Earnings call transcript Q4 2022

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Operator

Hello and welcome everyone to Ouster’s Fourth Quarter 2022 Earnings Conference Call. [Operator Instructions] And just a reminder, today’s call is being recorded and a replay 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 Ms. Sarah Ewing, Director of Investor Relations. Sarah, please go ahead.

Sarah Ewing

afternoon, good and you everyone. Thank joining Thank quarter our fourth for call. you for earnings XXXX us I by joined Chief am today Financial Pacala; Officer, Officer, and Angus Mark Weinswig. Ouster’s Chief Executive

like on the published presentation, remarks, today begin of an issued release fiscal investor quarter press the which section its a you ouster.com. The year we Before XXXX Ouster we would results. Investor that to Relations prepared earlier fourth and available announcing is remind company also

everyone and share performance, Ouster’s may are with may to Thus, be that achieved. current remind materially call, results trends, future and Velodyne, be to from commercial provisions like during synergies outlook expectations for by results intended discuss forward-looking future merger are the while these results benefits statements forward-looking of company’s and conference statements Safe anticipated customer the also benefits first and to There I’d company’s release, actual is will the the Act customer statements. releases, trajectory forward-looking statements this today. such traction ability differ of that financial and Securities and quarter that paths, estimates that shipments, product near and savings forecasts, and expected new recognize long-term Ouster’s technological share certain to initiatives, potential that products, expectations with and cost business actual course from management’s guidance advancements Harbor applications Litigation potential Private and plans, its of several are press represent subject agreements, you targets, will future revenue management XXXX cause orders uncertainties customer risks anticipated the we from opportunities, company, to opportunities, market the future Reform information covered regarding including market the strategic XXXX of guarantee no of

industry most other consider or other SEC. any should as and its in based which knowledge research sources internal as cause which sources it assumptions data upon such that competitive recent obligation report and during research data made information reports forward-looking XX-K By from important any operates and by independent future annual disclosures and to estimates. and this risks and any analysts which date with on in required these position from or its statements carefully results In company reasonable from and call, may undertakes assumptions highlighted markets addition and Form update reason materially the third-party concerning affect as and in as definition, well reviewing Information industry organizations, to management independent other files differ are furnishes experience markets. those the risk the on call is derived such expressed and released law, third-party of regulation, to results the estimates you based other are and of the Ouster’s could factors information no risks, after on available discussed that from in by industry to described for subject company call. of are company’s industry with Except computations the publicly on uncertainty and this this company’s the rule

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

refer comparable to to release. call GAAP please of discussed reconciliation measures a the measures, non-GAAP financial recently For press this today’s during most

for the only as well Finally, as will financial Ouster company. historical we be statements cover please advised forward-looking results that combined

results standalone Velodyne. provide We for will on report nor not

I’d turn Angus. call the to now to like over

Angus Pacala

Good lidar market of a end want quality for autonomy safer, to Ouster’s I from by best-in-class to accelerate to and afternoon, which recap to by aim improve lidar autonomy shareholders. software delivering deepen robust creating more Ouster’s spans building thank joining markets. and through digital We markets, all that manufacturer this increases mission and ecosystem start, releasing leading technology category-defining you customers and vertical-specific to for value autonomy diverse provider life evolving do To solutions, today. to adoption and efficient a lidar a us of relationships everyone hardware assistance, automation customer

REVX quarter. performance meaningful OS first sensor introduced We and our expand for LX sensor launched smart which this pre-released we and applications, the market, for our OS for most suite digital and of Last new chip, which platform production infrastructure for the goal solid-state samples our lidar made each strides released towards DF Ouster lidar. across the high-volume Even particularly on subscription sensors lineup will fourth increases first A more, by our accelerate competitiveness the markets. digital year, the series, target industrial Gemini, in a our cloud-backed XXXX, perception in programs we built the opportunities powered software,

fourth XX% product with our a in year our XXXX, XX,XXX Ouster XXXX Furthermore, margins than sold As worldwide. over gross in XXXX. $XX multiyear guidance million agreements, in sensors million units shipped and and record nearly delivered a and $XX in fourth total result quarter in million to achieved XXXX of customer revenue quarter combination X,XXX sensors our We the revenue bringing of in the more we booked and X,XXX gross $XX to-date full margins. with business XX% with over in number developments in in these of

completed merger February our of which initial on the XXXX fourth ahead our we in timeline. quarter, Velodyne with XX, announced we Finally,

stronger company, position than team, a set win and of of serve an customers partners to healthy a As even wide one to ever products that we sheet, channel margin consolidated positive balance new more have us selection a diverse before. deals

solutions new to by further across catalyze expand We serviceable expect exciting the lidar software roadmap innovative our and market digital our business. amplified growth

we lidar, support digital and centers, Ouster’s VLS-XXX DF will to product and manufacture to VLP-XX, continue addition lines. the and the VLP-XX OS In

bolsters the our to term As ultimately revenue continue alignment ratio due existing a offers its price-to-performance we and which for digital lidar longer customers. with we state our base, which superior end approach support customers Law, believe Moore’s the products, architecture, advantage for to simplified is Velodyne using

