OUST - Earnings call transcript Q2 2021

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Operator

Good afternoon, and welcome, everyone, to Ouster's Second Quarter Earnings Conference Call. [Operator Instructions]. The call today is being recorded, and a replay of the call will be available under Ouster Investor Relations website, an hour after the completion of this call. I'd now like to turn the conference over to Sarah Ewing, Director of Investor Relations. Ma'am, please go ahead.

Sarah Ewing

you. Thank afternoon. Good by Chief today Executive Angus Officer, I'm Officer, Ouster's Anna and Financial Brunelle. Pacala, joined Chief

Before we presentation. announcing begin remind the also after prepared remarks, we The today. Aster XXXX results company a market quarter close you an would issued press second release investor its published financial shortly that like to

everyone Litigation with and current report remind on You and may statements the during the on like Act and our by materials are forward-looking that for discuss other today. forecasts, of customer outlook Investor Relations also to future intended X-K the of in call, safe filed the course access orders harbor targets these section XXXX SEC company's that I'd Reform business of forward-looking this Securities statements. ouster.com management Ouster's regarding provisions covered the company, of be Form to the conference Private will the

statements performance differ and about could current those represent many risks actual expectations uncertainties While today, management's are expectations. to from projections results to results of actual as cause and the subject these and materially that results future Ouster's

these most future addition are important factors undertakes obligation release. date of Except Ouster's call applicable statements the any described call. by risks any law, and forward-looking Exchange of In this may for to the company affect no in today's highlighted this that Securities with earnings press to during recent reason update the after and including filings results Commission, as the any required

which and it are such derived those released data third-party publicly estimates. it information results could experience sources believes estimates other competitive subject as in cause its the management uncertainty materially third-party are which call on in position upon industry markets, and the assumptions These from to research operates by from reasonable. this knowledge are sources industry other in based such of which and expressed analysts Management from discussed be and research company's made differ is on assumptions Information well internal information industry the organizations, as data and the estimates. on to based risks, available in independent concerning and independent industry Lastly, markets reviewing and and company's to from

we our certain transactions financial with measures and the not core for accordance should During this call, outside non-GAAP prepared and in be which supplement a effects of be non-GAAP exclude These discuss consider substitute will measures, operations. events to we considered of measures a GAAP. to

I measures, with Angus For Officer, refer the any to please measures our to GAAP today's turn Pacala. comparable most call press like reconciliation non-GAAP to Executive of directly Chief financial the release. would over now

Angus Pacala

our I everyone. to our map. call. our quarterly on joining road across market trends we product over Brunelle, markets including Ouster's will and for to few then expect that us I CFO, will have and greater outlook. you potential several financial Anna also the unlock today I'll even Hi, years. believe for latest look this turn the report our I'll Thanks forward-looking next milestones quarter, lidar that results demand earnings forward to on our key the over end call who performance adoption about and developments talk updating second few drive a

other As we set fundamentally go through differentiators, to to X out the attention which lidar call, key companies. I draw from your want to apart

to lidar, combination allows first today. we the which approach performance us price offer of believe to digital The our is best and

unlocks of our the TAM. is verticals lidar priced flexible which our possible largest is technology is drive our architectures due multi-market of across second to diversified the This helping business digital The adoption and competitively sensors, model. of all

are we say truly proven has excited to to do and continued Ouster execute deliver. future us. do strategy. going ability We The aim the to third about our ahead what of is to our on we're

Senior Now as since excited to our to of have Heystee have Susan's Ouster's years, Interim of her leadership has our capacity. September to held in Verizon extremely Ouster's trajectory, appointed Global results, Directors. positions of business X leadership Vice President and that Sales and Board Board various technology we automotive jump before experience could integral member I'm Susan more last been contributor in and quarterly Telogis. a Global Connect a software of growth chair her Ouster and over pivotal announce I to Susan to Officer our addition, Executive Directors into has has of this more years She to And including of serving career, XXXX. of than Chief January Vice this business XX Automotive in from OEM year. President be the over at July thrilled been I Revenue not

million last us through The up total from smart sensors performance. last lidar contracted turning $X.X quarter, margin Ouster million $XXX XX second driven agreements, demand countries. primarily with over CMOS SCAs, revenue Ouster's in the in strategic revenue Now automotive, by our XXX across includes infrastructure our and total and XX to earnings SCAs in in XXXX, I'm a approximately months revenue to report verticals, XX%. our This each has to target or of of robotics, now call. new customer our a and XX gross bringing the opportunity that representing digital pleased over as for recorded million quarter-to-date industrial, customers customers been XX over of highest $XXX of

important sensor thermal our Since considerable the made precision, show software we've a you lidar Ouster's high first with and in the of year. with launched XXX resolution field we portfolio. sensor Turning was resolution, to offering updates short addition chipsets. significant as to time provided channels that there generation met product It's customer to doubling improved our growth excitement relatively outsourcing to a in I note in to performance contributor key across come and and new range, minimum was through company a of view, learning the performance of a It a manufacturing double a we've manufacturing it incredible a first wider us XXXX in complete second-generation quarter and the in product last work in improvements making was our setting digital a by keep alive first shorter environment. a period the well knows field. channels, making prototype takes product a XXXX, of product. of to how to want in Ouster launched is what sensor in far from real-world that already test works the curve architecture.

