Q1 2024 Ouster Inc Earnings Call
Operator: Hello, and welcome to Ouster's first quarter 2024 earnings conference call. All lines have been placed on mute to prevent any background noise.
Hello, and welcome to <unk> first quarter 2024 earnings conference call all lines have been placed on mute to prevent any background noise.
Operator: After today's presentation and remarks, there will be an opportunity to ask questions. If you'd like to ask a question during this time, simply press a star followed by 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 Ouster Investor Relations website an hour after the completion of this call. I'd now like to turn the conference over to Chen Geng, VP of Strategic Finance and Treasurer. Please go ahead.
Operator: After today's presentation and remarks, there will be an opportunity to ask questions. If you'd like to ask a question. During this time simply press star followed by one on your telephone keypad. If he would like to withdraw your question Press Star one again.
Chen Geng: Our 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.
Chen Geng: I'd now like to turn the conference over to Chen Gang VP of strategic Finance and Treasurer. Please go ahead.
Chen Geng: Good afternoon, everyone. Thank you for joining us for our first quarter 2024 earnings call.
Chen Geng: Good afternoon, everyone. Thank you for joining us for our first quarter 2024 earnings call. I am joined today by Ouster's Chief Executive Officer, Angus Pacala, and Chief Financial Officer, Mark Weinswig. Before we begin the prepared remarks,
Chen Geng: I am joined today by Al <unk>, Chief Executive Officer, Angus for Kala and Chief Financial Officer, Mark Weinberg.
Chen Geng: Before we begin the prepared remarks, we.
Chen Geng: We would like to remind you that earlier today, Ouster issued a press release announcing its first quarter 2024 results. An investor presentation was published and is available on the Investor Relations section of Ouster's website. Today's earnings call and press release reflect management's views as of today only and will include statements related to our business and financial outlook that are forward-looking statements under the federal securities laws. However, actual results may differ materially from those contained in or implied by these forward-looking statements due to risks and uncertainties associated with our business.
Chen Geng: We would like to remind you that earlier today <unk> issued a press release announcing its first quarter 2024 results.
Chen Geng: An investor presentation was published and is available on the Investor Relations section about <unk> web site.
Chen Geng: Today's earnings call and press release reflects managements views as of today only and will include statements related to our business and financial outlook that are forward looking statements under the federal Securities laws.
Chen Geng: Actual results may differ materially from those contained in or implied by these forward looking statements due to risks and uncertainties associated with our business.
Chen Geng: For a discussion of the material risks and other important factors that could impact our actual results, please refer to the company's FEC filings and today's press release, both of which can be found on our Investor Relations website. Any forward-looking statements that we make on this call are based on assumptions as of today, and, other than as may be required by law, we undertake no obligation to update these statements as a result of new information or future events.
Chen Geng: For a discussion of the material risks and other important factors that could impact our actual results. Please refer to the company's SEC filings and today's press release.
Chen Geng: Both of which can be found on our Investor Relations website.
Chen Geng: Any forward looking statements that we make on this call are based on assumptions as of today and other than as may be required by law. We undertake no obligation to update these statements as a result of new information or future events.
Chen Geng: Information discussed on this call concerning <unk> industry competitive position in the markets in which it operates as based on information from independent industry and research organizations. Other third party sources and management estimates, which are derived from publicly available information released by independent.
Chen Geng: Information discussed on this call concerning Ouster's industry, competitive position, and the markets in which it operates is based on information from independent industry and research organizations, other third-party sources, and management estimates, which are derived from publicly available information released by independent industry analysts and other third-party sources, as well as data from Ouster's internal research and are based on reasonable assumptions and computations made upon reviewing such data and its experience in and knowledge of such industry and By definition, assumptions are subject to uncertainty and risk, which could cause results to differ materially from those expressed in the estimate.
Chen Geng: Industry analysts and other third party sources as well as data from <unk> internal research and are based on reasonable assumptions and computation made upon reviewing such data and its experience and knowledge of such industry end markets.
Chen Geng: By definition assumptions are subject to uncertainty and risks, which could cause results to differ materially from those expressed in the estimates.
Chen Geng: During this call, we will discuss certain non-GAAP financial measures. These non-GAAP financial measures should be considered as a supplement to, and not a substitute for, measures prepared in accordance with GAAP. For a reconciliation of non-GAAP financial measures discussed during this call to the most directly comparable GAAP measures, please refer to today's press release. I would now like to turn the call over to Angus.
Chen Geng: During this call we will discuss certain non-GAAP financial measures.
Angus: non-GAAP financial measures should be considered as a supplement to and not a substitute for measures prepared in accordance with GAAP.
Angus: For a reconciliation of non-GAAP financial measures discussed during this call to the most directly comparable GAAP measures. Please refer to today's press release.
Chen Geng: I would now like to turn the call over to Angus.
Charles Angus Pacala: Hello everyone, and thank you for joining us today. I'll start with a brief recap of the quarter, an overview of the market, and an update on our strategic priorities. Mark will cover our results in more detail before I close with some final thoughts. In the first quarter, we continued to build upon the positive operational momentum that we generated throughout 2023. We reported record revenues of $26 million, which was at the high end of our guidance range.
Angus: Hello, everyone and thank you for joining us today.
Charles Angus Pacala: I will start with a brief recap of the quarter overview of the market and update on our strategic priorities.
Charles Angus Pacala: Mark will cover our results in more detail before I close with some final thoughts.
Charles Angus Pacala: In the first quarter, we continued to build upon the positive operational momentum that we generated throughout 2023.
Charles Angus Pacala: We reported record revenues of $26 million, which was at the high end of our guidance range. This represents growth of 51% year over year and our revenues exceeded an annualized run rate of 100 million for the first time in <unk> history.
Charles Angus Pacala: This represents growth of 51% year over year, and our revenues exceeded an annualized run rate of $100 million for the first time in Ouster's history. Our customers continued adoption of REV7 sensors combined with our operational leverage. This drove non-GAAP gross margin expansion to 36%, which represents our highest level to date.
Charles Angus Pacala: Our customers continued adoption of Red seven centers combined with our operational leverage drove non-GAAP gross margin expansion to 36%, which represents our highest level to date.
Charles Angus Pacala: During the quarter, we closed numerous large deals in our smart infrastructure and industrial verticals. Within smart infrastructure, we continue to extend our collaboration with a leading global logistics company to install additional REV7 sensors and Ouster Gemini at their distribution yards. We see potential for further expansion as we are currently deploying our solutions on only 5% of their global footprint. Moreover, we estimate that this single customer represents only a fraction of the market opportunities for this use case.
Charles Angus Pacala: During the quarter, we closed on numerous large deals in our smart infrastructure and industrial verticals.