aim We revenue will to continue high-margin to our with in transition digital and exclusively Over focus BlueCity Ouster along invest and digital time, product and roadmap, products. adoption to lidar customers Gemini R&D drive new the we to streams. software

lidar aim experience Executive as but form public team Board and Board growing in company Mark our understands complex Megan We Chairman. Board, and finance at integration, evolve As from executives companies. Velodyne’s to company, and digital Ouster with General GC, only and part company competitive ongoing of our lidar work both autonomy directors the who all brought scale with provider. Deputy on Weinswig, market. Tewksbury, Ouster Ouster’s lead also and development of in a I former a the to from also management history, not that CEO, a products, a lead and to team category-defining CFO, has am Ted a team our new perspective Counsel. and excited and inclusive the promoted to offer management a manufacturer the Board, to designated the market-leading team Chung, announced to Velodyne this Ouster including to We experience to will Each X of directors valuable strong

contract initiatives on products and currently to of outsourcing in ongoing synergies. had to the Fabrinet, activities, achieve its Turning cost Thailand, process manufacturer the of started to are merging, merger bring focused structure. improvements announced to support we Prior cost immediate a to meaningful to Velodyne the the manufacturing integration

as efforts the maintained lines VLP-XX in and the transition starting by result of VLS-XXX in these accelerated a track to year, the VLP-XX with year. the merger complete QX product and QX, are the end on have We of of the sensors all the this

and Solutions which Velodyne a already roadmaps. digital strategy BOM As both to Gemini quality a teams and plan products and organization software umbrella, improving the on we action customers after took Software the with under merger, goal integrate BlueCity Ouster closing transitioned, integrate developed is engineering execute We and sensors. to improving of to successfully Infrastructure our of underway. optimizing margin on focused support the for structure cost, the our lidar yields the sales and our Velodyne single Smart hardware we Immediately remain are existing and

are structure to we cost-efficient realize IT and value G&A drive our streamlining under Additionally, operations for and a platform to consolidated its Ouster and creation team shareholders.

Following employees. the integration, XXX retain approximately we to expect

solutions, new to ecosystem our The comprehensive execute XXXX: has support smart lidar value infrastructure reach robust incredible global is portfolio strategic industrial digital and financially robotics with and long-term offering spanning patent smart industries software automotive, the Ouster a spanning suite deliver lidar XXX build a comprehensive lidar for business Ouster a two lidar and XX a in of analog customers strong three digital sensors, a software roadmap; and approximately growth infrastructure commercial countries. over lidar novel our adoption; and develop on priorities accelerate to shareholders. to powerhouse,

lidar digital technology the uniquely near markets. business model diversified multiple to revenue long-term supports scale growth and a and ability differentiated with drive Our across

our we In precision new accuracy REVX sensors, in market, lineup. entire released highest of family the range, performing improvements across sensors the our fourth quarter, and dramatic delivering the on OS

Our than resolution OSX competitors. delivers higher Xx and X.Xx more range

over now range XXX Xx delivers objects, and achieved OSX on has only than not meter a higher competitors. greater XXX range meters. maximum OSX reflective Our range our a Xx resolution but of And more than XX%

Additionally, opportunities leader across Hemisphere our field competitiveness the higher our XXX-degree resolution REVX lidar. competitors. industry overall than opens OSDome sensor up the markets, and cements Xx delivers suite view as position of high-performance improves for The new

We deals REVX in has from to positive. been quarter. sensors The shipping the closed early expanded XX customers feedback new extremely customers and for fourth

long-range torque our with and REVX for market Cyngn a We aerial robotics customer, mapping European trucks. and drone using trucking; for as new by well for more as on orders customers as speed enforcement; than European Vecna applications. the OEM warehouse inspection automation; booked also a mining and Parafix large will major double OEM sensors for and for serviceable driven such RYSE We mapping opportunities REVX another believe

in catalyst be expect As REVX such, XXXX. we to for major a growth Ouster

Flash second also critical the Digital demonstrated release to roadmap half In for automotive digital competitive also our milestone production a form XXXX, of the samples samples growth. DF for strategic major our or to of at commercial A OEM This the the the first in including series is year, flash requirements on industry automakers, solid-state our B DF Looking could catalyst final sensors. which Series plan we factor and our performance that partner. a expect We with in cost. early our achieve our engagements automotive automotive architecture a forward, stringent programs, be of high-volume we released

demonstrate to OEM placing the and in wait the DF size, to For of line. the represent performance DF line. flexibility cost and DF product will the performance, of hands first the advantage time, final sensors I product we be shape can’t

for as well for Turning as initiatives development infrastructure BlueCity robust This vertical. by market to applications smart modernizing Gemini and guest software. and driven revenue customers and new enhance to cities sustainable build remains of ecosystem business and as our security targeting boost more by includes development simplify to growing, emerging Building lidar on to experience, solutions opportunities operations. and infrastructure fast built a to in across systems tools public is as infrastructure lidar safer, software crowd government growth. analytics new best-in-class the smart transportation well our important for product roadmap software the The simplify catalyze Ouster part an

for for already smart is lidar market signalized world global cameras at there millions infrastructure. security dollar billion, the system market multibillion With of around and opportunity end intersections estimated a the $XX and

roadways, As centers. country’s shipping offering to our few be to of is populated American from the critical Ouster companies and on one cities most becomes infrastructure proud airports U.S. the prevalent lidar increasingly traffic certified ports technology and By across