vibration product We a believe ingress, address field digital to For that platform advantage meaningful in X because worked we've Law. temperature to applications environmental of time related has shock longevity and with and competitive over years, extremes. established quickly and through performance real-world issues line wide-ranging durability us Moore's to improve we've our allowed water

sensors past take firmware on our that continuous to the range believe advantage Our have advantage. the and improvements. less better which respond design even to constant us allows to improve shipping are been positioned Ouster opportunities for lidar iteration, performance We to thermal that over maintain that technology, updates. updates delivered beginning, adaptive. of companies engineered X over-the-air From years sensor by included our to precision, analog our is relative on helping is competitive market to We've ability reliant consistently

which website trend also can in is our features a X.X this quarter step the with and downloaded continued major We our second into today. off forward be easily latest update, firmware

is line but kit of one best-in-class and lidar our development committed tools. our at we area companies accelerating by deliver lidar, more the first One which we to where is we software is and This levers we industry. deliver also of adoption the which lidar to that the in our for This have ecosystem just continue critical and first follows integrate a the best-in-class on their into software already a step Ouster integrations biggest adding launched hundreds best to systems. developing make to rich long promote developer a customers hardware had features This has sensors, invest where rate downloads. software in quarter, of to intend sensors external also past not have

tape-out our our road and to improve on nearing performance completion most LX are map. digital to which our on through we capability further product in promise chip, planned, date as rapidly advancement our represents the Lastly, will deliver significant of

already fit we've verticals. sensors competitiveness close our second-generation across L-X L-X the our door and chip believe of product we using with lead, will competition chip, increase on the our While proven our performance market the extend further each

a to lidar is company architecture. automotive want share is possible our automotive standards, sensors both insight we This best-in-class designing sensors map crew safety because certifications. scanning currently Now meet including our solid-state because only road digital [ASOB] share and believe forward-looking we functional of again for common to the some all Ouster on

years manufacturer grade lidar Ouster's industry. selected supply And quest with automotive readiness, achieving and for starting ago our of IATF key our in passed the meet its a automotive differentiator These and for any Thailand years for audits but specifications, manufacturing X just Thailand Ouster together example and benchmark we facility Another We our products, in X manufacturing our XXXXX certified ago. critical years also progress towards X production partner of are OEM started is lead not for benchmark, milestones chain. to automotive ago. another within

We into plans our sensors in the B move now for with the sample are phase in to C sample phase OS XXXX.

and full to XXXX. product map, road quarter moving now expect of in first portfolio, our with into we're engineering phase. defined samples the ready as product this state our in locked design we solid In have the we far guidance, specs past As line solid-state quarter, fourth our the past

for forward-looking While medium solid-state certifying of only other on far there we scanning need certifying as know, single sensor a its and Ouster market a the be long-range both is lidar We types. and company in is are those. offering true lineup and sensors that will believe invested real lidar, as companies Ouster sensors. focused delivering And entire short,

robo technology core driver ongoing adopt other turn that of trend that of is this player sub adoption to a automation buses. the not shuttles across vertical for are The we've greater Every before, safety, robotaxis, automotive, aspect is significant for levels with which like the to and a and economy quality in autonomy companies. I'd auto top a today growth consumer Ouster chain. lidar trucking, Now ADAS in Ouster. already In is worldwide is of called to efficiency with vertical of fourth moving core automotive revenue submarkets and life. and supply an improved compared driving industrial out the for important

XX great there is and more, vehicles. XX% meaningful approximately had historically opportunity taking fuel of marquee this the world, binding has drive This this trucking, with in labor, will market the extend XX Plus fleets freight there OEM margins existing first in new retrofit a advantage are deal our lidar our to believe reduction the years retrofitting for largest lead. by core Plus X replaced Take in need wins costs Even today shipping technology the through is in a our a for approximately of example, opportunity we buckets: annually. on autonomous are products pursuing reported Amazon, existing be X which opportunity production CapEx. business like not integrations future million across while years, only midterm near-term these have We like Companies and sensors trucks to trucks. publicly to in costs industry reduce but is with to that to customers and driving

for systems even goal X% we operating we're costs Ouster's Amazon. affordability XX%, significant a in around trucking to our driving potentially be supplier fleets. volume factory position in think is lidar are savings are for wave industrial reduce While With with a guard logistics, warehousing. applications. today like many to We robo-trucking vertical believe and The opportunity save companies construction, there manufacturing adoption submarkets mining, scale, key the the X end drivers ability of of the this companies agriculture, for core by driver and a great performance, manufacturing long-term to industrial is next and port still lidar

needs these already we automation proposition increasing legacy second and there's a system centers enabling lidar incredibly billion We safety. partially offer industrial them and with first the is while task value The market And their compelling optimization is efficiency. safety for today. sensors, $X an believe our to fewer digital customers simplify by XD addressing through lidar

