Q4 2024 Ouster Inc Earnings Call

Operator: Hello and welcome to Ouster's 4th Quarter 2024 Earnings Conference Call. All lines have been placed on mute to prevent any background noise.

Hello, and welcome to Ousters for fourth quarter 2024 earnings Conference call. All lines have been placed on mute to prevent any background noise. After today's presentation and remarks, there will be an opportunity to ask questions. If you would like to ask a question. During this time simply press star followed by the number one on your <unk>.

Operator: After today's presentation and remarks, there will be an opportunity to ask questions. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again.

Telephone keypad if.

If you would like to withdraw your question Press Star one again.

Operator: 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.

Speaker Change: 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 Jim The New key Investor Relations. Please go ahead.

Jim Finucchi: I'd now like to turn the conference over to Jim Finucchi, Investor Relations. Please go ahead. Good afternoon, everyone.

Speaker Change: Good afternoon, everyone. Thank you for joining us for our fourth quarter 2024 earnings call I'm joined today by <unk>, Chief Executive Officer, Angus Mccullough and interim Chief Financial Officer, Ken gotten before we begin the prepared remarks, we would like to remind you that earlier today <unk> issued a press release announcing its <unk>.

Jim Finucchi: Thank you for joining us for our fourth quarter 2024 earnings call.

Jim Finucchi: I am joined today by Ouster's Chief Executive Officer, Angus Pacala, and Interim Chief Financial Officer, Chen Geng. Before we begin the prepared remarks, we would like to remind you that earlier today, Ouster issued a press release announcing its fourth quarter 2024 results. An investor presentation was published and is available on the investor relations section of Ouster's website.

Speaker Change: Fourth quarter 2024 results and Investor presentation was published and is available on the Investor Relations section of <unk> website.

Jim Finucchi: Today's earnings call and press release reflect management's views as of today only and will include statements related to our competitive position, anticipated industry trends, our business and strategic priorities, our financial outlook, and our revenue guidance for the first quarter of 2025, all of which constitute forward-looking statements under the federal securities laws. 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. 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, both of which can be found on our Investor Relations website.

Today's earnings call and press release reflect management's views as of today only and will include statements related to our competitive position to anticipated industry trends, our business and strategic priorities, our financial outlook at our revenue guidance for the first quarter of 2025, all of which constitute forward looking.

Speaker Change: <unk> under the federal Securities laws.

Speaker Change: 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.

Speaker Change: 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, both of which can be found on our Investor Relations website.

Jim Finucchi: 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. Information discussed in 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's estimates. These estimates are derived from publicly available information released by independent industry analysts and other third-party sources, as well as data from Ouster's internal resources.

Speaker Change: 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.

Speaker Change: 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's estimates.

Speaker Change: These estimates are derived from publicly available information released by independent industry analysts and other third party sources as well as data from <unk> internal research.

Jim Finucchi: These estimates are based on reasonable assumptions and computations made upon reviewing such data and Ouster's experience in and knowledge of such industry and markets. By definition, assumptions are subject to uncertainty and risk, which could cause results to differ materially from those expressed in the estimates.

Speaker Change: These estimates are based on reasonable assumptions and computations made upon reviewing such data at <unk> experienced in and knowledge of such industry end markets by definition assumptions are subject to uncertainty and risks, which could cause results to differ materially from those expressed in the estimates.

Jim Finucchi: 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.

Speaker Change: 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.

Speaker Change: Today's press release.

Angus Pacala: I would now like to turn the call over to Angus. Hello, everyone, and thank you for joining us today. I'll start with a brief recap of the quarter and review of our execution against our 2024 strategic priorities.

Angus Mccullough: I'd now like to turn the call over to Angus.

Angus Mccullough: Hello, everyone and thank you for joining us today.

Angus Mccullough: I'll start with a brief recap of the quarter and review of our execution against our 2024 strategic priorities.

Angus Pacala: Chen Geng, our interim CFO, will cover our financial results in more detail before I close with our 2025 objectives and some final thoughts. The fourth quarter capped off a year of consistent execution, record financial results, and delivering increased value for our customers. For the quarter, we generated $30 million in revenue and gross margins of 44%. Reinforcing our position as a leader in the LIDAR This is the 8th straight quarter. We have met or exceeded our guidelines. We continue to have one of the strongest balance sheets in the industry, ending the year with $175 million of cash and equivalents with zero debt.

Speaker Change: John <unk>, our interim CFO will cover our financial results in more detail before I close with our 2025 objectives and some final thoughts.

Speaker Change: The fourth quarter capped off a year of consistent execution record financial results and delivering increased value for our customers.

Speaker Change: For the quarter, we generated $30 million in revenue and gross margins of 44% <unk>.

Speaker Change: Reinforcing our position as a leader in the Lidar industry.

Speaker Change: This is the eighth straight quarter, we have met or exceeded our guidance.

Speaker Change: We continue to have one of the strongest balance sheets in the industry ended the year with $175 million of cash and equivalents with zero debt.

Angus Pacala: We also won a $2 million contract to deploy our Blue City traffic management solution in Chattanooga, Tennessee, to improve roadway safety and reduce congestion. Chattanooga is expanding Blue City to over 120 intersections, covering the downtown area, and will be the largest deployment of LiDAR detection technology for traffic and pedestrian safety in the United States. We have launched Blue City across the United States, from Tennessee to Washington, tapping into the massive opportunity presented by the Intelligent Transportation Systems, or ITS, There are 300,000 signalized intersections in the United States, and we see a similarly-sized opportunity in both Europe and Asia.

Speaker Change: We also won a $2 million contract to deploy our blues city traffic management solution in Chattanooga, Tennessee to improve roadway safety and reduce congestion.

Speaker Change: Chattanooga is expanding boosted to over 120 intersections covering the downtown area and will be the largest deployment of lidar detection technology for traffic and pedestrian safety in the United States.

Speaker Change: We have launched blues city across the United States from Tennessee to Washington, tapping into the massive opportunity presented by the intelligent transportation systems or Ips market.

Speaker Change: There are 300000 signalized intersections in the United States, and we see a similarly sized opportunity in both Europe and Asia with each intersection supporting tumor more lidar sensors. We estimate this market can drive demand for over 1 million units.

Angus Pacala: With each intersection supporting two or more LiDAR sensors, we estimate this market can drive demand for over 1 million units. Ouster is also working closely with several of the world's largest heavy equipment manufacturers, such as John Deere, to support their automation efforts in agriculture and construction. These companies manufacture millions of machines every year and their customers face a significant challenge to fill positions that are often strenuous and dangerous. The automation technology powered by our LiDAR solutions helps make the global supply chain safer, their operations more efficient, and alleviate chronic labor constraints. These highlights wrapped a year in which our OS sensor volumes increased by over 50%, our software-attached bookings grew by over 60%, and we deployed sensors at iconic events like the Paris Olympics.

Speaker Change: <unk> is also working closely with several of the world's largest heavy equipment manufacturers such as John Deere can support their automation efforts in agriculture and construction.

Speaker Change: These companies manufacture millions of machines every year and our customers face a significant challenge to fill positions that are often strenuous and dangerous.

Speaker Change: The automation technology powered by a lighter solutions helps make the global supply chain safer their operations more efficient and alleviate chronic labor constraints.

Speaker Change: These highlights wrap the year in which our OS sensor volumes increased by over 50% our software attach bookings grew by over 60% and we deployed sensors at iconic events like the Paris Olympics we.

Angus Pacala: We also reached major milestones in our next generation custom silicon chips and developed new software tools to accelerate ladder adoption.

Speaker Change: We also reached major milestones in our next generation custom silicon chips and developed new software tools to accelerate later adoption.

Angus Pacala: We also successfully executed against each of our 2024 business priorities, which were, one, expand software solutions and grow the installed base, two, advance the development of digital LiDAR hardware, and three, progress on our long-term financial framework. Starting with software, we saw impressive growth in our software attached bookings in 2024, which increased by over 60% versus 2023 and exceeded the double digit percentage of our total bookings in each quarter of 2024. We define software-attached bookings as a sale of either our Ouster Gemini Perception Platform or our Blue City Traffic Management Solution, along with sensors and associated accessories and services.

