Q3 2021 Ouster Inc Earnings Call
Good afternoon, and welcome everyone to extra third quarter earnings Conference call.
All lines have been placed on mute to prevent any background noise.
After today's presentation and remarks, there will be an opportunity to ask questions. If you would like to ask a question. During this time simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question Press Star one again.
The call today is being recorded and a replay of the call will be available on the Elster Investor Relations website, an hour after the completion of this call.
I'd now like to turn the conference over to Sarah Eubank Director of Investor Relations. Please go ahead.
Thank you good afternoon, I'm joined today by our Chief Executive Officer, Angus, Nicola and Chief Financial Officer on a per now.
Before we begin with prepared remarks, we would like to remind you that elster issued a press release announcing its third quarter 2021 financial results shortly after market close today.
The company also published an investor presentation, which is available on the Investor Relations section of <unk> Dot com.
The company's current report on form 8-K, including the press release was filed with the SEC today.
I'd also like to remind everyone that during the course of this conference call <unk> management will discuss forecasts targets and other forward looking statements regarding the company future customer orders and the company's business outlook that are intended to be covered by the safe Harbor provisions of the private Securities Litigation Reform Act of 995.
Hi.
Forward looking statements.
These statements represent management's current expectations and projections about future results and performance as of today. Our actual results are subject to many risks and uncertainties that could cause actual results to differ materially from those expectations.
In addition to any risks highlighted during the call important factors that may affect <unk> future results are described in the most recent filings with the SEC, including today's earnings press release.
Except as required by applicable law. The company undertakes no obligation to update any of these forward looking statements for any reason after the date of this call.
Lastly, information discussed on this call concerning the company's industry competitive position in the markets in which it operates is based on information from independent industry and research organizations. Other third party sources and management estimates.
Management estimates are derived from publicly available information released by the independent industry analysts and other third party sources as well as data from the company's internal research and are based on assumptions made upon reviewing such data and his experience and knowledge of such industry end markets, which it believes to be reasonable.
These assumptions are subject to uncertainties and risks, which could cause results to differ materially from those expressed in the estimate.
During the call, we will discuss certain non-GAAP financial measures, which exclude the effects of events and transactions, we consider to be outside our core operation.
Non-GAAP measures should be considered a supplement to and not a substitute for measures prepared in accordance with GAAP.
Or a reconciliation of non-GAAP financial measure to the most directly comparable GAAP measures. Please refer to today's press release.
I would now like to turn the call over to our Chief Executive Officer Angus Nicola.
Hi, everyone. We've accomplished a lot in the recent months highlighted by the strategic acquisition of chunks, photonics, which bolsters our position in the automotive market and our continued technology advancements and commercial traction in the non automotive market in the third quarter also continued to gain market share across each of our four verticals automotive industrial.
Smart infrastructure and robotics, we generated $7 8 million in revenue and gross margins of 24%. We continue to ramp production shipping over 630, <unk> sensors, we added over 80, new customers and increased our total number of strategic customer agreements or FCA is from 53% to 62.
Collectively these fca's represent roughly $470 million in contracted revenue opportunity through 2025, which give us confidence that we are well positioned to meaningfully grow our revenue over the coming years.
Turning to leadership and governance after recently announced the appointment of global automotive leader, Karen Rod strength to our board of Directors. Karen is an invaluable addition, that's further solidifies <unk> automotive expertise. She brings over 15 years of automotive experience through her current role as CEO of <unk>.
Ladies Benz trucks, and board member at Daimler trucks, and past roles, leading sales and marketing at Scania.
Earlier today, <unk> announced the formation of an advisory board made up of industry luminaries with deep knowledge and expertise across our addressable markets and decades of combined experience building and leading global enterprises. Our founding Advisory Board members are current and former executive leaders from companies spanning the industrial automotive.
And smart infrastructure sectors, including Siemens Am General Flair, Honda and Acura, ABB, GE Porsche tenants, but Tesco Marelli Zeff group and Ford.
We're moving quickly to enable automation in multiple industries, and our advisory Board and board of directors have decades of combined experience at some of the most innovative companies in the industries. We serve this experience will be invaluable shaping our strategy and technology offering as we aim to capture our multibillion dollar Tam.
