Over $19 million in revenue and $43 million in
bookings in the second quarter 2023
Now targeting annualized cost savings of over
$110 million exiting the fourth quarter 2023
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 six months
ended June 30, 2023. The second quarter 2022 comparative financial
highlights reflect only the results of standalone Ouster. First
quarter 2023 comparative financial highlights 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 through March 31, 2023.
Second Quarter 2023 Highlights
- Over $19 million in revenue, up 13% quarter over quarter, and
up 88% year over year.
- Booked1 $43 million in business with new and existing
customers.
- Gross margins of 1%, compared to (2)% in the first quarter 2023
and 27% in the second quarter 2022.
- Non-GAAP gross margins of 26%, up from 25% in the first quarter
of 2023.
- Shipped over 3,000 sensors for revenue in the second quarter,
up 1% quarter over quarter and 71% year over year.
- Net loss of $123 million in the second quarter of 2023,
compared to $177 million in the first quarter of 2023 and $28
million in the second quarter of 2022.2
- Adjusted EBITDA3 loss improved to $24 million, compared to a
loss of $27 million in the first quarter of 2023 and a loss of $23
million in the second quarter of 2022.
- Cash, cash equivalents and short-term investments balance of
$224 million as of June 30, 2023.
“Ouster exited the second quarter 2023 with record quarterly
revenues and strong bookings. These results, coupled with our cost
reduction efforts, and continued execution on our cutting-edge
product roadmap, position the Company for long-term success,” said
Ouster CEO Angus Pacala. “We remain on track to build a strong
go-forward enterprise that will create value for all of our
stakeholders.”
Ouster’s second quarter GAAP gross margins of 1% include certain
expenses outside of our ordinary operations, including excess and
obsolete costs, of $3.8 million associated with the consolidation
of product lines and manufacturing transition from the REV6 to REV7
OS sensors. The Company improved non-GAAP gross margins to 26% in
the second quarter of 2023, through strong demand for the REV7
sensor product line and improved average selling prices. Continued
commercial traction for the REV7 sensor and recent cost reduction
efforts support management’s expectations that margins will improve
in the second half of 2023.
______________________________________ 1 Bookings represent
binding contract orders entered during the period. 2 Net loss
includes goodwill impairment non-cash charges of $99 million in
first quarter 2023 and $67 million in second quarter 2023. 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
increased shipments of its REV7 OS sensors in the second quarter
with higher average selling prices. REV7 sensors now account for
the majority of OS sensor revenue and bookings. The Company also
shipped VLS-128 sensors to Motional and May Mobility coinciding
with new and expanded customer agreements.
Execute on Digital Product Roadmap:
Ouster continued to make progress on its digital lidar roadmap with
the release of early B-samples of its solid-state Digital Flash
(DF) sensors. At only 40mm tall, and fully solid state, these final
form-factor DF sensors can detect 10% reflective objects at up to
200 meters range with camera-like resolution. Early B-samples will
be offered to leading automakers starting in the third quarter of
2023, which we expect will be a major catalyst to our automotive
platform.
Develop Robust Software Ecosystem:
Ouster enabled OS sensor compatibility for BlueCity, its turnkey
traffic management solution, as part of its plans to unify the
solution with Ouster Gemini, its digital lidar perception platform
for smart infrastructure applications.
Build Financially Strong
Business:
- Cost Savings: Following its June cost reduction announcement,
Ouster now expects to realize annualized cost savings of over $110
million exiting the fourth quarter of 2023, baselined against the
standalone cost structures of the two companies as of the third
quarter 2022. The Company reduced annual run-rate costs by an
additional approximately $40 million in the second quarter of 2023.
The Company recognized a one-time cash expense of over $3 million
in the quarter.
- Scaling Manufacturing: As part of its outsourced manufacturing
strategy to scale production and reduce costs, Ouster completed the
transition of the VLP-32 sensor to Fabrinet in Thailand, and is on
track to fully transition the VLS-128 by the end of the year.
