Ouster (OUST) 7 Nov 242024 Q3 Earnings call transcript

Hello and welcome to Ouster's Third Quarter 2024 Earnings Conference Call. [Operator Instructions] The call today is being recorded and a playback of the call will be available on the Ouster Investor Relations website an hour after the completion of this call. I'd now like to turn the conference over to Chen Geng, Vice President of Strategic Financial and Treasurer. Please go ahead.

Good afternoon, everyone. Thank you for joining us for our third quarter 2024 earnings call. by Officer, Executive Mark today and Angus joined Financial Chief Weinswig. am Ouster's Officer, Chief Pacala; I

include Before only anticipated we competitive a and forward-looking those earnings strategic security begin of investor the federal forward-looking our in to views contained its due the revenue our remind priorities, Investor the management's constitute quarter press our industry presentation by the from prepared and remarks, that third of and statements of is risks to quarter position, trends, as today, guidance laws. release we with or implied business was earlier Actual Relations published related reflect Ouster financial uncertainties XXXX, available fourth results. section to statements call issued our XXXX which press will associated and announcing under you and all release results today of outlook An would these our may on and statements like materially website. Today's for business. Ouster's differ

reviewing a and available law, uncertainty subject on on a of on other management's industry, website. Any on competitive on Ouster's new risks statements it and research important press impact are of discussed to information that by obligation from internal such both concerning as make such that operates could SEC be can third-party the made please undertake Ouster's released we independent and than reasonable industry events. could sources markets. are statements research. and actual result required Relations and results based the which today's assumptions those of well data material independent results, For factors future publicly and assumptions our filings refer risk, are this and be on release, other no and as call update other are our to the experience Investor found which discussion company's upon is as data in sources, estimates. to call knowledge we forward-looking of other today and position in information may of and third-party and, this computations materially Ouster's from Information to expressed or analysts as derived assumptions the and estimates. industry information estimates from based as from estimates which by differ cause These markets based industry definition, These By organizations, these

should supplement call, measures we accordance During discuss measures to, financial as considered non-GAAP financial a will this substitute not a These with be certain for, non-GAAP GAAP. measures. in prepared

of directly reconciliation comparable call measures release. I Angus. a please the would refer now call this today's turn over most discussed the to For to to during press to measures, GAAP financial like non-GAAP

reinforcing our in GAAP this third exceeded is our and met record delivered a revenue a joining gross guidance. We operational for focus in recap an revenue, lidar XX% on built the quarter, you thank priorities. of third margin in final with I'll quarter and results results start and detail our financial seventh leadership everyone a reported $XX with some quarter. with market and overview technology on the of I the margin, and differentiation the We thoughts. Ouster an in have Hello, brief Mark product quarter update position representing leader record today. with close cover we reflected strong before us or straight our will of industry. Ouster as efficiency, million more in gross strategic the

customers on third our the quarter autonomous were and line, to excited during move customers protecting and Many We with all is quarter from see million course solving sheets. efficiency deployment are have solutions we scaling stage to expanding our of our golf customers. credit largest of I'm built repaying deals troops increased also accelerating the production the safety. wins balance These ended adoption of real-world balances the industry's After $XXX more and robotics of with one most and with resilient cash. Lidar precision, challenges into outstanding production. revolving

During largest order enabling mobile flexibly a technology the for in with upgrading pounds, This leading need Ouster's in helping a quarter, goal improve while employees dynamic to stress reducing history with we global robots alleviate its the received its almost weighing these carts operate Powered by for move to workplace autonomous company. this REVX is injury. customer robots, the environment. purchase productivity to REVX, to customer and them X,XXX

engaged when Vision the especially and to to analytics, Pedestrian business, safety lighting Nashville, on with National detailed our them to the Safety customers lidar, pedestrians conditions. With is our pedestrians continued alerting occurring low BlueCity detecting in momentum in country beacon Month. X,XXX Zero of conflict the drivers accuracy, extends across also to than We with the traffic provides improve timers software nearly to achieve cost range, overcoming are Ouster performance. in more XX% killed road night. crucial control such traffic and BlueCity. solutions XXXX, accidents physical at of street, challenges. October safety safety pedestrians shortcomings In by In and was are reliably data build municipalities safer BlueCity light essential critical where of making traditional lighting goals. cities and of drivers, low solution flashes we as safely. were activates world cross Ouster's for pedestrians of many capable technology BlueCity with is BlueCity and are allow the their presence, weather crosswalk Florida, first conditions. In detects solve all

