Q4 2021 Ouster Inc Earnings Call
Good afternoon, and welcome everyone to extras fourth 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 pass 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 <unk> Investor Relations website, an hour after the completion of this call.
I'd now like to turn the conference over to Sara Lee Director of Investor Relations. Please go ahead.
Thank you I'm going today by answers Chief Executive Officer, Angus, the caller and Chief Financial Officer entrepreneur now.
Before ever again prepared remarks, you would like to remind you that alter issued a press release now think its fourth quarter and full year 2021 financial results shortly after market close today it.
The company also published an investor presentation, which is available on the Investor Relations section of <unk> Dot com.
I'd also like to remind everyone that during the course of the conference call Astra's management will discuss forecast target and other forward looking statements regarding the company future customer order and the doubling over contracted revenue in 2022, and the company's business outlook that are intended to be covered by the safe Harbor provisions of the private security Lynn.
Negation Reform Act 1995 before looking statements.
Statement regarding the doubling of the companies contracted revenue opportunity does that speak.
The expectation for any curious beyond 2022.
All these statements represent management is expected to get your results and performance <unk> actual results are subject to many risks and uncertainties I could cause actual results to differ materially can current expectations that we may share with you today and.
In addition to any risks highlighted during the call you should consider important risk factors and other disclosures that may affect ousters neutral results are described and that's S. A SEC filings that will be updated and it's 10-K.
Except as required by law or regulation. 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 independent in the Street and research organization. Other third party sources and management estimate.
<unk> 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 reasonable assumptions made upon reviewing such data and it's experiencing and knowledge out in the street and market.
By definition assumptions are subject to uncertainty and risk, which could cause results to differ materially from those expressed and yes ma'am.
During the call we may discuss certain non-GAAP financial measures, which exclude the effects of events and transactions, we consider to be outside our core operation.
These non-GAAP measures should be considered a supplement to and not a substitute for measures prepared in accordance with that.
For reconciliation of non-GAAP financial measures to the most directly comparable got measure please refer to the days actually.
I would now like to turn the call over to our Chief Executive officer and get them to call.
Hi, everyone. The fourth quarter represented a strong EM to a transformative ear for ouster with 86% revenue growth over the fourth quarter of 2020 and continued industry, leaving gross margins, but clearly validate are diversified strategy are providing state of the art solutions to multiple rapidly accelerating industry Vern.
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Our growth rate and strategic position reinforced their confidence that Alistair is poised for continued market share gains we have a significant lead over earlier stage prerevenue competitors and superior technology to legacy players. This is proven by our growth and ability to deliberate positive and meaningful gross margin even as the industry matures.
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As a letter market continues to mature we're confident that our multimarket approach will enable out or to capture significant shares would be automotive industrial smart infrastructure Ah robotics verticals. These.
These four target industries represented aggregate addressable market 8.6 billion by 2025, and the ouster as well positioned to deliver meaningful growth in each vertical we're confident in the ability to win an automotive with our multi sensor sweeps as well as their advantage in the industrial robotics, and smart infrastructure verticals, which represented an even larger.
Near term opportunity.
The first 100 days about the automotive have exceeded our expectations and our two teams are now fully integrated with each adding highly complementary expertise design development and validation work are on track with the timeline. We've previously shared our automotive negotiations are progressing well in our pipeline of deals continues to expand as <unk>.
Engage more Oh, yes, we're excited to share more details on our progress today and over the coming months.
After has the most differentiated ladder technology with R. O S. N D. F series digital let our platforms backed by a leading patent portfolio scalable manufacturing and growing supplier relationships. We have the most diversified business with over 600 customers over the last 12 months across multiple markets, allowing us to build toward a stable run rate while it.
Best thing and products and solutions to capture new growth opportunities and we have a proven ability to execute nearly doubling our revenue more than tripling the number of censorship and having 58 strategic customer agreements or S. T A's year over year, all while operating but the highest hardware gross margin of our public pier set.
In short we're confident that we have the team the technology and our strategy to make after the leader of Lidar as the eyes of economy, we're poised to have a large scale impact on the safety and sustainability of our society to the multitude of applications and industries that we touch anything that moves or that monitors moving objects has the potential to become.
More intelligent and efficient with digital lidar with that I'd like to turn the call over to our C. O Oh auto Brunel to provide a full update on a 2021 results in 2022 guidance before I dive into Ousters growth strategy.
Thank you and then I.
<unk> had a breakout year, one in which we maintained and delivered on our 20th 21 Guy.
