Ouster Announces Record Revenue for Fourth Quarter and Full Year 2023

Record revenue of $83 million for the full year 2023

Expects $25 to $26 million of revenue for the first quarter of 2024

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 today financial results for the three and twelve months ended December 31, 20231.

Fourth Quarter 2023 Highlights

• Over $24 million in revenue, up 10% sequentially and a quarterly record.
• Shipped over 4,100 sensors for revenue, up over 20% sequentially and a quarterly record.
• GAAP gross margins of 22%, compared to 14% in the third quarter of 2023.
• Non-GAAP gross margins2 of 35%, compared to 33% in the third quarter of 2023.
• Net loss of $39 million, compared to $35 million in the third quarter of 2023.
• Adjusted EBITDA2 loss of $14 million, compared to a loss of $18 million in the third quarter of 2023.

Full Year 2023 Highlights

• Over $83 million in revenue, up 103% year over year and an annual record.
• Booked $142 million in business with new and existing customers, representing a book-to-bill ratio of 1.7x.3
• Closed merger with Velodyne and established a combined company with a robust range of products, stronger financial position, diversified business, extensive intellectual property portfolio, and a significantly reduced cost structure.
• Ended 2023 with cash, cash equivalents, restricted cash, and short-term investments balance of $192 million.
• Exceeded initial post-merger annualized cost savings target by over 40%4.
• Scaled production and shipments of REV7, Ouster’s most performant sensor to date.
• Awarded production wins by May Mobility and Motional to supply lidar for their autonomous vehicles.
• Transitioned manufacturing of Velodyne products to Thailand.
• Launched Ouster Gemini, a digital lidar perception platform for crowd analytics, security, and intelligent transportation systems.
• Unified Blue City and Ouster Gemini, adding new performance-improving deep learning AI perception models.

"Ouster had a transformative year, reporting record revenue of $83 million and bookings of $142 million in 2023. We successfully completed the merger with Velodyne, which solidified our balance sheet, expanded our patent portfolio, and streamlined our cost structure. We achieved important milestones across our operations, notably scaling production and shipments of REV7. Additionally, we added new revenue streams with the launch of Ouster Gemini and Blue City and demoed our first DF sensors with customers, marking a significant stride forward in our product development journey. This was accomplished while delivering record financial performance, significantly reducing our cash burn, and exceeding our initial post-merger annualized cost savings target by over 40%”, said Ouster CEO Angus Pacala. "I’m excited to continue this momentum in 2024 as we execute our plan towards profitability."

Ouster delivered record quarterly revenue of over $24 million with shipments exceeding 4,100 sensors. GAAP and non-GAAP gross margins were sequentially higher, in line with expectations. Margin expansion was driven by higher revenues and lower manufacturing costs attributable to operational improvements. GAAP gross margins of 22% in the fourth quarter of 2023 include the impact of certain expenses outside of ordinary operations associated with the consolidation of product lines and outsourced manufacturing of Velodyne products. Non-GAAP gross margins improved to 35% in the fourth quarter of 2023. GAAP operating expenses were higher sequentially, driven by a litigation settlement and higher stock-based compensation expenses.

2024 Business Objectives

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: Ouster’s smart infrastructure solutions, powered by Ouster Gemini and Blue City, are enabling customers to improve operating efficiency and safety. The Company plans to release additional subscription-based software solutions later this year that improve the ease of installation and provide additional statistics and analytics to customers. These tools are expected to support expanded adoption by existing customers as well as new opportunities at global logistics companies, security integrators, and transportation authorities. With a multibillion-dollar lidar opportunity in smart infrastructure, the Company expects software coupled sales to be a key contributor to future growth.

Advance the development of digital lidar hardware: Ouster continues to progress on its digital lidar roadmap, developing technologies that will enhance operating performance and provide further differentiation versus peers. Ouster’s next generation L4 custom silicon chip is taped out and is expected to bring significant improvements in range, field of view, and manufacturability, along with safety certifications to the OS sensor family. The Company plans to integrate the Chronos chip into its solid-state digital flash (“DF”) sensors later this year.

Progress on the long-term financial framework: Last quarter, Ouster set a financial framework focused on achieving 30-50% annual revenue growth, expanding gross margins to 35-40%, and maintaining operating expenses at or below third quarter 2023 levels. The Company expects 2024 results to make meaningful progress against this framework, putting Ouster on a path towards profitability.

First Quarter 2024 Outlook

For the first quarter of 2024, Ouster expects to achieve $25 million to $26 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, March 26, 2024 to discuss its financial results and business outlook. To access the call, please register at https://registrations.events/direct/Q4I934283.

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 April 4, 2024 by dialing (800) 770-2030 from the U.S. or +1 (609) 800-9909 from outside the U.S. The conference I.D. number is 93428.

About Ouster

Ouster (NYSE: OUST) is a leading global provider of high-resolution scanning and solid-state 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. 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 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. 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,” “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 statements of historical fact, including statements regarding Ouster’s revenue guidance for the first quarter of 2024; anticipated new product launches and developments; Ouster’s future results of operations, cash reserve and financial position; anticipated cost savings; 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; the benefits of the Company’s merger with Velodyne; 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, 2022, as will be updated in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, 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 measures of Non-GAAP Gross Profit, 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.

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