Since its inception, <unk> committed to building, a safer and more efficient future through the mass adoption of digital lidar across our four industry verticals.
So we focused on developing a wide array of lidar products spanning scanning and solid state product families. All based on our performance and affordable digital Lidar technology to meet a wide range of customer applications from port and yard logistics to consumer vehicles with the acquisition of sense Photonics, we formed ouster.
Automotive a new functional division of the company focused on driving mass market adoption of digital lidar and consumer and commercial vehicles.
Led by former CEO Shauna Mcintyre.
As a result, we've accelerated our automotive product roadmap and commercial engagements by over a year.
More we increased our IP portfolio to over 50 granted and 200 pending patents and 250 exclusively licensed patents. It has been and is our beliefs that the lidar industry will be dominated by digital technology and it has been critical for alister to expand its IP in this space. We also grew our teams over 300.
<unk> full time and contracted employees, we're building a digital lidar powerhouse to win across verticals and maintained our competitive lead for years to come.
Also our automotive is building the short medium and long range sensor suite that automakers are asking for and.
And offering it at the performance and price points that automakers need and we believe that Cmos digital Lidar is the only technology that can deliver on all of this together.
Last week, we introduced our digital Flash D. F series of short medium and long range solid state Lidar sensors with absolutely no moving parts. The D. F series is built for best in class performance reliability and affordability and is designed to meet automaker requirements for advanced Adas, while seamlessly integrating.
Into the vehicle architecture and design.
Combining the best of <unk> previous solid state roadmap with the core technology of our recently acquired solid state platform. After automotive is developing the D. F series for high volume automotive programs with an anticipated startup production in 2025.
Automakers are looking for multi sensor lidar suites for a combined price of roughly $1000. We believe digital lidar is the only technology that can realistically meet that requirement.
But this is just the beginning over time, we believe that the cost of automotive Lidar has the potential to follow a similar trajectory to that of modern radar and automotive camera systems, reaching the low hundreds of dollars like radar and digital cameras digital Lidar technology is moving down the cost curve to meet automotive requirements.
One day become a standard offering and on road vehicles.
Oster automotive as a one stop shop that is uniquely positioned to deliver on OEM requirements with a single supplier offering reducing overall costs and making us an ideal partner for automotive Oems and tier ones alike.
Based on the exceptional performance of our functional prototype DF sensors ouster anticipates that it will achieve automotive readiness for the entire platform, including automotive quality and Asa will be functional safety certification in time for series production programs with the start of production in 2025.
While we will continue to ship functional prototypes to automotive Oems today, we expect to have samples available by Q2 2022, and these samples by Q4 2023.
We're excited about <unk> ability to deliver on our flagship development deal with a global automotive OEM awarded defense earlier. This year in October we shipped functional solid state sensors and progressed on site testing of Lidar in collaboration with our OEM partner, achieving another major milestone in the strategic.
Development agreement Astral.
After automotive has also continued to advance negotiations for five different series production programs collectively worth over $1 billion in potential revenue with an aggregate demand of up to $1 5 million vehicles.
These potential customers are sourcing a multi sensor lidar suite for L. Three systems for start of production in the 2025 to 2026 timeframe. This is further proof of the market need for multi sensor lidar suites and the value that <unk> brings is a single company positioned to meet that need.
We expect these programs to be determined within the next 24 months and we feel well positioned to win one or more in the next year I look forward to updating the market on our progress over subsequent quarters.
Oster has also continued to drive progress across the rest of the business delivering on our product roadmap for OS scanning sensors and signing new customers across all of our industry verticals.
A couple of weeks ago, we introduced our most powerful Cmos chip yet the L. Two X, which will power <unk> newest OS sensors. The <unk> is capable of delivering double the data rate of the prior chip, while maintaining the same small size and low power draw and providing even richer point cloud data to improve all weather performance of our.
Sensors.
Last quarter, we completed the RL III chip tape out, which will deliver another massive boost in performance and we're looking forward to our foundry partner completing the chip fabrication, both the <unk> and forthcoming L. Three chip demonstrate our ability to rapidly improved performance through the digital road map.