X.X market, Just and than of having machines automotive a world X% the with the annually, over to significant intelligence potential looking opportunity new There we market lidar using digital build of that less sold and unit millions at of retrofit believe automation. forklifts series is rival in volume. level could levels forklift today any in greater production are around deployed with forces million there CMOS the

autonomous up in by leader France-based automation. XX% a and to forklifts, through Balyo, is to up increase customer a forklift to this. by Our of XX% availability able They're the great productivity example

XX% potential to XX,XXX announced our that trucks automate is and the autonomous by we Ouster on which which wait systems to Konecranes year. yards, distribution to resulting drop previously also vehicles alone. Over-the-road aims automating to We replace over XX%, emissions on example and customer yards U.S. lidar pick or massive to distribution Another the There's with see operate trucks distribution yards. an large potential a loading X productivity sensors. waiting We're could anti-collision days a times. yard feature yards time Outrider, in for CMOS with [Lassa], are million deploy diesel the million crane wait where XXX,XXX combined decrease million operations roughly per leading year. sensors in the at by automation like over our X to off use would this trends in XX If and digital increase to up X X hour port equipment additional average human-operated also each days trailer working X just yards in FME, customers the there yard trucks

use would XD are and which accidents single a digital can type equipment market research. millions industrial. this defense [SOLX], these more lidar few the more sensors This lidar in sensors increased and vertical robotics of assume university proposition speed are market conservatively investment active XX,XXX significant within on per If driving reduced examples and average these potential to the the mapping has systems. of an sensors industrial incorporating over like of for and share also XXX just a the value delivery, port an opportunity of seaports us there's world's per XX core safety submarkets return to opportunity cost gantry and you supply Ouster given after take systems. dollars certifications crane, of digital displace most X an on cranes unlock case. additional The sensors These allow And through dedicated even the last-mile and many to allow

move in some phase are While applications others of beginning are large-scale now, to deployments. pilot these to

driving the a focused the just $X.XX with autonomous opportunities more last-mile via often of mile cost. delivery the to Our large-scale as the per robots showed other than XX% intelligent robotic $X.XX Industry a XX% market transportation smart X great to serve robotics in $X.XX robots X fleet core delivery of systems, security on expected In forecast form by and average Last deliveries customers high a infrastructure, robot. scale to tens delivery XXXX. expensive robotics. thousands customers submarkets delivery smart this the years. part and most an and is cost The next small representing reach per last are Serve of plans to in factor, It's lidar places. significantly And vertical robotics examples high mile today delivery of this cities resolution few chain mile of require billion already could is overall book proliferate. contactless human XXX,XXX has these of to drivers, units major drop XXXX, the reliability with be market U.S. CAGR. by with are supply over completed sensors

deployed Our and CMOS world. local digital is streets on highways the around already intersections, lidar

X in for roads Smart speed sensors in like for safety that City's previously French Ouster project X are camera-based each States enforcement improve legacy lidar in and use today Parifex deploying also to was million The latest some infrastructure way Camera across that installed customers at Award tend providers four using Chattanooga, Intersections the to co-won intersections not are XXX,XXX transportation units. signalized at the top recently intersection. possible alone. The a Tennessee. uses IDC analytics. Ouster and America the New shows traffic have over least United data and pedestrian there RADAR North cameras

a a cost U.S. lower by will the the Lidar Digital Per durability. installed CMOS better X and year, systems X surveillance nearly number security to in XX Gartner, globally. sensors X least billion accuracy million system at can and for addition end in be camera to than this there Our reduce of providing this

CCTV that believe products further before, replace we require certifications a an with milestone, ability to a our is preserve quarter, is available. San there As today, everywhere federal Buy or companies opportunity lidar U.S. digital for funding, certified American announced Ouster's can Ouster is achieved that our system demonstrate scale our there in differentiate in funded products manufactured given system said better state sensors and we Lidar that or American to local This and federally privacies from that major a sensor, augment and certifications These camera which when Francisco higher-performing cameras. past This which we Buy transportation facility. depend Buy customers. with projects many other on America

verticals market so product over to our market it significant opportunities, turn financial why our road to strongly fraction for equate our in These and digital of I'd and walk All And we fit map automotive a are Anna submarkets just production a quarter. believe you each. exciting could to this represent the these of few to deals years. each with of performance multi-market through with over our that, Winning like next approach. major opportunities their product for coupled win lidar

Anna Brunelle

you, Thank Angus.

revenue quarter quarter of quarter-to-date, XX% report up and is excited the XXXX. the a up to revenue. business execute. reasons that million Before of I our second technology, diversified a These $X.X with and I rest proven XX% quarter believer over to our that reiterate I'm the industry: highest from Ouster the record Ouster separate want begin, are the differentiated Aster and I'm the lidar ability to last ended from second big why our X in such takeaways our This in

