Q1 2025 Ouster Inc Earnings Call
One on your telephone keypad, if you would like to withdraw your question press the pound key.
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 would now like to turn the conference over to Jim Fanucchi Investor Relations. Please go ahead.
Jim Fanucchi: Thank you operator, and good afternoon, everyone. Thank you for joining our first quarter 2025 earnings call today on the call we have Chief Executive Officer, Angus for Kala and current in term Chief Financial Officer, Shandong as a reminder, after the market closed today.
Jim Fanucchi: <unk> ouster issued its financial news release, which was also furnished on a form 8-K and is posted in the Investor Relations section of the <unk> website.
Jim Fanucchi: Today's conference call will also be available for webcast replay in the Investor Relations section of our website.
Speaker Change: Before I pass the call over to Angus for his opening remarks, I want to remind everyone that on this call. We will make certain forward looking statements. These include all statements about our competitive position anticipated industry trends, our business and strategic priorities and our revenue guidance for the second quarter of 2025.
Speaker Change: Actual results may differ materially from those contemplated by these forward looking statements fat.
Speaker Change: Order 2025 Financial Results Release, and in the annual and quarterly reports we file with the Securities and Exchange Commission.
Speaker Change: Any forward-looking statements that we make on this caller based on assumptions as of today, and other than as may be required by law, Ouster assumes no obligation to update any forward-looking statements which speak only as of their respective dates.
Speaker Change: In today's conference call, we will discuss both GAP and non-GAAP financial measures. A reconciliation of GAP to non-GAAP measures is included in the financial results release that was issued today. I would now like to turn the call over to Angus.
Angus: 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.
Speaker Change: Chen will cover our financial results in more detail before I close with some final thoughts.
Speaker Change: Our first quarter results demonstrate our commitment to continued operational execution.
Speaker Change: We reported revenue of 32.6 million and gross margin of 41%, which includes certain patent oilp of 1.5 million.
First quarter shipment, exceeded 4,700 sensors.
Speaker Change: Our balance sheet remains one of the strongest in the industry, ending the quarter with 171 million of cash and equivalence was zero debt.
Speaker Change: During the quarter, we won multi-million dollar deals across all four of our verticals.
Speaker Change: Within our smart infrastructure vertical, we expanded our relationship with Laze Pico and signed our largest ever contract for software attached sales in Europe .
Speaker Change: LaJay will upgrade to Red 7, along with Ouster Gemini, to power real-time people counting mobility analytics and perimeter protection. [inaudible]
Speaker Change: Within the Industrial Vertical, we closed a multi-million-dollar deal with Kamatsu, one of the world's largest heavy equipment manufacturers, to equip their next-generation autonomous mining equipment.
Speaker Change: By replacing legacy 2D LiDAR systems with short and long range rev 7 sensors, we are helping come up to increase productivity and reduce the total cost of ownership.
Speaker Change: Within Automotive, we were chosen by the mobility subsidiary of a global OEM to supply both short and long-range sensors to support the development of their autonomous vehicles.
Speaker Change: <unk> is a physical AI company, leveraging our expertise in advanced perception solutions to enable intelligent real world economy across industries are.
Speaker Change: Our digital Lidar sensors combined with our AI software empower autonomous systems to perceive understand and interact with the physical world in real time.
Speaker Change: Physical AI demands hardware and software that is not only intelligent, but rugged and scalable qualities that we embed in every product.
Speaker Change: Turning to our 2025 strategic priorities, we progressed across all three key focus areas.
Speaker Change: One scaling the software attached business to transforming the product portfolio and three executing towards profitability.
Speaker Change: Starting with the software attach business, we had our strongest quarter, yet landing our largest ever contract for software attach sales in Europe.
Speaker Change: Another highlight of the quarter with our partner Carnallite, winning a five year contract with the Utah Department of transportation to deploy Rev, seven announced or blues city to enhance traffic flow safety and operational efficiencies at intersections and roadways throughout the state.
Speaker Change: The Utah Doty assessed multiple lidar detection systems and our solution in conjunction with <unk> received the highest overall score.