We also partnered with Nvidia to develop a dedicated the Nvidia drive works plug in to further simplify integration of our complete OS sensor suite onto autonomous vehicle platforms with now over 30 perception software partners and system integrators across our major markets. We intend to further accelerate the adoption of digital lidar across <unk>.
Just real smart infrastructure and robotics applications. We're also seeing fantastic engagement without your software development kit or SDK and then the last month alone. We saw hundreds of external downloads a few weeks ago, We released a new version of our SDK to support our new <unk> chip and I'm incredibly happy with the response from them.
The community so far.
With that I'd like to turn the call over to Ana Brunelle to provide an update on our quarterly financial results customer traction and business outlook.
Thank you Angus before moving on to the quarterly results I want to reiterate the importance of our acquisition as it is both revenue and technology accretive for ouster under the terms of the agreement Alastair acquired 100% of sense Photonics and all of its property for approximately 10 million shares of our common stock.
This acquisition is expected to help Alastair accelerated the capture of a multibillion dollar Tam by executing on our hiring goals and product roadmap on a faster timeline without significant impact to our cost structure.
Even with the head count increase resulting from this all stock deal ouster management expects that the additional opex spend in 2022, excluding stock based compensation will be offset by R&D savings related to our solid state product roadmap chip tape outs and design fees that same here.
<unk> ability to compete for design wins with the digital Flash solid state series also puts us in an excellent position to ramp automotive revenues sooner than expected through acquisition. We are working with a major automotive OEM on our flagship development deal shipping solid state sensors in the third and fourth.
Quarters of 2021 and progressing to onsite testing in October 2021, we.
We are excited about our momentum and we believe we are well positioned to continue to deliver on key milestones and progress towards series production.
We also continue to advance negotiations for the five automotive series production programs collectively worth over $1 billion in potential revenue with an aggregate demand of up to one 5 million vehicles.
Each of these potential programs is focused on securing a multi sensor lidar suite that is performance reliable and highly manufacturable at a price point that will enable vehicle adoption.
As Angus mentioned, we expect these potential programs to be determined within the next 24 months and look forward to providing more details.
Turning to our third quarter performance ouster generated a record $7 8 million in revenue up 31% over the third quarter of 2020.
We shipped over 1630 sensors, 127% increase over the third quarter of 2020.
With approximately 4100 sensors sold this year through the third quarter, we have nearly tripled the number of centers sold over the same period in the prior year.
We also delivered gross margins of 24% up from 18% in the third quarter of 2020, we.
We believe we are the only public Lidar company with positive hardware gross margins and this is largely because we have chosen the right technology Cmos digital Lidar, which makes our centers one of the most affordable and most performing on the market.
Overtime, we expect our average cost per unit sold will continue to decline faster than our average selling price as our sales volumes continue to increase we expect this will allow us to meet our revenue and gross margin targets in spite of headwinds from continued supply chain challenges.
We continue to monitor potential downside risks associated with the worldwide semiconductor chip shortage and our ability to control purchase price variance and customer timelines.
As of the third quarter earnings these shortages have not materially impacted our ability to ship sensors to our customers. However, we continued to experience temporary purchase price variance related to bulk purchases and expedited shipment fee in order to keep up with product demand.
Over the last quarter, we grew our customer pipeline by 80, new customers with nearly half of new customers coming from the robotics vertical.
Our largest revenue growth from new and existing customers has been in the automotive sector, making up 41% of sales in the third quarter and 34% of sales year to date.
As our pipeline grows we believe <unk> revenue will continue to ramp for the remainder of the year.
Well, we're excited about large deals that we anticipate will close in the fourth quarter deal timelines and uncertainties exist, but our commercial and manufacturing teams have continued to deliver giving us confidence that we'll meet our fourth quarter forecast.
As such we are reaffirming our full year 2021 guidance of $33 million to $35 million in revenue and 25% to 27% gross margins.
Further as anticipated we will provide full year guidance for 2022 during our fourth quarter 2021 earnings release.