We to also production and gross commitments. our second months. year. increase programs mutually Ouster's the have forecast, last purchasing We visibility QX, the positive customer also customer where multiyear nonbinding long-term They of customer's pricing our over X,XXX convert XX agreements, Ouster in date, over up $XXX requirements, increase and year. products up in to Ouster Benchmark XX the revenue second used. triple the customers continued has and a quarter, And scale strategic contracted shipped representing agreed this SCAs, quarter our in XX%, revenue signed preproduction from from margins SCAs grow SCA. specific customer over delivered we XX% has to prior for opportunity, production over $XXX customers the X% opportunity of purchase sensors To level to shipped purchase or year. a Ouster million established million earnings over all of giving key and more at on commitments. sum and time already XXX% call. half both of applications financial upon framework multiyear include This sensors a products the we shipped details last we manufacturing of be over about for deliver binding our are quarter will and some than Ouster the SCAs the This of the for binding and and as first clearly in the purchase metric cases, in the prior continue nonbinding of year. They digital the the Contracted means duration customer and and both to approximately a multiyear with we of partner supply agreement, production our represents us. than for include second have to grow include add Ouster sold projection sensor CMOS this contract to Demand XX ability while lidar and demonstrates to sensors XXX now pipeline, we the more XXXX last

than been less term X-year provide beyond a revenue customer's opportunity has of the that additional customers imputed. forecast forecast, no the For

lidar at grades, which orders customer their curve, long-term and SCAs. some ramp We about the we traction down additional manufacturing and as the beginning timing said, are adoption of very the forecast That continue SCAs quarter-to-quarter. move stickiness. of visibility, still curve can cost customers customer with our predictability being are provide us These and to to excited sign are we drive impact the learning us purchase enable

expect and timing As predictability of quarterly on and we we to notable grow our needs impact business, customers' improve our less a our expect results. the have timelines, orders into will

lowest that multiyear continue of multiyear pressure margins proud signing from on pricing, our some are the near experience deals term. We to include negotiated Because positive margins and Lidar Digital gross large SCAs anticipated downward cost to CMOS temporary in believe we platform. the is expect

the sales that SCAs continue meet average However, allowing our us over anticipate time, to our increase, targeted than will of to selling cost volumes our as prices, over decline term of we faster sold goods margins. the

forward-looking our opportunity. to Turning

like take customers' We $X.X $XX seeing expect lidar for through to alone, it only Parifex, for We total infrastructure, growth. verticals wins robotics of the billion automotive, new with on customers smart nearly have addressable these In respectively. not this we Light systems the driving one industrial, quarter delivery and target we Robotics We're autonomous Plus, customer X,XXX customers, existing Valeo and demonstrate X its in Amazon Blue that a believe brought or opportunity reach represents And a XXXX for belief and Ouster. ability reported our vertical, customer to shape that In our fleet. by submarket our each but our market already contract TAM significant penetrating to of XXXX. by this won we diverse are also across marquee that revenue that it was billion TAM submarkets. example, for our supply trucks in each is in pipeline capable build

quickly cost total lidar advantage addressable it manufacturing, to to remember, vertical. also of low-cost manufacture unlock and are us digital ramping leader believe for is lidar us their of by the companies. the expectations. across goods take of of industry other to of Optics, by Ouster for to due our reduce in sets lidar the to commercial goods with lidar we is competition materials ASICs sold line year an cost other our achieve reduction to for our positive in technology to companies achieve It generate sold VCSELs, market, which digital lidar lidar, near-term allows to technology does across and prior sold. has at outsource volume in scale XX% reducing long-term we have within of lidar and market We reductions our a TAM $X Not approximately has margins. revenue. XXXX, VCSEL and And viable would little working approach, belief operational our overhead in And approach stable rate close multi-market X is Ouster that to a billion CMOS still of of for goods ahead reduced bill very while opportunities XX% and outside scrap of continued lower our quarter each up business, only larger drive our automotive in in gross a and verticals, XD cost XXXX products manufacturing to make run value-added our capturing allowed a already as SPAD and and compared steady reductions in Our cost costs the Micro we yield FPGAs, the see through multimarket costs. improvements addition us

we due maintained times SCAs our the have same macro as supply experience XX%. of while decrease, current Importantly, quarter global pressures to COGS related sign meet and In to ramp our more our targeted And for and continue mature mentioned the the at positive the that customers material SCA period, Ouster suppliers impact and from to the during earlier, already anticipate on near gross under continue to gross we including chain goods recent the in may an environment, of in term, faster we I reasons increased sold will our declined we volume, second than our purchase margins the margin ASP. shortage, margins. lead cost spite will

would purchase to In fees production had order in margins not delivery variance and fact, expedite our some price situational have and we time meet unfavorable been higher experienced lines.