Speaker Change: In addition to Utah, we see the potential to expand into additional states as part of the United States Dot's Grant for the connected West project.
Speaker Change: Moving to light our development.
Speaker Change: We are excited to be transforming our entire product portfolio in 2025 with new hardware upgraded firmware capabilities enhanced features in the outdoor SDK and expanded software functionality.
Speaker Change: I wanted to share some updates on a few of these products discussed in our last call.
Speaker Change: We continue to see robust customer interest and on sensor <unk> zone monitoring.
Speaker Change: For industrial and material handling operators. This firmware features supports collision avoidance on moving vehicles with warnings deceleration in emergency stock.
Speaker Change: By leveraging <unk>, seven and <unk> zone monitoring, we recently secured a collision avoidance program with one of the world's largest manufacturers of material handling equipment I'm optimistic that we will be able to further expand our industrial footprint with this feature.
Speaker Change: We are also pleased to see rapid customer adoption. After the recent launch of our cloud portal for ouster, Gemini, which enables our customers to seamlessly and securely configure manage and view all of their lidar deployments through a single unified interface.
Speaker Change: Since its launch last quarter, we already have dozens of customers managing hundreds of their sights on Gemini portal, allowing these customers to optimize their operations at anytime and anywhere with.
Speaker Change: With Gemini portal, we have combined the convenience of cloud data and device management for Gemini customers for the first time.
Speaker Change: Key feature for scaling customer deployments.
Speaker Change: Gemini portal also supports ouster blues city, our turnkey traffic management solution to improve traffic management and road safety for all road users.
Speaker Change: Blues City is the first digital lidar solution to leverage a deep learning model for traffic management and in the first quarter, we achieved a major development milestone in our collaboration with Nvidia to bring physical AI to cities around the world Blue.
Speaker Change: Blue cities proprietary AI model has now been trained on over $4 million labeled objects collected from 800 sites encompassing diverse traffic patterns intersection designs and environmental conditions, using Nvidia has advanced computing technology for real time inference at the edge.
Speaker Change: Deep learning offer significant advantages over classical algorithms, including improved generalization persistent object detection and continuous improvement.
Speaker Change: This expands upon <unk> long standing relationship with Nvidia, including our integration with Nvidia drive for autonomous vehicles, Nvidia Isaac for industrial and robotics, and the Nvidia Metropolis ecosystem for Smart city applications.
Speaker Change: In addition to reaching new milestones and shipping new firmware and software products. Our next generation <unk>, four and Kronos custom silicon remain on track to bring significantly improved performance reliability and security to the ouster product family recent.
Speaker Change: <unk> with leading automotive and industrial accounts reinforced the value of our digital AD our roadmap and we estimate these innovations will more than double our current addressable market.
Speaker Change: Finally, our solid first quarter results represent another step in our execution towards profitability.
Speaker Change: We continue to align with our long term framework of 30% to 50% annual revenue growth, maintaining gross margin of 35% to 40% and operating expenses at or below third quarter 2023 levels irrespective of the patent royalty.
Speaker Change: Okay.
Speaker Change: Last week, we announced the appointment of Ken GNL as Chief Financial Officer effective may 19th Ken.
Speaker Change: Ken was most recently the CFO and COO at Quantum Corporation and has extensive operations and finance experience and the technology and communications industries with both public and private companies I.
Speaker Change: I am confident he will have a positive impact on Alastair.
Speaker Change: I also want to thank Chen who will remain with aster and his expanded role as senior Vice President of strategic finance and Treasurer for leading the finance group through this transition period.
Speaker Change: I'll now turn the call over to Chen who will provide more context on our first quarter financial results.
Chen: Thank you Angus and good afternoon, everyone.
Chen: In the first quarter, we shipped approximately 4700 sensors and recognized $32 6 million in revenue.
Chen: The industrial vertical was the largest contributor to first quarter revenue followed by automotive.
Chen: We shipped large volume deal to support applications and warehouse autonomy robo taxi and yard logistics.
Chen: First quarter gross margin increased by 200 basis points year over year to 41%.
Chen: Gross margin strength reflects the benefit of higher revenue favorable product mix and the patent royalty.