Over the last quarter, we converted an additional nine pre production and production level customers to a strategic customer agreement or SCA.
This means to date <unk> signed 62, <unk>, representing approximately $470 million in contracted revenue opportunity through 2025.
Up from 53 <unk>.
And $422 million at the end of the second quarter.
Notably we increased the value of our binding agreements by 39% this quarter versus Q2 2021.
New SBA customers that we have announced publicly include local motors, perone, robotics, and juice and for which we plan to supply over 1000 scanning sensors for autonomous vehicle applications through 2023, with a forecasted opportunity for tens of thousands of additional sensors through 2025.
These customers use three to six centers per vehicle and plan to deploy their next generation systems as early as the fourth quarter of this year.
As we stated in previous quarters, we believe <unk> are an important benchmark for us.
Establishing a multiyear purchase and supply framework for aster and the customer and include details about the customer programs and applications, where our products will be used.
They also include multiyear non binding customer forecasts, giving us better visibility to the customers' long term purchasing requirements mutually agreed upon pricing for specific elster products over the duration of the agreement and in some cases include multiyear binding purchase commitments.
Contracted revenue opportunity represents the sum of both binding and non binding purchase commitments and no additional revenue opportunity has been included beyond the customers' actual forecast.
When we became a public company last March we committed to using the cash proceeds to build out our sales and marketing teams accelerate our hardware roadmap and strengthen investments in software development to take advantage of our growing multibillion dollar Tam.
We have progressed on these commitments efficiently using capital while executing on our business strategy and driving additional value.
Through our all stock acquisition of since Photonics, we significantly accelerated our automotive product roadmap, while simultaneously building out automotive focused sales and marketing and engineering teams with minimal impact to our planned cost structure.
We did not stop there we scaled sensor production with our contract manufacturer and our Ats $16 949 certified Thailand facility continued to improve sensor performance. Most recently with the introduction of our <unk> chip, which we expect to increase demand for our scanning sensors and expanded our.
<unk> footprint with new distribution perception software and integration partners furthering the adoption of our digital lidar across our end markets.
These are the important achievements across our capital allocation plan and we were able to do so while maintaining a cash balance of $224 million at the end of the third quarter.
This leaves us room to continue to grow our business within our four industry verticals execute on our path to significant automotive growth further improved sensor performance across the board with our <unk> chip MTS solid state series.
And make key investments in software that will drive faster customer adoption and stickiness.
<unk> differentiated Cmos digital Lidar technology and diversified multi market approach, we are able to take advantage of near term opportunities across each of our four verticals.
Wowing us to build towards a stable commercial run rate, while also taking additional steps with the formation of ouster automotive to position ourselves to further grow our market share in the automotive vertical one of the largest addressable market opportunities with design wins for high volume series production programs.
In short ouster continues to execute on its business strategy and I am incredibly excited about the road ahead.
With that I would like to turn it back over to Angus for some closing remarks.
Thanks, Ana after is here to build a safer more efficient world by delivering best in class Lidar hardware and solutions that will transform industries and improve quality of life.
Three takeaways continued a separate ouster from the rest of the industry, our differentiated technology, our diversified business and our proven ability to execute I'm incredibly proud of what we've accomplished to date and beyond excited about what's to come and I look forward to answering your questions.
Thank you we will now begin the question and answer session to ask a question you May Press Star then the number one on your phone if youre using a speakerphone. Please pick up your handset before pressing the keys.
To withdraw your question. Please press star one again.
When called upon please limit yourself to two questions.
Our first question today comes from Tristan <unk> with Baird. Please go ahead.
Hi, and good afternoon. The first question is regarding the top line so.
Reiterating the full year revenue guidance, you're implying some inflection point to you.
Royalty revenue for the December quarter, if you could provide some color on what creates that infection point and also how should we look at the mix of revenue today is there a substantial amount of and are you using your current revenue trying to.
Perhaps get a little bit more color on your gross margin profile relative to the competition.
Yeah.
Yes. This is answer you can jump in.
Go ahead Ed.
Sorry about that I'm, just going to jump in and say.
The in terms of the fourth quarter.