Charles Angus Pacala: Within the smart infrastructure, we continue to extend our collaboration with a leading global logistics company to install additional red seven centers and Alastair Gemini at their distribution yards.
Charles Angus Pacala: We see potential for further expansion as we are currently deploying our solutions on only 5% of their global footprint.
Charles Angus Pacala: Moreover, we estimate that this single customer represents only a fraction of the market opportunities for this use case.
Charles Angus Pacala: Last year alone 10 of the largest retail and logistics companies collectively invested nearly $50 billion in capital expenditures.
Charles Angus Pacala: Last year alone, 10 of the largest retail and logistics companies collectively invested nearly $50 billion in capital expenditures. Our Gemini solution is designed to offer a myriad of benefits, such as reducing operating costs, boosting operating efficiency, fortifying perimeter security, enhancing workplace safety, and alleviating labor constraints. We believe that these compelling value propositions will help secure an increasing portion of this spend. The industrial vertical is a perfect example of our belief that, ultimately, everything that moves will become autonomous.
Charles Angus Pacala: Our Gemini solution is designed to offer a myriad of benefits such as reducing operating costs boosting operating efficiency fortifying perimeter security enhancing workplace safety and alleviating labor constraints. We believe that these compelling value propositions will help secure an increasing portion of this spend.
Charles Angus Pacala: The industrial vertical is a perfect example of our belief that ultimately everything that moves will become economists.
Charles Angus Pacala: During the first quarter, we landed million-dollar deals to bring REV-7 to agriculture and port applications. With agriculture, we see the potential for agricultural automation to become one of our largest end markets. Based on industry data, there are over 2 million tractors sold each year.
Charles Angus Pacala: During the first quarter, we landed a $1 million deals to bring red seven to agriculture, and port applications with an agriculture, we see the potential for agricultural automation to become one of our largest end markets.
Charles Angus Pacala: Based on industry data there are over 2 million tractors sold each year.
Charles Angus Pacala: Assuming two sensors per vehicle, each 1% penetration rate represents 40,000 sensors, or nearly triple the amount of sensors we sold during 2023. Our solutions also bring a convincing value proposition to ports around the world. Throughput imports globally surpassed 850 million containers in 2023. Our solutions can enable increased efficiency in tasks such as container positioning, tracking, collision avoidance, and twist lock detection. By saving one second per container, we estimate the ports can move an additional 20 million units per year. At an average terminal handling charge of $500 per container, this represents $10 billion of incremental revenue for the port industry.
Charles Angus Pacala: Assuming two sensors per vehicle each 1% penetration rate represents 40 sensors or nearly tripled the amount of sensors, we sold during 2023.
Charles Angus Pacala: Our solutions also bring a convincing value proposition to ports around the world.
Charles Angus Pacala: Throughput imports globally surpassed 850 million containers in 2023.
Charles Angus Pacala: Our solutions can enable increased efficiency and tasks such as container positioning tracking collision avoidance and twist lock detection.
Charles Angus Pacala: Hi, saving one second per container, we estimate the ports can move an additional 20 million units per year.
Charles Angus Pacala: Average terminal handling charge of $500 per container. This represents $10 billion of incremental revenue for the pork industry.
Charles Angus Pacala: Governments worldwide are investing in their infrastructure, and the U.S. alone has committed to spending over $20 billion on U.S. port infrastructure over the next five years. We feel well positioned to capitalize on this investment. Turning to our strategic business priorities for 2024, our first priority is to expand software and grow the installed base.
Charles Angus Pacala: Governments worldwide are investing in their infrastructure in the U S alone has committed to spending over $20 billion on U S port infrastructure over the next five years, we feel well positioned to capitalize on this investment.
Charles Angus Pacala: Turning to our strategic business priorities for 2024.
Charles Angus Pacala: Our first priority is to expand software and grow the installed base.
Charles Angus Pacala: During the first quarter, Ouster trained a new deep learning perception model that advances our ambition to become a world leader in LiDAR-powered perception solutions. With enhanced operating performance, our Gemini and Blue City customers now benefit from improvements in object detection at longer distances and multiple object tracking accuracy. We continue to expand Ouster Gemini and Blue City deployments and close millions in software attached sales in the first quarter. Ouster collaborated with a recipient of the U.S. Department of Transportation SMART grant to empower pedestrian safety improvements, near-miss detection, traffic counting, and traffic flow analytics.
Charles Angus Pacala: During the first quarter Hollister trained a new deep learning perception model that advances our ambition to become a world leader in Lidar powered perception solutions.
Charles Angus Pacala: With enhanced operating performance, our Gemini and Blues city customers now benefit from improvements to object detection at longer distances and multiple object tracking accuracy.
Charles Angus Pacala: We continue to expand downstream Gemini and believed to be deployments and closed millions in software attach sales in the first quarter.
Charles Angus Pacala: <unk> collaborated with a recipient of the U S Department of Transportation's Smart grant to empower pedestrian safety improvements near Miss detection traffic counting and traffic flow analytics.
Charles Angus Pacala: Compared to competing solutions, Ouster provides superior all-weather performance, privacy protection, and the ability to accurately detect and classify multiple types of road users. With over 300,000 signalized intersections in the US alone, we view the market for intelligent transportation systems as a tremendous future growth opportunity. Our smart infrastructure team also recently attended major industry events, including the United States' largest security trade show. There were a few anecdotes that I'd like to share.
Charles Angus Pacala: Compared to competing solutions also provide superior all weather performance privacy protection and the ability to accurately detect and classify multiple types of road users.
Charles Angus Pacala: With over 300000 signalized intersections in the U S alone we view the market for intelligent transportation systems, that's a tremendous future growth opportunity.
Charles Angus Pacala: Our smart infrastructure team also recently attended major industry events, including the United States largest security trade show.
Charles Angus Pacala: We're a few anecdotes that I'd like to share.
Charles Angus Pacala: First, one of the world's largest retailers noted that Ouster was one of the true gems of the show, while one of the largest security integrators in North America said Ouster was the most interesting technology he had seen in 20 years. This positive feedback reinforces our conviction that LiDAR is poised to become the preeminent technology for the next generation of smart infrastructure applications. Turning to hardware technology, Ouster continued to execute on its product roadmap in the first quarter.
Charles Angus Pacala: First one of the world's largest retailers noted that elster was one of the true <unk> of the shell well one of the largest security integrators in North America set out there was the most interesting technology. He had seen in 20 years.
Charles Angus Pacala: This positive feedback reinforces our conviction that ladder is poised to become the preeminent technology for the next generation of smart infrastructure applications.
Charles Angus Pacala: Turning to hardware technology ouster continued to execute on its product roadmap in the first quarter, we introduced new firmware designed to enhance the performance capabilities of our <unk> sensors and coincides with heightened interest for AI and robotics customers.