Chen: As <unk> stated our first quarter results include approximately $1 5 million in patent royalties following a confidential legal ruling.
Chen: This had a positive impact of approximately 300 basis points on GAAP and non-GAAP gross margin.
Chen: We continue to view, 35% to 40% as an appropriate annual gross margin target for the business.
Chen: For purposes of preparing and presenting our second quarter guidance, we have.
Chen: <unk> assumed that we will not have any material revenue from patent royalty.
Chen: GAAP operating expenses of $37 million in the first quarter were up 12% over the prior year the.
Chen: The increase was primarily driven by higher litigation expenses.
Chen: We expect operating expenses to fluctuate on a quarterly basis, largely due to the timing of R&D project spending and litigation costs and.
Chen: And remain committed to keeping our operating expenses at or below third quarter 2023 level.
Chen: Our balance sheet remains among the strongest in the industry with cash cash equivalents restricted cash and short term investments of 171 million at March 31.
Chen: During the first quarter, we did not receive any proceeds from our ATM.
Chen: We are pleased with our cash burn rate in the first quarter, which reflects our strong operational execution and prudent balance sheet management.
Chen: Finally, a quick note on the geopolitical and macroeconomic environment.
Chen: The landscape is fluid and we have worked diligently to assess the effect of tariffs on our costs were.
Chen: We are partnering with our customers to mitigate the impact of these changes.
Chen: Based on what we know today, we do not expect the currently proposed tariff level to prevent us from achieving our long term framework.
Chen: However, there remains a large degree of uncertainty and we are currently unable to predict how the demand drivers will play out for the rest of the year.
Chen: Moving to guidance.
Chen: For the second quarter, we expect to achieve revenue between 32 and $35 million.
Angus: I'll now turn the call back to Angus for his closing remarks.
Chen: Thanks, Jen <unk>.
Chen: We're starting off the year on solid footing, delivering our ninth consecutive quarter of meeting or exceeding our guidance and making meaningful progress on all three of our 2025 goals.
Chen: We remain focused on executing towards profitability through the combination of consistent revenue growth strong gross margins and stringent control of operating expenses.
Chen: I am encouraged to see our business expanding with multimillion dollar awards from existing customers to support the scaling of their commercialization efforts.
Chen: We're also seeing a growing number of long standing tier one customers commit to ouster for their multi year production and delivery schedules.
Chen: Thousands of sensors shipped each quarter and a growing installed base of connected software solutions underscore our customers' confidence in both our product performance and long term roadmap.
Chen: These real world applications exemplify the accelerating adoption of physical AI after digital Lidar combined with AI software enabled machines to perceive understand and interact with the physical world in real time.
Chen: From bustling cities and remote farms to mines ports and global supply chains, Alister is bringing physical AI to life.
Chen: With that I'd like to open up the call for Q&A.
Speaker Change: At this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad, we will pause for just a moment to compile the Q&A roster.
Speaker Change: Your first question comes from the line of Richard Shannon from Craig Hallum Capital Group LLC. Please go ahead.
Richard Shannon: Alright, Thanks, Edison Chen for taking my questions.
Richard Shannon: First of all I want to ask is on gross margins. If I look at the pro forma number here, excluding the patents revenues Youre about 43%. This is the.
Richard Shannon: Third straight quarter, you've had above 40%, which is above your 35% to 40% framework here.
Richard Shannon: And we haven't delineated the software contribution to that I got to believe it's at least noticeable at this point given your bookings have been good in this area.
Richard Shannon: So I guess I'm wondering why we haven't seen that gross margin framework move up here and I guess I wanted to delve into a couple of ways that maybe youre thinking about if you could address it that would be great.
Richard Shannon: Is there some sort of mixed dynamics, you're expecting in the future like with automotive that could break that down I think you've been clear on what you expect there is just give you some room to lower Asps will keeping that same margin range or are you worried about tariffs maybe you could just discuss how those bleed into and why wouldn't see that framework go up at some point in time.
John: Hey, Richard This is John it's a good question.
Speaker Change: We're very pleased with the margin performance of the business.