Speaker Change: We also successfully executed against each of our 2024 business priorities, which were one expand software solutions and grow the installed base to advance the development of digital light our hardware and three progress on our long term financial framework.

Speaker Change: Starting with software we saw impressive growth in our software attach bookings in 2024, which increased by over 60% versus 2023 and exceeded a double digit percentage of our total bookings in each quarter of 2024.

Speaker Change: We defined software attach bookings as a sale of either our ouster Gemini perception platform or a blues city traffic management solution, along with sensors and associated accessories and services or software solutions. Currently served the smart infrastructure vertical, which we see as a $19 billion market opportunity.

Angus Pacala: Our software solutions currently serve the smart infrastructure vertical, which we see as a $19 billion market opportunity spread across ITS, security, logistics, and crowd analytics. Our 2024 bookings for Ouster Gemini and Blue City are expected to expand our cumulative deployments to more than 700 sites. Blue City successfully passed the requirements of NEMA TS2 and we integrated Ouster Gemini and Genetech security. We also expanded our distribution network, bringing on traffic technology partners covering nearly 20 states across the country to sell Blue City to states and local governments, which should fast track the adoption of our intelligent traffic control solution.

The spread across Ics security logistics and crowd analytics.

Speaker Change: Our 2020 for bookings for Astro Gemini and Blue City are expected to expand our cumulative deployments to more than 700 sites.

Speaker Change: Blue City successfully passed the requirements of <unk> and we integrated after Gemini and Genentech Security Center.

Speaker Change: We also expanded our distribution network, bringing on traffic technology partners covering nearly 20 states across the country to sell Blue city to states and local governments, which had fast track the adoption of our intelligent traffic control solution.

Angus Pacala: I'm also excited to announce that shortly after the end of the fourth quarter, a leading global technology company renewed its Ouster Gemini annual license for over one million dollars per year. This amazing milestone represents our largest software deal ever and we have just scratched the surface of this potential opportunity as we increase our penetration with new and existing customers across the globe.

Speaker Change: I'm also excited to announce that shortly after the end of the fourth quarter, a leading global technology company renewed its aster Gemini annual license for over $1 million per year.

Speaker Change: This amazing milestone represents our largest software deal ever and we've just scratched the surface of this potential opportunity as we increase our penetration with new and existing customers across the globe.

Angus Pacala: Moving to LiDAR development. In 2024, we made significant advancements on our digital LiDAR roadmap. On the firmware side, we introduced firmware 3.1 with zero minimum range, along with improvements to accuracy and better obscurant penetration. We also spent much of the year developing Firmware 3.2, which we announced earlier this week and brings a powerful new set of features to our company. We are also accelerating LiDAR adoption with two developer tools, Ouster SDK and Ouster Studio. Over the past 12 months, we have released four new versions of our SDK that include real-time localization, multi-sensor support, and up to 4x faster data visualization.

Speaker Change: Moving to light our development.

Speaker Change: In 2024, we made significant advancements on our digital Lidar roadmap.

Speaker Change: On the firmware side, we introduced firmware three dot one with zero minimum range, along with improvements to accuracy and better Obscurant penetration.

Speaker Change: We also spent much of the year developing firmware three dot two which we announced earlier this week and brings a powerful new set of features to our customers.

Speaker Change: We are also accelerating lighter adoption with to developer tools after SDK announced their studio.

Speaker Change: For the past 12 months, we have released four new versions of our SDK that include real time localization multicenter support and up to Forex faster data visualization.

Angus Pacala: We also added new features to Ouster Studio, our LiDAR visualization tool. The new Ouster Studio web offers customers 250 gigabytes of free LiDAR data storage, making it easy to store, access, organize, and collaborate across an organization. No other LiDAR company provides such a robust software development ecosystem. Since launching in late 2022, REV7 quickly became our best-selling sensor as customers recognized its superior performance and enhanced reliability. Throughout 2024, we worked to upgrade select components in Rev 7 to improve reliability and thermal performance even further. We also taped out both our next generation L4 and Kronos custom silicon.

Speaker Change: We also added new features to our studio our Lidar visualization tool the new Astra studio Web offers customers 250 gigabytes of free Lidar data storage, making it easy to store access organize and collaborate across an organization no. Other led our company provides such a robust software development ecosystem.

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Speaker Change: Since launching in late 2022, seven quickly became our best selling sensor as customers recognize its superior performance and enhanced reliability.

Speaker Change: Throughout 2024, we worked to upgrade select components and breath seven to improve reliability and thermal performance. Even further we also taped out both our next generation <unk> and Kronos custom silicon.

Angus Pacala: Our L4 sensor prototypes are generating rich point clouds and have moved into validation testing. Our Kronos chip is back from the fab and is undergoing bring up. Finally, we delivered results in line with our long-term framework. We achieved revenue of $111 million, up 33% year-over-year, and aligned with our 30% to 50% growth target. Our full year margin of 36% sits squarely within our target range of 35 to 40%. Operating expenses reflect our continued focus on maintaining our cost structure, and our average quarterly OPEX in 2024 was 7% below third quarter 2023 levels.

Speaker Change: Our <unk> sensor prototypes are generating rich point clouds and have moved into validation testing our Kronos chip is back from the fab and is undergoing bring up.

Speaker Change: Finally, we delivered results in line with our long term framework, we achieved revenue of $111 million up 33% year over year and aligned with our 30% to 50% growth target.

Speaker Change: Our full year margin of 36% sits squarely within our target range of 35% to 40%.

Speaker Change: Operating expenses reflect our continued focus on maintaining our cost structure and our average quarterly opex in 2024 was 7% below third quarter 2023 levels.

Angus Pacala: In summary, I'm pleased with our accomplishments in 2024. In 2025, Ouster, like other businesses, will be navigating the volatility and uncertainty in the current climate. We are encouraged by the opportunities to empower global industries with high performance, reliable, and accessible 3D sensing solutions.

Speaker Change: In summary, I'm pleased with our accomplishments in 2024.

Speaker Change: In 2025 after like other businesses will be navigating the volatility and uncertainty in the current climate. We are encouraged by the opportunities to empower global industries with high performance reliable and accessible <unk> solutions.

Chen Geng: I'll now turn the call over to Chen, who will provide more context on our fourth quarter financial results. Thank you, Angus, and good afternoon, everyone. In the fourth quarter, we shipped approximately 4,800 sensors and recognized $30 million in revenue. This represents our eighth straight quarter of revenue growth. We saw strong sequential unit growth of 23% as we saw large volume purchases from automotive and robotics customers. These two verticals were also the largest contributors to fourth quarter revenues, with industrial closely behind. We are helping these customers solve challenges in a range of applications such as RoboTaxi, last mile delivery, mapping, and construction.

Chen: I'll now turn the call over to Chen who will provide more context on our fourth quarter financial results.

Chen: Thank you Angus and good afternoon, everyone.

Chen: In the fourth quarter, we shipped approximately 4800 centers and recognized $30 million in revenue.

Chen: This represents our eighth straight quarter of revenue growth.

Chen: We saw strong sequential unit growth of 23% as we saw large volume purchases from automotive and robotics customers.

Chen: These two verticals were also the largest contributor to fourth quarter revenues with industrial closely behind.

Chen: We are helping these customers solve challenges in a range of applications such as railroad taxi last mile delivery mapping and construction.

Chen Geng: This is a testament to the diversity of our business. Fourth quarter growth margin improved to 44% on both a GAAP and non-GAAP basis. Gross margin strength reflected record sensor volumes, along with lower costs related to legacy inventory. Absent this benefit, underlying growth margin performance was within our long-term framework target of 35 to 40 percent. This range remains an appropriate annual gross margin target for the business. And there may be quarterly variability in our margins due to customer shipment schedules, product mix, and other factors. Gas operating expenses of $39 million in the fourth quarter were down 9% over the prior year and up 1% sequentially.

Chen: This is a testament to the diversity of our business.

Chen: Fourth quarter gross margin improved to 44% on both a GAAP and non-GAAP basis.

Chen: Gross margin strength reflected record sensor volumes, along with lower costs related to legacy inventory.

Chen: Absent this benefit underlying gross margin performance was within our long term framework target of 35% to 40%.