Charles Angus Pacala: We introduced new firmware designed to enhance the performance capabilities of our REV7 sensors and coincides with heightened interest in AI and robotics customers. Delivered over the air, the update supports improved accuracy and zero minimum range and will enable operations in tighter spaces and closer proximity to other objects. Our next generation L4 custom silicon chip is taped out and is expected to bring significant improvements in performance, reliability, and manufacturability, along with safety certifications to the OS sensor family.
Charles Angus Pacala: Delivered over the air the update supports improved accuracy and zero minimum range and will enable operations and tighter spaces and closer proximity to other objects.
Charles Angus Pacala: Our next generation now for custom Silicon chip is taped out and is expected to bring significant improvements in performance reliability and manufacturer ability along with safety certifications to the OS sensor family.
Charles Angus Pacala: We continue to develop our automotive grade custom silicon and plan to integrate the Kronos chip into our final form factor solid state digital flash or DFS sensors in the next year.
Charles Angus Pacala: We continue to develop our automotive-grade custom silicon and plan to integrate the Kronos chip into our final form factor solid-state digital flash, or DF, sensors in the next year. PF represents a first-of-its-kind, truly solid-state, compact, affordable, and performance family of automotive-grade LiDAR sensors.
Charles Angus Pacala: <unk> represents a first of its kind truly solid state compact affordable and performance family of automotive grade Lidar sensors.
Charles Angus Pacala: Finally, we progressed on our long term financial framework during the first quarter, our first quarter revenue growth of 51% and margin expansion to 29% aligned well with the parameters we have laid out.
Mark B. Weinswig: Finally, we progressed on our long-term financial framework during the first quarter. Our first quarter revenue growth of 51% and margin expansion to 29% aligned well with the parameters we had laid out. While we are pleased that our GAAP operating expenses of $33 million were 14% lower than the third quarter of 2023, we do expect our GAAP operating expenses to fluctuate from quarter to quarter, primarily due to changes in non-cash stock-based compensation expenses and other items.
Mark B. Weinswig: While we are pleased that our GAAP operating expenses of $33 million were 14% lower than the third quarter of 2023, we do expect our GAAP operating expenses to fluctuate quarter to quarter, primarily due to changes in noncash stock based compensation expenses and other items, we continue to look.
Mark B. Weinswig: We continue to look for further opportunities to optimize our cost structure and reduce our cash flow. The first quarter marked strong operating results and progress on all three of our strategic business objectives. I'll now turn the call over to our CFO, Mark Weinswig, to provide more context on our financial results for the first quarter.
Mark B. Weinswig: For further opportunities to optimize our cost structure and reduce our cash burn.
Mark B. Weinswig: The first quarter marked strong operating results and progress on all three of our strategic business objectives.
Mark B. Weinswig: I'll now turn the call over to our CFO Mark <unk> to provide more context on our financial results for the first quarter.
Mark B. Weinswig: Thank you, Angus, and good afternoon, everyone. In the first quarter, we recognized a record $25.9 million in revenue, a 51% increase over the first quarter of 2023 and a 6% increase over the fourth quarter of 2023. We also shipped a record 4,500 sensors in the quarter. Overall, we saw strong revenue contributions from each of our four verticals, automotive, industrial, robotics, and smart infrastructure. The robotics vertical was the largest contributor to revenue and more than doubled on a year-over-year basis. It was followed by Automotive, which generated the highest quarterly revenue in our history.
Mark B. Weinswig: Thank you Amy and good afternoon, everyone.
Mark B. Weinswig: In the first quarter, we recognized a record $25 9 million in revenue a 51% increase over the first quarter of 2023, and a 6% increase over the fourth quarter of 2023.
Mark B. Weinswig: We also shipped a record 4500 sensors in the quarter.
Mark B. Weinswig: Overall, we saw strong revenue contributions from each of our four verticals automotive industrial robotics and smart infrastructure.
Mark B. Weinswig: The robotics vertical was the largest contributor to revenue and more than doubled on a year over year basis, followed by automotive, which generated the highest quarterly revenue in our history.
Mark B. Weinswig: This quarter illustrates the benefits of our strong customer and market diversity, which provides us with the opportunity to capitalize on multiple emerging industry trends. Gap gross margin improved to 29% from negative 2% in the first quarter of 2023 and increased 700 basis points from 22% in the prior quarter. Non-Gap Gross Margin improved to 36% in the first quarter and reached the highest levels in Ouster's history.
Mark B. Weinswig: This quarter illustrates the benefits of our strong customer and market diversity, which provides us with the opportunity to capitalize on multiple emerging industry trends.
Mark B. Weinswig: GAAP gross margin improved to 29% from negative 2% in the first quarter of 2023 and increased 700 basis points from 22% in the prior quarter.
Mark B. Weinswig: non-GAAP gross margin improved to 36% in the first quarter and reached the highest levels in <unk> history.
Mark B. Weinswig: This marks our fourth consecutive quarter with higher gap and non-gap gross margin. The margin expansion over the past year reflects the operating leverage inherent in our business model, along with our premium performing REV7 sensors. Over the past year, we have lowered our cost structure as we transitioned manufacturing to contract manufacturing partners in Thailand and streamlined our internal process. These actions have positioned Ouster to be a low-cost provider of high-performance sensors.
Mark B. Weinswig: This marks our fourth consecutive quarter with higher GAAP and non-GAAP gross margin.
Mark B. Weinswig: The margin expansion over the past year reflects the operating leverage inherent in our business model, along with our premium performing ramp <unk> sensors.
Mark B. Weinswig: Over the past year, we have lowered our cost structure as we transition manufacturing to contract manufacturing partners in Thailand, and streamlined our internal processes.
Mark B. Weinswig: These actions have positioned us to be a low cost provider of high performance sensors.
Mark B. Weinswig: Gap operating expenses of $33 million were lowered by 81% year-over-year and 22% sequentially. We have continued to make strides in reducing our cost structure while substantially growing revenues. We are carefully managing our cost structure while at the same time continuing to invest in new products and technologies to drive future growth avenues. Our balance sheet remains strong, with cash, cash equivalents, restricted cash, and short-term investments of $189 million at March 31st. This cash balance includes approximately $4 million raised via our ATM during the first quarter, reflecting our strategy to maintain a strong balance sheet to help fund our future growth.
Mark B. Weinswig: GAAP operating expenses of 33 million were lower by 81% year over year and 22% sequentially.
Mark B. Weinswig: We have continued to make strides on reducing our cost structure, while substantially growing revenues, we are carefully managing our cost structure, while at the same time continuing to invest in new products and technologies to drive future growth avenues.
Mark B. Weinswig: Our balance sheet remains strong with cash cash equivalents restricted cash and short term investments of 189 million at March 31.