Richard Shannon: We have been trending towards the higher end.
Richard Shannon: Our range in the past few quarters, so I wouldn't know 35% to 40% we looked at on a GAAP basis. So when you look at our GAAP gross margins adjusted for some of the onetime items that we have seen in the past few quarters.
Richard Shannon: We are at the high end of the range and we do believe that that is still an appropriate range for the business.
Richard Shannon: On the software contribution side.
Richard Shannon: We're pleased with the tailwind that we're seeing in software.
Richard Shannon: We have said is when it becomes a significant part of the business, we will break it out for additional clarity.
Richard Shannon: So we will continue to work on our software efforts and when it's time to give you. Some additional detail we will give it at that time.
Speaker Change: Okay, great well I look forward to seeing that you guys have done an excellent job in that regard.
Speaker Change: My second question is.
Speaker Change: Regarding the new products. So I know you Angus you mentioned this in your prepared remarks at least last quarter, perhaps before but I certainly remember at last quarter.
Speaker Change: When you are talking about new products, enabling you to double your Tam here.
Speaker Change: Particularly in our remarks today, you talked about I think conversations in B, I think automotive and industrial markets that add a little bit more detail to that so I guess I'm wondering if you could talk to the improvements with the new El Foreign Kronos chips are going to give you and what specific areas should we expect to see Tam expansion and over what time should we see.
Speaker Change: That happens.
Speaker Change: Yeah. Thanks for the question.
Speaker Change: I'm going to talk a little probably in more generalization than you might one and there is good reason for it we don't want to talk about unreleased products before they're real.
Speaker Change: But what youre hitting on us.
Speaker Change: While we don't talk publicly about release products, we are able to communicate the incredibly compelling roadmap that we have to our longstanding and important tier one customers on a confidential basis.
Speaker Change: And the product releases some are some are imminent enough.
Speaker Change: Next year that where we're able to we're starting to use that to move customers that are looking for a particular set of features reliability Ruggedness Asian functional safety certification these kinds of things.
Speaker Change: But are looking for those in order to move into production.
Speaker Change: Communicate those in kind of cement a longer term relationship with a customer that already maybe a long term relationship, but one that needs to move into production.
Speaker Change: So.
Speaker Change: I see I see the coming product releases.
Speaker Change: The most significant most transformational set of product releases in the company's history.
Speaker Change: Roughly a doubling of our of our addressable market.
Speaker Change: And.
Speaker Change: And we're already seeing some of that impact again positive impact, where we're able to share our road map behind closed doors with our most important customers.
Speaker Change: So a lot more to come on that but but definitely positive.
Speaker Change: Positive signals coming from the roadmap conversations.
Speaker Change: Great. Thanks for that detail I will jump out of the queue.
Speaker Change: Yeah.
Speaker Change: Again, if you would like to ask a question press star one on your telephone keypad.
Speaker Change: Our next question comes from comes from the line of.
Speaker Change: Colin Rusch from Oppenheimer. Please go ahead.
Speaker Change: Thanks, So much guys could you talk a little bit about.
Speaker Change: The testing process that youre going through with some of these new customers and how that's translating into New awards as you go little bit deeper with some of these folks I assume that that process gets a little bit faster.
Speaker Change: Youre able to accelerate some of the production orders.
Speaker Change: Yes, so that's a great question. Thanks, Colin so the.
Speaker Change: When youre, saying a testing process. So there is.
Speaker Change: Testing, we do testing with customers basically on an ongoing basis.
Speaker Change: Every time, we released new firmware, new hardware, new software and Gemini or Blues city. There is a certain set of customers that wanted to take immediate advantage of of that new capability.
Speaker Change: So that's one of the ways that we build these kind of long long standing and trusted relationships with customers is through the that testing that just happens all the time.
Speaker Change: And I think what we've seen is in.
Speaker Change: With some of the releases, we just had like the zone monitoring.
Speaker Change: Feature set that we announced last last quarter and now now we have at some customers.
Speaker Change: It's.
Speaker Change: We're testing features that allow customers to move into production for the very first time.