BlueCity momentum, Infrastructure Solution. build Gemini Perception the the and Traffic To added on recently this Ouster released we Platform Management Smart

U.S. we are A safety. improve roadway early successful after using and half and in these already Ouster Gemini in live handful Ouster across second of to deployments of of XXXX released January rollout more the security customers closing Europe than the Gemini XX XXXX. deals with operations, the officially retail and With in companies, Gemini Ouster

a active intelligent in deployments for XXXX. turnkey is over BlueCity lidar-based transportation systems solution with XXX

infrastructure smart Gemini As our and be overall more performance the BlueCity by BlueCity add underpinned part Ouster our better plans under for will customers. features compatibility, to of to unify solutions software to OS vertical,

is close DF our team, REVX centers, from of solutions and key portfolio smart game-changing for With merger the Velodyne, for expanded product the B and XXXX. our new to well Ouster applications with exciting in launch poised as and customer infrastructure ecosystem, early believe as more competitive base, software new partner including samples series we an benefits deals

to to model to and are lead building Weinswig to business near- us resilient. business the through market to the now help solid long-term our that our both CFO In stable, we into Mark the a and with new Velodyne with align support us growth, integration and I’m cutting-edge a position happy future. order company is for foundation competitive Ouster and growth introduce as technology

And with and year our I’ll well further results now Mark quarter plans. integration near-term full turn to our financial provide that, to over fourth on XXXX details the on update as it for as

Mark Weinswig

Ouster trajectory. Thank I is forward approach our you, technology team and industry’s diversified line Angus, and and am be of a good a look growth in lidar market management to business afternoon, the with estimated the everyone. that to model differentiated lidar excited with aligning member digital

million XXXX our fourth $XX in Starting off results, revenue. nearly we recognized with quarter

XX% robotics port and handling automation, fourth substantial and shipments which the sales inspection quarter accounted industrial of combined vehicles, material a warehouse in automation applications. Our for for included drone customers

we of a with markets key the REVX increase a A the position shipments sensors fourth platform of new fourth nearly XX of shipped, first over our to all number to record the XXX in the newly sensors of new great quarter key quarter customers. of was highlight units and X,XXX the over shipped XX quarter commercial This a or across our released in includes sheet. Ouster XX% in balance XXXX reaching customers entering is QX, XXXX. of Further, sensors of worldwide strong the customers a XXXX.

gross were REVX. as continued as positive with margins as associated commercial the some to and transition ASPs lower primarily margins quarter, large transition volume plan deliver gross well fourth sales expenses driven XXXX, XX% margins. lower recording in product in quarter the the the to overhead part Gross lower manufacturing build fourth our with to of platform of the unit certain from Ouster the higher underutilization REVX to customers sensor by

deliver to to REVX ramp REVX competitiveness transition opening than higher and after We a we the XXXX. catalyst market growth of up integration expect margins opportunities sensors of for doubles as and up suite overall the This more Velodyne in our this time serviceable our increasing manufacturing complete new is over sensors. major our

Moving our on to results. year full

XXXX, the shipped vertical in Ouster XX% XXXX, warehouses. shipped for automotive chain XX% saw buses. and and shipped mines and target and technologies strong XX% for industrial We robotics are demand over across in past farms shipped revised with verticals, pleased the $XX for to margin In targets traction in shuttles of strong robotrucking, from our and recording in very shipping over approximately year. Ouster amounts with our gross year. from X,XXX million margins accounting Across revenue the progress achieved markets, of we robotaxis, XXXX, to of The sensors our revenue to our for both the respectively, sensors supply total, gross ports which accounted over continues automation for XX,XXX sensors sensors XX% date. and primarily

thousands coming of sensors in sensors, to representing as smart XXX the be with as the area XXXX over offering. for in January XXXX. an with product customers Finally, BlueCity XXXX, years release new will over in in software This of and deployed the which our Ouster the Gemini well opportunity infrastructure were of shipped vertical demand remains significant programs new X% of awarded

peer metric our our both public on that gross lidar near- more and a and in customers, leading industry based to set momentum believe the growing In Bookings we captures customers. all Ouster contract customer as in bookings from or lidar as XXXX XXXX, long-term in We and margins. revenues Ouster’s new Ouster a customers, strengthened by company and the than allows strategic business orders maturity growth. model traction a showcases build near-term. only meaningful which from this can is recorded even us merger orders represent Velodyne, with amongst the ended agreements believe which with the sustain existing bookings metric $XX million verticals is binding demonstrating SCAs across

