Ouster Reports 44% Year-over-Year Q3 Revenue Growth, Followed by Groundbreaking REV7 Product Launch and Planned Merger to Accelerate Lidar Adoption

The financials herein are unaudited and subject to the finalization of year-end audit procedures. 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 measure of Adjusted EBITDA is useful in evaluating its operating performance. The calculation of Adjusted EBITDA for this reporting period does not include litigation expenses. 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, litigation and litigation related expenses 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.

Additional Information

In connection with the proposed transaction, [Ouster and Velodyne] plan to file with the SEC and mail or otherwise provide to their respective stockholders a joint proxy statement/prospectus regarding the proposed transaction. INVESTORS AND OUSTER’S AND VELODYNE’s RESPECTIVE STOCKHOLDERS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS IN ITS ENTIRETY WHEN IT BECOMES AVAILABLE AND ANY OTHER DOCUMENTS FILED BY EACH OF [Ouster AND Velodyne] WITH THE SEC IN CONNECTION WITH THE PROPOSED TRANSACTION OR INCORPORATED BY REFERENCE THEREIN BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND THE PARTIES TO THE PROPOSED TRANSACTION. Investors and stockholders will be able to obtain a free copy of the Joint Proxy Statement/Prospectus and other documents containing important information about Ouster and Velodyne, once such documents are filed with the SEC, from the SEC’s website at www.sec.gov. Ouster and Velodyne make available free of charge at www.ouster.com and www.velodynelidar.com, respectively (in the “Investors” section), copies of materials they file with, or furnish to, the SEC.

No Offer or Solicitation

This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended.

Participants in the Solicitation

Ouster, Velodyne and their respective directors, executive officers and certain employees and other persons may be deemed to be participants in the solicitation of proxies from the stockholders of [Ouster and Velodyne] in connection with the proposed transaction. Securityholders may obtain information regarding the names, affiliations and interests of Ouster’s directors and executive officers in Ouster’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, which was filed with the SEC on February 28, 2022, and its definitive proxy statement for the 2022 annual meeting of stockholders, which was filed with the SEC on April 27, 2022. Securityholders may obtain information regarding the names, affiliations and interests of Velodyne’s directors and executive officers in Velodyne’s definitive proxy statement for the 2022 annual meeting of stockholders, which was filed with the SEC on April 29, 2022. Additional information regarding the interests of such individuals in the proposed transaction will be included in the Joint Proxy statement/Prospectus relating to the proposed transaction when it is filed with the SEC. These documents (when available) may be obtained free of charge from the SEC’s website at www.sec.gov, Ouster’s website at https://investors.ouster.com/ and Velodyne’s website at https://investors.velodynelidar.com/.

OUSTER, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands, except share and per share data)
 
September 30,
2022
December 31,
2021
Assets
Current assets:
Cash and cash equivalents

$

133,189

 

$

182,644

 

Restricted cash, current

 

250

 

 

977

 

Accounts receivable, net

 

10,783

 

 

10,723

 

Inventory

 

20,804

 

 

7,448

 

Prepaid expenses and other current assets

 

6,923

 

 

5,566

 

Total current assets

 

171,949

 

 

207,358

 

Property and equipment, net

 

8,594

 

 

10,054

 

Operating lease, right-of-use assets

 

13,652

 

 

15,156

 

Goodwill

 

51,151

 

 

51,076

 

Intangible assets, net

 

19,286

 

 

22,652

 

Restricted cash, non-current

 

1,088

 

 

1,035

 

Other non-current assets

 

554

 

 

371

 

Total assets

$

266,274

 

$

307,702

 

Liabilities, redeemable convertible preferred stock and stockholders’ equity
Current liabilities:
Accounts payable

$

8,154

 

$

4,863

 

Accrued and other current liabilities

 

14,395

 

 

14,173

 

Operating lease liability, current portion

 

3,127

 

 

3,067

 

Total current liabilities

 

25,676

 

 

22,103

 

Operating lease liability, long-term portion

 

14,288

 

 

16,208

 

Warrant Liabilities

 

276

 

 

7,626

 

Debt

 

19,181

 

 

 

Other non-current liabilities

 

1,561

 

 

1,065

 

Total liabilities

 

60,982

 

 

47,002

 

Commitments and contingencies
Redeemable convertible preferred stock

 

 

 

 