Speaker Change: So it might be a feature like a ruggedized <unk> spec.
Speaker Change: <unk> and environmental spec or a dust.
Speaker Change: Penetration capability or a zone monitoring feature that is a requirement to have a company, let's say at the logistics robotics company or a company like Komatsu.
Speaker Change: That debt.
Speaker Change: Has been working with us for many years has developed a robust autonomy stack, but needs to check the box on a final couple of features.
Speaker Change: <unk>.
Speaker Change: And we're down to I would say that final couple of features with a lot of customers and and so that testing is proving that they can check those final those final boxes and expand the scope of their autonomy R&D.
Speaker Change: Development into a production type scale.
Speaker Change: So.
Speaker Change: A big part of the strategy and the growth outlook for Alastair is that we have so many of these customers pans in the fire.
Speaker Change: Baking in over the last couple of years and now we're moving tranches of them into production. So that's going to fuel our growth for years to come and it's great to.
Speaker Change: To be able to communicate about some really high quality customers like komatsu.
Speaker Change: This earnings call I think theres going to be more like that to come.
Speaker Change: Given all the activity, we're seeing behind closed doors.
Speaker Change: And then just on warehouse automation, specifically can you just give us an update on how close you are to fully validating functional safety and how quickly.
Speaker Change: Validation could trigger some new orders and that's it for me. Thanks.
Speaker Change: Yes, so the functional safety.
Speaker Change: Certifications and capability is it.
Speaker Change: As important and coming in future products that we're releasing we're not giving a lot of detail there, but it's a major focus of future products coming from Alastair now the value that we bring is that.
Speaker Change: Traditionally we play in a non functionally safe lidar space, meaning that you need to as a customer of ouster, if youre using our products and you want to use them in place.
Speaker Change: Places, where you need to protect human lives you need to go through your own certifications and usually build redundancy into your system adjacent to the lidar with functionally safe Lidar, we can tap into new markets.
Speaker Change: That rely solely on the lidar itself to provide that safety for humans and in around the vehicles. The customer can side set step based safety certification or cost and time associated with system level certification theres, a huge amount of value. There. There is a huge established market functionally safe lidar.
Speaker Change: <unk>.
Speaker Change: And we've been investing in this for a long period of time so.
Speaker Change: As to when that will make a major impact on <unk> business, it's coming but we're not we're not committing to a particular timeline, but given the immense opportunity.
Speaker Change: There is a huge focus internally here on it.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: Our next question.
Speaker Change: Okay.
Speaker Change: Our next question comes from the line of Casey Ryan from West Park Capital. Please go ahead.
Speaker Change: Okay.
Speaker Change: Good afternoon everybody.
Speaker Change: There's a lot of exciting things to talk about here for the quarter.
Speaker Change: Yes.
Speaker Change: When you mentioned <unk>, you mentioned robo taxi as being an area.
Speaker Change: Could you guys give any color on the region.
Speaker Change: Global Robo taxi opportunities or North America, or Europe, or any sort of color around what that.
Speaker Change: Category.
Speaker Change: As we move forward in 2025.
Speaker Change: Yeah.
Speaker Change: Okay. That's a good question. So historically, we've talked about a couple of our robo taxi customers emotional being one of them <unk> being another thing generally robo taxi.
Speaker Change: <unk>.
Speaker Change: As an industry as a trend has accelerated over the past 12 months.
Speaker Change: Especially in San Francisco, you see them utilize on a daily basis, it's becoming.
Speaker Change: A real.
A real example of physical AI.
Speaker Change: So we continue to support that trend and that's part of <unk> ability to make physical AI happen.
Speaker Change: Okay.
Speaker Change: Okay, and so emotional and May I think are sort of north American centric, if thats fair to say.
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: Yes, so right now I mean, those are our two two of our high profile named Robo taxi customers. We have some real good trucking customers, but largely we're tapping into a north American market. The other big market for robot taxis as Chinese robo taxi market, we really don't play in that space for a variety of reasons, but.
Speaker Change: We feel we're well positioned in North America, we have some marquee customers there.