Mark B. Weinswig: This cash balance includes approximately $4 million raised via our ATM during the first quarter, reflecting our strategy to maintain a strong balance sheet to help fund our future growth.
Mark B. Weinswig: Since Q1 of 2023, we have significantly reduced our operating cash burn as a lighter industry transitions into its next phase of growth.
Mark B. Weinswig: Since Q1 of 2023, we have significantly reduced our operating cash. As the LIDAR industry transitions into its next phase of growth, we intend to maintain our financial position as a point of differentiation. We believe our customers are placing increased emphasis on their partners' balance sheets. Moving to our guidance for the second quarter of 2024, we expect to achieve between $26 million and $28 million in revenue. At the midpoint of the range, this represents approximately 40% year-over-year revenue growth.
Mark B. Weinswig: We intend to maintain our financial position as a point of differentiation.
Mark B. Weinswig: We believe our customers are placing increased emphasis on their partners' balance sheets.
Mark B. Weinswig: Moving to our guidance for the second quarter of 2024, we expect to achieve between 26 and $28 million of revenue at the midpoint of the range. This represents approximately 40% year over year revenue growth.
Charles Angus Pacala: Now, with that, I'll turn the call back over to Angus.
Mark B. Weinswig: Now with that I'll turn the call back over to Angus.
Charles Angus Pacala: Thanks, Mark. I'm proud of the notable accomplishments Ouster achieved during the first quarter. Our revenues exceeded an annualized run rate of $100 million for the first time. We shipped a record 4,500 sensors, and we reported the highest non-GAP gross margin in Ouster history. We also mark the one-year anniversary of our merger with Velodyne. Compared to the first quarter of 2023, we have grown our revenues by 51% and expanded our gross margin by over 3,000 basis points.
Angus: Thanks, Mark I'm proud of the notable accomplishments achieved during the first quarter our.
Charles Angus Pacala: Our revenues exceeded an annualized run rate of 100 million for the first time, we shipped a record 4500 sensors and we reported the highest non-GAAP gross margin in <unk> history.
Charles Angus Pacala: We also marked the one year anniversary of our merger with valid items.
Charles Angus Pacala: Compared to the first quarter of 2023, we have grown our revenues by 51% and expanded our gross margin by over 3000 basis points.
Charles Angus Pacala: We are the only publicly traded LIDAR company in the past year to deliver four straight quarters of sequential revenue growth, margin expansion, and lower cash burn. In the past year, our focused operational execution, combined with a leading product portfolio, has established us as one of the strongest Western LiDAR companies in the industry. This positions us well for the substantial opportunity ahead of us, as we are firm believers that everything that moves in the future will be robotic.
Charles Angus Pacala: We are the only publicly traded light our company over the past year to deliver four straight quarters of sequential revenue growth margin expansion and lower cash burn.
Charles Angus Pacala: Over the past year, our focused operational execution combined with our leading product portfolio has established us as one of the strongest western lidar companies in the industry.
Charles Angus Pacala: This positions us well for the substantial opportunity ahead of us as we're firm believers that everything that moves in the future will be robotic.
Charles Angus Pacala: The adoption of LiDAR among our customers and across industries remains in its infancy, and we are determined to capture the multibillion-dollar market for a global ecosystem of autonomy solutions. With our REV7 sensors and Gemini and BlueCity software solutions, Ouster is creating the critical technologies at the core of autonomy. 2024 is off to a positive start, and I'm confident that our persistent execution will continue to set Ouster apart from the rest of the industry. With that, I'd like to open it up for Q&A. Thank you. And once again, everyone, if you would like to ask a question, please press star one on your telephone keypad. We'll take the first question from.
Charles Angus Pacala: The adoption of Lidar, among our customers and across industries remains in its infancy, and we are determined to capture the multibillion dollar market for our global ecosystem of autonomy solutions with.
Charles Angus Pacala: With our <unk> sensors, and Gemini and <unk> software solutions ouster is creating the critical technologies at the core of autonomy.
Charles Angus Pacala: 2024 is off to a positive start and I'm confident that our persistent execution will continue to set us apart from the rest of the industry with that I'd like to open it for Q&A.
Operator: Thank you. And once again, everyone, if you would like to ask a question, please press star one on your telephone keypad. We'll take the 1st question from Madison DePaola Rosenblatt. Hi, yeah, thanks for taking my question.
Speaker Change: Thank you and once again, everyone. If you would like to ask a question. Please press star one on your telephone keypad will.
Speaker Change: We'll take the first question from Madison Depaola Rosenblatt.
Speaker Change: Hi, yes, thanks for taking my question and congrats on the great results this quarter.
Speaker Change: So I just was wondering did you have any 10%.
Speaker Change: Customers in the in Q1, and do you expect that over time, there'll be one or more 10% customers.
Unknown Executive: Well, thank you for the question. And, you know, this quarter, we did have one 10% customer. We have continued to see 10% customers come and go during different quarters based on our customers' ramping up from the commercial perspective. You know, our customers continue to go through this stage of, you know, obviously, early trials into pilot production. And as we see more and more customers move into production, we do expect that those customers are 10%, and the 10% level will continue to increase over time.
Speaker Change: Well. Thank you for the question and this.
Unknown Executive: This quarter, we did have 110% customer.
Unknown Executive: We have continued to see 10% customers come and go during different quarters based on the our customers ramp up from the commercial perspective.
Unknown Executive: Our customers continue to go through this the stage of obviously early trials into pilot production and as we see more and more customers move into production. We do expect that those customers are 10%, 10% level will continue to increase over time.
Speaker Change: Okay, Yeah, great. Thanks for taking my question.
Operator: Once again, it is star number one. If you have a question, we'll go next to Shadi Mitwalli, Craig Hallam.
Unknown Executive: Once again it is star one if you have a question we'll go next to <unk> Craig Hallum.
Unknown Executive: Hey, this is Shadi Mitwalli on behalf of Richard Shannon. Congratulations on another solid quarter, guys. My first question is on revenue growth. In Q1, revenues grew 51%, and Q2 is guided for growth of 40% year over year. So I was just wondering if Ouster could give us some clarification on whether this 40 to 50% revenue growth range is expected for 2024.
Operator: Hey, this is Charlie <unk> on for Richard Shannon, Congrats on another solid quarter guys.
Unknown Executive: First question is on revenue growth in Q1 revenues grew 51% and Q2 is guided for growth of 40% year over year. So I was just wondering its ouster can give us some clarification on this.
Unknown Executive: 40% to 50% revenue growth range is expected for 2024.
Speaker Change: Yes, thanks for the question Sean.