Third Quarter 2023 Outlook
For the third quarter of 2023, Ouster expects to achieve $20
million to $22 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 10, 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
August 24, 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. 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
revenue guidance; anticipated new product launches and
developments; its future results of operations, cash reserve and
financial position; anticipated cost savings; execution against the
Company’s product roadmap; industry and business trends; its
business objectives, plans, strategic partnerships, market growth;
manufacturing transitions; 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 and
recognize anticipated cost savings; 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) June
30,2023 December 31,2022 Assets Current assets:
Cash and cash equivalents
$
91,237
$
122,932
Restricted cash, current
528
257
Short-term investments
133,176
—
Accounts receivable, net
15,106
11,233
Inventory
27,812
19,533
Prepaid expenses and other current assets
12,565
8,543
Total current assets
280,424
162,498
Property and equipment, net
12,739
9,695
Operating lease, right-of-use assets
21,069
12,997
Unbilled receivable, long-term portion
7,433
—
Goodwill
—
51,152
Intangible assets, net
27,951
18,165
Restricted cash, non-current
1,090
1,089
Other non-current assets
3,079
541
Total assets
$
353,785
$
256,137
Liabilities and stockholders’ equity Current liabilities:
Accounts payable
$
10,296
$
8,798
Accrued and other current liabilities
39,843
17,071
Contract liabilities
9,776
402
Operating lease liability, current portion
7,317
3,221
Total current liabilities
67,232
29,492
Operating lease liability, long-term portion
22,455
13,400
Debt
40,135
39,574
Contract liabilities, long-term portion
5,264
342
Other non-current liabilities
1,708
1,710
Total liabilities
136,794
84,518
Commitments and contingencies Stockholders’ equity: Common stock
39
19
Additional paid-in capital
959,111
613,665
Accumulated deficit
(741,929
)
(441,916
)
Accumulated other comprehensive loss
(230
)
(149
)
Total stockholders’ equity
216,991
171,619
Total liabilities and stockholders’ equity
$
353,785
$
256,137
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,
2023
2022
2023
2022
Revenue
$
19,396
$
10,329
$
36,626
$
18,887
Cost of revenue
19,210
7,547
36,816
13,514
Gross (loss) profit
186
2,782
(190
)
5,373
Operating expenses: Research and development
26,447
15,893
58,906
31,799
Sales and marketing
11,666
7,563
25,199
14,653
General and administrative
17,842
12,515
49,167
26,298
Goodwill impairment charges
67,266
—
166,675
—
Total operating expenses
123,221
35,971
299,947
72,750
Loss from operations
(123,035
)
(33,189
)
(300,137
)
(67,377
)
Other (expense) income: Interest income
2,245
344
3,964
498
Interest expense
(1,728
)
(444
)
(3,397
)
(444
)
Other income (expense), net
(165
)
5,326
(111
)
7,010
Total other income, net
352
5,226
456
7,064
Loss before income taxes
(122,683
)
(27,963
)
(299,681
)
(60,313
)
Provision for income tax expense
50
37
332
84
Net loss
$
(122,733
)
$
(28,000
)
$
(300,013
)
$
(60,397
)
Other comprehensive loss Changes in unrealized gain (loss) on
available for sale securities
$
(74
)
$
—
$
(24
)
$
—
Foreign currency translation adjustments
$
23
$
(76
)
$
(57
)
$
(88
)
Total comprehensive loss
$
(122,784
)
$
(28,076
)
$
(300,094
)
$
(60,485
)
Net loss per common share, basic and diluted
$
(3.19
)
$
(1.60
)
$
(8.84
)
$
(3.49
)
Weighted-average shares used to compute basic and diluted net loss
per share
38,448,241
17,505,736
33,937,505
17,296,583
OUSTER, INC. CONSOLIDATED STATEMENTS OF CASH
FLOWS (unaudited) (in thousands)
Six Months Ended June 30,
2023
2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss
$
(300,013
)
$
(60,397
)
Adjustments to reconcile net loss to net cash used in operating
activities: Goodwill impairment charges
166,675
—
Depreciation and amortization
10,605
4,739
Loss on write-off of construction in progress and right-of-use
asset impairment
1,423
—
Stock-based compensation
38,246