And we will not stop there we believe the pace of digital lighter adoption is only accelerating across each of our industry vertical automotive industrial smart infrastructure and robotic we.
We have the right technology Cmos digital lighter an outstanding team and a multimarket strategy to take advantage of both near and long term revenue opportunities and extend our market leadership throughout the upcoming year let.
Let me turn to our financial results.
Elster delivered record quarterly results generating $11.9 million in revenue up 86% over the fourth quarter of 2020, and 53% sequentially demonstrating the acceleration of our business.
We shipped over 2400 sensors in queue for nearly a 200% increase over the fourth quarter of 2020.
Further we increased our total find strategic customer agreement to 68 through the fourth quarter.
Consistent feedback from these customers indicates that they chose Oh for other light our company, because we offer superior performance and deliver industry, leading reliability or.
Digital technology has fewer part than our analog competitors, meaning greater reliability and real world applications and less risk in our manufacturing process.
This translates directly to our financial results.
We continued to deliver industry, leading gross margin, reaching 30% in the fourth quarter and continued to reduce our cost per unit sold in.
Site of the ongoing supply chain challenges.
Which resulted in temporary purchase price variance related to bulk purchases and expedited shipment Cid in order to keep up with product demand.
We have a phenomenal manufacturing and operations team that managed to secure source material.
Scale production of our new O S sensors powered by the L. Two X chip ship.
Shipped a record number of sensors with short lead times and without shipping delays and strategically drive down our cost per unit sold during a year in which manufacturing proved challenging for many of our competitors.
We delivered on our full year 2021 guidance with $34 million in revenue and 27% gross margin we.
We made a commitment to our shareholders and executed on that commitment by almost doubling our revenue in 12th night.
With approximately 6500 censorship in 2021, we tripled the number of censor sold over the prior year amounting to over 10000 sensors <expletive> today.
These results help illustrate the three key take away the separate ouster from the rest of the light or industry.
Are differentiated technology are diversified business and are proven ability to execute.
Oh sure has a diverse group of over 600 customers across over 50 countries purchasing and using our sensors in the last 12 months.
68 signed S. D A's accounted for 20% of <unk> 2021 revenue and represents approximately 500 million and contracted revenue opportunity through 2025.
We see strong customer and S D a growth across each of our four vertical and throughout the Americas Asia Pacific Europe , and the Middle East.
The automotive vertical which includes road, though taxi robo trucking shuttles and buses and consumer Ada accounted for 34% of censorship in 2021.
This includes robotic research, which uses ousters ah with sensors across the number of the commercial and defense platform offering.
Including five O S sensors on the modular unmanned dinner vehicle for the agricultural industrial and defense market.
Industrial accounted for 25 per cent of censorship in 2021, including Beckner robotics, which studying the strategic customer agreement to utilize approximately 3000 O S. Digital sensors to equip self-driving palette trek tow tractor and lift truck through 2025.
We saw the strongest quarter on quarter growth and smart infrastructure, which accounted for 15% of censorship in 2021 to support 86 deployed project within our intelligent transportation Smart places and security Submarkets.
Finally, robotics accounted for 26% of censorship in 2021, including third robotics, which recently signed a binding commitment through 2023, along with a non-binding forecast for additional sensors through 2025 as it scales it's delivery fleets.
This diverse group of S. T. A exemplifies the success of our multimarket approach and outdoors not dependent on a single or a small handful of customers or even one market vertical with revenue hitting in 2025 and 2026.
But rather on both auto and nonauto opportunities that offer revenues and attractive margins in both the near and long term.
These strong financial are a direct result of our targeted capital allocation plan.
In 2021, we committed to using our public offering cash proceeds to accelerate our product roadmap increase software offerings and built out of global sales and marketing team. These.
These initiatives help to nearly double revenue growth year over year increase our market share across our four market vertical and extend our technical advantage over our peers.
In particular, we have grown our commercial team across the Americas, Amir and Asia Pacific market and brought an experienced leaders to develop a coke in sales organization geared towards the ramping our sales pipeline.
We released the first software development kit for Lidar expanded our partner platform and invested in Verticalize software solution to drive new customers and higher margin revenues.
Since the tonic our first major acquisition accelerated our automotive product roadmap by more than a year and immediately position to in late round negotiations with multiple O M and pier one.
We were able to make these strategic investments, while maintaining a cash balance of approximately 184 million at the end of the fourth quarter.