strategic business priorities XXXX. our for to Turning

third requirements software and a In our NEMA installed successfully TSX the traffic sales certified grow our certified and base. is America system passed lidar. priority to quarter, first first traffic detection with Our solution the of BlueCity as management TSX is increase solution NEMA actuation for the Buy

lidar digital This Gemini our and for seamless perception surveillance solution interface lidar security operations. video Center. single Security into Genetec a fuse we Ouster customers quarter, During to with integrated the enables

and Ouster company We installations improve Ouster Gemini global to infrastructure, of at utilizing to also continued distribution In increase operational safety their smart Gemini. efficiency hubs. is a technology

solution In perimeter at and security, times roughly of addition our footprint of to is and is their savings estimates million queuing wait used trucks. X% unloading $X global deployed loading and when improve per to current week. vehicle over customer Gemini this

digital lidar to map. our Turning hardware road

clouds, verticals unlock our significantly while our Both our are Chronos on During powered LX and we performance, Development family. reliability milestone the which next-generation track. on sensor also Ouster OS in LX the third turned of point hardware the major remains rich road generated and enhancing on quarter, map. chip prototypes, Chronos a manufacturability new expected product to first

XXXX, our Finally, we XX% to XX%. we execute the continue on from XX% have to to expanded margin X% first gross our and have target to quarter profitability. of negative Since reached of path our

a our look third the and Weinswig, portfolio. I'll our quarter. continuing annual was third the product strong execution to strengthened to low-cost to X the business and added financial CFO, in forward two, maintaining over our structure. In turn one, and the context provide of achieving parts further of to are summary, the revenue XX% Mark of features to on that We on now more number for our improve call results quarter our the other we growth; a XX% delivering long-term framework: execution

the we record In Angus largest vertical everyone. delivery and and robotics large revenue second good customers. seventh shipments The sensors a infrastructure for Smart contributor million to and the contributor last our was was recognized X,XXX driven represents shipped the demand of in revenue, mile largest with quarter, by you, $XX revenue. from security. straight revenue approximately third Thank quarter growth. afternoon, This mapping perimeter to

on both gross for Ouster. increases. was quarter record to of REVX primarily XX% The Third reached gross on product to to adoption customer a a framework basis, non-GAAP gross mix XX% margin highs improved In QX, our target XX%. our our basis sensors due long-term and margin favorable of margin as and GAAP XX% improvement

an our Going basis, to margins a schedules, our we a for and to business. mix shipment target due see degree may view of customer range factors. margin annual forward, gross as appropriate in variability other On continue quarter-to-quarter we product this

Over to X% pursue increase we continue progress $XX sequentially. quarter higher the operating The of third expenses have years, driven will in our up prior year past sequential opportunities the was over performance. GAAP to substantial the down by were our we made in X additional XX% improve million primarily operations expenses. and and litigation

expenses Excluding X% litigation operating of million, up and were expenses down $X X% year-over-year sequentially.

of litigation timing to on due the expenses and costs. spending quarterly operating R&D to expect We project basis, a largely fluctuate

Moving to the balance sheet.

cash, balance in investments XX. strongest is September sheet the equivalents, $XXX cash at cash among Our million industry short-term the and of with restricted

our close utilized expense $X and of During revolving from of our quarter, year. cash reducing to received $XX line, per ATM the repay third by million fully and proceeds we $XX million credit approximately million interest approximately our

Moving to guidance.

revenue. I'll the call For expect of between to achieve Angus quarter, now million we fourth turn closing $XX million remarks. his the back for $XX to and