Chen: This range remains an appropriate annual gross margin target for the business and there may be quarterly variability in our margins due to customer shipment schedules product mix and other factors.

Chen: GAAP operating expenses of $39 million in the fourth quarter were down 9% over the prior year and up 1% sequentially.

Chen Geng: The sequential increase was primarily driven by higher litigation expenses of $6 million, offset by lower stock-based compensation. We expect operating expenses to fluctuate on a quarterly basis, largely due to the timing of R&D project spending and litigation costs.

Chen: The sequential increase was primarily driven by higher litigation expenses of $6 million offset by lower stock based compensation.

Chen: We expect operating expenses to fluctuate on a quarterly basis, largely due to the timing of R&D project spending and litigation costs.

Chen Geng: Turning to full year results. For 2024, we shipped over 17,000 sensors and reported revenues of $111 million, an increase of 33% year over year. Bookings were $115 million and represented a book-to-bill ratio over 1.

Chen: Turning to full year results.

Chen: For 2024, we shipped over 17000 sensors and reported revenues of $111 million, an increase of 33% year over year.

Chen: Bookings were $115 million and represented a book to bill ratio over one.

Chen Geng: We are encouraged to see more customers moving into production, but this can come with a quarterly order cadence rather than large orders that cover a full year outlook. Overall, we are maintaining our long-term framework of 30 to 50% annual revenue growth. Gap gross margin was 36%, up 2600 basis points year over year.

Chen: We are encouraged to see more customers moving into production, but this can come with a quarterly order cadence rather than large orders that cover our full year outlook.

Chen: Overall, we are maintaining our long term framework of 30% to 50% annual revenue growth.

Chen: GAAP gross margin was 36% up 2600 basis points year over year.

Chen Geng: GAAP operating expenses were $145 million, down from $382 million in 2023 which included goodwill impairment charges of $167 million. Our balance sheet remains among the strongest in the industry with cash, cash equivalents, restricted cash, and short-term investments of $175 million at December 31st.

Chen: GAAP operating expenses were $145 million down from $382 million in 2023, which included goodwill impairment charges of $167 million.

Chen: Our balance sheet remains among the strongest in the industry with cash cash equivalents.

Chen: <unk> cash and short term investments of $175 million at December 31.

Chen Geng: During the fourth quarter, we received approximately 24 million of net proceeds from our ATMs. Our differentiated financial position reflects our prudent decision to proactively manage our balance sheet.

Chen: During the fourth quarter, we received approximately $24 million of net proceeds from our ATM.

Chen: Our differentiated financial position reflects our prudent decision to proactively manage our balance sheet.

Chen Geng: Finally, a quick note on the rapidly evolving tariff environment. While there remains significant uncertainty over the path of terrorism, Our supply chain is largely positioned outside of the countries currently impacted by the recently enacted tariffs, and we do not expect a material impact to our business at this time.

Chen: Finally, a quick note on the rapidly evolving tariff environment.

Chen: While there remains significant uncertainty over the path of tariff.

Chen: Our supply chain is largely positioned outside of the country is currently impacted by the recently enacted tariffs and we do not expect a material impact to our business at this time.

Chen Geng: Moving to guidance. For the first quarter, we expect to achieve revenue between $30 and $32 million.

Chen: Moving to guidance.

Chen: For the first quarter, we expect to achieve revenue between 30 and $32 million.

Angus Pacala: I'll now turn the call back over to Angus to share our 2025 goals and closing remarks. Thanks, Jen. I'm excited to share our three strategic priorities for 2025, which will be the most transformational year in Ouster's history. First, we are laser-focused on scaling our software-attached business. Second, we plan to transform our product portfolio. And third, we will continue to execute towards profitability.

Angus Mccullough: I'll now turn the call back over to Angus to share our 2025 goals and closing remarks.

Angus Mccullough: Thanks Jen.

Angus Mccullough: I am excited to share our three strategic priorities for 2025, which will be the most transformational year in <unk> history.

Angus Mccullough: First we are laser focused on scaling our software attach business.

Angus Mccullough: We plan to transform our product portfolio and third we will continue to execute towards profitability.

Angus Pacala: Starting with our software-attached business. In 2025, we are focused on capturing more of the $19 billion smart infrastructure market opportunity and have a dedicated sales effort for this vertical. For After Gemini, we're working directly with some of the world's leading global corporations, as well as a network of strategic partners and integrators to increase our penetration in security and logistics applications. We are expanding the use case of our BlueCity solution from intersections and crosswalks to applications like tolling and highway traffic management. We are also working to secure partnerships for Blue City to increase our presence to the entirety of North America, which would nearly triple our current.

Angus Mccullough: Starting with our software attach business in 2025, we are focused on capturing more of the $19 billion smart infrastructure market opportunity and have a dedicated sales effort for this vertical.

Angus Mccullough: After Gemini, we're working directly with some of the world's leading global corporations as well as the network of strategic partners and integrators to increase our penetration in security and logistics applications.

Angus Mccullough: We are expanding the use case of our blues city solution from intersections and crosswalk to applications like tolling and highway traffic management we.

Angus Mccullough: We are also working to secure partnerships for Blue city to increase our presence to the entirety of North America.

Angus Mccullough: Which would nearly triple our current footprint.

Angus Pacala: We see promise in our EMEA and APAC markets as well, and we'll be implementing a similar sales strategy this year to expand our international software-attached business. After strong growth in our software-attached bookings in 2024, I expect further tailwinds in 2025 as our smart infrastructure customers embrace LiDAR's enhanced performance. I continue to expect margins from our software-attached business to be accretive to our hardware-only sales.

Angus Mccullough: We see promise in our EMEA and APAC markets as well and we'll be implementing a similar sales strategy. This year to expand our international software attached business.

Angus Mccullough: After strong growth in our software attach bookings in 2024, I expect further tailwind in 2025 as our smart infrastructure customers embraced lighters enhanced performance I continue to expect margins from our software attach business to be accretive to our hardware only sales.

Angus Pacala: Turning to our new product roadmap. Our work in 2024 has set the stage for the biggest year of innovation in Ouster's history. In 2025, we will transform the entire Ouster product portfolio, including all new hardware, powerful new capabilities embedded in firmware, new features in the Ouster SDK, and increased software functionality in Ouster Gemini and Blue City.

Angus Mccullough: Turning to our new product roadmap.

Angus Mccullough: Our work in 2024 has set the stage for the biggest year of innovation in <unk> history.

Angus Mccullough: In 2025, we will transform the entire ouster product portfolio, including all new hardware powerful new capabilities embedded in firmware new features in the ouster SDK and increased software functionality and Alastair Gemini and Blues City.

Angus Pacala: This week alone, we announced two product enhancements that expand our addressable market and make the development and usability of Ouster sensors and solutions easier than ever before. We introduced 3D zone monitoring, a major milestone on Ouster's industrial safety certification roadmap. For the first time, Ouster is embedding 3D zone monitoring directly into its sensors lineup. This new firmware feature allows our customers to detect objects within customized 3D zones and trigger real-time alerts or actions without the need for additional software development. This feature is the result of significant demand from our material handling customers and will immediately expand our reach in the existing billion-dollar industrial market for legacy 2D LiDAR, where 2D zone monitoring has near universal adoption.

Angus Mccullough: This week alone, we announced two product enhancements that expand our addressable market and make the development and usability of elster sensors and solutions easier than ever before.

Angus Mccullough: We introduced three D zone monitoring a major milestone on <unk> industrial safety certification roadmap for.

Angus Mccullough: For the first time after is embedding <unk> zone monitoring directly into its sensors lineup.

Angus Mccullough: This new firmware feature allows our customers to detect objects within customized <unk> zones.

Angus Mccullough: Trigger real time alerts or actions without the need for additional software development.

Angus Mccullough: This feature is the result of significant demand from our material handling customers and we will immediately expand our reach in the existing billion dollar industrial market for legacy TD, Lidar, where <unk> zone monitoring has near Universal adoption.

Angus Pacala: With 3D zone monitoring, we are enabling the next generation of industrial robotics.

Angus Mccullough: With <unk> zone monitoring we are enabling the next generation of industrial robotics.