We generated higher gross margin compared to Q3, but additional cash burn versus the third quarter with driven by non-recurring items related to defense Photonics acquisition.
Working capital headwinds to support growing sale and mitigate supply chain shortage risk.
And manufacturing equipment purchases.
We aim to reduce our quarterly cash burn rate in the first quarter of 2022, as the 11 million Fourthquarter 2021, non-recurring cash impact from the sense Baton acquisition rolls off.
This past year was a breakout year for out there and we expect this rapid growth to continue in 2022.
For the full year 2022, we aimed a double revenue targeting a range of 65 million to 85 million and maintain a positive gross margin targeting a range of 25% to 30%.
Broad range. It projected revenue reflects the continued evolution of the industry with customer timelines that can shift and email.
With this we do anticipate some variability in the first quarter of 2022 as compared to the previous quarter.
As we progress throughout the year, we expect to narrow our projected range.
As we move into 20 twenty-two we expect our quarterly operating expenditures, excluding stock based compensation to be roughly in line with the fourth quarter of 2021, as we continue to support ongoing product development goals, including a full quarter acquired headcount call.
Upset by one time fees associated with the sense acquisition in the fourth quarter 2021.
We expect capital expenditures to increase by approximately 5 million year over year since the formation of outdoor automotive our deal flow has both accelerated and expanded these high volume opportunities require some additional investment in the development and manufacturing process as we work with L E N and pier one.
To integrate our solid date digital light are in mass production vehicle.
Further we are investing in other areas of the business like product and vertical specific certifications and software tool and value added solution, which will drive high margin deal over the long term <unk>.
Resulting from our digital technology, we remain confident in our ability to continue to meaningfully reduce cost per unit sold faster than our average selling price over the course of 2022.
Three a significant 20th 21 customer growth and our 68 established S D A's for.
Sure now has greater insight into our customers forecasted longterm purchasing need including several multi your binding purchasing commitment.
<unk> S D. As we are building a business based on greater visibility predictability and sticking it and remain confident in our long term strategy and the immense opportunity we are pursuing through our multimarket approach.
We think about our long term business growth from both the top down and bottom of that perspective.
We see at 8.6 billion dollar total addressable market opportunity by 2025 across our four vertical which shows we have significant head room to grow with our customers as the market expands into this tan.
From the bottom that every one of our 68 S. D. A's includes the three to five year forecast provided directly from the customer in aggregate a metric we call contracted revenue opportunity.
Which we see roughly doubling year over year.
We're encouraged by what we see with S D, a and they're still potential to win additional new business and expand further with existing customers.
The weather, we look bottoms up or tucked down the numbers paint an incredibly exciting vision for the immense multimarket opportunity worth pursuing backed by the doubling of our revenue that we've seen over the past year.
Needs growth expectations are supported by your accelerated automotive momentum generated by the formation of Ulster automotive the upcoming launch a R. L. Three chip, which we believe will unlock new opportunities in every vertical we sir.
<unk> industrial automotive and safety certification to expand market opportunities and displaced legacy sensors.
And a more robust software ecosystem, which will enable us to accelerate liner adoption and provide customized solutions for our customers.
These advancements will be a catalyst for growth across each of our four vertical.
2021 provided us with an excellent foundation on which to grow and I cannot wait to drive towards our goal in 2022.
I'd now like to turn it back over to <unk> to speak through key opportunities driving or 2022 guidance and overall growth.
Thanks on a digital <unk> is permeating our roads in cities, how we manufactured goods and every link along the global supply chain.
This widespread adoption is driven by three key trends that span or target circles first a generational shift and what consumers and regulators expect from next generation vehicles, including increase safety efficiency and advanced driver assistant functionality second accelerated the industrial automation to improve workplace.
Safety and productivity and counter ongoing supply chain challenges and third increased investments with smart infrastructure to build safer and more efficient transportation systems.
We're in the midst of a generational shift in the automotive world consumers and regulators are expecting more from vehicles than ever before including new levels of safety driver assistance at electrification.
As a result automakers a re imagining the automobile around these expectations.
Camera and radar based systems work in limited scenarios and fall far short of higher levels of autonomy.
Comprehensive lidar coverage around the vehicle promises to close the performance gap to deliver it improves safety and driver assistance systems, Ousters affordable flexible and high performance multi sensor light or sweet delivers exactly what oem's need to bring safe eight off enabled vehicles to market.
However, when it comes to passenger vehicles and series production the best technology in the World is simply a curiosity unless it comes with a price point that allows for true mass adoption.