Unknown Executive: Yeah, thanks for the question, Shadi. So, you know, we're really focused on delivering on the long-term financial framework that provides a path of profitability for Ouster. And that spells out a 30 to 50% year over year revenue growth, a 35 to 40% gross margin, and an OPEX goal of keeping things flat or below Q3 2023 levels. And so that's very much what we're committed to. And as you can see, we're definitely tracking to those metrics in Q1 and in the mid range of guidance for those metrics in Q2. So, definitely happy about the progress to date and committed to that long-term model, ultimately ending in profitability.
Unknown Executive: We're really focused on delivering on the long term financial framework and that provides a path to profitability for ouster.
Unknown Executive: And that spells out of 30% to 50% year over year revenue growth.
Unknown Executive: A 35% to 40% gross margin and and an opex goal of keeping things flat or below Q3, 2023 levels and so that's very much what we're committed to.
Unknown Executive: And as you can see where we're definitely tracking to those metrics in Q1 and at.
Unknown Executive: In the mid range of guidance to those metrics in Q2, so definitely happy about the progress to date.
Unknown Executive: And and committed to that long term model ultimately ending in profitability.
Speaker Change: Great. Thanks for the question a color on that and then just have a follow up on Opex R&D. This quarter was lower than usual and SG&A higher than usual. So I was just wondering if these are the new levels or just typical seasonality going on opex.
Unknown Executive: Great, thanks for the color on that. And then, just a follow-up on OPEX. R&D this quarter was lower than usual, and SG&A was higher than usual. So I was just wondering if these are new levels or just some typical seasonality going on in OPEX.
Unknown Executive: Yeah, so OPEX in the first quarter is always just a little bit unusual. As you probably know, FICA and a lot of these taxes and 401K items do get reset in the first quarter. In addition, we do see some of the fees that relate to year-end audit-related insurance. Those kind of come in at the end of the fourth quarter, which causes the fourth quarter typically to be, you know, or sorry, first quarter to be a little bit higher than the prior quarter.
Unknown Executive: Yes.
Unknown Executive: So opex in the first quarter is always just a little bit unusual as you probably know FICA and a lot of these taxes and 400 <unk> do get reset in the first quarter. In addition, we do see some of the fees that relate to year end audit related insurance those kind of come in at the end of the fourth quarter, which causes fourth quarter typically to be.
Unknown Executive: Sorry, first quarter to be a little bit higher than the prior quarter, we do expect going back to English remarks to continue to see our opex.
Unknown Executive: We do expect, going back to Angus' remarks, to continue to see our OPEX, you know, be flat to down from where we had guided from our financial framework, which was the third quarter of 2023. You know, we've made really good progress over the last couple of quarters, almost better than expected. And we continue to really focus hard in terms of what we can do to bring down our cost structure on an overall basis.
Unknown Executive: Flat to down from where we had guided in the from our financial framework, which is the third quarter of 2023, we've made really good progress over the last couple of quarters, almost almost better than expected and we continue to really focus hard in terms of what we can do to bring down our cost structure on an overall basis, yes, one thing I'd just add to that.
Unknown Executive: Yeah, and one thing I just add to the R&D spend portion of the OPEX, two of our strategic priorities this year are based around the product roadmap, the software solutions, and then the digital LIDAR hardware at the core of our business. But our business is ultimately driven by silicon development. The chips that go into our sensors drive our product roadmap, and the costs associated with those chips can be lumpy. A chip tape out can fall in a single quarter, causing a rise in R&D, and then go back to a more normal level. So that's where you might see some of the kind of inconsistency quarter to quarter, specifically in R&D spend.
Unknown Executive: The R&D spend portion of the Opex.
Unknown Executive: We are in two of our strategic priorities this year.
Unknown Executive: Are based around product roadmap the software solutions, and then the digital AD or hardware as the core of our business.
Unknown Executive: But our business is driven ultimately by Silicon development.
Unknown Executive: <unk> that go into our sensors drive our product roadmap and the costs associated with those chips can be.
Unknown Executive: It can be lumpy.
Unknown Executive: Chip tape out can fall in a single quarter and then.
Unknown Executive: Causing a rise in R&D and then go back to a more normal level. So that's where you might see some of the kind of inconsistency quarter to quarter, specifically in R&D spend.
Speaker Change: Awesome, Thanks for the color on that and congrats on another solid quarter.
Unknown Executive: Awesome. Thanks for the call on that, and congrats on another solid quarter.
Speaker Change: We'll take the next question is from Timna Kelly City.
Operator: We'll take the next question from Itay Michaeli, Citi.
Itay Michaeli: Great. Thanks.
Itay Michaeli: Hi, everyone.
Operator: Jeremy.
Unknown Executive: Sorry, Itay, you're kind of coming in and out.
Itay Michaeli: Sorry can you tell you are kind of coming in and out.
Unknown Executive: There we go. Sorry. I hope you can hear me now.
Itay Michaeli: Let me go.
Unknown Executive: Right.
Itay Michaeli: Thank you you may now just two follow ups for me first going back to the revenue growth for the full year.
Unknown Executive: Just two follow-ups for me. First, going back to revenue growth for the full year, given the momentum at the end, as you spoke about at the beginning of the call, just curious if there's a bias to the lower high end of the 30%, 50% range for this year. And then second, maybe for Mark, the cash use this quarter, I think about $7 million, maybe $13 extra working capital inflow. Is that how we should be thinking about the kind of quarterly cash use over the next couple of quarters?
Unknown Executive: Given the momentum at the I guess you spoke about at the beginning of the call. Just curious if there's a bias to the lower high end of the 30% to 2% range.
Unknown Executive: For this year and then second maybe for Mark.
Unknown Executive: The cash used this quarter I think about $7 million, maybe 13 extra working capital inflow is that how should we be thinking about kind of quarterly cash use over the next couple of quarters.
Unknown Executive: Yeah, I'll take the first question. So we're very much committed to the 30 to 50% range for the long-term model. There are many avenues that bring us to profitability within that framework, and you have to understand that one of the biggest is that we have a lot of tailwinds that are helping buoy our business. LIDAR is a predominant sensing modality across all of the future projects, most of the future projects that we're working on across our industries.
Mark: Yes, I'll take the first question so.
Unknown Executive: So we're very much committed to the 30% to 50% range and for the long term model there many avenues that bring us to profitability within.
Unknown Executive: Within that framework and you have to understand that.
Unknown Executive: One of the biggest we have a lot of tailwind that are helping buoy our business.
Unknown Executive: Lidar is a predominant sensing modality across all of the future projects are the.
Unknown Executive: Most of the future projects that we're working on across our industries, but there are also challenges with our customers adopting the technology at.
Unknown Executive: But there are also challenges with our customers adopting the technology at a rapid pace. That's one of the biggest kinds of headwinds to the business, just the pace of adoption of LIDAR. And it's something that we continue to push on each and every day to make it easier for this technology to be adopted at a rate that pushes us into the high end of the framework. But right now, so yeah, we have tailwinds, but also headwinds to the business that we have to counter, and that's where the work is still to be done. So ultimately, the 30 to 50% is something that we feel comfortable with and expect to track towards.