Speaker Change: And there is some positive tailwind for those customers I saw just I think last week may mobility announcing a contract with Uber to get onto their network and expand their offerings. So.
Speaker Change: Robo taxis are seeing some positive trends, we're partnered with some of the best companies in this space and.
Speaker Change: Looking to expand our reach through them and to new partners all the time.
Speaker Change: Okay terrific terrific.
Speaker Change: You guys also called out warehouse, which is really.
Speaker Change: Obviously, a large opportunity.
Speaker Change: And like a really great space.
Speaker Change: There are lots of different types of equipment.
Speaker Change: And sort of the warehouse space.
Speaker Change: Should we think about all of those as being opportunities for ouster or shall we narrowed down to category say forklifts or sort of loaders on motors.
Speaker Change: <unk> sort of these automated things are moving pallets around and then I guess I'm also curious like is there an opportunity in these things.
Speaker Change: Have a humanoid form factor that may or may not be impactful in warehouses in the next 12 months, but sort of are all those form factors opportunities browser or are there.
Speaker Change: Specific categories, where we should sort of spend our time looking.
Speaker Change: Yes, so I mean, the warehouse of modern warehouses of bustling hive of activity and there are many different machines.
Speaker Change: Some autonomous many driven by human all of which are benefiting from increasingly capable and flexible autonomy.
Speaker Change: That is largely coupled or enabled by lidar sensors and some of them like driver assistance systems that significantly reduce accidents in a warehouse even for human operated vehicles. So we play across all of these applications. I mean this is this is the core of the thesis at ouster is that autonomy is.
Speaker Change: <unk> is a diverse set of applications that span the entire logistics supply chain of the globe.
Speaker Change: And it's all getting automated or.
Speaker Change: Being improved with assistance systems, and Alastair is incredibly well positioned to capture all of that all of that activity. So.
Speaker Change: Humanoids as kind of the leading edge of the logistics automation in the warehouse, we do have some humanoid customers you can see some some examples of our sensors on some humanoids I think thats still it's unclear what the business model and the timeline for human humanoids are so I'm not expecting the adoption of.
Speaker Change: That those those devices to kind of drive <unk> business, but the good thing is that there is so there's such an obvious.
Speaker Change: Cost benefit.
Speaker Change: For driving more automation into our warehouse fill.
Speaker Change: <unk> filling labor shortages with automation and improving safety with assistance features that you talked to any.
Speaker Change: Housing robotics, or OEM equipment manufacturer and they have an automation strategy and <unk> is doing a really good.
Speaker Change: Good job of Blanketing this market.
Speaker Change: A good example is we were at pro Matt just last month, I think which is a major material handling conference in the United States and <unk> sensors were on all manner of vehicles implant platforms. There. So.
Speaker Change: Just showing the great job, we've had in covering that market so tons of opportunity. It's one of those practical uses of physical AI today with a clear ROI and tech technology stack that actually works.
Speaker Change: Okay, well, that's actually helpful and very.
Speaker Change: Very encouraging kind of a last thing I wanted to I know, we're all eager to sort of get a software hardware breakout.
Speaker Change: Sort of dig into the impacts around margins, but.
Speaker Change: What can you say trend wise about sort of just where you've had just sensor sales are sort of sensor pricing.
Speaker Change:
Speaker Change: What would you call the environment I guess as we get into a little bit higher volume. So would you say that.
Speaker Change: Pricing has been stable or sort of sort of a natural curve, where we see some price reductions and then.
Speaker Change: As you refresh the product line does that kind of change.
Speaker Change: What town hall that pricing.
Speaker Change: Yes so.
Speaker Change: I mean generally prices go down not up.
Speaker Change: And we want to see that I mean, I am focused as much on maintaining gross margins as making sure that our revenue and our unit shipments are growing.
Speaker Change: And unit shipments really in a healthy business, where the technology is working for customers generally want to see unit shipments.
Speaker Change: <unk> faster than revenue.
Speaker Change: And I think we've been able to show that as a business.
Speaker Change: Though.
Speaker Change: Yes.
Speaker Change: Been able to show that as a business so.
Speaker Change: So that whenever you are.