This is where ousters simple Cmos based on digital light our approach truly separate from the pack today. After can offer pricing on R. D. F series sensors that makes light our standard fit on next generation luxury and mass market vehicles. The next five years will determine the winter some automotive I'm confident that our technology and team.
Is poised to make Alastair automotive, believing latter solution.
The second macro trend driving growth across our business is the widespread automation of millions of industrial vehicles across the global supply chain for mining and agriculture ports distribution yards warehouses trucking last mile delivery collectively these applications have the potential to rival theory.
<unk> production runs in the automotive and with even higher margins.
This trend has only accelerated in the wake of the global supply chain challenges and COVID-19, pandemic ongoing labor shortages inflation and public health concerns are increasing the pace of later adoption as industries across the supply chain seek to improve workplace safety and improve the efficiency of their operations.
Automated technologies, we're seeing a huge demand from customers looking to adopt digital light or whether they're established multibillion dollar Oems looking to update their fleets like some <unk> and comb creams or upstart like back not an outrider, bringing economy to mature industries.
<unk> is working with both to help address worker shortages and increased safety and efficiency through automation.
The third trend driving growth is government led initiatives to build safer more sustainable cities by modernizing public infrastructure and transportation systems with the over 1 million signalized intersections and 85 million surveillance systems in the US alone, we see significant potential upside beyond the 2.8.
<unk> dollar tab for digital <unk>, and the smart infrastructure vertical.
We're at the very beginning of abroad for final shift that will bring greater intelligence connectivity and safety to public and private spaces and transportation systems. For example, deploying just to light our sensors and intersection can replace expensive and unreliable ground loops and adds analytics that reduce idling time for.
Vehicles and increase pedestrian safety and ports are digital lidar is being used to increase productivity and safety and handling shipping containers and then metro stations lighter sensors are being used to count foot traffic and analyzed crowd patterns without compromising citizens privacy.
Last year I also was selected for 110 smart infrastructure projects in over 20 countries money of which represent large scale growth opportunities over the coming years, we view the acceleration and market demand as a signal that the smart infrastructure vertical is starting to ramp.
These projects represent nearly 3000 digital lidar Oh with sensors for initial deployment across the intelligent transportation systems Smart places and security Submarkets, the social impact of these programs as significant increase road safety and efficiency improved quality of life and enhance the sustainability.
If our communities that.
The U S infrastructure investment and jobs Act and the new National roadway safety strategy are great. Examples of the current administration the strategic focus to fund these programs and we're seeing a similar trend play out across Europe Asia and the Middle East.
He's three macro trends are driving widespread adoption of lighter technology and after as well positioned to meet customer requirements across each of our vehicles.
Last quarter, we introduce the ouster automotive B F series of flexible and scalable high performance solid state like ours.
High volume automotive programs are breakthrough D. F series is impressive in terms of performance and unique and offering multiple ranges field give you for automakers to design into their vehicles, we shook short and long range D. F zero M. B F. Two prototypes to a number of automotive customers last quarter as well as our strategic.
<unk> partner.
We also achieved another major milestone with the introduction of our L. Two X chip.
Highest performing chip we've ever designed with two times the processing power and twice the date output that'd be L. Two chips.
This chip advancement enabled us to offer our most reliable and rugged sensors, yet for superior three D perception to fog rain dusk, and snow and made each sensor and R. O S product family even more capable.
B L. Two X powered sensors unlock new market opportunities and revenue in the fourth quarter and are expected to drive additional growth across our vertical some 2022.
Finally, we launched features and sensor capabilities with another over the year firmware update and rolled out a new version of our software development kit or S. D. K, that's being adopted by an increasing number of our customers I'll come back to this critical piece of our software ecosystem later on.
Well 2021 was an important year for product releases and scaling for ouster, we expect 2022 to be even stronger with more products spanning hardware and software than ever before.
How's yours diversified digital light our strategy has taken strides we have a clear plan to grow our business further differentiate a product offerings capture market share and extend our market leadership.
Foremost I view 2022 out of the year of the L. Three chips.
<unk> three will offer the most significant performance upgrade ever four O S series.
B O three chip is the culmination of years of R&D inside ouster and keeps us on the exponential performance paths of Moore's law.
The technology inside the L. Three is incredible and brings the same back side illumination advancements that revolutionized the camera sensor industry to the high performance lighter industry for the very first time.