Stockholders’ equity (deficit):
Common stock

 

18

 

 

17

 

Additional paid-in capital

 

605,195

 

 

564,045

 

Accumulated deficit

 

(399,740

)

 

(303,356

)

Accumulated other comprehensive loss

 

(181

)

 

(6

)

Total stockholders’ equity

 

205,292

 

 

260,700

 

Total liabilities, redeemable convertible preferred stock, and stockholders’ equity

$

266,274

 

$

307,702

 

 
OUSTER, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(unaudited)
(in thousands, except share and per share data)
         
  Three Months Ended September 30,   Nine Months Ended September 30,
 

2022

 

2021

 

2022

 

2021

Product revenue  

$

11,204

 

 

$

7,755

 

 

$

30,091

 

 

$

21,726

 

Cost of product  

 

7,488

 

 

 

5,879

 

 

 

21,002

 

 

 

16,212

 

Gross (loss) profit  

 

3,716

 

 

 

1,876

 

 

 

9,089

 

 

 

5,514

 

Operating expenses:        
Research and development  

 

17,212

 

 

 

8,390

 

 

 

49,011

 

 

 

19,576

 

Sales and marketing  

 

8,541

 

 

 

6,737

 

 

 

23,194

 

 

 

14,777

 

General and administrative  

 

14,008

 

 

 

14,073

 

 

 

40,306

 

 

 

36,177

 

Total operating expenses  

 

39,761

 

 

 

29,200

 

 

 

112,511

 

 

 

70,530

 

Loss from operations  

 

(36,045

)

 

 

(27,324

)

 

 

(103,422

)

 

 

(65,016

)

Other (expense) income:        
Interest income  

 

733

 

 

 

165

 

 

 

1,231

 

 

 

305

 

Interest expense  

 

(699

)

 

 

 

 

 

(1,143

)

 

 

(504

)

Other income (expense), net  

 

61

 

 

 

14,490

 

 

 

7,071

 

 

 

(422

)

Total other expense, net  

 

95

 

 

 

14,655

 

 

 

7,159

 

 

 

(621

)

Loss before income taxes  

 

(35,950

)

 

 

(12,669

)

 

 

(96,263

)

 

 

(65,637

)

Provision for income tax expense  

 

37

 

 

 

 

 

 

121

 

 

 

 

Net loss  

$

(35,987

)

 

$

(12,669

)

 

$

(96,384

)

 

$

(65,637

)

Other comprehensive loss        
Foreign currency translation adjustments  

$

(87

)

 

$

 

 

$

(175

)

 

$

 

Total comprehensive loss  

$

(36,074

)

 

$

(12,669

)

 

$

(96,559

)

 

$

(65,637

)

Net loss per common share, basic and diluted  

$

(0.20

)

 

$

(0.08

)

 

$

(0.55

)

 

$

(0.53

)

Weighted-average shares used to compute basic and diluted net loss per share  

 

181,361,354

 

 

 

156,647,259

 

 

 

175,795,093

 

 

 

123,175,390

 

         
OUSTER, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
   
Nine months ended September 30,

2022

 

2021

CASH FLOWS FROM OPERATING ACTIVITIES  
Net loss

$

(96,384

)

 

$

(65,637

)

Adjustments to reconcile net loss to net cash used in operating activities:  
Depreciation and amortization

 

7,070

 

 

 

3,428

 

Stock-based compensation

 

25,324

 

 

 

18,557

 

Change in right-of-use asset

 

2,075

 

 

 

1,292

 

Interest expense

 

290

 

 

 

36

 

Amortization of debt issuance costs and debt discount

 

104

 

 

 

250

 

Change in fair value of warrant liabilities

 

(7,350

)

 

 

406

 

Inventory write down

 

894

 

 

 

866

 

Provision for doubtful accounts

 

9

 

 

 

 

Gain from disposal of property and equipment

 

(100

)

 

 

 

Changes in operating assets and liabilities:  
Accounts receivable

 

(69

)

 

 

(4,378

)

Inventory

 

(14,249

)

 

 

(2,551

)

Prepaid expenses and other assets

 

(1,540

)

 

 

42

 

Accounts payable

 

3,225

 

 

 

(2,707

)

Accrued and other liabilities

 

(158

)

 

 

7,060

 

Operating lease liability

 

(2,431

)

 

 

(1,770

)

Net cash used in operating activities

 