As we've worked through the year and continued to release new products and develop deeper relationships with customers. Our pipeline has continued to grow our SBA deals have continued to grow and.
And that visibility is what has allowed us to reiterate guidance for the fourth quarter and I will just pause there because I think it gets wanted to answer also.
Yes, I mean, I think the entire year has been building towards.
Her team mature business systems and mature customers by the by Q4.
We've been investing a huge amount to get to this point from the start of the year from from early March when we went public and so.
On top of the fact that Q4 has always been kind of historically, our biggest quarter and there are a lot of kind of year end.
Tailwind for our business, we just have been investing all year and now we have this ramp team and a lot of great visibility into our customer base.
And mature and mature customers and so for all those reasons, we are able to reaffirm the guidance for the year.
Okay.
You had a.
Question about <unk>.
And historically, we've had no NRI in the business. So I think it's.
Excuse me for the 2021.
Revenue numbers, you haven't really been splitting that out, but the battery versus hardware sales, but.
Think the vast majority if not all revenue has been <unk>.
<unk> revenue.
Though that may change in the future.
Great that's very used to it and then so my follow up question. If you could provide a bit more details on the Nvidia engagement that uses that you mentioned on the cone as well as your efforts in terms of software for specifically highway autonomy and what are you.
Your goals there in terms of having a platform that goes beyond just a.
Jack to recognition.
Yeah and so.
And video is one part.
One kind of aspect of our.
Software strategy at ouster and I can walk you through kind of the overall strategy to help put that in context.
But we're taking a multi pronged approach because we have this diversified business around how we provide value in the software stack to our customers and you can think of it as almost a pyramid of building the foundation up.
And the first and most important thing is to have core hardware that is winning business and winning winning sockets at customers without that we don't get in the door and we don't have the opportunity to sell software. So that's really all relies on highly sticky long term engagements with our customers through hardware.
Riding on top of that though is the opportunity to enable our customer set through software development tools.
Some of which are developed in house.
Typically with our SDK, which we've been talking about and released earlier this year and about updated.
But some of that through software integrations with partners across our diversified end markets and so that's where Nvidia sits right now that Nvidia drive works plug in is a way for our sensors to seamlessly work and the NPD Nvidia ecosystem for the customers that have selected that ecosystem is kind of their go forward plan on the software side.
<unk>.
But if you go to our website, we actually have 30 odd customer excuse me <unk> 30.
Integrators and partners listed on our website that span different different verticals and video specifically as one focused on more highway economy. As you pointed out but we are integrators that are in the.
The industrial space, so the agricultural space, so the robotics space and so or in automotive.
And then there is and then we are able to provide in certain cases full solutions and complete solutions, where it makes sense.
Building upon.
Our hardware, our SDK and then the solution space and investing in that and and.
And we mentioned in Q2 that we had opened the solutions office out of Ottawa, Canada, and we've continued to hire into that solution software arm of the business and we'll be providing updates as they come.
In the.
In the next couple of quarters.
Great Thanks for that.
Your next question comes from each of them have Kelly with Citi. Please go ahead.
Great. Thanks, Good afternoon, everybody just two questions for me one on the quarter and the outlook on the gross margin side, maybe for Anna well was there any.
Material supply chain or other costs other affected gross margin this quarter and maybe you could affect our gross margin in the fourth quarter as well.
Yeah, I mean, we.
You talked a bit in our prepared remarks about how we're still seeing some headwinds from the.
The worldwide.
Global kind of <unk>.
Around semiconductor shortages in parts shortages and so we'll continue to monitor that downside risk and we.
We continue to work to control the purchase price variance and meet our customer timelines and I think.
The answer is yes, we have seen some impact we still maintained 24% gross margins. This quarter, we were still able to ensure that all of our customers got the product that they needed and so.
Other than some additional pressure on our margins right now we don't see it as having an impact on the business.
Great Thats very helpful. And then just secondly, a longer term question on the automotive gross margin now that you've completed a sense photonics transaction and you're looking for.
Essentially when the the five series production programs any updated thoughts to the prior 25% long term gross margin target within auto is that still kind of the right number or has that changed just with the recent acquisition.