Unknown Executive: At a rapid pace, that's one of the biggest kind of head.
Unknown Executive: Excuse me headwinds to the business is just the adoption pace of Lidar and it's something that we continue to push on each and every day to make it easier for this technology to be adopted at a rate that.
Unknown Executive: That pushes us into the high end of the framework.
Unknown Executive: But right now so yes, we are a tailwind, but also headwinds to the business that we have to counter and Thats, where the work is still to be done.
Unknown Executive: So ultimately the 30% to 50% is something that we feel comfortable with <unk> and.
Unknown Executive: And expect to track towards.
Unknown Executive: And on cash usage, you know, this quarter, the Ouster team really did a great job. We saw lower inventory, better AR, lower DSOs, you know, a little bit of an increase in our accounts payable, which led to some significant working capital improvements. While I'd love to see those kinds of going forward, sometimes those are one-time in nature, but we do expect that we will continue to drive down our inventory levels over time.
Unknown Executive: And on the cash usage this quarter.
Unknown Executive: The altra team really did a great job, we saw lower inventory better lower.
Unknown Executive: Lower dsos.
Unknown Executive: Little bit of an increase in our accounts payable, which led to some significant working capital improvements.
Unknown Executive: I'd love to see those kind of going forward, sometimes those are onetime in nature, but we do expect that we will continue to drive down our inventory levels over time.
Unknown Executive: And in the second quarter, just as a quick FYI, we will have a $4 million fee or settlement associated with a previous litigation that we had that we took the charge for in the fourth quarter. So there will be a little bit of cash usage from that, but otherwise, you know, like you said, significant improvements in our overall cash flow from operations over the last year.
Unknown Executive: In the second quarter, just as a quick FYI, we will have a $4 million fee or settlements associated with a previous litigation that we had that we that we have taken the charge for the in the fourth quarter. So there will be a little bit of cash uses from that but otherwise like you said significant improvements in our overall cash flow from operations over the.
Unknown Executive: Last year.
Unknown Executive: Terrific, very helpful. If I could sneak one last one in, I think the incremental margin on gross margin sequentially this quarter was something like 57%. Is that kind of level sustainable here going forward as we think about continued revenue growth from here?
Speaker Change: Terrific very helpful. If I could sneak one last one and I think the duck the incremental margin on gross margins sequentially. This quarter was something like 57%.
Unknown Executive: Is that kind of level sustainable here going forward as we think about your continued revenue growth from here.
Unknown Executive: So, on a non-GAAP basis, our gross margins this quarter were 36%. We were, you know, very happy with that performance. You know, if we look at where we were a year ago, 11 percentage points higher than where we were a year ago. In terms of kind of incremental gross margins, you know, this quarter, we did see some benefits in terms of some lower costs in operating expenses, and our cost of goods sold.
Unknown Executive: So on a non-GAAP basis, our gross margin this quarter was 36%.
Unknown Executive: We're very happy by the performance if we look at where we were a year ago, and 11 percentage points higher than where we were a year ago.
Unknown Executive: In terms of kind of incremental gross margins. This quarter, we did see some benefits in terms of some some lower.
Unknown Executive: So lower costs in the operating expenses our cost of goods sold we also saw some improvements in other areas, but in terms of our incremental margin. While we've never disclosed that we do have an incremental margin that obviously is higher than our 35% to 40% level and thats and by continuing to increase our revenue levels, that's what's going to get us to that 35% to 40% GAAP gross margin less.
Unknown Executive: We also saw some improvements in other areas. But, you know, in terms of our incremental margin, while we've never disclosed it, we do have an incremental margin that is obviously higher than our 35 to 40% level. And by continuing to increase our revenue levels, that's what's going to get us to that 35 to 40% GAAP gross margin level that we're targeting as part of our financial framework.
Unknown Executive: Those that were targeting as part of our financial framework.
Unknown Executive: Terrific, that's very helpful. Thank you.
Speaker Change: Terrific Thats very helpful. Thank you.
Operator: And a reminder, everyone, star one for questions. Next up is Andres Sheppard, Cantor, and Fitzgerald.
Unknown Executive: And a reminder, everyone star one for your question next step is Andres Sheppard Cantor Fitzgerald.
Speaker Change: Hi, guys. This is a non Don here for Andres Congrats on the quarter and thanks for taking our question.
Unknown Executive: Hi guys, this is Anandan here for Andres. Congratulations on the quarter and thanks for taking our questions.
Anandan: I know you're focused primarily on the non automotive.
Anandan: Automotive markets, but with Tesla moving to further implemented FSD software anymore vehicles, and potentially launching a robo taxi in the future do you think this could potentially be an opportunity for <unk> is still likely have to adopt a lidar or do you see potential similar opportunities in the automotive space.
Unknown Executive: Well.
Charles Angus Pacala: I know you're focused primarily on the non-automotive market, but with Tesla moving to further implement its FSD software into more vehicles and potentially launching a robotaxi in the future, do you think this could potentially be an opportunity for Ouster since they'll likely have to adopt LiDAR? Or do you see potential similar opportunities in the automotive space?
Anandan: Automotive continues to be a major vertical for us in the robo taxi Robo trucking shuttle bus industry and we have major customers that had been buying our sensors for years in those industries.
Charles Angus Pacala: Well, automotive continues to be a major vertical for us in the robo-taxi, robo-trucking, shuttle, and bus industries, and we have major customers that have been buying our sensors for years in those industries. Many of those customers naturally will transition between different products that Ouster has over time, specifically things like the DF sensors. As we bring those to market, I do see a natural transition to different product lines. For us, I think, you know, I can't comment specifically on Tesla as being an opportunity or whatever for Ouster specifically, but I think that the AI advancements that are being made that companies like Tesla are taking advantage of very much apply to all sensor modalities, LiDAR being one of them, and that is definitely buoying our business.
Charles Angus Pacala: Any of those customers naturally will transition.
Charles Angus Pacala: Different products that Elster has.
Charles Angus Pacala: Overtime, specifically things like deep the DFS sensors as we bring those to market I do see a natural transition.
Charles Angus Pacala: Two different product lines.
Charles Angus Pacala: For us.
Charles Angus Pacala: I think.
Charles Angus Pacala: I can't comment specifically on on the Tesla as being an opportunity or whatever for <unk>, specifically, but I think that the AI advancements that are being made that companies like Tesla are taking advantage of very much apply to all sensor.
Charles Angus Pacala: <unk> lidar being one of them and that is definitely buoyed our business I see that as a really good development again because of the.