Angus Pacala: Second, we introduced a cloud-based portal for Ouster Gemini, enabling users to seamlessly and securely configure, manage, and view all of their LiDAR deployments through a single unified interface. Additionally, customers can host data and review events and analytics directly in the portal. Gemini Portal represents a paradigm shift in the usability and convenience of our software and has the potential to add new software revenue streams over time.

Angus Mccullough: Second we introduced a cloud based portal for ouster Gemini, enabling users to seamlessly and securely configure manage and view all of their lidar deployments through a single unified interface.

Angus Mccullough: Additionally, customers can host data and review events and analytics directly in the portal.

Angus Mccullough: Gemini portal represents a paradigm shift in the usability and convenience of our software and has the potential to add new software revenue streams over time.

Angus Pacala: Finally, our next generation L4 and Kronos powered sensors will mark a step change in our product portfolio, significantly improving the performance, reliability, and security of the Ouster product family. Importantly, we estimate these innovations will more than double our current addressable market, particularly for automotive, industrial, and robotics applications.

Angus Mccullough: Finally, our next generation <unk>, four and Kronos powered sensors low market step change in our product portfolio significantly improving the performance reliability and security of the outdoor product family Importantly, we estimate these innovations will more than double our current addressable market.

Angus Mccullough: <unk> for automotive industrial and robotics applications.

Angus Pacala: Lastly, we will remain focused on progressing towards profitability through a combination of consistent revenue growth, strong gross margins, and stringent control of operating expenses. For 2025, we are maintaining our long-term framework of 30 to 50 percent annual revenue growth, gross margin in the range of 35 to 40 percent, and operating expenses at or below third quarter 2023 levels. Our performance in 2024 is a testament to what sets Ouster apart as a LiDAR company, our people, customers, and technology. The product developments in 2025 will result in the largest increase in our addressable market in our history.

Angus Mccullough: Lastly, we will remain focused on progressing towards profitability through a combination of consistent revenue growth strong gross margins and stringent control of operating expenses.

Angus Mccullough: For 2025, we are maintaining our long term framework of 30% to 50% annual revenue growth.

Angus Mccullough: Most margin in the range of 35% to 40% and operating expenses at or below third quarter 2023 levels.

Angus Mccullough: Our performance in 2024 is a testament to what sets <unk> apart as a lidar company, our people customers and technology.

Angus Mccullough: Product developments in 2025 will result in the largest increase in our addressable market in our history.

Angus Pacala: I'm confident that we are on the right path to reaching our profitability goals and maintaining our status as the largest ladder company in the Western world.

Angus Mccullough: I am confident that we are on the right path to reaching our profitability goals and maintaining our status as the largest ladder company in the western World.

Angus Pacala: I want to thank our employees, partners, and shareholders for their continued support.

Angus Mccullough: Wanted to thank our employees partners and shareholders for their continued support and with that I'd like to open up the call for Q&A.

Operator: And with that, I'd like to open up the call for Q&A. Thank you. As a reminder, press star 1 on your telephone keypad. If you would like to withdraw your question, simply press star 1 again.

Angus Mccullough: Thank you.

Angus Mccullough: Sure.

Speaker Change: Star one on your telephone keypad ask a question if you would like to withdraw your question simply press Star one again.

Speaker Change: Sure you are not on speaker phone and that your phone is not on mute when called upon thank you.

Andres Sheppard: Your first question comes from the line of Andres Sheppard with Cantor Fitzgerald. Hey guys, good afternoon and congratulations on the quarter. Hey, thanks. So, you know, lots of great progress, something that stood out to us in your prepared remarks, you talked about maybe the majority of the sensors in this past quarter being used for use cases like robo-taxis and last mile delivery. I'm wondering if you can maybe elaborate a bit further on that, you know, what are you seeing in those markets, you know, as this, you know, robo-taxi segment becomes more commercializable and is it more for passenger vehicles, commercial vehicles, more delivery robots, just wondering if you can maybe expand on that.

Speaker Change: Your first question comes from the line of Ann James Shepherd with Cantor Fitzgerald. Your line is open.

Speaker Change: Hey, guys good afternoon, and congratulations on the quarter.

Speaker Change: Hey, thanks.

Speaker Change: So lots of great progress something that stood out to us in your prepared remarks, you talked about.

Speaker Change: Maybe the majority of the sensors in this past quarter being used for use cases like robo taxis and last mile delivery I'm wondering if you could maybe elaborate a bit further on that.

Speaker Change: What are you seeing in those markets.

Speaker Change: As <unk> becomes more commercialize a ball and is it more for passenger vehicles commercial vehicles more delivery robots. Just wondering if you could maybe expand on that thank you.

Angus Pacala: Thank you. Yeah, no, that's a great question. And thanks for highlighting. I mean, this is, this is one of those great tailwinds that's propelling our business into the future. You know, we've had, there's been a kind of a trough of disillusionment and robo taxis over the last couple years, but with the resurgence and success of Waymo in San Francisco, and now expanding to LA and elsewhere, and a bunch of other kind of well performing stocks in the robo taxi sphere, there's just proof points that this is going to happen. And it's, you know, it's fueling our customer base, we still have a number of high profile customers in the robo taxi space, like Motional, like May Mobility, Torque Robotics, that, you know, now, we see this as a positive piece of momentum for them, and it's, it's positively affecting Ouster.

Speaker Change: Yes, no thats, a great question and thanks for highlighting.

Speaker Change: This is.

Speaker Change: This is one of those great tailwind, that's propelling our business into the future.

Speaker Change: There's been a kind of a trough of disillusionment robo taxis over the last couple of years, but with the resurgence and success of Weibo.

Speaker Change: In San Francisco, and now expanding to la and elsewhere and a bunch of other kind of well performing stocks in the robo taxi sphere.

Speaker Change: There is proof points that this is going to happen and it's.

Fueling our customer base, we still have a number of high profile customers in the robo taxi space like emotional like May mobility.

Speaker Change: TORC robotics.

Speaker Change: Is that now we see this as a positive piece of momentum for them in it.

Speaker Change: Possibly affecting ouster.

Angus Pacala: And so I'm definitely bullish on the robo taxi opportunities for Ouster in the future.

Speaker Change: And so I'm definitely bullish on the robot taxi opportunities for us during the future.

Angus Pacala: The, on the last mile delivery robotics, I mean, this is more, this is a general trend around physical AI. And I use that term, because that's, you know, that's what Jensen Huang has been labeling this whole movement of, of kind of industrial and medium form factor intelligent machines that are emerging as a, you know, a critical new kind of innovation for, for AI, physical AI. And Ouster, obviously, is powering the eyes of that revolution. And we're, you know, already seeing the benefits of that, with increased kind of mind share and, and commercial opportunities for the customers that we have in that space today.

Speaker Change: On the last mile delivery robotics I mean this is more this is a general trend around physical AI and I use that term because that's.

That's what Jensen Huang has been labeling this whole movement of kind of industrial and medium form factor intelligent machines that are emerging as a critical new kind of innovation.

Speaker Change: For for AI, physical AI and Alastair obviously is powering the eyes of that Revolution, and we're already seeing the benefits of that.

Speaker Change: With increase kind of mind share and and commercial opportunities for the customers that we have in that space today, So very positive tailwind to those aspects of the business. Thanks for the question.

Angus Pacala: So very positive tailwinds to those aspects of the business. Thanks for the question.

Operator: And again, ladies and gentlemen, if you have a question, it is star one.

Speaker Change: Once again, ladies and gentlemen, if you have a question. It is star one on your telephone keypad.

Tim Salvageable: Your next question comes from Tim Salvageable with Northland Capital markets. Your line is open.

Tim Savageau: from Tim Savageau with Northland Capital Markets. Your line is... Hey, good afternoon. I want to go back to something you mentioned about Ouster status as the largest lighthouse supplier in the Western world. And, you know, I wonder, it sort of begs the question to some degree, but I wonder what you are seeing out of your, you know, current and potential China-based suppliers and whether there are any kind of dynamics changing that. And maybe a broader competitive update on what you're seeing in your target markets, especially in smart infrastructure and robotics.

Tim Salvageable: Hey, good afternoon.

Speaker Change: To go back to something you mentioned about master status.

Speaker Change: Largest slide our supplier in the western World.

Speaker Change: And I wonder sort of begs the question to some degree but I wonder.

