Ouster Reports 40% Year over Year Revenue Growth Driven by Automation in Industrial and Robotics Sectors
Ouster, Inc. (NYSE: OUST) ("Ouster" or the "Company"), a leading provider of high-resolution digital lidar sensors for the automotive, industrial, robotics, and smart infrastructure industries, announced financial results for the three months ended June 30, 2022.
Second Quarter 2022 Financial Highlights
Ouster achieved its second highest revenue quarter, driven primarily by growth in the industrial and robotics verticals, predominantly from customers utilizing digital lidar for warehouse and port automation, off-highway mining and agriculture vehicles, construction robots, and drones for mapping and volumetric measurement. Sizeable orders in the automotive vertical, specifically for autonomous trucks, buses, and shuttles also meaningfully contributed to revenue in the second quarter followed by revenues from smart infrastructure deployments around the world. The Company delivered gross margins of 27%, down slightly from the first quarter of 2022 due to continued supply chain headwinds and efforts to avoid production and shipping delays.
Continued Customer Traction: In the second quarter, Ouster sold sensors to approximately 90 new customers3, and converted another 8 customers to multi-year SCAs with binding commitments, further expanding its contracted revenue opportunity to approximately $575 million through 2026.
Progressed Automotive Traction: Ouster Automotive continued to expand its traction with OEMs, Tier 1s, and AV companies, driven by strong demand for its solid-state Digital Flash (DF) A-sample sensors, which started shipping in the first month of the second quarter.
Strengthened Financial Position: Ouster continued to bolster its financial position through balance sheet initiatives, including a previously announced term loan facility of up to $50 million. In the second quarter, the Company drew $20 million on the term loan facility and raised approximately $15 million from sales of common stock through an at-the-market offering. Combined with initiatives to optimize spend and accelerate growth, the Company believes these actions will strengthen the business and provide the flexibility and liquidity to execute on its business plan.
"Ouster continues to capture share in a rapidly evolving market, increasing revenue by 40% over the second quarter of 2021," said Ouster CEO Angus Pacala. "Our ability to deliver performant and cost-efficient products to customers on-time is a key differentiator. Our diversified strategy ensures that we are well-positioned to leverage automation trends across the industrialized economy, as more companies take steps to increase productivity, improve safety, and address ongoing labor shortages across their supply chains. The positive momentum we're seeing from automakers following the release of our DF A-sample, coupled with upcoming product releases planned for later this year, position us to capture additional market share and continue to outpace the competition."
Ouster revised its FY 2022 revenue guidance to $40 million to $55 million and reaffirmed its gross margin target of 25% to 30%.
While the fundamentals of Ouster's business remain unchanged, ongoing macroeconomic pressures are impacting customer ramp timelines, resulting in a significant number of large deals being delayed or staggered over a longer period of time than previously anticipated.
"Ouster's differentiated technology, backed by a leading cost structure and our multi-market approach, positions us to continue to win head-to-head commercial opportunities and gain market share across our four market verticals," said Ouster CFO Anna Brunelle. "By revising our revenue guidance for this year and taking prudent financial measures to ensure access to capital in the current environment, we are better positioned to navigate headwinds, while simultaneously scaling the business to achieve industry-leading growth."
Conference Call Information
Ouster will host a conference call and live webcast for analysts and investors at 5 p.m. EDT today, August 4, 2022, to discuss its financial results and business outlook. To access the call, please register at https://conferencingportals.com/event/xojjoxlp.
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 18, 2022. 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.
Ouster (NYSE: OUST) is building a safer and more sustainable future through its high-resolution digital lidar sensors for the automotive, industrial, smart infrastructure, and robotics industries. Ouster's sensors offer an excellent combination of price and performance with the flexibility to span hundreds of use-cases and enable revolutionary autonomy across industries. With a global team and high-volume manufacturing, Ouster supports over 600 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.
This press release contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding Ouster's technological advancements, market opportunities, market growth expectations, potential pipeline of customers, strategic partnerships and outlook, its ability to meet its revenue goals and guidance, its strategy, and market positioning, effects of its near term bottom-up analysis and cost structure, sales pipeline, bookings and commercial expansion plans, anticipated product releases, and ability to drive near and long term revenue growth. Forward-looking statements give Ouster's current expectations and projections relating to its financial condition, competitive position, financial position, future results of operations, plans, objectives, future orders whether binding or non-binding, and business. You may identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as "aim", "anticipate", "estimate", "expect", "project", "plan", "forecast", "intend", "believe", "may", "will", "should", "can have", "likely", "guidance", "continue", "could", "would", "potentially", "preliminary" and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. 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 Ouster's limited operating history and history of losses; the negotiating power and product standards of its customers; fluctuations in its operating results; supply chain constraints and challenges; cancellation or postponement of contracts or unsuccessful implementations; the adoption of its products and the growth of the lidar market generally; its 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 it operates; selection of its products for inclusion in target markets; its future capital needs and ability to secure additional capital on favorable terms or at all; its ability to use tax attributes; its dependence on key third party suppliers, in particular Benchmark Electronics, Inc., and manufacturers; its ability to maintain inventory and the risk of inventory write-downs; inaccurate forecasts of market growth; its ability to manage growth; the creditworthiness of its customers; risks related to acquisitions; risks related to international operations; risks of product delivery problems or defects; costs associated with product warranties; its ability to maintain competitive average selling prices or high sales volumes or reduce product costs; conditions in its customers' industries; its ability to recruit and retain key personnel; its use of professional employer organizations; its ability to adequately protect and enforce its intellectual property rights; its ability to effectively respond to evolving regulations and standards; risks related to operating as a public company; risks related to the COVID-19 pandemic; risks related to certain of its warrants being accounted for as liabilities; and other important factors discussed in the Company's Annual Report on Form 10-K for the year ended December 31, 2021, as any such factors may be updated from time to time in the Company's other filings with the Securities and Exchange Commission (the "SEC"), and in other reports the Company files with or furnishes to the SEC. 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 required by law, even if subsequent events cause its views to change.
The financials herein are unaudited and subject to the finalization of year-end audit procedures. In additional 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 measure of Adjusted EBITDA is useful in evaluating its operating performance. 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, depreciation and amortization and other non-recurring expenses. Ouster believes that 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.
1 "Strategic Customer Agreements" or "SCAs" establish a multi-year purchase and supply framework for Ouster and the customer, and include details about customer programs and applications where the customer intends to use Ouster products. SCAs also include multi-year non-binding customer forecasts (typically of three to five years in length) giving Ouster visibility to the customer's long-term purchasing requirements, mutually agreed upon pricing over the duration of the agreement, and in certain cases include multi-year binding purchase commitments. "Contracted revenue opportunity" represents the sum of both binding purchase commitments and non-binding forecasts. No assurances can be given that non-binding forecasts will mature into binding purchase commitments, or that any contracted revenue opportunity will result in revenue. No additional revenue opportunity beyond the customer's actual forecast has been imputed.