Over $17 million in revenue and $33 million in
bookings in the first quarter 2023
Shipped REV7 sensors to over 110 customers in
the first quarter 2023
Now targeting annualized merger cost synergies
of between $80 and $85 million
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 months ended March
31, 2023. First quarter 2023 financial results are composed of
Ouster standalone performance through February 10, 2023 and
combined performance of both companies following the merger with
Velodyne on February 10, 2023. The first quarter 2022 comparative
financial highlights reflect only the results of standalone
Ouster.
First Quarter 2023 Highlights
- Over $17 million in revenue1, up 101% from $8.6 million in the
first quarter of 2022.
- Booked2 $33 million in business with new and existing
customers.
- Gross margins of (2%), compared to 30% in the first quarter of
2022.
- Non-GAAP gross margins of 25% in the first quarter of
2023.
- Shipped over 3,000 sensors for revenue in the first quarter, up
95% year over year.
- Net loss increased to $177 million in the first quarter of 2023
primarily due to the non-cash goodwill impairment charges of $99
million and higher operating losses associated with Velodyne
merger, compared to $32 million in the first quarter of 2022.
- Adjusted EBITDA3 loss increased to $27 million, compared to a
loss of $23 million in the first quarter of 2022.
- Cash, cash equivalents and short-term investments balance of
$257 million as of March 31, 2023.
“Ouster had a strong first quarter of 2023 marked by significant
customer demand for our new REV7 sensors, enabling us to both
exceed our revenue expectations for the quarter and book $33
million in business with new and existing customers,” said Ouster
CEO Angus Pacala. “We also laid the groundwork to realign our cost
structure, streamline manufacturing, and deliver on our product
roadmap to catalyze further growth.”
The Company’s non-GAAP gross margin was 25% in the first quarter
of 2023, reflecting strong demand for the REV7 sensor product line
and a quarter-over-quarter rebound in average selling prices for
Ouster’s OS sensors. Ouster’s first quarter GAAP gross margins
include certain non-recurring or unusual items, including excess
and obsolete costs of $3.6 million, associated with the
consolidation of product lines and manufacturing transition from
the REV6 to REV7 OS sensors, as well as amortization of acquired
intangibles. Looking forward, increasing commercial traction for
the REV7 sensor and ongoing actions to reduce Ouster’s cost
structure support management’s expectations that margins will
improve in the second half of 2023.
_______________________________________
1 First quarter 2023 revenues include $6.4 million in revenue
from Velodyne products following the merger but exclude revenues
from Velodyne products prior to the merger on February 10, 2023. 2
Bookings represent binding contract orders entered during the
period. 3 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, the
most directly comparable financial measures calculated in
accordance with U.S. GAAP.
2023 Business Objectives and Updates
- Drive new business through targeted sales approach to deliver
near-term growth
- Execute on the digital lidar roadmap for OS and DF series to
expand serviceable market
- Develop a robust software ecosystem to accelerate lidar
adoption
- Build a financially strong business to support long-term growth
and deliver value to shareholders
Drive New Business: Ouster expanded
sales of its new REV7 OS sensors powered by its next-generation L3
chip, shipping sensors to over 110 customers in the first quarter
of 2023, including warehouse automation customers such as Vecna
Robotics, Cyngn, and Balyo, as well as several large industrial
trucking, bus, and mining equipment OEMs. Ouster also announced
today that Motional, a global leader in driverless technology, has
selected Ouster as its exclusive provider of long-range lidar
sensors for its all-electric IONIQ 5-based robotaxis. As part of
the serial production agreement, Ouster will supply Motional with
Alpha Prime™ VLS-128 sensors through 2026.
Execute on Digital Product Roadmap:
Ouster continued to make progress on its digital lidar roadmap:
- OS Series: Rapid progress on the next-generation custom silicon
to power its OS sensors, the L4 chip, which is expected to tape out
later this year.
- DF Series: On track to deliver early B-samples of its
solid-state DF sensors to automotive customers in the second half
of 2023.
Develop Robust Software Ecosystem:
As part of Ouster’s plans to unify software solutions for the smart
infrastructure vertical, BlueCity will be underpinned by Ouster
Gemini to add OS sensor compatibility, more features and better
overall performance to customers. The Company has received a
terrific customer response and a steady increase in software
adoption. Ouster has hundreds of active smart infrastructure
solution deployments around the world for intelligent
transportation systems, crowd and retail analytics, and security
monitoring.