shortages global our could the to the continue year, to expect on through margins. put rest pressure material continue which the of We

of shortage We second mitigate this in to material the are steps $XXX with impact on approximately However, actively business. cash. taking our we the quarter million closed

announced and allocation our plan X we to development; product hardware accelerating debut, teams; our offering. expand out marketing areas: map software investments on strengthening public our capital During targeted and a sales building in Ouster's focused road

on majority by goals made of organization. of Prior We the have industry-leading and our interest. build revenue inbound our best-in-class a the and we public are driven proud to are Ouster to progress delivering year-to-date. was is these investing debut, commercial

are on year-to-date organization geared engagement end, we account outbound We To XXXX expansion. the at grown pipeline our Pacific this commercial sales focused approximately employees a mature to the XX ramping EMEA Asia now from developing employees towards XX markets. targeted and of our end sales under team through have across Americas, and

sales, have experienced brought on customer and for enterprise leaders critical we Specifically, functions, operations including success. sales

This from is increasing our in our investments, quarter, have XXX around from in us. base larger As all to of the these a XXX result by line opportunity invest multinational sales building massive with force increased customer XXX. around customer count in during capture commitment the a second with to approximately we overall to our

Additionally, we committed software. to invest in

to first first in second the branch of team online our kit software this. Canada development focus our will quarter launch in taking direction. including The internal build our step on a to software expanding that are ecosystem was a steps bring in developer We a rich that critical

We are and to customer plan verticals of to accelerate leading providers invest to adoption. time. more for markets We also access new continue our each solutions forward partnering look sharing with over and to here

of our developments, and for update our some our our believe quarter investing in on game which product we're all Lastly, verticals. road of our progress also chip, including LX highlighted changer map. Angus hardware will second firmware we significantly be a

even solid-state when fully to we scanning are and multifaceted both to automotive true right. map excited for committed our are We which time the road in is and more development, product sensors have share

offering optimistic intended of these first $XX these public As EBITDA expect the we result, we incredibly the bring autonomy solutions, deliver loss we in on quarter initiatives. March, a million levels $XX forward-looking XXXX quarter our use increased closing, our as years. of that well thousands from million our proceeds approximately OpEx the which over software on and second I'm to announced applications few about of approximately we organization of as hardware new the to adjusted will of And In in in growing next as increased commercial such to initial initiatives XXXX. our to

are guidance our in and back turn million margin. like full closing of to year XX% some revenue As that, such, gross to we I'd million to to to with remarks. reiterate XXXX Angus XX% $XX the And pleased call for $XX

Angus Pacala

to here solutions build best-in-class Thank and you, that life. improve industries and is software by Anna. delivering Ouster safer efficient quality will a lidar world of transform and more

Our have diversified compared digital companies. platform a why lidar highly is business other with we

to By lead and capitalize While X expect betting Ouster vertical, on others certifications. strategy, multi-market to now a we continue or today our while continuing We on and long to products, in achieve drive single a executing time. just is build us execute advantage strategy, on each your of our allows we real a look questions. enhance verticals our solutions application to to revenue mover for which our are on forward first answering

Operator

line Instructions] first of from Curtis question the [Operator Our Barclays. Blayne comes from

Blayne Peter

lidar when the I even over that your to Maybe wanted of think about least on is important talked and at auto at like and particularly patch using, first, companies performance look traction to of that going in like leadership getting metric you, Plus a highlight you auto. beauty pursuing digital category. looking with lot Angus, at in you distance XX% the made and ask the with your meters I that's you a of or reflectivity And is a what's point XXX Plus, solution solution, in auto,

obviously you kind Just of your trucking. a autonomous view, got win in curious,

about getting when leadership. to maybe of you to And So about and fits auto to solution those that your on. it's talk you talk the maybe your your map specs road performance how circling could market in if seems in kind be

Angus Pacala

sure. Yes,

multiproduct And So keep is They as suite short-range name the an of sensors, in auto earnings type our automaker only just lidar, that of automotive lidar. need the in true certifying not single And all it. lidar, but that this we've in auto systems from lidar lidar highlighted every offering we've conceivably are solid-state thing types certification, to long-range lidar, been one could call mind, needs talking we that that investing core need. of scanning product strategy fact our well. of beginning, you of all mid-field is also

provide narrow sensors goal complete to different to we're range, sensors medium solid-state is that wide come the different field our market with -- short, us there and are of long of needs they of reality view the need. view and for to Because the application the allow types auto scanning exactly So and systems. and suite of is field

going understand map and put of they what the systems, us what some parking digital highway whether automakers, have systems. automakers used working exactly not cannot reality. -- with all. are somewhat we working what Some to those And automaker says, to that's the technology it of automakers of just automakers come that as or there customers X applicable comes that ever sensor right? lidar And so that's a ability customized the so exact is doing a Literally, need need. achieve underpinning, in exact -- autopilot competitors, our options. same are to And a one-stop may road years, be to we're offering car be all on they one on X solution. is -- a both. this course, the us you no is all to for whether spec we're architecture And and good, applying -- And is the are shop That's in for we're

we each have we're to to standard our And so that and able automaker's road somewhat then map, customize requirement. product

but it or state. range long short range, so there's of depends solid on And we be automaker we or road shop. need, what it's achieve this scanning that understand And that all whether one-stop they the the map. And can they requirements, and -- can

has view And they sensors. so And a wide to of able started with -- provide under like NDA. lidar customer field Plus, we're

our not application years of an for is longer-term of scanning by relationships, to One is exact conceivable for they're solid And map that it products we're the or releasing that something suite. doing need But into more out. is that product specs even any automaker for. encompass X, providing every our SCAs possible medium-term is the expanded things completely of that spec they required road and all our using, insight X, reality they state X we're our our and much this the confidential