Yeah, I mean, I think you're referring to the materials put out like a year ago. Oh go ahead Angus.
Yeah, well I was going to say, we don't see any reason to change.
That thinking that that was based on kind of.
Pretty good understanding of the automotive margins.
A year ago, and nothing has significantly changed there I think that the overarching theme, though was.
From then and continues to know is that we have more realistic expectations on hardware margins in auto than our peer set.
We're expecting 25% margins. We know this is a price dominated industry.
And the <unk> acquisition is absolutely confirmed that price is.
One of the most if not the most important aspect of this technology and we.
Winning deals and and that just goes back to we are extraordinarily well positioned to offer the most competitive pricing in the industry for high performance products and.
And and we're being realistic about hardware margins as well.
I think the business on it so no real update there, but a re re confirmation of the thesis that we went into the year with.
Well then I think also I would just add onto that you really quickly that you know.
We also have really strong insight into our cost structure, we are already doing outsourced manufacturing of our products for many years and so I think we have more confidence than our peer group and what our costs will actually be having products in market for for a long time now and also working with benchmark.
Our auto certified facility for manufacturing in Thailand, and so in my mind I think that we feel pretty good about what we've put out and should things change we'll continue to talk about that with you all.
Terrific. That's all that's all very helpful. Thank you.
Your next question comes from Blayne Curtis with Barclays. Please go ahead.
Hey, good afternoon, Thanks, taking my question.
I know you only recently acquired if and I was just curious if you could speak to that on a wind pipeline, particularly the lead one I mean, you said you passed some key milestones they have the product and maybe you can just walk us through kind of timing of next kind of milestones before you can get a more definitive win there.
Sure. So what we said in the call is that all of these.
These five deals will be determined in the next 24 months because any automotive deal that's moving to series production. They have a date selected and in our case 2025 to 2020 segment, where the the the winning party suppliers must be selected a specific amount or.
Time beforehand to actually commercialize the technology and get it into manufacturing and production and so every one of these will be decided.
And we I'm confident that one or more of them will actually go in our favor in the next year.
Let alone the next 24 months.
But this isn't the end its not like Theyre, just five deals out there and automotive Lidar theres, a rolling set of opportunities and as opportunities fall off new ones.
Come into play and so we will always be kind of chasing new opportunities that come in the 2026, and 2007 timeframe and that will just continue to move out.
As time goes on so.
<unk>.
That my expectation and I'm confident that we'll be able to close something in the next 12 months. That's a serious production win with one of these five deals.
Thanks, I just want to follow up on choices.
Question on <unk>.
I know you only guide annual and then obviously you have one more quarter to go so you're effectively guiding December and it's a large step up so I just had two questions one.
I think sensors photonics has very little revenue, but I just wanted to make sure I think you said no <unk>. So I just wanted to make sure theres no contribution or any material contribution in the Q4 timeframe and then.
Maybe just a little bit more color speaking too you've grown revenue, but it's been very small it's early days.
What's driving this big step up for December.
Yeah, I mean, I think just for Angus and I talked about when we took kind of a similar question a minute ago is that we more than doubled the size of our sales and marketing teams over the course of the year, we've continued to release.
The new products, we're just moving forward with the momentum on the business and we've been signing sba's with customers, giving us insight into their production plan. So.
Think that that's where we're moving your point about sense historically, having small numbers of revenue is accurate and so obviously moving forward will be combining.
<unk> forecast into the ouster forecast and building one combined forecast, which is what we're doing now for December.
And to the extent of your question around <unk>.
Obviously, we've talked a bit about the <unk>.
<unk>.
Production deal series production deals that we're discussing right now and.
And moving towards closure hopefully over the next 24 months, but those deals could very well come within our <unk> down the road absolutely, but this year historically, we have not seen a significant <unk> our hardware sales are making at our revenue for 2021.
Thank you.
Yeah.
Your next question comes from Richard Shannon with Craig Hallum Capital Group. Please go ahead.
Thanks for taking my questions I think I've got a follow up on the last one here is I think it's going to be the big question that investors will be asking.
Until your next conference call here so.