As with our L. Two adults, who X chips B O. Three chip is a fully customize sick fabricated on a standard Cmos process.
The significant performance improvement provided by this proprietary chip design cannot be replicated with off the shelf chip offerings by simply cannot wait to unveil to our customers as planned later this year.
While the L. Three chip Willpower O S sensors are solid state digital flash Silicon is powering all of our D F sensors.
In line with our digital roadmap, our next generation digital Flash chip will be taped out later this year and serve as the backbone of our automotive grade multi censored P. F sweep the series production program starting in 2025.
We remain on track with select the samples in the first quarter of 2022 and expect to establish digital light R. As the predominant light our technology and automotive this year.
While product features and performance upgrades will be major growth drivers for a business for the foreseeable future.
We have a significant additional axis on which to capitalize new business and this is the vertical specific product and safety certifications, which we are pushing.
It's well understood that high volume automotive applications require stringent quality and safety certifications, notably Ace O B and I T F.
16 949.
We believe doster is uniquely positioned to achieve these certifications across our entire portfolio of O S. N D S sensors.
In fact, our contract manufacturer benchmark achieved I E. T. F 16, 9492 years ago at our Thailand facility and there's already a past several automotive OEM audits.
Outside of automotive, there's an established market for sill to Nemo T. S. Two safety certified industrial and smart infrastructure Lidar that as prime to convert to advanced three D lighter.
There's already nearly a 1 billion dollar market for legacy to the industrial lighter censors today <unk>.
We understand from our customers that there are significant latent demand for digital lidar that can reduce costs and enable advanced economy by displacing outdated safety sensors were excited about the anticipated developments this year, which have the potential to open up these high margin opportunities.
Finally, we are building a robust software ecosystem built on three foundational pillars that will be a major catalyst for growth.
The first is the best in class software development experience that provides the resources and tools to reduce our customers times to test validate and integrate our sensors.
The second is an expanded partner platform to bring targeted solutions to our customers and a third are verticalize software solutions that drive new customers higher margin revenues.
In 2021, we invested in building out a best in class software development experience that serves as the foundation of our entire software ecosystem.
These tools accelerate our customers time to autonomy, enabling them to test and validate our sensors faster and bring their applications to market sooner.
Since releasing the ouster S T K and Q2 2021, we've seen tremendous customer adoption and will continue to ship major additional advancements in 2022.
We also invested in building out and expanded Parker platform that includes over 40 software and integration partners to date and growing these partners help us win new customers streamline sensory integration and accelerate our customers time to market across each of our target industries.
And finally ouster has a tremendous opportunity to bring to market Verticalize software solutions to complement our partner ecosystem and developer tools.
Our customers solve repeatable problems using our sensors across a wide variety of these cases every day and there was a clear need for solutions in the market that solved. These repeatable pieces, we see the software solutions, creating a new high margin revenue stream as well as accelerating light or censor adoption by lowering the barrier.
To entry to a new set of less technical customers and I can't wait to share what we have in store later this year.
In closing Astor continued to execute this year, we had a record fourth quarter and we achieved our 2021 guidance. This year, we intend to double our revenue, while maintaining industry, leading gross margins.
We've laid out an aggressive plan for 2022 to grow our business further differentiate our products and extend our market leadership and the team is continuing to execute as we've done in the past and with that I'd like to open it up for Q&A.
Thank you and we will now begin the question and answer session.
Ask a question you May <unk> then one on your phone if you're using a speaker phone. Please pick up your handset before pressing the keys to withdraw your question. Please press star one account when called upon please limit yourself to two questions.
Our first question today comes from Blaine Curtis with Barclays. Your line is open hey, good afternoon, and thank you for taking my question, but maybe just first uhm on the outlook for 22, you know I think on a talk about some variability for Q wanted to know what that meant but then if you could just address.
That a little bit and then I'm. Just curious you know you you started break out the percent and vertical or if you're gonna continue to do that but any color between those vertical that's how you're thinking about the growth this year.
Well I can take the first one this is on a good to talk to you again blame him on the variability in Q1, you know much like we saw on the prior here we saw the Q1 number.
You know aligning closer to the queue for number then too you know to see in a step up a significant step up and growth and so we were just kind of guiding that will see the cute <unk> one ramp uhm potentially have a little bit of variability in it rather than just a straight to your texture.
And then good to talk to you blame thanks for the question on the vertical breakdown hope you appreciate it the the breakdown at all that's the first time, we've done that giving the percentage units per vertical but now that we've done that you know we're committed to doing that on an annual basis.