Build Financially Strong
Business:
- Merger Integration: Ouster expects to realize annualized costs
synergies greater than previously announced; now targeting $80 to
$85 million exiting the fourth quarter of 2023. The synergy
estimate is baselined against the standalone cost structures of the
two companies, as of the third quarter 2022. During first quarter
2023, the Company reduced over $50 million in annual run-rate
costs, which resulted in a one-time cash expense of approximately
$10 million.
- Scaling Manufacturing: As part of its outsourced manufacturing
strategy to scale production and reduce costs, Ouster completed the
transition of the VLP-16 sensor to Fabrinet in Thailand, and is on
track to fully transition the VLP-32 in the second quarter of 2023
and the VLS-128 by the end of the year.
Second Quarter 2023 Outlook
For the second quarter of 2023, the first full quarter
post-merger, Ouster expects to achieve $18 million to $20 million
in revenue.
Conference Call
Information
Ouster will host a conference call and live webcast for analysts
and investors at 5:00 p.m. EDT today, May 11, 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
May 25, 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 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 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 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; the Company’s expected contractual obligations and
capital expenditures; the capabilities of and demand for its
products; anticipated new product launches and developments; its
future results of operations and financial position; industry and
business trends; the Company’s expectations regarding the Hesai
intellectual property patent infringement case; its business
strategy, plans, strategic partnerships, market growth and its
objectives for future operations; and its competitive market
position 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, 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, including as
relates to Hesai Group; 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 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, amortization of
acquired intangible assets, depreciation expenses, certain
restructuring costs excluding stock-based compensation expenses,
certain excess and obsolete expenses and losses on firm purchase
commitments, certain litigation and litigation related expenses and
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. 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
31,2023 December 31,2022 Assets Current assets:
Cash and cash equivalents
$
115,827
$
122,932
Restricted cash, current
566
257
Short-term investments
140,909
—
Accounts receivable, net
22,848
11,233
Inventory
28,726
19,533
Prepaid expenses and other current assets
10,646
8,543
Total current assets
319,522
162,498
Property and equipment, net
14,643
9,695
Operating lease, right-of-use assets
21,968
12,997
Unbilled receivable, long-term portion
6,657
—
Goodwill
67,266
51,152
Intangible assets, net
29,654
18,165
Restricted cash, non-current
1,089
1,089
Other non-current assets
3,199
541
Total assets
$
463,998
$
256,137
Liabilities and stockholders’ equity Current liabilities:
Accounts payable
$
17,634
$
8,798
Accrued and other current liabilities
41,683
17,071
Contract liabilities
5,965
402
Operating lease liability, current portion
7,404
3,221
Total current liabilities
72,686
29,492
Operating lease liability, long-term portion
23,908
13,400
Debt
39,853
39,574
Contract liabilities, long-term portion
2,660
342
Other non-current liabilities
2,155
1,710
Total liabilities
141,262
84,518
Commitments and contingencies Stockholders’ equity: Common stock
39
19
Additional paid-in capital
942,072
613,665
Accumulated deficit
(619,196
)
(441,916
)
Accumulated other comprehensive loss
(179
)
(149
)
Total stockholders’ equity
322,736
171,619
Total liabilities and stockholders’ equity
$
463,998
$
256,137
OUSTER, INC. CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE LOSS (unaudited) (in
thousands, except share and per share data) Three
Months Ended March 31,
2023
2022
Product revenue
$
17,230
$
8,558
Cost of product
17,606
5,967
Gross (loss) profit
(376
)
2,591
Operating expenses: Research and development
32,459
15,906
Sales and marketing
13,533
7,090
General and administrative
31,325
13,783
Goodwill impairment charges
99,409
—
Total operating expenses
176,726
36,779
Loss from operations
(177,102
)
(34,188
)
Other (expense) income: Interest income
1,719
154
Interest expense
(1,669
)
—
Other income, net
54
1,684
Total other income, net