Speaker Change: What you are seeing.

Speaker Change: On a.

Speaker Change: Current and potential China based suppliers and whether there are any.

Speaker Change: Kind of dynamics changing that.

Speaker Change: And maybe maybe a broader competitive update on what youre seeing in your target markets, especially in smart infrastructure and robotics.

Angus Pacala: Sure, so I may be misinterpreting the question on supply chain, but if you're referring to Ouster's supply chain for, you know, manufacturing your own products, you know, we've taken kind of a strategic view there. We manufacture our product products in Thailand with strong partners, Benchmark Electronics and Fabrinet, and we also still provide, you know, American made LIDAR by American certified LIDARs by that with a production facility in the United States. So, you know, we think we've kind of strategically positioned ourselves and our supply chain to be a strong kind of Western provider of this technology with a secure supply chain.

Speaker Change: Sure.

Speaker Change: No.

It may be misinterpreting the question on supply chain, but if youre, referring to <unk> supply chain for manufacturing your own products, we've taken kind of a strategic view there we manufacture our products products in Thailand with strong partners benchmark electronics and fiber net and we also still provide American made light.

Speaker Change: Our.

Speaker Change: By American certified <unk> debt with a production facility in the United States. So we think we've kind of strategically positioned ourselves and our supply chain to be a strong kind of western provider of this technology with a secure supply chain.

Angus Pacala: And then on the competitive landscape, you know, we. Just stepping back, Ouster has been consistently positioned as the diversified LIDAR company. It's kind of one of our three strategic pillars. Digital LIDAR, diversification, and execution on core business initiatives. And smart infrastructure, I think we're leading the way, we were leading the way just on pure sensor sales and building sensors that were applicable to the $19 billion smart infrastructure market, traffic analytics, traffic control and analytics, security and logistics automation. And now we're leading the way with software attached business. Now there is a difference here because these markets are established markets.

Speaker Change: On the and then on the competitive landscape.

Speaker Change: We.

Speaker Change: But.

Speaker Change: Just stepping back Alistair has been consistently.

Speaker Change: <unk> as the diversified led our company, it's kind of one of our three strategic pillars digital lidar diversification and execution on core business business initiatives.

Speaker Change: And smart infrastructure I think we're leading the way we were leading the way just on pure sensor sales and building centers that were applicable to the $19 billion smart infrastructure market in traffic analytics traffic control and analytics security and logistics automation.

Now we are leading the way with software attached business.

Speaker Change: Now there is a difference here because these markets are established markets. So there are legacy players in legacy technologies.

Angus Pacala: So there are legacy players and legacy technologies, whether it's camera centric technologies for security applications or inductive loop and radar technologies and now traffic camera technologies in the ITS sphere. So there are legacy competitors generating significant revenues in this space and I view that as a good thing because it's a proof point on the clear and concrete potential that Ouster is tapping into versus we're growing with this emerging market for autonomy and AI and our other markets. So there's a big pie to go after and Ouster is bringing a significantly differentiated technology to the smart infrastructure markets.

Speaker Change: Whether its camera camera centric technologies for security obligations or inductive loop and radar technologies and now traffic camera technologies in the in the Ips sphere.

Speaker Change: There are legacy competitors generating significant revenues in this space.

Speaker Change: I view that as a good thing because it's a proof point on the clear and concrete potential that ousters tapping into versus we're growing with this emerging market for autonomy and AI in our other markets. So there's a there's a big there's a big pie to go after and.

Speaker Change: <unk> is bringing a significantly differentiated.

Speaker Change: Technology to these smart infrastructure markets and so that's the key is when we're winning in a city like Chattanooga, It's because we're bringing superior performance superior capability more flexibility to a traffic operator.

Angus Pacala: And so that's the key is when we're winning in a city like Chattanooga, it's because we're bringing superior performance, superior capability, more flexibility to a traffic operator, a DOT of a city and we're meeting the economics, we're competitive on price. And so it's a very compelling sale, whether you're a traffic operator or whether you are a physical security manager at a utility company. So I think we're well positioned there and it's more about how we expand in those markets is first product readiness and second market education and market outreach. And that's why we have these dedicated sales efforts to educate and do outbound commercial activity in the smart infrastructure sphere this year.

Speaker Change: The city and we're meeting the economics, we're competitive on price and so it's a it's a very compelling sale, whether your traffic operator, or whether you are a physical security manager at <unk>.

Speaker Change: At our utility company. So I think we're well positioned there and it's more about.

How we expand in those markets is first product readiness and second market education end market outreach and that's why we have these dedicated sales effort to educate and do outbound.

Speaker Change: Commercial activity in the smart infrastructure sphere this year.

Tim Savageau: Okay, thanks.

Speaker Change: Okay. Thanks.

Tim Savageau: And I may have misspoke there, but I was talking more about your Chinese competitors in the supply chain and whether you're seeing any change in the competitive environment from suppliers that are competing with you based out of China, I guess, versus the supply chain? Yeah, so I think that the, you know, there's obviously you know, public results posted now by Hisai and Robosense is another Chinese company that went public in the past year. And so there's more exposure to public investors for some of the competitive set in China. But the backdrop for Ouster is, you know, those we've been competing with the same set of companies for the last nine years.

Speaker Change: I may have misspoke, there, but I was talking more about your Chinese competitors in the supply chain and whether you are.

Speaker Change: Seeing any change in there.

Speaker Change: <unk>.

Speaker Change: Competitive environment from suppliers that are competing with you based out of China, I guess versus the supply chain.

Speaker Change: Yes, so I think that the there's obviously.

Speaker Change: Public results posted now by Psi and <unk> is another Chinese company that went public in.

Speaker Change: In the past year.

Speaker Change: And so there is more exposure to public investors.

Speaker Change: For some of the competitive set in China, but the backdrop for <unk> as we've.

Speaker Change: <unk> been competing with the same set of companies for the last nine years and so the competitive dynamic really hasnt changed there.

Angus Pacala: And so the competitive dynamic really hasn't changed there. In many ways, actually, Ouster has brought with Rev7, a mature version of the digital LiDAR technology that we built our business on, to market in the last two years, and increased our competitiveness versus our, you know, versus our other competitors. So I feel very good about where we stand in these markets, where we have chosen to play, and where we're able to play geopolitically. We have maintained, and in some cases grown, significant market share over the last couple years. And I don't see a significant shift in the competitive landscape in the foreseeable future.

Speaker Change: In many ways actually Alastair has brought with Rev. Seven a mature version of the digital Lidar technology that we built our business on to market in the last two years and increased our competitiveness versus our versus our other competitors. So I.

Speaker Change: I feel very good about where we stand in these markets, where we have chosen to play and where we are able to play geopolitical.

Speaker Change: We have maintained and in some cases grown significant market share over the last couple of years.

Speaker Change: I don't see a significant shift in the competitive landscape in the foreseeable future.

Tim Savageau: Okay, great.

Speaker Change: Okay, Great and last one for me I think you talked about doubling the Tam. This year I think you were at $70 billion before so expect an incremental 70, I guess, you talked about kind of breaking that down between segments I assume although it might be a big piece of that but any more color there would be great.

Tim Savageau: And last one for me, I think you talked about doubling the TAM this year. I think you were at $70 billion before, so expect an incremental $70 billion, I guess. And you talked about kind of breaking that down between segments. I assume auto might be a big piece of that, but any more color there would be great. Thanks. Yeah, so thanks for that color. So in terms of the breakdown of the TAM, we've been consistent and still have the view that there's roughly an equal split between the four markets that we're going after, auto, industrial, smart infrastructure, and robotics.

Speaker Change: Thanks.

Speaker Change: Yes so.

Speaker Change: Thanks for that color.

Speaker Change: The in terms of the breakdown of the Tam.

Speaker Change: Been consistent and still have the view that there is roughly an equal split between the four markets that we're going after auto industrial smart infrastructure and robotics.

Tim Savageau: And we have seen that play out in our revenue split in the last couple of years.

Speaker Change: And we have seen that play out in our revenue split in.

Speaker Change: In the last couple of years.