And we're gonna look to you know, whether we do it on a quarterly basis, but haven't committed to that yet.
Great I I definitely appreciate it and just any color of thought between those four vertical <unk>.
You know, what's driving the growth Fisher.
Uhm, Yeah, absolutely I mean, so the the three major catalyst that we outlined are the major growth drivers for the the first three vertical so we in the automotive we have you know the adoption electrification in autumn autonomy and increase safety and automotive and and the kind of the receptiveness to that technology set.
<unk>, specifically I'm, an industrial if they ought to make sure the global supply chain that we've seen kind of top to bottom you can't talk to an industrial OEM.
At this point and not care about an automation strategy of some kind or another and that's whether it's a legacy company or a major established company in the space like Amazon or John Deere before a caterpillar of the world or you know I I guess, a newcomer in the space like Outrider effect, everyone has an Ottoman.
<unk> strategy and it <unk>, you know far more often than not centres around lidar or requires ladder as a component.
And then the last you know an smart infrastructure I think that's.
The industry, where we had a huge amount of gross uhm quarter over quarter, and smart infrastructure, and we mentioned that in the script, but.
And we see that having huge potential upside when you look at the potential unit kind of sockets, where where lidar could go and displaced legacy censors, whether their cameras or radar sensors are ground loops or just make something that was not intelligent before intelligent like a crosswalk uhm, there's there's <unk>.
<unk> of sockets that we could put <unk> in the next five years and there's such a significant investment uhm at the government level, there's funding available and and but but it's greenfield and so it's it's a lot of new emerging applications and so that's why we see so much upside is because it's not fully understood yet.
It's a lot of new and emerging uhm application so.
A lot of growth across all our vertical robotics being the last which is more of a catch all and provides a member of our some vertical send this growing for its own reasons a lot of emerging applications in robotics as well.
Thanks, and then just one for on Ah just I I appreciate the the revenue gross margin guidance for the year I was curious how are you thinking about managing opex for the year is any color you can give I I think I won't why you gave EBITDA guidance, if there's anything in terms of off extra or even that would be all.
Yeah, I mean, I think we we gave some clues to what we're gonna be entering 2022 with in terms of in my script scripted remarks, we talked a little bit about that there were about 11 million of nonrecurring sent fees that we won't see from Q4 to Q1, and then we would see a full quarter.
<unk> the sense employees cause we had a partial quarter in queue for going into Q1, and so we talked about that we expected you know opex thing going into 2022 to look similar to the fourth quarter.
Okay and that would be my net of stock based compensation, just just the baseline fees.
<unk>. Thank you.
Your next question comes from the line if he came Italian with city. Your line is open.
Oh, great. Thanks, good afternoon, everyone.
And just want to go back to the topic of the non auto certification and and the opportunities you see there have to think the the industry opportunity maybe around the billion dollars and you mentioned an appetite from some of the customers there to upgrade sensors and of course, you've got the L. Three chip coming just curious you know you have roughly.
Roughly what the timing is on on some of those certifications and once you're there you'll how quickly can you book additional revenue was just really more of a 2023 2024 kind of revenue opportunity as you unlock some of these up markets post certification.
Yeah sure and thanks for the question UK Uhm. So you know I think that the.
The <unk> the.
The timeline actually the the Astors strategy around certifications that unlock these new kind of land and expand opportunities with existing customers or just unlock completely new certified light our markets to us that that is paying dividends already today to some degree which is it's been a great benefit to be able to go to a customer.
A <unk> a robotic fork like lift customer and say, we can replace some of the light ours on your platform today with a consolidated set that's more affordable and more performance, but you can also expect then the future any of the certified Lidar that are that you have to keep on your on your platform by law.
That that we can replace those in the future as well and make your system simpler and make it more coffees capital efficient lower lower cost for you and that's all because we have this clear roadmap that's pretty unique in the industry. Because we had this unified product portfolio and we had this roadmap towards certifying all of our products.
For all of the major certifications required across our verticals.
All that being said, it's paying dividends today to some degree but you can expect in the next year or so for that to be an even bigger catalyst is we actually achieve somebody certifications, we're not giving an exact timeline on when we're achieving each one of the certifications basically for competitive reasons, but it's you know don't have.
Hold your breath significantly and again, we're already seeing some of the benefits.
Great and what other kind of new business question I think they're released mentioned goal of of winning at least one OEM production program. This year.