And company that only be shop of and so lidar needs that We with credibility. and we kind can share one-stop to automaker ever information have the automakers the that an with. work

into providing And the we a in unique don't see so company market. products such industry. that's Really, what of think we're that's any broad swath providing. We that's the other

Blayne Peter

on then for OpEx just line. Anna, And one maybe the

few map et investing software, road a mentioned You cetera. areas, in and

be Just That the any helpful. would on OpEx thoughts for year?

Anna Brunelle

I guidance thought plan we think we proceeds that addressed areas what kind mean beginning the the remarks. out the some prior gave -- just X those use at we said came of my for of our be year, hiring I when and to would that Yes. we I on we in

on from we track be. And changed and to so we we're where would we haven't really said that, right

year, back at half kind continue similar to rate. So we to I of think looking the the into hire of a intend

Operator

the Micheaeli Citi. line next from comes of Our question Itay of

Itay Michaeli

Maybe just on first the gross two quick ones, margin.

that freight you the it sequentially, costs And of quantify of in premium I grow mentioned were. maybe revenue chain looks incurred some for supply flat. half and perhaps then second hoping could you was what gross the in guiding kind like margin other year, inefficiency about You QX. to you're those

ASPs, assumptions little the you the year? the I think second a around particular Maybe in more the factors half some you on to could alluded of bit there. of provide in

Anna Brunelle

out without positive question company far our question we're that. Yes. reiterating that on as I I first of margins, am just there I very first I can't go the a by think as let your hardware. of how proud with proud I on margins mean gross to And only -- I we're margin know, Lidar address all,

And that so we had of have quarter. of points or shipping prior and not fees expedite that had margin, incurred additional which we quarter And mentioned, to in to managed handful to a I'm that keep we the those of spite was nature. pressures shortage the added this would percentage sorry, year flat things this versus -- some the global semiconductor

And ensure that feel plan customers so we will a our them those place pressures we product little continue a in mitigate we timely. obviously, and receive longer, that but have expect while to for

ahead. think go your -- I

Itay Michaeli

No.

on I ASPs. kind the think on walk and the maybe second the of half year of

Anna Brunelle

know, to ASPs. you that goods really our Well, our margin than is reiterated aiming And declining that's faster we we're sold as of towards. what important I so reiterating think keep guidance, our are then cost what's on ASPs, here

business really as have initiative get we're we So time. and that these SCAs and a revenues lot of that costs of signing we think both to a into ASPs predictability our over

a rate to And units SCAs we to that so as continue just costs. we that which to I power and COGS will volumes and our COGS, about when we purchasing steady over are at -- improve our grow think know able our have very our ASPs and spread fixed as more decline

predictable scale. very that's benchmark. so already We we're to what products And with it manufacture our us know since working for costs at

And and faster believe negotiated COGS. allows revenue longer-term from are our understand we ASPs to and revenue both SCA needs or for better that our work really ensure than us are us declining to forecasts COGS not our pricing our our way so their and that driving to the predict look them as we we gather customers a at process -- such with that ensures that

look And but declined same year, prior by -- about QX they XX%, declined the in if per at so as an our example, our ASPs the average COGS QX XX%. of our of declined versus unit you period COGS this year over about

so variability that. And some may there expect that in be we

term, have and signing pricing confident visibility funnel margins. -- many multiyear may are to SCAs. have And getting the of our be a goals. meet who we the as there that customers mentioned, mid- we'll that in over XXX customers, But those long-term closer long are customers quite and We progressing and in have the and with we to through some initial we lot we variability commit agree margin

Itay Michaeli

If helpful. on super in That's question could one SCAs. the I just sneak

bit existing to what on customers then Maybe you kind you drove as last new I that just also versus remarks. quarter. seeing growth. prepared about customers. alluded saw could of from think markets But comment was I generally a as talk little incremental you're of sort of you hoping end the demand in what terms growth in particular well And that your

Anna Brunelle

mean I all across SCAs X we markets, sign end continue I to across of verticals. our Yes. think

– I'm So what sorry, your about was across that. said demand we're second excited really And question? You

Itay Michaeli

of split existing new as between as Kind customers well of the in? sort coming customers

Anna Brunelle

we you because tell by really in both rate how we're signing second added new that the getting the and customers can XXX approximately we're obviously, quarter. Well, SCAs

from that idea can an there's coming kind You it's get -- of both.