Angus Pacala: In terms of TAM expansion, yes, so the products that we have under development, we see doubling the TAM opportunity for us, the biggest expansion in our TAM in the company's history. There's huge potential in continuing to develop digital LIDAR technology and the software solutions that ride on top of that. And I really think we are just scratching the surface with today's set of products that we have in market. We really only have one product line, the OS Sensor products. We've been talking about the DF products for a long time. We've been developing and investing in them for a long time, so that's obviously coming.

Speaker Change: In terms of Tam expansion.

So so.

Speaker Change: The products that we have under development, we see doubling the Tam opportunity for us our biggest expansion in our Tam in the company's history.

Speaker Change: There is there is huge potential.

Speaker Change: In continuing to develop digital Lidar technology, and the software solutions that ride on top of that and I really think we are just scratching the surface with today's set of products that we have in market. We really only have one product line. The OS sensor products, we've been talking about the <unk> products for a long time.

Speaker Change: We've been developing and investing in them for a long time, so that's obviously coming.

Angus Pacala: But there are many other products that we are developing as our resources as a company have expanded over the years. So there's a lot to come here. And yes, we are going to have the biggest expansion in our addressable market in the company's history.

Speaker Change: But there are many other products that we are developing as our resources as a company have expanded over the years. So there's a lot to come here.

Speaker Change: <unk>.

Speaker Change: And yes, we are going to have the biggest expansion in our addressable market in the company's history.

Speaker Change: Okay. Thanks.

Tyler Owen: Your next question comes from Richard Shannon with Craig Hallam. Your line is open. Hi, this is Tyler Owen for Richard Shannon. Thank you for taking my questions. Has your 3D zoning been gaining interest in the smart and for market as well? And have you seen any more engagement with the increase in manufacturing reshoring? Yeah, thanks for the question.

Speaker Change: Your next question comes from Richard Shannon with Craig Hallum. Your line is open.

Tyler: Hi, This is Tyler on for Richard Shannon. Thank you for taking my questions.

Tyler: Has your <unk> zoning been gaining interest in a smart and for Mark as well and have you seen any more engagement with the increase in manufacturing reassuring.

Tyler: Yes.

Speaker Change: Yes, thanks for the question so.

Angus Pacala: So, the 3D zone monitoring, for those listening, we just released that this week. It's a firmware upgrade to all existing Rev7 customers and future Rev7 sales. So, and it enables the sensor for the first time to process on sensor without any external software at all or external compute and determine when there are people or objects in the surroundings around the sensor. It's a very similar feature to what has been shipped on every, basically every 2D industrial LiDAR for the past 30 years. So, it's a requirement to serve that 2D industrial LiDAR with a new 3D LiDAR like we produce.

Tyler: The <unk> zone monitoring.

Tyler: For those listening we just released this.

Tyler: This week, it's a firmware upgrade to all existing rep, seven customers and future Red seven sales so.

Tyler: And it enables the sensor for the first time too.

Tyler: The process.

Tyler: <unk> sensor without any external software at all or external compute and.

Tyler: Determined when there are people or objects in.

Tyler: And in the surroundings around the center. It's a very similar features to what has been shipped on every basically every two D industrial lidar for the past 30 years. So it's.

Tyler: Our requirement to serve that to the industrial lidar with a new three D. Lidar like we produce this has been a longstanding requirement. So really excited and bullish on this in the industrial space, that's where it's targeted we already have a lot of beta customers very happy with the with that functionality.

Angus Pacala: This has been a longstanding requirement. So, really excited and bullish on this in the industrial space. That's where it's targeted. We already have a lot of beta customers very happy with that functionality. And I would say it remains to be seen what other markets it becomes useful in.

Tyler: And I would say it remains to be seen what other markets it becomes useful in.

Angus Pacala: So, not sure that it will be a key feature for the smart infrastructure vertical because we have even more sophisticated versions of perception that we sell in our Blue City and our Gemini software solutions. But it could be and, you know, that's one of the benefits to Alstair. We have this platform of products that play across verticals. So, when we build something valuable for one vertical, occasionally there's crossover value into another vertical and we're happy to provide that value to those other customers as well.

Tyler: So not sure that it will be a key feature for smart.

Tyler: For the smart infrastructure vertical.

Tyler: Because we have even more sophisticated versions of perception that we sell in our Blue City and our Gemini software solutions.

Tyler: But it could be and that's one of the benefits to Alastair we have this platform of products that play across verticals. So when we built something valuable for one vertical.

Tyler: Occasionally there is crossover value into another vertical and we're happy to provide that value to those other customers as well.

Angus Pacala: And then your second question on just any benefits we're getting from, you know, reshoring or on-shoring of some of our manufacturing. I just want to highlight that we've always maintained an onshore manufacturing presence. Our Buy American certification is not a new thing. It's something we've maintained for the last, I think, four years now. And we see an ongoing benefit of being, you know, a key Western provider of LiDAR technology and really the largest provider of this technology in the West at this point with onshore manufacturing capability when it's needed. So, definitely driving a benefit from that, but it's not a new thing.

Tyler: And then your second question on just any benefits, we're getting from re shoring or onshoring of some of our manufacturing I just want to highlight that we've always maintained an onshore manufacturing presence.

Tyler: Our buy American certification is not a new thing and it's something we've maintained for the last I think four years now.

Tyler: We see an ongoing benefit of being a.

Tyler: Key western provider of Lidar technology, and really the largest provider of this technology in the west at this point with onshore manufacturing capability when it's needed.

Tyler: So definitely driving a benefit from that but it's not a new thing it's something we've been investing in for years at this point.

Angus Pacala: It's something we've, we've been investing in for years at this point.

Tyler Owen: Okay, I meant more so on the manufacturing talks of other companies coming back here in semiconductor, but alongside of that, what kind of revenue streams could we expect?

Speaker Change: Okay I meant more so on the manufacturing talks of other companies coming back here in semiconductor.

Tyler: But.

Tyler: Alongside of that.

Speaker Change: What kind of revenue streams could we could you describe any that you would be getting from the Gemini portal and additional ones.

Angus Pacala: Could you describe any that you would be getting from the Gemini portal, the additional ones? Yeah, so yeah, I'm glad you're bringing this up.

Tyler: Yes.

Tyler: So, yes, I'm glad you're bringing this up so this morning, we announced Gemini portal or yesterday morning, We announced Gemini portal, which is a cloud connection to the Gemini edge deployments that we have so basically the idea is we have now.

Angus Pacala: So this morning we announced Gemini Portal, or yesterday morning we announced Gemini Portal, which is a cloud connection to the Gemini Edge deployments that we have. So basically the idea is, you know, we have now about 700 deployments of Gemini in Blue City booked, 300 deployments of Gemini at this point. And in those cases, you know, the customer's installing an Edge box, an Edge AI processor alongside our sensors at their facility. And we have a couple customers now that have hundreds of sites that they're deploying across.

Tyler: About 700 deployments of Gemini and Blues City booked 300 deployments of Gemini at this point.

Tyler: And in those cases.

Tyler: Customers installing an edge box and edge AI processor, alongside our sensors at their facility.

Tyler: And we have a couple of customers now that have hundreds of sites that they're deploying across and so management of those sites health monitoring diagnostics configuration upkeep.

Angus Pacala: And so management of those sites, health monitoring, diagnostics, configuration, upkeep, support, that starts to become a challenge unless there's a centralized hub for accessing those sites and managing them. And that's what Gemini Portal is. It's that centralized cloud-based hub for aggregating. But it's not just about kind of the table stakes like maintaining a system that's already there. There's value that we are going to provide in the future through that portal. We mentioned a couple things in the press release around our ability to collect event recordings, store them, allow the customer to review them, save them, share them, things like that.

Support that starts to become a challenge unless theres, a centralized hub for accessing those sites and managing them and Thats, what thats, what Gemini portal is it's that centralized cloud based hub for aggregating.

Tyler: But it's not just about kind of the table stakes like maintaining a system. That's already there. There is value that we are going to provide in the future through that portal and we mentioned a couple of things in the press release around our ability to collect event recordings.

Tyler: Store them allow the customer to review them save them share them things like that analytical layers.

Angus Pacala: Analytical layers that we can build in to give you information about crowd flows in your facility over the course of the day. So there's a ton of value that we're going to be able to provide to our Gemini customers. We wanted to get them portal in a state that we can offer to all Gemini customers, all paying Gemini customers today.