(83,290

)

 

 

(45,106

)

CASH FLOWS FROM INVESTING ACTIVITIES  
Proceeds from sale of property & equipment

 

275

 

 

 

 

Purchases of property and equipment

 

(2,353

)

 

 

(1,774

)

Net cash used in investing activities

 

(2,078

)

 

 

(1,774

)

CASH FLOWS FROM FINANCING ACTIVITIES  
Proceeds from the merger and private offering

 

 

 

 

291,454

 

Payment of offering costs

 

 

 

 

(27,124

)

Repayment of debt

 

 

 

 

(7,000

)

Proceeds from issuance of promissory notes to related parties

 

 

 

 

5,000

 

Repayment of promissory notes to related parties

 

 

 

 

(5,000

)

Repurchase of common stock

 

(46

)

 

 

(43

)

Proceeds from exercise of stock options

 

398

 

 

 

539

 

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

 

16,322

 

 

 

 

At-the-market offering costs for the issuance of common stock

 

(278

)

 

 

 

Taxes paid related to net share settlement of restricted stock awards

 

(59

)

 

 

 

Net cash provided by financing activities

 

35,414

 

 

 

257,826

 

Effect of exchange rates on cash and cash equivalents

 

(175

)

 

 

 

Net increase (decrease) in cash, cash equivalents and restricted cash

 

(50,129

)

 

 

210,946

 

Cash, cash equivalents and restricted cash at beginning of period

 

184,656

 

 

 

12,642

 

Cash, cash equivalents and restricted cash at end of period

$

134,527

 

 

$

223,588

 

   
OUSTER, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(unaudited)
(in thousands)
         
  Three Months Ended September 30,   Nine Months Ended September 30,
 

2022

 

2021

 

2022

 

2021

GAAP net loss  

$

(35,987

)

 

$

(12,669

)

 

$

(96,384

)

 

$

(65,637

)

Interest expense (income), net  

 

(34

)

 

 

(165

)

 

 

(88

)

 

 

199

 

Other expense (income), net  

 

(61

)

 

 

(14,490

)

 

 

(7,071

)

 

 

422

 

Stock-based compensation (1)  

 

8,455

 

 

 

7,147

 

 

 

25,324

 

 

 

18,557

 

Provision for income tax expense  

 

37

 

 

 

 

 

 

121

 

 

 

 

Non-GAAP operating loss  

 

(27,590

)

 

 

(20,177

)

 

 

(78,098

)

 

 

(46,459

)

Depreciation and amortization expense (2)  

 

2,331

 

 

 

1,174

 

 

 

7,070

 

 

 

3,428

 

Litigation expenses (3)  

 

1,123

 

 

 

500

 

 

 

1,715

 

 

 

500

 

Adjusted EBITDA  

$

(24,136

)

 

$

(18,503

)

 

$

(69,313

)

 

$

(42,531

)

(1) Includes stock-based compensation expense as follows:
  Three Months Ended September 30,   Nine Months Ended September 30,
 

2022

 

2021

 

2022

 

2021

Cost of product revenue  

$

207

 

$

206

 

$

570

 

$

457

Research and development  

 

3,681

 

 

 

2,063

 

 

 

11,248

 

 

 

4,305

 

Sales and marketing  

 

1,913

 

 

 

1,717

 

 

 

5,276

 

 

 

2,702

 

General and administrative  

 

2,654

 

 

 

3,161

 

 

 

8,230

 

 

 

11,093

 

Total stock-based compensation  

$

8,455

 

 

$

7,147

 

 

$

25,324

 

 

$

18,557

 

(2) Includes depreciation and amortization expense as follows:
  Three Months Ended September 30,   Nine Months Ended September 30,
 

2022

 

2021

 

2022

 

2021

Cost of revenue  

$

227

 

$

275

 

$

820

 

$

678

Research and development  

 

889

 

 

 

231

 

 

 

2,600

 

 

 

350

 

Sales and marketing  

 

75

 

 

 

 

 

 

225

 

 

 

 

General and administrative  

 

1,140

 

 

 

654

 

 

 

3,426

 

 

 

1,226

 

Total depreciation and amortization expense  

$

2,331

 

 

$

1,160

 

 

$

7,070

 

 

$

2,254

 

(3) Litigation expenses and litigation-related expenses outside of the Company’s ordinary business operations

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