I guess, we'd be able the way I will ask it is are you expecting one or a very small number of deals to help you kind of bridge between the third and fourth quarter. I mean, just modeling to the bottom end youre requires 45% sequential growth.
So just wanted to get a sense of whether this is a lot of smaller deals or a few larger ones at least relative to your current crude base here. If you could provide us details that'd be great. Please.
Yeah, I mean, I think we continue to add quite a few customers every quarter. We added 80, new customers in Q3, so obviously.
We still continue to sell to a large number of customers I think where your question around are we seeing more activity from larger customers is as the business grows and over time, then yes, that's our expectation.
Okay.
Okay. My second question, probably for Angus has talked.
<unk> talked about the profile of of end markets here with the rest of the A's and I think that maybe even the engagement or the pipeline for sca's here, especially called out robotics, maybe if you can talk about the dynamics of that space here. That's been a market specifically are at historically driven by cameras and other sensors and obviously letter is more expensive right now then.
Some of those other sensor modalities. So what are you seeing here that that these robotics customers need lidar or what are they looking at maybe any profile for the big pickup in engagement there.
Sure I mean, when you think robotics.
You think smaller form factor battery operated devices rolling flying walking crawling machines.
And that requires a certain type of product that can hit a form factor of size weight power and price point.
To enable putting it onto the onto that platform and Thats really one of digital lidar sweet spots is the ability to hit all of those.
Smallest devices lidar sensors on the market most power efficient lightest weight all of that combined makes it really an ideal sensor for putting on these smaller form factor robotics applications. Great. Examples of that are like.
The Amazon excuse me the.
Postpaid excuse me serve robotics last mile delivery robots, we have a number of different delivery robotics customers at this point.
<unk> drone.
<unk> surveying applications renewed lightweight device going on a flying vehicles. So.
And then warehouse robotics is another example.
Where you just have smaller smaller scale logistics vehicles that are battery operated in a lot of cases, so that now and then combining just product specifications, where the price point.
Enables the whole industry. So I think that's why we're hitting an inflection point with that customer set.
And our and our products today.
Okay.
And I guess just to follow up on that last point here regarding prices at your price are forward pricing roadmap here, that's getting a lot of interest here. So you are calling you maybe suggesting that the activity here is based on a share of share of mind because of that.
Say that again.
At your last comment there was about.
Leveraging the digital digital Cmos Lidar technology or lower costs. Here is this engagement profile in robotics is that essentially kind of the.
Talking about the increase in mind share.
For our <unk> competition.
Oh sure well I mean, we're able to one of our core goals here is to.
Provide pricing that.
Enables.
Vast new applications across our four verticals that's necessary in automotive, obviously, but it is true across our verticals.
And obviously our goal is to do that while dropping cogs faster than enabling volume pricing.
Im very high confidence that we're going to continue to do that clearly have.
We have done that historically so there is no question that elster.
There is an awareness in the market that Oscar can provide.
Extraordinarily compelling combinations of price form factor and performance.
Thats uniquely positioned to capture things like this.
New emerging robotics applications.
Okay I appreciate all the detail that's all for me. Thanks.
Yeah.
Your next question comes from Kevin Cassidy with Rosenblatt Securities. Please go ahead.
Thank you.
Congratulations on the great progress Youre, making.
And with that.
You had talked about you wanted to build out your sales and marketing effort.
The new partnerships you have with distribution can you give a little more details on what the nature of that is what you which markets are they going to address them and are they stocking distributors or do they do they create demand.
Yeah.
Most of our partners have you go to our website, there's a partner's page again with around 30 partners on it they're mostly value add resellers of some kind and integrators.
But that and not just pure distribution.
And that.
Most of our end customers require some value add engineering of some sort and theres a rich ecosystem, that's cropped up to help supply that to our customer set so.
We are we're selecting we are selective with who we're working with we want to we want to vet companies across each one of our verticals and really sub verticals.
Make sure that they are well positioned to actually sell our products on our behalf and market them and that Theres a good relationship there.
So it's not a pure distributor relationship in most cases.
<unk>, which we view as a good thing right now.