Velodyne the to merger Turning integration activities.

healthy steps the capitalized exceed and reduce the taking stand-alone December is million X million to short-term on cash, synergies on cost months. immediate of company Velodyne cost equivalents the two XX, $XX of The to quarter $XXX to removed million rate of have build costs. compared track the run structures the in restricted achieve the annual that investments expected, are allow us of merger closed quarter to a earlier cash the estimate cash, combined XXXX. business. of We By $XX expects strategic a approximately with annualized well against the synergy to first XXXX. companies XX, costs within to and as previously remain We synergies than end projected of We is approximately significantly with XXXX. XXXX, cost as The baselined of third steps in quarter took of third February company the

We require end paid expect million the of million phase one-time the March. first cash with costs of the $XX $XX of to by to majority approximately integration

duplicative programs, and joint cost employees focused implemented XXX along closing of a These activities approximately the These facility reductions R&D team. and administrative of Velodyne’s include in a primarily with India. on headcount of activities creation operations general the reduction

to expect efforts. our the approximately employees of retain following completion integration XXX We

the the activities, we for as keenly will success, to positioning we we long-term and synergies focused identify on Through the continue are integration. healthy, we our company realign the work steps shareholders. providing of and develop can business We execute our look as scalable over couple deliver further that model on quarters plan. our forward to to to build next additional continue We’re through first cost taking to these operating a value to details

we quarterly for at guidance to revenue. this provide plan only forward, time, Going

revenue. million XXXX, between in is targeting For $XX Ouster the and $XX quarter million of first

the the sensors. pressure we That to sheet, the work believe XXXX we some sensors costs trajectory our experience balance integration and scale continued REVX to market. offerings, well a this will expect said, merger product ongoing work and long-term company. increased transformational transition as margin outsource the OS remain from in traction REVX confident With manufacturing be to first for highly manufacturing and for strong Velodyne start-up the in a including to the quarter due as We year new

turn And with to Angus. call like would I to back over that, the

Angus Pacala

lidar believe and model new we software XXXX Ouster is a in and Thank you, quickly path on long-term major our growth essential the on driven is a build efficient operating technology, Mark. adoption ubiquitous is to well plans. team to our lidar a across supply new to chain more becoming for with and be us that critical accelerate the positioned infrastructure. aimed to put roads, an year our technology approach our hardware line safer, Ouster solutions strategic and lidar going with by future. profitability to make will throughout

Q&A. I’d that, open With for it to like up

Operator

[Operator Pacala. question Mr. Instructions] you, Andres this take will at Fitzgerald. Cantor Sheppard We Thank first afternoon our from

Andres Sheppard

Hi. on Thank thanks us Good whether bit provide is can more we margins, similar numbers. expect last don’t right? – historical everyone. taking came you wanted margins in you gross color or give but sense I So you. just little guidance whether off, of to afternoon, gross to and a I you a little this start realize our outlier see on in an the XXXX? over than should of XXXX, a for Congratulations lower questions. a provide could for the if Maybe quarter bit QX margin number

Angus Pacala

the much question. very you for Thank

at deliver commercial plan, manufacturing volume, number were two lower three over then deals the which It to from a ASP transition for did some fourth bill do sensors, quarter, reduced margins the associated with looking higher REVX we and number fourth lower large the the areas: to Number with three will manufacturing costs a and key higher start-up REVX which absorption leverage. primarily believe by time. margins. reduced was one operating driven we impacts led quarter. was customers; was see lower So gross was Those some

outsource related we’re over with and manufacturing or some first work obviously, pressures in for Looking start-up will merger those manufacturing to to the Thailand. at to quarter, Velodyne. ongoing That the with products additional associated have the some costs going integration opportunities include

We costs, But will the items move one-time us with some the continue costs margins this then such merger-related move step-up as that inventory. REVX rest manufacturing higher transition to will sensors from we the drive and do we potentially including additional year. relating to some accounting through help REVX associated to believe see as purchase the sensors of REVX

Mark Weinswig

levels, Yes. QX, be levels And we I would stabilized lower also seeing in that and do expect ASPs add not what historic to we’re the at back that’s QX. of

products. in the QX overall, REVX costs it associated obviously I lineup, and with it XX XXXX the call positive to early margin. shipped was the we We’ve the So And we’re into quarter. us where well with looking the to up customers, right absolutely the that from the from immense there did on REVX invest response But were think customers impact extremely going in business. set that, had reaction those

just So we investment. made that why context helpful little a on

Andres Sheppard

you that’s a needs, Got So that I follow-up. very capital quick us that just mind the merger Maybe and it. color. includes in $XXX the million Velodyne. Can right? your No, liquidity, helpful with on insightful. appreciate reminding as

liquidity significant does runway? to anticipate And so you you is give there Thank a that need aggregate being that capital? you. to raise additional going sufficient what forward? Do Or mean