Mark. revenue Thanks, a in sixth row. a strong expansion third and quarter, team sequential Ouster quarter growth achieving delivered The for the margin

use supply overnight developing and to offerings quarter best-in-class the customers in shipment Over groundbreaking set as chain, foundation. customer Ouster XXX,XXX cases providing robust the our products, a a we extraordinary Chronos Security of on up product, to inception, knowledge Genetec each and solution a Development are lidar have manufacturing segment the we well our with excited and lidar and over am sales leader out see best of of a support challenges. efficient chips robotics premise new will shipped building designing have the real-world and strengthened this play process, These does progressing time, and relationships about does Gemini's Our attached happen prototypes. are had history across top-tier the trusted maintaining production certification insights NEMA nor I more manufacturing world. its in integration. Ouster accumulated amount an high. come for our TSX clear strong universal. through production ramping solve founded that our BlueCity's different solutions. Scaling their be customer financial an is was thesis next-gen software not not and Since a we LX of sensors setting quarter, necessary

autonomous I With revolution. With to the Q&A. for join number like our open the world customers increasingly the have a problems supplier growing become as of trusted these to helping industries we learnings, look up of the to call I'd companies that, largest today. forward many complex a solve in

Kevin Cassidy ] Your from the Instructions] [ comes first (sic) Securities. Rosenblatt line [Operator question of with Garrigan

guys echo me you congratulate all let or the Let progress. me on

the your So, able quarter. down was sequentially like -- I it think it straight second But hit looks sensor for your revenue guidance. you to shipments were were

puts helped? And high software of takes ASPs record kind the just a and you high also. that about So there? kind can sales of think talk the just it Was I hit

ASPs to mainly better as you you these expect Or just and of software? just kind in continue to is So this normal, back if mix grow, they we revert can especially add shipping will? to product

the Kevin. for Thanks Yes. question,

with hands So on product. mean, feedback as adopted mean I favorable REVX. you really gotten universally nailed have as their it the customers there's customers product have yes, really terrific been I that mix

revenue And last high lot the BlueCity been -- a a just with ASPs it's point feedback so helped that of terrific. really And really -- calls the is the quarters. both significant margins. to of attached and it dynamics in was is that's give and record exceptional definitely and new just with of has quarter was then play that software software started growth unit direct to them feedback and on we've customers huge just margin and counts we expansion on us a sales. of product. Gemini X first. But get kind the in affects of I board have that's and last And versus gotten come helping adoption been number into the our in overall just and also the This to get the yes, Really, able customer on this

noted you they've during how add in to customers and would larger Okay. Perfect. Can increasing just ago about you they I deals look kind you of year Angus, color contracts of and mean, this are these as the a these Any robotics follow-up, how kind as orders a big kind contracts And smart again say, saw largest on grown? then let's are to, talk automation? compared be quarter. where guys infrastructure of helpful.

absolutely. Yes,

robotics getting customers on And there, record different of barely are done our are manufacturing parts So I that deployments sales things obviously. warehouses our Robotics the robotics barely And mobile are and just very iceberg tip infrastructure the industrial and here. Like, X we're the smart from in -- we've and really robots, we've scratched moving customers what surface we robotic at packages or quarter. around is mean, yet look the floors. at like. markets, last

thousands, millions, component, growing. There the chain of more customer present. Ouster deployed hundreds even flexible vehicles So automated those ever And we're be being robotics them if of to and definitely at that are supply platforms becoming the are and than key now eyes base flexible. devices capable seeing a those is of to logistics intelligent, allow more into before. not providing And

have little just So, I smart of both when sensors. orders repeated something saturation ITS to these year. and growth come, for a all the There different. like than new into new the and we're real-time products yes, as digital of at seeing and providing turnkey domains. totally management this there's the less markets expansion and new, for our X things solutions come lidar on old the from for the lot XD Mature and yard comes then said. And years traffic it again, kind space, of markets strong customers we're strength into And infrastructure, from we're seen that that now these bit introduced bringing surface. We then Gemini security deployments. And customer to a there, camera point. But definitely But base more recurring there, twins They're these well. legacy BlueCity like we're scratching space. last and are kind

Ouster to push it growth our to software hardware further and of attached but lot So road to record definitely software there's lot seeing a ways strong a for map accelerate both was more quarter product now sales, a there. for market. that and Again, come

time, [Operator your there this I to At further the now host closing remarks. Instructions] are questions. over turn no call will for back

products Great. built but Ouster's of a financial And nothing exciting on has long-term software Well, company's history. most model. I in profitability see hardware model. robust growth and the the and working set our Ouster path diversified to really business and on We're

to want gentlemen, the and that and thank quarter team So today's for joining Thank all for thank fantastic I the you for together Ladies another joining. Ouster you all putting concludes entire call. call.

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