16,869
Reduction of revenue related to stock warrant issued to customer
61
—
Change in right-of-use asset
2,012
1,358
Interest expense
889
402
Amortization of debt issuance costs and debt discount
125
42
Accretion or amortization on short-term investments
(2,097
)
—
Change in fair value of warrant liabilities
(126
)
(7,134
)
Inventory write down
5,065
447
Provision for doubtful accounts
541
—
Loss/(Gain) from disposal of property and equipment
(248
)
(100
)
Changes in operating assets and liabilities, net of acquisition
effects: Accounts receivable
3,420
1,341
Inventory
(3,644
)
(10,180
)
Prepaid expenses and other assets
(1,126
)
(1,957
)
Contract assets
—
—
Accounts payable
(1,741
)
1,094
Accrued and other liabilities
(4,779
)
(329
)
Contract liabilities
759
—
Operating lease liability
(2,525
)
(1,588
)
Net cash used in operating activities
(86,478
)
(55,393
)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property and equipment
560
275
Purchases of property and equipment
(1,973
)
(1,277
)
Purchase of short-term investments
(48,554
)
—
Proceeds from sales of short-term investments
72,481
—
Cash and cash equivalents acquired in the Velodyne Merger
32,137
—
Net cash provided by (used in) investing activities
54,651
(1,002
)
CASH FLOWS FROM FINANCING ACTIVITIES
Repurchase of common stock
—
(43
)
Proceeds from ESPP purchase
310
—
Proceeds from exercise of stock options
150
252
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
units
—
(59
)
Net cash provided by financing activities
460
33,599
Effect of exchange rates on cash and cash equivalents
(56
)
(88
)
Net decrease in cash, cash equivalents and restricted cash
(31,423
)
(22,884
)
Cash, cash equivalents and restricted cash at beginning of period
124,278
184,656
Cash, cash equivalents and restricted cash at end of period
$
92,855
$
161,772
OUSTER, INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL
MEASURES (unaudited) (in thousands) Three
Months Ended June 30, Six Months Ended June 30,
2023
2022
2023
2022
GAAP net loss
$
(122,733
)
$
(28,000
)
$
(300,013
)
$
(60,397
)
Interest expense (income), net
(517
)
100
(567
)
(54
)
Other expense (income), net
165
(5,326
)
111
(7,010
)
Stock-based compensation(1)
16,466
8,119
38,246
16,869
Provision for income tax expense
50
37
332
84
Goodwill impairment charge
67,266
—
166,675
—
Amortization of acquired intangibles(2)
1,702
1,122
3,213
2,244
Restructuring costs, excluding stock-based compensation expense
3,342
—
15,977
—
Excess and obsolete expenses and loss on firm purchase commitments
3,750
—
7,380
—
Depreciation expense(2)
2,744
1,232
7,392
2,495
Litigation expenses(3)
3,364
92
3,901
592
Merger and acquisition related expenses(4)
—
—
6,058
—
Adjusted EBITDA
$
(24,401
)
$
(22,624
)
$
(51,294
)
$
(45,177
)
(1)Includes stock-based compensation expense as follows:
Three Months Ended June 30, Six Months Ended June 30,
2023
2022
2023
2022
Cost of revenue
$
654
$
146
$
1,428
$
365
Research and development
8,204
3,806
15,709
7,566
Sales and marketing
3,500
1,839
6,381
3,362
General and administrative
4,108
2,328
14,728
5,576
Total stock-based compensation
$
16,466
$
8,119
$
38,246
$
16,869
(2)Includes depreciation and amortization expense as
follows:
Three Months Ended June 30, Six Months Ended
June 30,
2023
2022
2023
2022
Cost of revenue
$
1,772
$
310
$
3,522
$
690
Research and development
892
823
3,856
1,613
Sales and marketing
258
75
440
150
General and administrative
1,524
1,146
2,787
2,286
Total depreciation and amortization expense
$
4,446
$
2,354
$
10,605
$
4,739
(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, Six Months Ended
June 30,
2023
2022
2023
2022
Gross profit (loss) on GAAP basis
$
186
$
2,782
$
(190
)
$
5,373
Stock-based compensation
654
146
1,428
365
Amortization of acquired intangible assets
412
—
661
—
Excess and obsolete expenses and loss on firm purchase commitments
3,750
—
7,380
—
Gross profit on non-GAAP basis
$
5,002
$
2,928
$
9,279
$
5,738
Gross margin on GAAP basis
1
%
27
%
(1
)%
28
%
Gross margin on non-GAAP basis
26
%
28
%
25
%
30
%
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