Speaker Change: Increasing unit shipments faster than revenue Theres, a good chance that asps are dropping now of course, we have our software attach business thats, making it a little more difficult to pull out the numbers, but suffice it to say like we think we are managing the ASP.
ASP trend well here there is a lot of stickiness.
Speaker Change: In Lidar and so theres a lot of kind of relationship building and things that get priced into the value of a ladder system that.
Speaker Change: So it's not just to come on a commoditized piece of hardware, where it's pure pricing discussion.
Speaker Change: So.
Speaker Change: But there is also opportunities to unlock new use cases, and new markets by offering lower pricing and I think we're in a position to do that each and every year that we also lower our cost and that's why we've been shown we've been able to do so.
Speaker Change: I don't think Theres anything.
Speaker Change: Any fundamental change to pricing or that's coming down the line like we're doing a good job managing this.
Speaker Change: And enabling our customers' applications, because ultimately they need to be commercially successful and some of that does come back down to the cost of their platforms.
Speaker Change: In our case before anything I would add to the latter half of your question.
Speaker Change: The impact of future technology, certainly it does have something to do with Asps is what you've seen out there able to accomplish in the past two years since we've rolled out Rev. Seven is we've actually seen our asp's increase given that customers are able to.
Speaker Change: Extract more value proposition out of the product offering that we are providing.
Speaker Change: We have been generally consistent with our expectation that asps do decline over time.
Speaker Change: But our ability to introduce new technology, new revisions to our product new features.
Speaker Change: It does have a tailwind in terms of supporting our ability to price.
Speaker Change: Price.
Speaker Change: Our value proposition to our customer.
Speaker Change: Yes.
Speaker Change: I think certainly sort of from the analyst perspective, right, we're sort of I guess as you alluded to sort of.
Speaker Change: ASP price drops could actually be really encouraging when units start to jump right in there is some.
Speaker Change: And basically halo effect around that and that all could be.
Speaker Change: Maybe enabling it doesn't sound like price as a barrier to adoption at this point is sort of one conclusion, but like I'm trying to drive to from the conversation which is.
Speaker Change: Our sensors arent limiting people's demand, it's sort of an evolution of technology.
Speaker Change: As people get the volume you guys sound like you're well positioned.
Speaker Change: To meet that demand I guess from a.
Speaker Change: Hardware component.
Speaker Change: Perspective, that's right that's right for the majority of our customers. The economics are not what is holding back them expanding their volumes that's a good great.
Speaker Change: Yeah, Okay, great. Thank you a lot of exciting things great quarter, and thanks for taking my questions.
Speaker Change: Your next question comes from the line of Kevin Garrigan from Rosenblatt Securities.
Speaker Change: Please go ahead.
Kevin Garrigan: Yeah, Hey, Andrew Hey, Tim Thanks for taking my questions and congrats on the strong results.
Speaker Change: And you talked earlier about having a lot of pans in the fire.
Kevin Garrigan: You announced a few new multimillion dollars deals recently.
Kevin Garrigan: <unk> lidar adoption kind of happening faster than you would have thought maybe a year or two ago or has it been pretty much on par with what youre thinking.
Kevin Garrigan: Well that's.
Kevin Garrigan: That's a good question.
Kevin Garrigan: Nearing my 10 year anniversary of the ouster.
Kevin Garrigan: So.
Kevin Garrigan: I think you have to be impatient to run a company like this and keep pushing and so there's one side of things, where we all thought were going to riding around in like flying cars that were autonomous in 2018 and that didn't happen, but on the other hand.
Kevin Garrigan: We are tracking to our long term model our revenue growth.
Kevin Garrigan: And seeing just a ton of positivity in the field of autonomy and feel that the physical AI whats going on with.
Kevin Garrigan: And video with etch capability with.
Kevin Garrigan: The advancements in AI are making these systems more capable more affordable and faster to market and so there's definitely a lot of positivity.
Kevin Garrigan: That's underpinning outsource entire business so.
Kevin Garrigan: Nothing ever happens fast enough and yet.