Charles Angus Pacala: I see that as a really good development. Again, much of the difficulty with customers ramping quickly into this technology is just the challenge of them integrating the technology, building robust systems, and the advancements in AI that companies like Tesla are evangelizing are actually helping us, not just in the automotive industry but across all of our verticals.
Charles Angus Pacala: Much of the difficulty with customers ramping quickly into this technology is just the challenge of them integrating the technology building robust robust systems and the advancements in AI that companies like Tesla are.
Charles Angus Pacala: Evangelizing I would say are actually helping us not just in automotive, but across all of our verticals.
Charles Angus Pacala: Okay.
Unknown Executive: And to add some numbers to that, as we mentioned in the prepared remarks, automotive, we had a record quarter for us. So we were very, very happy with Ouster's performance in the first quarter.
Charles Angus Pacala: And to add some numbers to that as we mentioned in the prepared remarks automotive we had a record quarter for us. So we were very very happy by asset performance in the first quarter.
Unknown Executive: Gotcha. Thanks. That's very helpful. And if I could just get one quick follow-up. Since software was a big emphasis this quarter, I was wondering if you could go over quickly the business plan related to your software ecosystem and how that's going to impact your margins in the long term and how you're going to bridge to your long-term target with Gemini and Blue City.
Speaker Change: Got you. Thanks, that's very helpful and if I could just get one quick follow up and I was wondering since software was it big emphasis this quarter. If you could go over.
Unknown Executive: The business plan related to your software ecosystem, and how thats going to impact your margins in the long term and how youre going to bridge to your long term target with with Gemini and Blues City.
Charles Angus Pacala: Yeah, so I see, the software that we're providing to customers is now a central kind of strategic pillar and differentiator for Ouster. There are a couple different tiers of software that we provide to customers. The first is the developer tools that we're providing, largely free, to every customer that buys an Ouster sensor. This is the SDK and associated tools.
Unknown Executive: Yes, so I see I mean, the software that we're providing to customers is now a central kind of strategic pillar and differentiator for ouster.
Charles Angus Pacala: There are a couple of different tiers of software that we provide to customers. The first is the developer tools that we're providing.
Charles Angus Pacala: Largely free to every customer that buys announced our sensors the SDK and associated tools, we don't talk a lot about them, but the goal there is to make after sensors the de facto easiest and most convenient and efficient hardware to develop around and I think where we.
Charles Angus Pacala: We don't talk a lot about them, but the goal there is to make Ouster sensors the de facto easiest and most convenient and efficient hardware to develop around. And I think we're, you know, we're well on the path to making that happen. Now, Gemini and Blue City are really the revenue-generating. [inaudible] and traffic control solutions, major markets that traditionally LiDAR has not played in. And the second thing is just to build a completely new revenue model for Ouster and, ultimately, a higher-margin one that's very sticky.
Charles Angus Pacala: We're well on the path to making that the case.
Charles Angus Pacala: Now Gemini and Blues city are really the revenue generating total solutions that we brought to market over a year ago and I'm incredibly happy with that.
Charles Angus Pacala: The goal there is to both expand into a new set of markets that increase the overall opportunity set for <unk> and specifically, we're talking to smart infrastructure market security and cloud analytics and traffic control solutions are major markets that traditionally lighter has not played in.
Charles Angus Pacala: And the second thing is just to build a completely new revenue model for aster and ultimately a higher margin one that's very sticky so in the last year plus we.
Charles Angus Pacala: So in the last year plus, you know, we've not only brought these products to market, but we've commercialized them, built go-to-market plans, and now deployed them at pretty significant scale within customers. And, you know, as I mentioned in my prepared remarks, customer feedback has been incredibly strong for these products, even in their infancy. And I do think that they are still in their infancy. We are a long way from Ouster being a dominant player in any of our smart infrastructure verticals.
Charles Angus Pacala: We not only brought these products to market, but we commercialize them and build go to market plans and now deployed them at pretty significant scale with end customers and I mentioned in the prepared remarks customer feedback has been incredibly strong for these products even in their infancy and I do think that they are still in their infancy.
Charles Angus Pacala: We are a long way from master being a dominant player in any of our smart infrastructure verticals, but I think that given the initial feedback.
Charles Angus Pacala: But I think that given the initial feedback that has been effusive in many cases, we're on a path where that is a distinct possibility. So we're going to continue to make major investments in the software side of Ouster, given the kind of unique position we have in the market to bring both hardware and software to these players.
Charles Angus Pacala: That has been effusive in many cases that we're on a path where that is a distinct possibility. So we're going to continue to make major investments into the software side of ouster given the kind of unique position we have in the market to bring both hardware and software to these players.
Unknown Executive: And going back to the second part of your question on the margin side, the 35 to 40% goal that we, or the framework that we have put together in terms of margins, you know, that's based on, you know, a significant amount of hardware revenue. We do expect our software revenue to increase. We do expect that our margins from software will be higher in the long term. So, you know, we're looking forward to being able to discuss that a little bit more thoroughly, probably in the, probably sometime early next year.
Charles Angus Pacala: And going back to the second part of your question on the margin side, the 35% to 40% goal that we are a framework that we have put together in terms of margins.
Unknown Executive: Just on a significant amount of <unk>.
Unknown Executive: Hardware revenue, we do expect our software revenue to increase we do expect that our margins from software will be higher on the long term. So we're looking forward to being able to discuss that a little bit more thoroughly probably in the probably sometime early next year.
Speaker Change: Wonderful that's very helpful. Thanks, I'll pass it on.
Unknown Executive: Wonderful. That's very helpful. Thanks. I'll pass it on.
Unknown Executive: Okay.
Operator: Your next question comes from Kevin Garrigan of West Park Capital.
Unknown Executive: Your next question comes from Kevin Garrigan West Park capital.
Operator: Okay.
Unknown Executive: Yeah, hey, good afternoon, Angus and Mark. And thanks for taking my questions. And let me echo my congratulations on the progress. Kind of going off the previous question, can you give us a sense of how quickly you're expecting to continue or to, you know, offer new software solutions? And, you know, any customers that only buy the sensor and kind of don't go for the software? Is there anything you guys can kind of do to change their minds? Or how do those conversations kind of go? Yeah,
Kevin Garrigan: Yeah, Hey, good afternoon, I guess, mark and thanks for taking my questions and let me Echo my congrats on the.
Unknown Executive: Progress kind of going off the previous question can you give us a sense of how quickly you are expecting to continue to offer new software solutions and.
Unknown Executive: Any customers that only buy the sensor and kind of not go for the software is there anything you guys can kind of do to change their mind or how do those conversations kind of go.
Charles Angus Pacala: Yeah, no, that's a great question. The first part of it is just simple. We absolutely expect to be more nimble with the software and be able to provide more rapid kinds of updates, product updates, and release updates with that software. It's just the nature of the medium.
Speaker Change: Yes, no that's a great question.