Mark Weinswig

XX, the that into balance we received if roughly sheet of December from Velodyne had account we as mentioned, healthy merger you As we a combined million. $XXX the very with cash take

day made X of on the after cost One had the merger in structure. we as to exceed of took cost action merger, that $XX to to, synergies. the key our we committed million We is reduce part – things

share significant associated space, costs our in products but million, about prepared $XX We our do and technology integration. and mentioned that we’ve lidar There the $XX we As believe opportunities the win that quarter. the the million significant good in to we very of some should enable already early-stage first see future. the to one-time success we us do remarks, was $XX about with feel with million removed in cash exiting

obviously it sure over to which to is going weighing, investments making can put healthy are in the We make model for we that but we something business a is place that time, our future. continue

continue we structure are to put our at to so looking opportunities reduce good that. position a us And cost in and for

Andres Sheppard

again Thanks, pass on will and it quarter. I Wonderful. congratulations on. the

Angus Pacala

you. Thank

Operator

We Brian to you. Thank Chardan Markets. now Dobson Capital go of next

Brian Dobson

Yes. Thanks very much.

not So guidance. issuing I you’re that understand

issue outlook a for pro you two combined the forma just did the companies the close to However, of prior deal.

Now businesses to had feel overview combined and those some you how the that And rely the you’ve with time do numbers? should Street XXXX still about revenue [indiscernible], the XXXX on them?

Angus Pacala

Yes. Obviously, We $XX and right this we’re only for guidance, was which appreciate between now, question. which period, first the $XX is quarter million giving our the million.

into We merger. combined Obviously, are to look look we’re it’s continuing at to what and going only the days like. XX business this

So we’re opportunities kind with structure to the cost for off the our grow of opportunities looking get to at business, the line. in just starting

at really down to updating just continue our forward now, progress activities. as putting we’re the focusing for in But look right heads of on future I you integration these So we and task quarters to hand. more some make on

Mark Weinswig

for And And are extremely obviously, Yes. we $XX for product REVX game as that bookings in invested expanding primarily that the products. base changer That’s an was for add line. and million just I’d our built shipping with us from the we’ve of XXXX we’re a and strong business, number and They for customer SOM. now a our year. REVX came out

a we’re the the we’ve of merger. trajectory in and right and that work the last deals saw revenue X And shipments weeks, saw on done from growth merger on the us growth confidence this the gives won the for so last the year. bookings, lot we And we we’re in with year track in

that product really with the track well. long-term on Fabrinet those base Velodyne to products supporting and side, our as on We’re transition revenue

So in for the we are think feel aggregate, we really good where about I year.

Brian Dobson

Right. out the were contemplated that those forma numbers in REVX the put in pro you sales, filing? And those were

Angus Pacala

absolutely. Yes,

advanced game upgraded devices absolutely, of for the sets. the the cost of to winning size, much much form released also REVX worth the entire this the drawback no a starting basically with changed line. business will year, range major double our OSDome how product of new form millions existing enough stress more structure a with transistors chip line of us draw, business every in in new the be We in changer logic product with I node, component hundreds LX the that So a factor, semiconductor and factor, product expanding of also And a power those REVX process. can’t catalyst is. we customer we line

So not we improving all differentiated robotics released in are perfect a but dome. this a products, very using security more space, only to also existing and we like expand ceiling-mounted solutions but I’m smart sensor industrial of way, it product us give our for our in OSDome our infrastructure a just business.

we recently REVX robotics, one part is already and RX sensors, the of released LASE And So the highlight a absolutely in LASE port industrial REVX business. that I’d with the in that the we automation. have announced other Cyngn wins head-to-head

the feedback incredibly early been so has product And promising.

Brian Dobson

Thank That’s color. for excellent to you that hear.

seems Velodyne it, numbers forma like leakage and Just those redundant redundant and you some then there have it that’s numbers, revenue one Ouster. three In the call entity. And you have to, final due question. some for for pro between filing, product is And the ‘XX lines combined or for customers. probably

The right? be below first results quarter guidance you Ouster, that’s just combined expect Would gave, you range? stand-alone that for to

Mark Weinswig

the Well, I question. appreciate

of we’re giving date that XX. million guidance the out that after revenues, to So that February the products Velodyne million merger includes shipping are for we for any of stand-alone $XX the $XX

the business Ouster the include product So Velodyne. lines VLP-XX, from VOS-XXX the and that existing VLP-XX the would plus,

Brian Dobson

very thanks Alright, much. Okay.

Operator

We will go now to not to Tristan Gerra of Baird.