104
1,838
Loss before income taxes
(176,998
)
(32,350
)
Provision for income tax expense
282
47
Net loss
$
(177,280
)
$
(32,397
)
Other comprehensive loss Changes in unrealized gain (loss) on
available for sale securities
$
51
$
—
Foreign currency translation adjustments
$
(81
)
$
(12
)
Total comprehensive loss
$
(177,310
)
$
(32,409
)
Net loss per common share, basic and diluted
$
(6.03
)
$
(1.90
)
Weighted-average shares used to compute basic and diluted net loss
per share
29,411,612
17,090,620
OUSTER, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited) (in thousands) Three Months
Ended March 31,
2023
2022
CASH FLOWS FROM OPERATING ACTIVITIES Net loss
$
(177,280
)
$
(32,397
)
Adjustments to reconcile net loss to net cash used in operating
activities: Goodwill impairment charges
99,409
—
Depreciation and amortization
6,159
2,385
Loss on write-off of construction in progress and right-of-use
asset impairment
1,423
—
Stock-based compensation
21,780
8,750
Change in right-of-use asset
1,112
644
Interest expense
685
—
Amortization of debt issuance costs and debt discount
62
—
Accretion or amortization on short-term investments
(805
)
—
Change in fair value of warrant liabilities
(106
)
(1,745
)
Inventory write down
2,836
203
Provision for doubtful accounts
445
—
Loss/(Gain) from disposal of property and equipment
145
(100
)
Changes in operating assets and liabilities, net of acquisition
effects: Accounts receivable
(3,450
)
842
Inventory
(2,329
)
(4,373
)
Prepaid expenses and other assets
672
2,480
Accounts payable
5,488
4,807
Accrued and other liabilities
(9,218
)
(2,551
)
Contract liabilities
944
—
Operating lease liability
(984
)
(772
)
Net cash used in operating activities
(53,012
)
(21,827
)
CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of
property and equipment
168
275
Purchases of property and equipment
(1,006
)
(416
)
Purchase of short-term investments
(5,003
)
—
Proceeds from sales of short-term investments
19,981
—
Cash and cash equivalents acquired in the Velodyne Merger
32,137
—
Net cash provided by (used in) investing activities
46,277
(141
)
CASH FLOWS FROM FINANCING ACTIVITIES Repurchase of common
stock
—
(31
)
Proceeds from exercise of stock options
18
209
Taxes paid related to net share settlement of restricted stock
units
—
(59
)
Net cash provided by financing activities
18
119
Effect of exchange rates on cash and cash equivalents
(79
)
(12
)
Net decrease in cash, cash equivalents and restricted cash
(6,796
)
(21,861
)
Cash, cash equivalents and restricted cash at beginning of period
124,278
184,656
Cash, cash equivalents and restricted cash at end of period
$
117,482
$
162,795
OUSTER, INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL
MEASURES (unaudited) (in thousands) Three
Months Ended March 31,
2023
2022
GAAP net loss
$
(177,280
)
$
(32,397
)
Interest expense (income), net
(50
)
(154
)
Other expense (income), net
(54
)
(1,684
)
Stock-based compensation(1)
21,780
8,750
Provision for income tax expense
282
47
Goodwill impairment charge
99,409
—
Amortization of acquired intangibles(2)
1,511
1,122
Restructuring costs, excluding stock-based compensation expense
12,635
—
Excess and obsolete expenses and loss on firm purchase commitments
3,630
—
Depreciation expense(2)
4,648
1,263
Litigation expenses(3)
537
500
Merger and acquisition related expenses(4)
6,058
—
Adjusted EBITDA
$
(26,893
)
$
(22,553
)
(1)Includes stock-based compensation expense as follows:
Three Months Ended March 31,
2023
2022
Cost of revenue
$
774
$
217
Research and development
7,505
3,761
Sales and marketing
2,881
1,524
General and administrative
10,620
3,248
Total stock-based compensation
$
21,780
$
8,750
(2)Includes depreciation and amortization expense as
follows:
Three Months Ended March 31,
2023
2022
Cost of revenue
$
1,750
$
382
Research and development
2,964
789
Sales and marketing
181
75
General and administrative
1,264
1,139
Total depreciation and amortization expense
$
6,159
$
2,385
(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,
2023
2022
Gross (loss) profit on GAAP basis
$
(376
)
$
2,591
Stock-based compensation
774
217
Amortization of acquired intangible assets
249
—
Excess and obsolete expenses and loss on firm purchase commitments
3,630
—
Gross profit on non-GAAP basis
$
4,277
$
2,808
Gross margin on GAAP basis
(2
)%
30
%
Gross margin on non-GAAP basis
25
%
33
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230511005664/en/
For Investors Sarah Ewing investors@ouster.io
For Media Heather Shapiro press@ouster.io
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