Charles Angus Pacala: The first the first part of it is just its simple we absolutely expect to be more nimble.
Charles Angus Pacala: With the software and being able to provide more rapid kind of updates product updates and release updates with that software.
Charles Angus Pacala: It's the nature of of the medium.
Charles Angus Pacala: And then.
Charles Angus Pacala: And then on the second part of the question, I am. I do see that, ultimately, we can expand the software footprint into many different industries. You have to understand that every single one of our customers needs a pretty complex piece of software in order to make, you know, take advantage of the latter hardware that they're buying from us. And we're building credibility in each one of our verticals by providing this incredibly sophisticated hardware, but also a long-term relationship to each one of our major customers that builds confidence in Ouster, not only as a hardware provider, but as a support provider, as a systems provider, and ultimately as a combined software and hardware provider.
Charles Angus Pacala: On the on the second part of the question.
Charles Angus Pacala: Hi.
Charles Angus Pacala: I do see that ultimately we can expand the software footprint into many different industries you have to understand that every single one of our customers' needs a pretty complex piece of software.
Charles Angus Pacala: In order to make to take advantage of the lighter hardware that they're buying from us and we're building credibility in each one of our verticals by providing.
Charles Angus Pacala: This incredibly sophisticated hardware, but also a long term relationship.
Charles Angus Pacala: Each one of our major customers that that builds confidence in <unk> not only as a <unk>.
Charles Angus Pacala: So I do think there's opportunities for us to move into adjacent verticals, move into the industrial, automotive, and robotics verticals, potentially with software solutions as we're doing in smart infrastructure. That's kind of the, the end state for Ouster, I think, is more of an autonomy systems provider than just a, you know, an isolated hardware and isolated software provider. But, like I said, it's still early days, and we're going to stay committed to the smart infrastructure portion of our software business for the time being.
Charles Angus Pacala: Hardware provider, but as a support provider as a as a system to provider and ultimately as a combined software hardware provider. So I do think there is opportunities for us to move into adjacent verticals move in the industrial automotive and robotics verticals potentially with software solutions as we are doing and smart infrastructure.
Charles Angus Pacala: That's kind of that's the and one of the states for <unk> I think is more of autonomy systems provider than just a.
Charles Angus Pacala: And isolated hardware and isolated software provider, but like I said, it's still early days and we're going to stay committed to the <unk> infrastructure portion of our software business for the time being.
Charles Angus Pacala: Okay.
Charles Angus Pacala: Yep, I got it. Got it. Okay, perfect. And then just as a quick follow-up, and I apologize if I missed this, but you know, I'd love to hear feedback customers are giving you on the DS sensors and, you know, from what you're seeing in the automotive industry, you know, our and the people you're talking to our timelines for, you know, starter production for some of these models, are they getting pushed out pretty significantly? I've heard 2028 is some of the new kind of years that people are seeing.
Speaker Change: Yep got it got it okay perfect and then just as a quick follow up and I apologize if I missed this but I'd love to hear feedback customers are giving you on the <unk> sensors and.
Charles Angus Pacala: From what Youre seeing in the automotive industry.
Charles Angus Pacala: And the people youre talking to our timelines kind of four.
Charles Angus Pacala: Start of production for some of these.
Charles Angus Pacala: These models are they getting pushed out pretty significantly I have heard 2028.
Charles Angus Pacala: Some of the new.
Charles Angus Pacala: You kind of years that people are seeing.
Charles Angus Pacala: Yeah, absolutely. And I'm going to sound a little bit like a broken record here because my view of the automotive industry remains the same, and our place within it. We're building DF sensors to meet the market at the end of what is required, which is low-cost, solid-state, modular, flexible, high-performance, and affordable products. And that's what DF is. It's a product that will be in cars for the next multiple decades, not just the next five years.
Speaker Change: Yes, absolutely and I'm going to sound like a little bit like a broken record here because my view of the automotive industry remains the same and and our place within it we are building <unk> sensors to meet the market at the end state of what is required which is low cost solid state modular flexible high performance and affordable.
Charles Angus Pacala: <unk> products and Thats, what <unk>, it's a product that can that will be I expect in cars for the next multiple decades not just in the next five years. So.
Charles Angus Pacala: And yeah, unfortunately, one of the things that we've seen timelines push out. They rarely pull in in the automotive industry and in the kind of adjacent robo-taxi industry. So that's definitely a dynamic that gives me confidence that we should be taking our time with DF and making sure we're building exactly the right thing, which I think we are, and meet the market on our timeline because it's better to be correct than to be first in a market like this.
Charles Angus Pacala: And yes. Unfortunately, one of the one of the things that we've seen.
Charles Angus Pacala: As timelines push out they rarely pull in in the automotive industry, and then that kind of the adjacent robo taxi industry. So thats definitely a dynamic that gives me confidence that we should be taking our time with DF and making sure. We're building exactly the right thing, which I think we are in and meet the market.
Charles Angus Pacala: On our timeline, because it's better to be correct then to be first into a market like this.
Unknown Executive: Yeah, no, absolutely. That makes a ton of sense. Okay, perfect. Thanks, guys.
Speaker Change: Yes, no absolutely that makes a ton of sense, okay perfect. Thanks, guys.
Speaker Change: Thank you.
Charles Angus Pacala: And at this time, there are no further questions. I'll hand things back to Angus Pacala for any additional or closing remarks.
Unknown Executive: And at this time there are no further questions I'll hand things back to Andy just to call out for any additional or closing remarks.
Charles Angus Pacala: Well, thank you all for joining the call. Ultimately, Ouster's success is the result of our team's belief in the differentiated strategy that we've set out and the effort that the Ouster team has put in day in and day out. So I do want to thank the Ouster team for another great quarter. 2024 is off to a really positive start, and at this point, we're advancing on our path to profitability, and I'm confident that the Ouster team's execution is going to continue to set Ouster apart from the rest of the industry. So thanks again, and have a good evening, everyone.
Charles Angus Pacala: Well. Thank you all for joining the call ultimately ouster of success is the result of our team's belief in the differentiated strategy that we've set out and the effort that the altra team has put in day in and day out. So I do want to thank the <unk> team for another great quarter 2024 is off to a really pause.
Charles Angus Pacala: <unk> start and.
Charles Angus Pacala: And at this point, we are advancing on our path to profitability and I am confident that the ouster team's execution is going to continue to set <unk> apart from the rest of the industry.
Charles Angus Pacala: So thanks, again and have a good evening everyone.
Speaker Change: Once again, everyone that does conclude today's conference we would like to thank you all for your participation you may now disconnect.
Operator: Once again, everyone, that does conclude today's conference. We would like to thank you all for your participation. You may now disconnect.
Speaker Change: Please wait the conference will begin shortly.
Operator: Please wait; the conference will begin shortly.
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