Unidentified Analyst

half you the us provide an to could Could Do update Hi, in China? of questions. Thanks expect for this remind you also, Tyler of you is Tristan. just your what the then revenue And demand is exposure for recovery? taking on a state China? second

Angus Pacala

the question. for Thanks Yes.

a China base. we is There Velodyne ton presence there. presence China, a APAC the did, So both be do invested have have to great of never and We’ve revenue region a region. business overall. the in Ouster continue in broken in we’ve out and a significantly to We had as

and in of major like We investing customers Korea, China our have we in Thailand and ton is well physical kind markets other been But space as where manufacturing adjacent into in robotics a lot Asian have within significantly a a there the of with we’re South also big Singapore. great robotaxi presence obviously, Australia, And there. investment of automotive industries. Japan,

So region invest us. to the continue It’s in important we’re entire region. expecting an to for

we’re We but really don’t haven’t the demand APAC broken and and about in performance the out XXXX. what to, feeling expecting XXXX region their expect and in from good them

Unidentified Analyst

Okay. Great.

you levels. ASP follow-up, year and ‘XX expected for But of your go back the to how cost price compare that the should should expected for then also declines mentioned about declines we XQ year. with rest my that think For the historical

Angus Pacala

Yes.

a continue of this stepping just will have as digital the will to some trajectory do the to REVX merger, premise of the sensors lidar to going mentioned our ASPs down continue than part that as transition, part fundamental the more that of our march to that COGS we decrease while are REVX a faster headwinds kind stable. expectation. So of ASPs our are the we But effects. expect COGS to continues near-term be of stay Mark those back, REVX

given ASPs ASPs, ASPs, the lower in their some already we by so rebound were higher and the premium in design, are performance. seen customers, that we’ve but quarter to REVX due noted coming lower the premium the REVX than at volume, And ASPs already ASP products for products products REVX higher fourth

Unidentified Analyst

Okay. Thanks, again.

Operator

now We Thank Rosenblatt go Kevin at Securities. you. Cassidy next to

Kevin Cassidy

you Thank taking questions. my for Yes.

$XX at ratio type had book-to-bill first in revenue? the on of million you’re looking that quarter, congratulations XXXX. continuing you are ratio, the you book-to-bill assuming Just that in When

Angus Pacala

Absolutely.

the that think is business. book-to-bill for indicator a strong the I such

to went talked expect visibility about customers supply us business importance we and succeed. going. with do binding their in to with when relationships our back signing better continue continue is for where It’s and cycles, You’ll our to it’s recall better customers, we contracts we of purchasing and even building that for and the customers, going public, our to managing have understanding to into chain the

Kevin Cassidy

so shipments? be – in that more And back up? is high-volume still better they understand bringing that again, mix in one-time say, back ASPs the Are the – just getting Great. to volume, and high-volume XXXX let’s ASP to Okay. higher just you’re you customer up still getting ASP, high-volume customers. the is going lower are the is Or

Angus Pacala

QX It’s saw volatility to a We ASPs, little quarters was There some more business. think there higher too really through we year. is lower and the are that not in It of seasonal both. that slightly our – year. mix a volumes things we pronounced yes, I generally see But read much this the are ASPs. And is there into. with last in of – have effects

high-volume are We all through the the in that year. have quarters customers purchasing

Kevin Cassidy

merger Okay. Great. Congratulations the done. getting on

Angus Pacala

Thank you.

Operator

next will of We go now to Shannon Craig-Hallum. Richard

Richard Shannon

structure. Hi, your Maybe model here is guys. cost and cost I here. my you from to see us OpEx Thanks thoughts model the one give guess to point some for here a Mark for But of question want a questions. my just breakeven taking gross direct first how view. of build ask margin, how

Mark Weinswig

that ago, modeling process make you – company. entire of plans that And building into organization obviously, on Rich, that the days the out And the just dynamics the we I changed than time of excited question. been obviously topic we in the can long-term that. you on probably can very we’ve XX take obviously that one. the about more kind tell have our other appreciate focusing can with combined are of sure tell to I are any we combination. I We we account Yes.

that near-term terms million we synergies. $XX of cost on In of kind focused the outlook, really of are

have we our mind. merger that – on with the We went into

a onto We have really effort of it. lot put

are basis. to we We have on drive a of we two cost really from And continue perspective. that and cost first able already XX% structure down actually obtain in roughly as the cost – go-forward the those committed to the months, that savings to continue to see lower the really merger been opportunities expect to in happy additional just very agreement to from

the increase Angus which In before. manufacturing we it products of move to a side. some to Thailand terms talked about work is lot on are long-term I the prepared my in the margins. doing of I really business had over remarks, this historical model, also little of bit mean of Velodyne a

seeing I things start some business us get to One that of remarks your more the know you the more are more mentioned allowed actually question merger of exactly, days, these especially in our unfortunately, few we of Angus answering was his am going information And are opportunity products as of that next to of expedite especially Velodyne and start over increase we belt. are you should work. capital costs parts as through getting that that early in under start a able give place. the and we There allow what gross giving the quarters, some to have start-up go us not There with manufactured to more forward margins. I us But put means through more to updates I some about and XX overseas, associated is to we we merger. that. but which being look terms in we margin excited the and really higher are this still

Richard Shannon

the of quarter. would affect here, the one. figured I Okay. but sure in things for attempt two again it at quarter. margin talked the I would that, Velodyne well just your your that the early at little some I – REVX on Maybe gross that follow-up as might ask in appreciate about you merger I merger I a future. kind the the first a am impact assume least will Velodyne transitional part second thoughts as topic, the be

manufacturing Ouster, of affecting do what last with then the still at of when expectation so Velodyne Ouster-like margin business? you up get So, the few effects And to structure way are those that products where on in rid done Is of reported Velodyne of get course approach or kind remaining is gross talk good. kind a can of the there and gross you we that, have some that get normal to about an you margin following any as quarters?