Any anything else you can share in terms of is it one cents or is it sore us around does it kind of L. Two plus features maybe the region.
The volume of what whatever you can check on that would be it would be super helpful.
Yeah, absolutely uhm.
So so.
One of the major updates is that from out of all of them. The automotive side is that we've been pushing forward with the production versions of R. D. F sensor lineup. So we announced the digital flash sensors fully stocked solid-state lineup now we're moving into the the design phase of the digital flash Silicon, that's gonna move into production and <unk>.
Place the Gen. One silicon that we have them in how state.
And that's silicon is capable or the digital flash product lineup is capable of being single sensor installs for like L. Two <unk>, two plus applications and it could also be multi sensor sweeps for either advanced L. Two plus systems that have much more capability or L. Three.
Mm powered systems.
And <unk>.
Regardless of application our goal is to be the most affordable solution for either of those I would say it's split you know a lot of the deals that we're working on are actually multi sensor suites that are pushing towards L. Three capability.
But there is there still is a contingent of automakers that are focused on typically your term opportunities that are just single censored installs. So you know we have the strategy and the product line and the affordability and the performance that allows for these you know more advanced more feature rich L. Three multicenter suites.
But.
Because of that we also are able to offer it highly competitive and affordable Uhm single sensor solutions for kind of the L. Two L. Two plus feature set so yeah of the five deals that we've you know previously announced that we're working on they're both of those requests are are represented and you know one of the significant read.
That's why we're in the mixes because we can be so competitive on pricing for either.
That's great. That's all that's all very helpful. Thank you.
Your next question comes from the line of Sam Peterman with Craig Hallum Capital Grill. Your line is open.
Oh.
Hi, guys. Thanks for taking my question Congrats on a quarter I just wanted to ask on the S. C. A pipeline I'm curious, where you saw kind of a strike coming this quarter, an increase is coming and I wanted to make sure I heard you right. The you saw that pipeline dollar value doubling in 2022.
And if that's the case kind of based on the run rate you've been out for the average value per S. C. A you need to you know probably close to 100.
C. A is obviously that can change with you know one or two larger customers thrown in there, but it was that kind of how you're thinking about it for 2022.
I think that when you're talking about the S. C. As in we talked about seem kind of a roughly doubling in our customers forecast you know we we're we're talking about not necessarily doubling the number of Sta's were just talking about looking ahead to what our customers are telling us their businesses are growing at that rate.
<unk> and so that's that's what we were referencing we weren't trying to impute like a certain number of signed S. C. As needed in the future that was based off of customers that are in existence today.
Yeah, I want to make sure. That's yeah that makes sense cause it's a really important point and it's a really positive sign for the business. So that doubling is when we ask our customer for a three to five year forecast in aggregate you know our customers are roughly doubling their forecast that you know what.
They're gonna purchase from us year over year.
So that's the doubling received a doubling of growth and the established customer base based on the you know the direct information they're providing.
And then there's a separate goal of ours is to increase the number of Sca's that we have you know every year, but we haven't given any indication of what our expectation necessarily is there obviously, we intend to grow D. C account this year.
Gotcha, Okay, <unk> <unk>, yeah, yeah. Thanks for clarifying that and then I wanted to ask one of the gross margin.
That guidance, obviously, you guys you know have you.
Industry, leading margins like you've talked about and you would expect it all seems to come down to use to go out.
Overtime, but kind of the way you frame that was you saw.
You know.
You saw you and it's coming out faster today's Peter growing up but your margin guidance is pretty flat here uhm. So I just wanted to get some color on what's built into the gross margin guidance are there. Other factors <unk> you know maybe a mixture of up to a certain product lines and markets that are affecting the guidance or just any color on that would be helpful.
Yeah, I mean, I think we are still seen our cost if installed decline at a faster rate than R. A S. P. So for the annual results. It was about at 35% decline on E. S. P. As in a 53 per cent I think decline on cost of goods sold. So we are still meeting our initiatives to to to target.
The the March and start to achieve the margins that we've targeted uhm I think going forward into next year, we're being a little bed, perhaps cautious related to supply chain issues, and allowing ourselves a little bit of room, there, but generally we do still continue to see the margins developing in the way that you're expecting.
[noise]. Okay. Thanks, guys does it for me.
Your next question comes from the line of Joseph <unk> with Guggenheim. Your line is open.
I'm Joseph <unk>, Hello, everyone [laughter].