Tyler: That we can build in to give you information about crowd flows in your facility over the course of the day. So there's a ton of value that we're going to be able to provide to our gemini customers. We wanted to get them portal.

Tyler: State that we can offer to all Gemini customers, all paying Gemini customers today.

Tyler Owen: And I expect to have more to come on other revenue streams in the portal in the future. Awesome. Thank you all.

Tyler: And I expect to have more to come on other revenue streams in the portal in the future.

Speaker Change: Awesome. Thank you I'll hop back in the queue.

Casey Ryan: Thank you. The next question comes from Casey Ryan with West Park Capital. Your line is open. Good afternoon. Great quarter and great outlook.

Tyler: Yeah.

Speaker Change: The next question comes from Casey Ryan with West Park Capital. Your line is open.

Casey Ryan: Good afternoon, great quarter, and great aisle look.

Casey Ryan: One thing that sort of might be helpful is to talk about the margin profile, the gross margin profile, I guess by vertical or You know, if there's another way to look at it in combination between, you know, software and sensors, but. I'm just curious how big the range is between, say, end markets, right, if there's a big... Delta between Industrial and Automotive. How do you think about... That sort of revenue or sort of margin contract.

Speaker Change: One thing that might be helpful is to talk about the margin profile. The gross margin profile I guess by vertical or.

Speaker Change: If there is another way to look at it in combination between software and sensors, but.

Speaker Change: I'm just curious how big the range is between say end markets right. If there's a big.

Speaker Change: Jim Delta between industrial and automotive.

Speaker Change: How you think about.

Speaker Change: That sort of revenue.

Speaker Change: For the margin contribution mix.

Angus Pacala: Yeah, and I'll step in but I'll allow Chen to give some additional color here. But I mean, I think the first thing is just that we are We are running a margin-positive business on all four of our verticals, just in case there's something unsaid there. We really want to make sure that we have sustainable long-term verticals that we're playing in. And it's a reason why we don't name some verticals. Those four are specifically chosen because it's the business and the margin we see now and long-term.

Speaker Change: Yes, and I'll step in but I'll allow churn to give some additional color here, but I think the first thing is just that we are.

Speaker Change: We are running a margin positive business on all four of our verticals. Just in case, there is something unsaid. There, we really want to make sure that we have sustainable long term verticals that we're playing in and it's the reason why we don't named some verticals. Those four are specifically chosen because of the business and the margin, we see now and long term.

Chen Geng: We historically haven't broken out the margin, so I'm going to stop there in case Chen has anything else to cover.

Speaker Change: <unk>.

Speaker Change: We historically haven't broken out the margin so.

Speaker Change: I'm going to I'm going to stop there in case churn has anything else to cover we're not ready to give that.

Chen Geng: We're not ready to give that level of insight into our business because it does start to inform things like costs and ASPs by vertical, which there are competitive reasons maybe not to share, but I'll let Chen add any additional color. Yeah, Casey, I think the only thing that would be additive to Angus' comment is that we have mentioned that we expect software-attached business to be accretive to our overall margin profile. So as that revenue stream becomes a larger portion of the consolidated business, we do expect a tailwind from that. Right. Well, right. And, and so that's really where the question goes, right, is that if, if verticals where the software attach grows, The Margin Contribution sort of raises the question of your gross margin guidance, right, which could look kind of conservative coming out of this quarter, right?

Speaker Change: That level of insight into our business because it does start to inform things like cost and asps by vertical which there are competitive reasons, maybe not to share, but I'll, let <unk> add any.

Speaker Change: Additional color.

Speaker Change: Yes, Casey I think the only thing that would be additive to <unk> comment is that we have mentioned that we expect software attached business to be accretive to our overall margin profile. So as that revenue stream becomes a larger portion of the consolidated business, we do expect a tailwind from that.

Speaker Change: Right well right.

And so that's really where the question goes right is that if if verticals where the software attach grows.

Speaker Change: The margin contribution grows.

Speaker Change: The question of your gross margin guidance, right, which could look kind of conservative coming out of this quarter right. I know there were some one time items, but in sort of a positive note. It looks like your business could be.

Casey Ryan: I know there were some one-time items, but in sort of a positive note, it looks like your business could be trending to a higher GM kind of target model. But I just wonder how you think about that, if you're uncertain about what the mix is or if you just want to be conservative as we go to 25. But why you're sort of focused on keeping the 35% to 40% target range, I guess. Yeah, no, I appreciate the comment. And I guess there's a difference between our goal and our commitment to our shareholders. And so absolutely, you know, there are goals with our software growth, and ways we could, you know, beat our, beat our commitment, have upside in the business, we've mentioned that many times, whether it's in the automotive industry, or with our software attached growth.

Speaker Change: Turning to our higher GM kind of target model, but.

Speaker Change: I just wonder how you think about that if you're uncertain about what the mixes or if you just want to be conservative as we go into 'twenty five but.

Speaker Change: But why you're sort of.

Speaker Change: Focused on site.

Speaker Change: Keeping with the 35% to 40% target range I guess for now yes, no I appreciate the comment that I guess.

Speaker Change: There is a difference between our goal and our commitment to our shareholders and so absolutely their goals with our software growth and ways we could.

Speaker Change: Beat.

Speaker Change: Beat our commitment have upside in the business, we mentioned that many times, whether it's in the automotive industry or with our software attach growth.

Angus Pacala: You know, we're showing really strong bookings year over year growth of 60% in the Smart Infrastructure Protocol, with our software attached booking. So there are things like that, that indicate there may be upside, but I want to pull it back and, and just, you know, ground us in what we're willing to commit to our shareholders is that long term financial framework. Still, there's a lot of uncertainty, some of it out of our control in this day and age. And so 30 to 50% revenue growth 35 40% margins is where we think will be or where we feel we can commit to being through through the path of profitability.

Speaker Change: We're showing really strong bookings year over year growth of 60% in the smart infrastructure vertical with our software attached.

Speaker Change: Bookings. So there are things like that that indicates there may be upside, but I want to pull it back and just.

Speaker Change: Ground us in what were willing to commit to our shareholders is that long term financial framework still theres a lot of uncertainty.

Speaker Change: Some of it out of our control.

Speaker Change: In this day and agents, so 30% to 50% revenue growth $35, 40% margins.

Speaker Change: Is where we think will be or where we feel we can commit to being through through the path to profitability.

Casey Ryan: Okay. All right. Well, fair enough.

Speaker Change: Okay, all right well fair enough.

Angus Pacala: And then one, I guess, last thing, sort of, you know, take Smart Cities as an example. You know, how competitive is price, you know, as a factor or is it really about the solution and, you know, maybe the maybe the fact is, is that between the hardware and the software, your solution superior and that kind of wins the day. But, but just tell me how intense the pricing is necessarily if people can do apples to apples and sort of a competitive bid situation. That would be helpful. Yeah, absolutely. The pricing dynamics in smart infrastructure can be really different.

Speaker Change: And then one I guess last thing sort of take smart cities as an example.

Speaker Change: Yeah.

Speaker Change: How competitive is price.

Speaker Change: <unk> or is it really about the solution and maybe maybe the fact is is that between the hardware and the software your solutions superior and that kind of wins the day, but but just tell me how intense the pricing is necessarily if people can do apples to apples in sort of a competitive bid situation.

Speaker Change: Yes.

Speaker Change: That would be helpful.

Speaker Change: Yeah, absolutely the pricing dynamics and smart infrastructure can be really different and specifically and you mentioned traffic the traffic industry.

Angus Pacala: It's specifically, and you mentioned traffic, the traffic industry. And it's because there's a lot of this technology requires a public tender. And so there's pretty well known kind of pricing requirements. And yeah, there's just a lot of public information about pricing in traffic specifically. The takeaway from this all is, you know, pricing, you have to meet a price. You don't, but you don't necessarily need to, if, once you meet a price, there's a performance benefit and a requirement commonly that's coming with that public tender and a reason why they have that tender out. You know, they need a technology that can see both vehicles and pedestrians or that can be reconfigured on a monthly cadence instead of being dug into the ground.

Speaker Change: Because theres a lot of a lot of this technology requires a public tender.

Speaker Change: So there is pretty.

