

3,343

 

 

4,108

 

 

2,903

 

 

10,620

 

 

6,246

 

 

14,728

 

Total stock-based compensation

$

10,695

 

$

16,466

 

$

9,404

 

$

21,780

 

$

20,099

 

$

38,246

 

 
(2)Includes depreciation and amortization expense as follows:
Three Months Ended June 30, Three Months Ended March 31, Six Months Ended June 30,

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Cost of revenue

$

999

 

$

1,772

 

$

1,100

 

$

1,750

 

$

2,099

 

$

3,522

 

Research and development

 

670

 

 

892

 

 

712

 

 

2,964

 

 

1,382

 

 

3,856

 

Sales and marketing

 

249

 

 

258

 

 

248

 

 

181

 

 

497

 

 

440

 

General and administrative

 

582

 

 

1,524

 

 

747

 

 

1,264

 

 

1,329

 

 

2,787

 

Total depreciation and amortization expense

$

2,500

 

$

4,446

 

$

2,807

 

$

6,159

 

$

5,307

 

$

10,605

 

 
(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 June 30, Three Months Ended March 31, Six Months Ended June 30,

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Gross profit (loss) on GAAP basis

$

9,098

 

$

186

 

$

7,425

 

$

(376

)

$

16,523

 

$

(190

)

Stock-based compensation

 

1,210

 

 

654

 

 

913

 

 

774

 

 

2,123

 

 

1,428

 

Amortization of acquired intangible assets

 

371

 

 

412

 

 

464

 

 

249

 

 

835

 

 

661

 

Excess and obsolete expenses and loss on firm purchase commitments

 

 

 

3,750

 

 

572

 

 

3,630

 

 

572

 

 

7,380

 

Gross profit on non-GAAP basis

$

10,679

 

$

5,002

 

$

9,374

 

$

4,277

 

$

20,053

 

$

9,279

 

 
Gross margin on GAAP basis

 

34

%

 

1

%

 

29

%

 

(2

)%

 

31

%

 

(1

)%

Gross margin on non-GAAP basis

 

40

%

 

26

%

 

36

%

 

25

%

 

38

%

 

25

%

 

Contacts

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