Ouster, Inc. Q1 FY2025 earnings call

• Recap of quarter: Reported revenue of $32.6 million, gross margin of 41%, and shipped over 4,700 sensors. Balance sheet is strong with $171 million in cash and equivalents. • Market overview: Won multimillion-dollar deals across verticals including smart infrastructure, industrial, automotive, and robotics. • Strategic priorities: 1. Scaling software-attached business, e.g., largest software-attached contract in Europe and Utah DoT deal. 2. Transforming product portfolio with new hardware, firmware, and software updates like 3D Zone Monitoring and Gemini portal. 3. Executing towards profitability, aligning with 30%-50% annual revenue growth and 35%-40% gross margin. • Partnerships: Collaboration with NVIDIA for BlueCity's AI model training, integration with NVIDIA ecosystems. • Next-gen silicon: L4 and Chronos custom silicon on track to double addressable market.

In the first quarter, Ouster reported revenue of $32.6 million. The industrial vertical was the largest contributor to first quarter revenue, followed by automotive. First quarter gross margin was 41%, which included approximately $1.5 million in patent royalty. The company shipped over 4,700 sensors, and ended the quarter with $171 million in cash and equivalents with zero debt.

• For the second quarter, Ouster expects to achieve revenue between $32 million and $35 million. • Assumed no material revenue from patent royalty for second quarter guidance preparation.

• Geopolitical and macroeconomic environment is fluid, with uncertainty regarding tariffs. The impact of tariffs on costs is being assessed, but currently, proposed tariff levels do not prevent achieving long-term framework, though uncertainty remains.

Q: About gross margins, specifically the pro forma number excluding patents being around 43% and why gross margin framework hasn't moved up.

A: Chen Geng said they're pleased with margin performance, 35%-40% is an appropriate GAAP gross margin target, and software contribution will be detailed when significant.

Q: Regarding new products and TAM expansion, specifically L4 and Chronos.

A: Angus Pacala said upcoming product releases are transformational, roughly doubling addressable market, and positive signals from roadmap conversations with Tier 1 customers.

Q: About testing process with new customers and translating to new awards.

A: Angus Pacala said testing happens ongoing with new firmware, hardware, software, helping customers move into production, e.g., Komatsu deal.

Q: On robotaxis region and warehouse automation categories.

A: Chen Geng said robotaxis are accelerating, mostly North American with key customers like Motional and May Mobility; Angus Pacala said Ouster plays across all warehouse applications, including humanoids but not driving business yet.

Q: On sensor pricing trend.

A: Angus Pacala said generally prices go down, but unit shipments rise faster than revenue, software-attached business complicates, but managing ASP trend well.

Q: On lidar adoption speed and tariffs impact.

A: Angus Pacala said positivity in autonomy and physical AI, Ouster maximizing adoption speed; Chen Geng said tariffs not significantly disrupting business as automation is strong trend.

Q: On competitive dynamics with other lidar companies.

A: Angus Pacala said other lidar companies have fits and starts in moving into non-automotive verticals, while Ouster has emerged as leading in diverse end markets.