Over $22 million in revenue and bookings of $38 million in the third quarter 2023

Achieved over $120 million in annualized cost savings, one quarter ahead of schedule

Announced targets for revenue growth, expanding gross margins, and additional cost management

SAN FRANCISCO — (BUSINESS WIRE) — November 9, 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 nine months ended September 30, 2023¹.

Third Quarter 2023 Highlights

• Over $22 million in revenue, up 15% quarter over quarter.
• Booked² $38 million in business with new and existing customers, representing a book-to-bill ratio of 1.7x.
• GAAP gross margins of 14%, compared to 1% in the second quarter of 2023.
• Non-GAAP gross margins³ of 33%, compared to 26% in the second quarter of 2023.
• Shipped over 3,300 sensors for revenue in the third quarter, up 10% quarter over quarter.
• Adjusted EBITDA³ loss improved to $18 million, compared to a loss of $24 million in the second quarter of 2023.
• Net loss of $35 million in the third quarter of 2023, compared to $123 million in the second quarter of 2023.⁴
• Cash, cash equivalents, restricted cash, and short-term investments balance of $202 million as of September 30, 2023.

"Ouster continued to realize the benefits of our merger with Velodyne as we exceeded revenue guidance, maintained strong quarterly bookings, improved gross margins, and further reduced costs to bring spending below third quarter 2022 pre-merger levels," said Ouster CEO Angus Pacala. "We are pleased with the traction of our software offerings and are making progress towards being a provider of complete digital lidar solutions. In addition, we are encouraged by the positive customer feedback on our solid-state automotive Digital Flash (DF) sensor. As we look to our new operating framework, we are taking major steps to achieve profitability."

Ouster delivered sequentially higher gross margins in the third quarter of 2023, in line with its expectations for improvements during the second half of the year. Margin expansion was driven by higher revenues, a favorable mix shift in Ouster’s product portfolio, and lower manufacturing costs attributable to operational improvements. GAAP gross margins of 14% include certain expenses outside of ordinary operations associated with the consolidation of product lines and outsourced manufacturing of Velodyne products. Non-GAAP gross margins improved to 33%, a near-record level since becoming a public company. Management expects gross margins to improve further in the fourth quarter of 2023.

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¹ The comparative financial results for the three and nine months ended September 30, 2022 reflect only the results of standalone Ouster. The financial results for the nine months ended September 30, 2023 are composed of Ouster standalone performance through February 10, 2023 and combined performance of Ouster and Velodyne for the remainder of the period. The results for the three months ended September 30, 2023 and June 30, 2023 reflect the combined performance of Ouster and Velodyne.
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 to their respective most directly comparable financial measures calculated in accordance with U.S. GAAP.
⁴ Net loss includes goodwill impairment non-cash charges of $67 million in the second quarter 2023.

2023 Business Objective Updates

1. Drive new business through targeted sales approach to deliver near-term growth
2. Execute on the digital lidar roadmap for OS and DF series to expand serviceable market
3. Develop a robust software ecosystem to accelerate lidar adoption
4. Build a financially strong business to support long-term growth and deliver value to shareholders

Drive New Business: During the quarter, Ouster booked a multi-million dollar contract to supply REV7 sensors for use in a mapping application. REV7's enhanced range, accuracy, and precision are expanding the addressable market by uncovering new opportunities within this sub-vertical. The Company also booked a significant contract to provide a complete lidar solution to a leading logistics company. This win leverages the breadth of Ouster’s REV7 sensor suite paired with its advanced Gemini Detect perception software platform.

Execute on Digital Product Roadmap: Ouster progressed on its solid-state DF product roadmap in the third quarter, including demos of its early B-samples with over a dozen OEMs and Tier 1s in Europe, North America, Korea and Japan. At only 40mm tall, these final form-factor DF sensors can detect 10% reflective objects at up to 200 meters range with camera-like resolution. With the upcoming Chronos powered DF sensor, Ouster expects 2024 to reflect the culmination of years of investing in building the end-state architecture for automotive lidar.

Develop Robust Software Ecosystem: Ouster achieved major software milestones in the third quarter, which are expected to accelerate product adoption and reflect growing demand for lidar-powered smart infrastructure solutions. This included completing the unification of Blue City and Ouster Gemini and adding new performance improving deep learning AI perception models. In addition, the Company booked software coupled sales worth millions of dollars, which will increase its software installed base to over 375 cumulative sites.

Build Financially Strong Business:

• Cost savings: Ouster achieved annualized cost savings of over $120 million during the third quarter, baselined against the standalone cost structures of the two companies as of the third quarter 2022. Notably, this brings Ouster below the pre-merger spending levels it incurred as a standalone company during the third quarter of 2022.
• Lowering cost of capital: Ouster closed on a new credit facility and repaid its existing term loan on October 25, 2023. This is expected to result in a significantly lower interest expense and increased financial and operational flexibility going forward.
• Long-term financial framework: Ouster has set a financial framework focused on achieving 30-50% annual revenue growth, expanding gross margins to 35-40%, and maintaining operating expenses at or below third quarter 2023 levels. The Company expects to achieve meaningful progress against these goals over the next 18 months.

Fourth Quarter 2023 Outlook

For the fourth quarter of 2023, Ouster expects to achieve $23 million to $25 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, November 9, 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 November 23, 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