Kevin Garrigan: So I think we're doing everything we can to speed things along with our investments in software and the SDK and peripheral features and are the support we provide our customers. So I think we're doing we're doing we're maximizing the speed that things are being adopted and.
Kevin Garrigan: And it's nothing but kind of a positive outlook for the entire industry.
Kevin Garrigan: Okay.
Kevin Garrigan: Yes that makes a ton of sense, okay great.
Speaker Change: And then John you mentioned Youre not seeing any impacts from tariffs at the moment, but I'd just love to hear any commentary from customers you can give on whether theyre just kind of going about business unusual because things are so fluid and whatever kind of happens happens or are they trying to readjust strategies at all anything you are hearing about how customers are looking at this market would be great.
Kevin Garrigan: Yes sure. It's a good question we are just talking about this earlier today.
Kevin Garrigan: We honestly haven't seen much disruption to our business because of the tariffs.
Kevin Garrigan: There might be some minor things moving here and there, but overall I think automation is just such a strong trend.
Kevin Garrigan: And again it goes back to the value proposition that we provide with our hardware with our software where.
Kevin Garrigan: These tariffs at the current level.
Kevin Garrigan: Not significantly impacting the business.
Kevin Garrigan: Difficult to predict how things evolve from here, but.
Kevin Garrigan: But we feel pretty confident that we'll be able to execute the business plan with the status quo.
Kevin Garrigan: Okay.
Kevin Garrigan: Okay, great. Thanks, guys.
Kevin Garrigan: Our final question comes from the line of Richard Shannon, Craig Hallum Capital Group LLC. Please go ahead.
Kevin Garrigan: Okay.
Speaker Change: Hey, guys. Thanks for letting me ask a follow up and I just have one here I can't remember how long it's been since we've heard the question on the call, but I would love to get your thoughts here.
Speaker Change: From the competitive.
Speaker Change: Dynamic here. So we've seen a lot of other liner companies have been focused in the automotive space for a long time and they have seen.
Speaker Change: Difficulty there in the last year or two and then obviously if we can focus their businesses in other markets, where you've been there frankly since the beginning here wondering if youre seeing any changes in the competitive dynamics here with other companies who used to be in that in those spaces, primarily now coming into your non automotive markets and how you're responding to that.
Speaker Change: Yes.
Speaker Change: Well first I'd love to point out.
Speaker Change: <unk> has continued to be correct and our thesis that there has been plenty of time to develop automotive lidar solutions, given the pace of automotive lidar adoption in the automotive industry. It's been our founding thesis diversifying diversifying into other industries and <unk>.
Speaker Change: And being around to be able to be ideally a major player in the automotive industry in the future. So that's still that's still on track.
Speaker Change: When it comes to our auto centric competitors, maybe rethinking their strategy in moving into our diverse verticals.
Speaker Change: I mean, I really haven't seen there fits and starts.
Speaker Change: Each and every earnings cycle, one of our competitors has kind of a refresh of their perspective, and some announcement about moving into adjacent industries, but I've never seen the consistent push quarter.
Speaker Change: Quarter after quarter required to develop ground up solutions ground up hardware ground up software ground up commercial efforts to be a long term player in this space. So may change in the future I'm surprised frankly that there hasn't been more of a pivot as I mean, I think Alastair has emerged as a leading player in <unk>.
Speaker Change: Diverse end markets, but.
Speaker Change: So far it's just fits and starts from I think our competitors.
Speaker Change: Okay I appreciate that perspective, and I guess, that's all for me.
Speaker Change: I will now turn the call back over to Angus Mccollough.
Angus Mccollough: Closing remarks.
Angus Mccollough: Alright, well, thanks, everyone for joining the call.
Angus Mccollough: We look forward to speaking with you all again next quarter, Thanks and have a good day.
Angus Mccollough: Okay.
Angus Mccollough: Ladies and gentlemen that concludes today's call. Thank you all for joining you may now disconnect.
Angus Mccollough: Yeah.
Speaker Change: Please wait.
Angus Mccollough: France will begin shortly.
Angus Mccollough: Yes.
Angus Mccollough: Yes.
Angus Mccollough: Okay.
Angus Mccollough: [music].