Operator

line the Our from of comes Baird. next of Gerra question Tristan

Tyler Bomba

Bomba This is Tyler on for Tristan.

timing of the Lidars the will the 'XX, And You then you're in state fourth versus is this in introduced Lidar you've market still mentioned reasons? technology solid your of solid-state could the made on end or that terms far be because applications? rotational because working on quarter of choice you for market elaborate thus

Angus Pacala

Sure.

simply just that release XXXX. products. we've the said prototypes that of in for reason solid-state or QX we'll introducing the is the sensors design So And new QX cycles for

has fundamental of lidar architecture, module one no see were the by prototypes created the all delay. similar, lidar the our looks next ready because we're end digital new SPAD powers would if that no you to very that There's it's specific to VCSEL solid-state a systems, devices same So that pull fully you technology solid-state it's apart almost have for scanning to be true And architecture, year. identical developing -- the of digital our very, products. to

ladder market So one. is designing strategic the is there realization it's a solid really just field sensors to the in that scanning industrial industrial the lidar the -- analog And are sensors, to of by But wide systems. And this years. inertia scanning back for produced today, to lidar it's for scanning last both mostly systems, XX entire it's use like and -- sensors more for from market and which companies the -- products. the sensors, the scanning for then or an essentially new also systems, Velodyne -- that's today offer immense choice goes just the is XX either companies state still

do and can And scanning established we to just market that effectively, need we outcompete. affordability we sensors. to performance very both so And immense reeducate, on with don't this outer that need digital there's

which sensors. we able come winning and And start the they to want sensors decide business so and while same provide doesn't that Ouster, from And to choose from frank, the one our sensors. and significant through could to to entire scanning solid-state and certifying two product solid-state portfolio. that customers be other were simultaneously of any do those and customers which We're automotive that go we it true So out industry specifications and in want particularly vertical developing sensors. products matter all that industrial

yes, it's that So question. hopefully, this -- answers

Tyler Bomba

them X the as ramp a look declines we versus at ASP rotational X unit And should lidars declines? less Maybe intersect the then of Great. of how ramps? and for ASP offset follow-up, Yes. than the unit where

Anna Brunelle

I jump and add. Well, if to in are ramping. I maybe, can mean, you something start guess and units But have I our Angus,

So we QX about of year, last of X,XXX. we this units, year, then sold QX sold XXX and

asked, our as And on sold of question ramping. So the are our I mentioned faster units are goods our declining I much definitely last cost ASPs. than

that So meeting really over our decline, widen and customers adoption goal to it's goals by we margin the business. as while it our time. been to do see grow ASPs our always

do And taken continue that future. kind to product we approach to -- our price a the so thoughtful how as products volume, of we we'll ramping our very we've are into and

Operator

Craig-Hallum Our comes line Capital. from of question Richard of Shannon the next

Richard Shannon

on guess here. agreements the first my I strategic one customer is

like a those large or XX million suspect be deals to probably was fair roughly. of Maybe, million modest $X how a of last million the average of some there value quarter. on something interesting offer. perspective want more I quarter size with you during can the X number, the Or $X on maybe more? of, if added I should us was so we number think, that deals think, I You've X in to amount an give to $XX quoted that and is couch you see or us end you markets, it perspective that Angus, for terms average in

Angus Pacala

Yes.

with -- visibility SCA the to stated our goal is our is the That with entire of into goal customers. pipeline stated so provide kind SCAs. credible And long-term of

SCA business, of near to we anything, a under relatively communicating customers of of if customers. years. hundreds so the couple size term And hopefully, hundreds the of we of And And want also, highly under to want underestimating are or thousands in with a the hundreds with run in customers. business diversified and opportunities our next the diversified be

And $XX several I'm of so I'm much while of million kind we foundation hundred fantastic -- that And if larger extremely customers we opportunities, kind each pleased for that business. are have certain have winning SCA the -- that a seeing also million multi we're that's to will $XXX customers $X opportunities. be million

think are will $X affect build I'm business. for looking that I'm opportunities. to In And have looking But right to quarters, mostly going been larger And that's the always larger sign have so And happy what in we it. much SCAs million about some I'm opportunities, some really just And way deals, to we're that have SCA those also the we I opportunities. that's number great. a the We report make the the don't on has -- a And if supporting this, right? in those reporting end be numbers. that's we a that on do to sure these lot we customer will reputable -- volatility their change want customer want of SCA, larger to their forecast customer because that have volumes, not Street. we're to

possible. have reputable of the that wherever larger that reason, customers with end kind making So sure for we're really opportunities them associated here

Anna Brunelle

said, get perspective to And how term. few that that way, period, in operating like quite mind, billion see or to like SCAs, is Richard, term. you see sign goal period, predictable that the many in a to I I the billion. a SCAs as level start is time I'd a additional a I'd cover us them a over near X-year which Angus operate if X-year near cover some bit to time of at could to business because at add my $X the little of about the to very And us think just of you is, it, $X that sign don't

the add nearly to think less $XXX funnel, think And for rate pipeline those new kind considerably year, the signing back customers and of I with I build convert them there. at million SCA through XX% we're already when continue relationships, so And predictable we're just that that a SCAs than we'll we've mark, agreements. we're been ramp into happy those the I'm and ramping very the that develop And business. that only

Richard Shannon

increasing been What of great any the perspective second the a them you the you perspective. down? markets is have and quarter of have broader Have at the kind would Just please. negatives slow of seen Where That's positive market? of seen in any automotive last be outside flows tension? my looking question Great. here most of Angus, the your great, here.