Hi, Joe good to hear from you here Uhm, Yeah, just a couple of questions first on the your comments a male to action. The all three just looking at Dell to ask and the the picture of it kind of looks like you've got.
Three pieces of big pieces of Silicon near the the digital logic.
The detectors and in your mirrors and then I look at this a little picture of all three and it's sort of a great square I'm wondering.
Is the idea as you go to L. Three that we might see greater integration of these different pieces of silicon can can you comment on that.
I can't really give more details on the on the L. Three I mean, the the the reason we have a great out is because there are things that you can figure out about a chip by looking at it and we want to we want to keep the the surprise for when we announce all the products <unk>.
But the general idea is that.
We mentioned this we're taking advantage of a really significant advancement in semiconductor technology backside elimination for the very first time with all three and that increases both the the you know key kind of raw sensing metrics like how well it can perceive light.
And then we're also combining that with architectural improvements in the digital and the digital logic and we have you know as you pointed out we have over 100 million transistors of digital logic, that's running the light or censor co located with that pixel array and improving both is the goal you know every time that we that we take out of checks. So it's a really significant advanced.
And it really is the most significant advancement we've ever had in a chipset, but where we're gonna save some of the improvements for when we released the products that are powered by the all three later this year.
Okay and that okay. So we will get a more detailed look at El through architecture later this year.
Absolutely.
Okay now completely different question just.
Thinking much longer term you obviously, we were talking about the mortgage network. This year, but just you know thinking about as you woke up to 2025, and we've been having lots of these conversations it <unk> it seems as if.
The industrial part of this business you always the sophomore ramps and so forth really.
Possibly could still get to you know 50, 562 said gross margin someday, but at the same time, all the conversation Guy and the other people just call a Pat on automotive you have it we should probably think about that.
Bill was Yo maybe.
<unk> kind of kind of mid thirties percent gross margin business looking at the way automotive is does that still a reasonable long-term sort of expectations to have.
Yeah, I think too like we've been giving guidance uhm for the next year and I think you know what's really important here is that you know with our guidance, where it's gonna do what we say, we're going to do and really build trust with the investor community in the Street.
And I think you know if you look out further it is an immense multimarket opportunity and we are very excited about our four verticals and the growth in about the near term and the long term and I do agree with you there's gonna be some very variability in margins across vertical, but overall I think it's gonna be a great business and.
You know we do agree with you we think probably order is gonna be the lowest margin vertical you know, we said before maybe around 25% is probably accurate for automotive while the other verticals, we see is higher margin opportunities.
But I think you know, it's an immense multimarket opportunity and we're really excited about our customers growth and the visibility that that that's giving us into the future you know greater visibility greater predictability greater stickiness in our business. So so we're really excited about the growth that we're seeing in the margins that we're seeing today.
Okay. Thank you and then just one final quick one if you can comment is shauna Mcintyre still running automotive or is there have been some kind of danger.
Yeah actually Shauna has moved onto a new C E O role as it just the last month and and on that note actually I want to thank her for a role in the acquisition. She was integral in in the <unk> successful integration of the two teams and so now also automotive as in.
Great hands that with the kind of the established team that was under her and there's no changed our outlook or a strategy or any commitment we have to our automotive partners or customers.
Okay. Thank you for that.
Thanks <unk>.
And this does conclude our question and answer session I'd like to turn the conference back over to Angus to call up for any closing remarks.
Yeah, absolutely I mean, I I I I just want to highlight 2021 was a fantastic year for US we doubled revenue we build a world class commercial an auto teams like we said, we would we accelerated our hardware and software Roadmaps three extra unit shipments dropped cogs faster than a S. P's sign 58 F C as grew our customers to over.
600, and over 10000, even shipped worldwide and we delivered on a full year 2021, your guidance and we did all of that in the midst of a global pandemic and you know a disruption in the semiconductor supply chain, that's pretty unprecedented. So you have to say I'm proud of our team of what we've accomplished is a complete understatement I'm incredibly proud and no where.
Not stopping there we've aligned ouster with these big catalysts and the global economy, new shifts and autonomy in the automotive automation in the global supply chain and industrial and an investment in the safety of inefficiency, if our world and smart infrastructure and so no ousters products address those.
Friends had on we have this digital technology and diversification across industries and we've proven that we're able to execute you know do what we say and say what we do so I think I'll <unk> future in 2022 and beyond is incredibly bright.
Uhm and I wanted to thank everybody for tuning in and everyone that ask questions and have a great rest of your day.
Ladies and gentlemen, the conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines at this time.
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