Yeah, that's great Okay and.
I'll sleep.
Yes.
Yeah.
When you look further out what percentage of your revenue do you think would go through those distributors.
Okay.
I don't.
Think.
I can give you directionally I think that a healthy business, we will have a <unk>.
Small minority of our business goes through.
Distributors just because.
If you look at things like our <unk> or any of our.
Any of the internal information, we have around major customer ramps, whether it's our SBA customers or our automotive customers theyre, such such volume growth across the key larger accounts that they'll dominate.
Maybe the long tail.
And when we get to three or four years from now.
Okay, great. Thank you.
Okay.
Your next question comes from Jonathan Bailey with Argos. Please go ahead.
Thank you.
Congratulations on another stellar quarter of.
Momentum in delivery.
I'm intrigued by the advisory Board you've put together their.
Their backgrounds and resumes kind of compelling I'd like to understand how you plan to use them and held the compensation plus.
Sure.
So.
Thanks for the question this is <unk>.
Great initiative that we've taken.
In the last quarter.
And it's a really really impressive group of people.
And we're looking at.
Well first of all there theyre compensated with.
A bit of equity and Alastair.
<unk>.
So theres no.
They're mostly doing this as a.
It's a really kind of a yes. There is an interesting place I think to advise forward just because we have such a diversity of customers that we could learn a lot about the global shift in autonomy.
That's very relevant to them.
You are an executive leading a global organization. So I think there is a compelling reason why.
These people are interested in devising Alastair and.
And there are some compensation to go with it but I.
I'm excited about.
The opportunity to learn from each one of these people about their requisite industries and this goes back to.
As alister.
Learns more about our verticals and we have more and more customers. We start identifying sub verticals that are worth going after and having a more targeted go to market strategy and I think that's really where that's one of the places where this advisory board is going to be Super informative and helpful. As the go to market.
Strategy by sub vertical that they have deep kind of decades of experience.
<unk>.
And then I think the other thing is most of these.
People have had experience running global organizations.
Oster is fast becoming a global organization and Org building is deeply important for our ongoing success and they're going to be able to advise me and the other executives here on that as well.
Yeah.
Thank you.
Just.
Yeah.
Obviously, we're going to sit here waiting with bated breath for 'twenty two guidance next quarter and I understand you want to completely yet to see that with any specificity that said broadly speaking in the nine months since you've been public would you say you feel more or less.
Confidence I'm excited about the developments over the multiyear period I E.
Are you learning things and seeing relationships build that make you more or less confidence about the longer term projections, we have at the time of the merger.
Well I can take a quick stab at that and just say you know just accelerating our automotive program by a single years, we've talked about through this acquisition.
That has the potential to add you know really significant revenue in the out years of that early forecast that we've put out some months ago and so when you look back on all of the activities that we've reported over the last nine months. We've continued to do everything that we've told the street that we would do and and more end.
So we're very happy with all of the execution that we've seen in a lot of that was covered in our prepared remarks, whether it was on the road map or <unk> chips that tape out or the new SDK activity that we had earlier in the year et cetera. I mean, we've just been firing on all cylinders and and really fulfilling all of the all of the promises.
So to speak that we made when we went public several months ago. So I think we're really excited about where we're at and we're really excited about where the future is and we're really excited about.
How this acquisition is going to really solidify our position as a leader in automotive and I think it heavily derisked the forecast that we've put out and potentially in the out years adds and adds additional growth opportunity from pulling in that timeline.
Okay.
I know that's a fantastic once again, congratulations great quarter.
That does conclude our question and answer session I'd like to turn the conference back over to Angus Mccullough for any closing remarks.
Oh, great. Thank you all for tuning in for earnings call I am incredibly excited about what.
What lies ahead for <unk> I think we had a fantastic quarter.
And the digital Lidar strategy diversified technology.
Differentiated technology diversified markets and our ability to actually make good on that plan.
Continued.
To prove themselves and so I'm looking forward to the next year ahead. Thank you all.
Ladies and gentlemen, the conference is now concluded. Thank you for attending today's presentation. You may now disconnect your lines.
Please wait the conference will begin shortly.
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