Speaker Change: Pretty well known kind of pricing requirements.

Speaker Change: And.

Speaker Change: Yes.

Speaker Change: A lot of <unk>.

Speaker Change: Public information about pricing and traffic specifically now.

Speaker Change: The takeaway from this all is pricing you have to meet our price.

Speaker Change: You don't but you don't necessarily need to.

Speaker Change: Once you meet a price there is a performance benefit and a requirement, commonly thats coming with that public tender.

Speaker Change: And a reason why they have that tender out they need a technology that can see both vehicles and pedestrians or that can be reconfigured on a monthly cadence instead of being dug into the ground. So there are requirements on the product side that lighter is uniquely positioned to provide.

Casey Ryan: So there are requirements on the product side that LiDAR is uniquely positioned to provide that push it over the edge and make sure that, you know, we're winning a lot of tenders based on that performance feature set while meeting a price that is required through the public tender. Right. Okay, good. That's sort of clarifying.

Speaker Change: That pushed it over the edge and make sure that we're winning a lot of tenders based on that performance feature set.

Speaker Change: Meeting a price that is required through the public tender.

Speaker Change: Right Okay. Good.

Casey Ryan: So I appreciate that and thanks for the update. Sounds like a very positive outlook for the year. Thanks for the question.

Speaker Change: That sort of clarifying so.

Speaker Change: I appreciate that and thanks for the update it.

Speaker Change: It sounds like a very positive outlook for the year. So thank you. Thank.

Speaker Change: Thanks for the questions.

Madison DePaola: The next question comes from Madison DePaola with Rosenblatt. Your line is open. Hey guys, I was just wondering, could you provide some more details on backlog? Yeah, so I assume the question on the backlog, I think, is just a question on prospects for growth in the future. And there I would first just highlight we had a very strong year delivering on our overall long-term guidance of 30% to 50% growth. We did 33% year-over-year growth, $111 million in revenue. Unit volumes way up, 17,300 units shipped last year. So we had a very strong year. And we, our bookings support that continued outlook and commitment to 30% to 50% growth in 2025.

Madison DePaola: The next question comes from Madison Depaola with Rosenblatt. Your line is open.

Madison DePaola: Hey, guys I was just wondering could you provide some more details on backlog.

Speaker Change: Yes so.

I assume the question on the backlog I think is just a question on <unk> prospects for growth in the future and there I would first just highlight we had a very strong year delivering on our overall long term guidance of 30% to 50% growth, we did 33% year over year growth of $111 million in revenue.

Speaker Change: Unit volumes way up 17300 units shipped last year.

Speaker Change: So we had a very strong year.

Speaker Change: And we.

Speaker Change: Our bookings support that continued outlook and commitment to 30, 50% growth in 2025, and obviously, we're guiding up in Q1 this year. So.

Angus Pacala: And obviously we're guiding up in Q1 this year.

Angus Pacala: So we haven't given specific backlog numbers. I can say that the backlog supports the continued growth at the commitment level that we've outlined in our long-term model. And maybe I'll just say, you know, we have anecdotally like the customer set that we have started to announce with, that we have started to show proof points in the market of with their marketing is indicative of the continued growth and investment from a mature and sophisticated customer base. And I'm talking about customers like John Deere, who at CES announced publicly working with Ouster LiDARs, had Ouster LiDARs on their tractors, at their booths, in their presentations.

Speaker Change: We haven't given specific backlog numbers I can say that the backlog supports the continued growth at the commitment level that we've outlined in our long term model.

Speaker Change: And maybe I'll just say we have.

Speaker Change: Anecdotally like the customer set that we have started to announce with that we are we have started to show proof points in the market with their marketing.

Speaker Change: Is indicative of the continued growth and investment from a mature and sophisticated customer base and I am talking about customers like John Deere.

Speaker Change: At CES announced publicly working with after <unk> had aster ladders on their tractors out their booths in their presentations.

Angus Pacala: Or Google Maps announcing at the Paris Olympics last year and showing Ouster LiDARs on the Google Maps vehicles on their new fleet. So really good evidence of the, you know, customers that are sophisticated historic LiDAR users by moving into a modern era of autonomy with 3D LiDAR powered by Ouster. Okay, great. Thank you so much.

Speaker Change: Or Google maps announcing at the Paris Olympics last year, and showing <unk> on the Google maps vehicles on their new fleet. So.

Speaker Change: Really good evidence of the customers that are sophisticated historic lidar users by moving into a modern era of autonomy with <unk> Lite are powered by by Alastair.

Speaker Change: Okay, great. Thank you so much.

Andres Sheppard: The next question is a follow-up from Andres Sheppard with Cantor Fitzgerald.

Speaker Change: The next question is a follow up from Andrea Shepard with Cantor Fitzgerald. Your line is open.

Andres Sheppard: Your line is open.

Speaker Change: Okay.

Andres Sheppard: Hey, guys. I'm sorry. I think I got cut off the first time, but thanks again for all the helpful context on our question there.

Speaker Change: Hey, guys, sorry, I think I got cut off the first time, but thanks again for all the helpful context on a question there.

Chen Geng: Just a quick follow-up, maybe a question for Chen. You mentioned, I think, you don't expect material impact from tariffs. I'm curious, do you expect material impact to your customers or to your supply chain, if you could maybe expand on that?

Speaker Change: Just a quick follow up maybe a question for.

Speaker Change: Ken You mentioned I think you don't expect.

Speaker Change: Material impact from tariffs I'm curious do you expect material impact to your customers or to your supply chain. If you could maybe expand on that and then can you just remind us your.

Chen Geng: And then can you just remind us your capital needs? No debt, $175 million. What are any outstanding capital needs?

Speaker Change: Capital needs no debt $175 million, what are any outstanding capital needs. Thank you.

Chen Geng: Thank you. Sure, thanks Andres. On the tariff side, I think the best we can do is comment that the environment is rapidly evolving, and we are adjusting to that environment as quickly as we can. At this point, we don't see any disruptions to our supply chain, and we continue to work with our customers. But I think it is a little bit difficult to anticipate what may happen with that environment even in the next day, much less the next year.

Speaker Change: Yeah.

Andreas: Sure. Thanks Andreas.

Andreas: On the tariff side I think the best we can do is comment that the environment is rapidly evolving and we are adjusting to that environment as quickly as we can at this point, we don't see any disruptions to our supply chain and we continue to work with our customers but.

Andreas: I think it is a little bit difficult to anticipate what may happen with that environment.

Andreas: And the next day much less the next year.

Chen Geng: On the capital needs side, we are continuing to be a fairly low capital needs business. We will continue to fund the development of our next generation sensors and transform the product portfolio in 2025. The way that the company is currently capitalized, the way that the company is currently supported from a personnel standpoint, we believe is pretty sufficient to still deliver a lot of growth ahead.

Andreas: On the capital need side, we are continuing to be fairly low.

Andreas: Capital needs does this we will continue to fund the development of our next generation sensors and <unk>.

Andreas: <unk> formed the product portfolio in 2025.

Andreas: So.

Andreas: The way that the <unk>.

Andreas: <unk> is currently capitalized the way that the company is currently supported from.

Andreas: From a personnel standpoint, we believe as it was.

Andreas: Pretty sufficient to still deliver a lot of growth ahead.

Andres Sheppard: Thank you. Super helpful. And again, congrats on the strong quarter.

Speaker Change: Thank you Super helpful and again, congrats on the strong quarter I'll pass it on.

Operator: I'll pass it.

Angus Pacala: This concludes the question and answer session.

Speaker Change: This concludes the question and answer session I'll turn the call to Angus Mccollough for closing remarks.

Angus Pacala: I'll turn the call to Angus Pacala for closing remarks. Alright, well thank you all for joining the call. We look forward to speaking with you all again during the first quarter call in early May. Have a good day.

Speaker Change: Alright, well. Thank you all for joining the call. We'll look we look forward to speaking with you all again during the first quarter call in early May have a good day.

Operator: This concludes today's conference call. Thank you for joining. You may now disconnect.

Speaker Change: This concludes today's conference call. Thank you for joining you may now disconnect.

Operator: Please wait, the conference will begin shortly.

Speaker Change: Please wait the conference will begin shortly.

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