Mark Weinswig

Yes.

existing seen am some Angus sure we discussing It communication this that’s it’s all, And been are to of than with we that expecting additional which of just will we of and started groups – it, kind most to of of second about And from a on ourselves because after the better that quarters lidar But historical forward the Velodyne what base. both from huge a to XX Ouster are differences – two couple the continue So, the perspective. different the we sometime the between higher newer is thinking merger, take half obviously, some base. with – are process have something products and margin some increased There forward. has of of Right what other We merger. some now, VLP-XX, the of a efforts focused transition the really before done that we before And products. only looking the them of But into but – year. margins I quarters, those the the allow get the historical there that move first there a products terms digital to transition. that in amount what to on one the are looking where the something at have that operations of do think basically Velodyne and of are through we we be are obviously, product doing, we it’s days as XX margin will in gross intricate company. we – opportunity margin about is products. will lines, some VLS-XXX call just

Angus Pacala

Yes.

products. add the base, mean of a that and the for of transition lidar that, really to could measured efficiently base purpose smooth I not look and products Velodyne from analog be the to product the in the do them Just existing giving supporting customer we at years, quarters, to increase digital lidar on to could what margins merger, quickly, time took quickly on we a

and when We the where customers step XX for in the digital a we them products just I And continue R&D are this the transition look in industry continue VLP-XX those advantage. we over products really supply going to where and think able the products of – matter and invest they are lidar that is that’s fundamental going, to to we guarantee we to are to have XXX – products really to lidar Velodyne fortunate and roadmap years. a purchase digital a these to when digital can behind position the about But products. provide foreseeable a smooth back structure give for investing be cost future are going

Richard Shannon

of was Mark. be, will days you your Okay. this one the quarter to I ending balance if around an figured trying estimate. ask range? give from And numbers eight of I I you appreciate estimate XXX. question so thoughts. for us kind was that just those guess I last quick end, kind envelope would only are could what get I in I back to cash Is you right and into the doing

Mark Weinswig

– But us. going kind at making do some us be to days. associated lower of historical announced that cash first that and it year. rate. the quarter Yes. burning Obviously, cost. to would of – really the is we very sorry, it. burn that did this typical savings of sure we year. million Obviously, us we looking just have runway both million are There integration, of into $XX have that’s publicly a to We for $XXX per first stage annualized something to of We it this Ouster. cash be with activities $XX as combined though we at run roughly million be a – run We historical of long their that time, an rate XX entered the it are we a very, with about note, we rates in because give would continued to costs the Since lot million cash integration are front would that important Velodyne basis, at look $XX these in our

and rate to we do we have making cash can, we is very sure We something so a that want obviously, as of as protect we that lot and much that burn that the investment lower on. asset are much focused retain can

Richard Shannon

Appreciate thoughts for Okay. guys. That’s the all me.

Angus Pacala

am And are you. just think sorry, that’s – checking more questions. am Great. I Thank if I the there I

Operator

sir. questions, a We couple of have more do

to now Kevin at next go will Capital. WestPark Garrigan We

Kevin Garrigan

congrats merger for taking Let me echo completion the thanks and in. my me on

of the last impacting markets. was two customer so quarter, the environment some first one, two you update Just end last quarters, actually in us the some quick macroeconomic Can cycles kind questions, or factor? macro and is or XXXX? all, are has your this improved lidar of be it still whether a will an in And on big kind to decisions impact delaying at customers deploy

Angus Pacala

Yes.

growth think industrial for we our the their technologies business customer And in I that companies diversified in more company. are expect looking XXXX out back, We environment other have focused we on. of much really emerging highlighted and well. – that in business the base this having came we quite – a weathered sector a the industries space companies have than of kind the of that R&D-focused stable some XXXX. are robotics Those

diversify in and investing are to our continue business that guess against places meant kind any build And year again, we allowed want see indicating the extremely more, so strong this of And just are bookings-to-bill business healthy in even highlight, to is company trends. to an scope the the you ratio. macroeconomic with even us of kind that to complete how really diversification robust environment. this can macroeconomic to broaden I I

Kevin Garrigan

And That makes a sense. in company combined follow-up. would the powerhouse lidar market. The is, just say, I it. non-automotive a as quick Got Okay. then

into lidar non-auto, non-auto. We or market? in big competitors heard this competition have any you making any that from Are trying break to a presence increased companies some are in other seeing they