Angus Pacala

SCA an that's over that's a what and and base sell $X currently is Ouster XX today. is in years. affordable that hear last market, they there's more I all signed, see to positive. mean, a established think to shifts look a industrial it's the been and up, capable, was incredibly to that's continue the product currently And is at we the you when the using I customer going that's in and revenue unit Lidar Lidar mean, be to them are Lidar That been want what for technology. I if extraordinarily are drop back up billion billion are signing all And asked. a $X and to is they going true. -- the -- such just different industry the announcing that in I pleased. I our incredibly customers I think is like be this it's I'm established purchasing. Lidar to to replacement that, to technology, working -- what is can more it's the momentum to is non-auto mean, markets -- receptive question And XX market

industrial infrastructure market, swaths of the today. market true large that For robotics all the market, is and the smart

just feel all fit in and in fantastic of results. paying verticals, the we market And -- off in certainly product so kind the of those have we a it's

Operator

Osha comes question the of line Guggenheim. from last Our of Joseph

Joseph Osha

to up topic first wanted that return question little came I a bit a earlier.

a of whatever. I markets you a mean, some products. you've Angus suite question. materials or opinion, And Or to gantry other You scanners? do need are really look one But penetrate handling those these cranes price lower rotating in opportunities? likely have at having complete you then got up know to I your markets think robots point those And of or say, like end I

Angus Pacala

be lot will a continue think the scanning decade those or systems I more. to of next for

Joseph Osha

that Okay. you just [Technical doesn't Difficulty] Difficulty] is wider [Technical And matter Can that's spinning because much. that -- robot

Angus Pacala

Yes.

different So reasons. there are many

first ASPs price fundamentally It's than industrial that consumer market, the The the already different Lidar points is quite automotive. high. are

And The then dollar robots [Technical model commonly like the second much is much for that consumer on the equipment, -- or And can going ROI investment customers Difficulty] better. can. than the It's the platforms that capital they're understand better or then they like ROI mining heavy are much platforms construction, vehicles. gantry something multimillion the warehousing cranes that. in

certifications. of incumbents come excuse are all for to and entrants in then so come for that there -- the certifications because -- these it of hard -- and compete with out And safety industry new me, or make

So the the XX price to able to And for points in all industry. already already XX those hit in reasons, set years. systems pace are last this we're points scanning competitive price the -- the

term, that entrant. there's scanning thing systems. the solid-state shift So from able for will I of but shift better part the the take for there industry, which with in industry it's us will alone, any it reason that long lot now a for Ouster take a to a products of be decade going major we're towards is think our be that inertia -- true to a And good significant a to

Joseph Osha

sense. Makes interesting. That's

question. could great deal you Obviously, you exists as Difficulty] a the and sensors on Secondly, the more gotten the other what just SPAD see on wondering, mean, ever map I'm attributes emitters CMOS. technology-oriented I a you've there, [Technical and with other integrating what's look just potential the in forward road product of done here? same

Angus Pacala

in playing huge performance with the jump access form start chipsets, of in I and potential much handing product product It the at we'll us to game. of analog dealt chip cards -- in our though incredibly really world of in as Lidar is the cards improvements semiconductor have But so digital this a seen, date. hand were it. is is us driven to Ouster the jumps everyone card is every are partners road we've ever that mean to already the the the they trump is giving -- round performance LX and map. is exciting. And There new biggest in the handed being that new the literally Yes.

this paradigm it's we term. so the have the forward move And in technology to capacity just long shift

it LX, so side. And LX, new the the the that there, well. And base the chip right, this just keeps and as silicon our technology the is you're not equation laser LX LX, the we're on being well, side. with VCSEL the immense just it's supplier the on -- investment handed through It's partnerships side as for There's deep going. and begets

for is most metrics. across that, And relevant so this in market-leading And beginning very we're despite technology. already this the all much position this

opportunity -- yes, just to I'm And there's push future, technology incredibly forward. huge excited so and the the for

Operator

Pacala I'd back Angus our does to to question-and-answer the closing conclude conference session. like remarks. And Mr. turn for this over any

Angus Pacala

everyone day. great. Well, a to I tuning everyone, have thank and wanted today, great in for just

Operator

now concluded. for attending conference Thank you Ladies and today's presentation. is the gentlemen,

lines at now may disconnect You your this time.

Ouster (OUST) 10 Aug 212021 Q2 Earnings call transcript