Angus Pacala

of seen it’s back release alone that. And with done press that competitive how And releases let to time space, lot now it we a seventh to not let lot of REVX, the and lidar hard have margin-positive in it’s going products, a hope have I products. gross products. I is the products alone just

are doing am in the to actually And expect I have head-to-head, in more be space. we to positive competitive shown head-to-head are we we sensors, highly, that to But past, and the I So, there. competition. the REVX going that drive. market that highly benefits vehicles market And historically thought point to the with competitive, competitors and safe. the a fundamentally into just product landscape to I is immense now, show there our you bringing consumer performing of the the that there that presence highest I early would the are to some that cost into B to building high it what at to bringing DF in has this the into at of of performance samples modular is world’s of was that of The is lidar kind of coming doing lidar. going as automotive is Ouster entire line an and line looking sensors automotive point some amount with technology DF automotive indication and solid-state Ouster sensor to go in digital have sensors gone in the this ultra-cost shifting DF we is XXXX highlight market targeted really finally continue And sensor the with

of just are final I size, released automotive have be samples the given performance shape, a the hardware with internally putting have and year, now samples, are final the roadmap factor ton in into in that for the quarters, this ultimately remarks, to cars that B catalyze next So, early expectations how hands. releasing eight our gotten actually. year, and communicated of from will And next of devices business, prepared we on all automakers’ as automakers we feedback to last that actual into going DF devices the we couple mentioned go it’s finally the we the form going

Kevin Garrigan

ton a of makes that Yes, sense.

for Thanks you that and That Great. congrats was guys thank have. again. I Okay, all that color.

Operator

to Colin will at now go Rusch Oppenheimer. we next And

Colin Rusch

Thanks in for guys. fitting much so me

that non-hardware the and the you to are base and little data First, synergy you how in could the or tools so progress customer of within bringing we being by is some bit and far? the development about much your received talk software other here merging table guys are there elements a of guys fusion customers that for the how that’s sensor offerings ecosystem

Angus Pacala

Yes.

pre-merger solutions we how solution, I solutions. and software we opportunities a teams deployments the to And quarter. roadmap couple And that now an have very done as XXX market this. seen infrastructure now systems. have And not vertical, roadmap fortune may we that it the early XX business. the up It and the intelligent platform are integrate over ton because grow BlueCity has in the traction side. a from and actually software. software the mentioned in initial management that’s provider, selling analytics, XXXX together audiences. a got that and can a thing traffic have a biggest they to question where and the customer BlueCity over progress could to defined specifically sped the on lidar Velodyne that where into those really really underpinned new into to is We know the already a the wants solution entire years which good Canada, a but where Gemini are of And we and going for targets end of summit that opened multi-pronged have capability. market Ouster Gemini announced a had have maker is in we sold analytics a be to to smart both lidar here, we in I traffic, is combined single actually BlueCity hardware this unified offering invest really their great software analytics Ouster think kind just we and the into, an security and a Since both at respective And great mentioned strategy had been really both by for in Velodyne teams selling autonomy and are traffic, customer released about beginning crowd crowd set on deployments solutions we security, provider. focused held have begun now for alone. with that time with Gemini this to We merger, where BlueCity of Gemini a then targets really so, we a I and highlight just then the

out summit are summit of that to combined roadmap a the that held – I significant month. came combining team now synergies so result last we of just and And as devoted the efforts we we huge the a have and these see

Colin Rusch

of are overall bit a shifting and helpful. combined scale you what organization little the Okay, synergies to ambition seeing from you can the capital runway balance just lower for that scope the the extend organization away and guys potential given optimization talk that’s cost the entity? to you the the for from of the about can super do And the sheet, of

Mark Weinswig

Yes.

obviously, $XXX As year we talked a we before, the combined with entered about million.

As you take the business can cost can on that and we those focused quickly as sure synergies are mentioned, we out really of take possible. out the we as making

of cost We entering annualized second out savings quarter. we the are with million the pleased very into have taken $XX that

in and is the XXXX that reasons technologies For as organization successful. $XX programs one so in new that an right have got new has why bookings investment key. we million that Ouster investment. It’s is we from The been of us, of

very needed. that’s sure so there the just structure that And beginning are will we our what same are we is and are now, be investment structure doing do that lidar about off. space very together we the At so the have time, are putting the opportunity. make additional while just excited us of starting us And work, these to this lot deployments to to business helped it’s additional but right These margin is it, we then feel together we putting we operation can right overall take plan can or that And we going some two going excited to to place cost a get of in and scale the really realign the merger terms organizations, to are about successful where truly structure. take us it’s giving the a we that allowing these a time, business.

Colin Rusch

the some Thanks, guys. offline. have Okay. I will more it of take rest detailed questions. I got

Angus Pacala

Thanks, Colin.

Operator

to I it the today. further questions Mr. we And no will Pacala, appears conference back turn you. have

Angus Pacala

today our a and to And and call the Alright. XXXX work for everyone just year attending by strong XXXX. for positions thank Well, I the questions thanking incredible for – for all to another for I’d in of like the also that asked. end I putting employees wanted actually Ouster very in

Operator

will earnings wish a thank conference all like conclude Ladies Thank XXXX for your and quarter Ouster’s Again, so great us much call. of you. fourth to that you joining and Goodbye. gentlemen, day. you remainder all I’d

Ouster (OUST) 23 Mar 232022 Q4 Earnings call transcript