Q1 2026 Ouster Inc Earnings Call

May 5, 2026

Operator: Hello, and welcome to Ouster's Q1 2026 Earnings Conference Call. I would like to now turn the conference over to Chen Geng, Senior Vice President of Strategic Finance and Treasurer. Please go ahead.

Speaker #1: Hello, and welcome to Ouster's first quarter 2026 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.

Speaker #1: If you would like to ask a question during this time, simply press star followed by the numbers 11 on your telephone keypad. If you would like to withdraw your question, press star 11 again.

Speaker #1: 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 #1: I would like to now turn the conference over to Chen Geng, Senior Vice President of Strategic Finance and Treasurer. Please go ahead.

Speaker #2: Thank you, Operator, and good afternoon, everyone. Thank you for joining our first quarter 2026 earnings call. Today on the call, we have Chief Executive Officer Angus Pacala and Chief Financial Officer Ken Gianella.

Chen Geng: Thank you, operator. Good afternoon, everyone. Thank you for joining our Q1 2026 earnings call. Today on the call we have Chief Executive Officer, Angus Pacala, and Chief Financial Officer, Ken Gianella. As a reminder, after the market closed today, 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 Ouster website. Today's conference call will be available for webcast replay in the investor relations section of our website. I want to remind everyone that on this call we will make certain forward-looking statements.

Speaker #2: As a reminder, after the market closed today, Ouster issued its financial news release, which was also furnished on a Form 8K and is posted in the investor relations section of the Ouster website.

Speaker #2: Today's conference call will be available for webcast replay in the investor relations section of our website. I want to remind everyone that on this call, we will make certain forward-looking statements; these include all statements about our competitive position, product advantages, and growth opportunities, anticipated industry trends, our business and strategic priorities, our operating expense targets, the impact of our recent acquisition, the development and expansion of our products, our product's capabilities and performance, and our revenue guidance for the second quarter of 2026 and long-term financial targets.

Chen Geng: These include all statements about our competitive position, product advantages and growth opportunities, anticipated industry trends, our business and strategic priorities, our operating expense targets, the impact of our recent acquisition, the development and expansion of our products, our products' capabilities and performance, and our revenue guidance for Q2 2026 and long-term financial targets. Actual results may differ materially from those contemplated by these forward-looking statements. Factors that could cause actual results and trends to differ materially from those contained in or implied by these forward-looking statements are set forth in the Q1 2026 financial results release and in the quarterly and annual reports we file with the Securities and Exchange Commission.

Speaker #2: Actual results may differ materially from those contemplated by these forward-looking statements.

Speaker #3: Factors that could cause actual results and trends to differ materially from those contained in or implied by these forward-looking statements are set forth in the first quarter 2026 financial results release and in the quarterly and annual reports we file with the Securities and Exchange Commission.

Speaker #3: 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, Ouster assumes no obligation to update any forward-looking statements which speak only as of their respective dates.

Chen Geng: Any forward-looking statements that we make on this call are based on assumptions as of today and, other than as may be required by law, Ouster assumes no obligation to update any forward-looking statements which speak only as of their respective dates. In today's conference call, we will discuss both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures discussed today is included in the financial results release. I would now like to turn the call over to Angus.

Speaker #3: In today's conference call, we will discuss both GAAP and non-GAAP financial measures. A reconciliation of GAAP and non-GAAP measures discussed today is included in the financial results release.

Speaker #3: I would now like to turn the call over to Angus.

Speaker #4: Hello, everyone, and thank you for joining us today. Over the last four months, we have seen the culmination of over 10 years of Ouster innovation, strategy, and execution.

Angus Pacala: Hello, everyone, and thank you for joining us today. Over the last 4 months, we have seen the culmination of over 10 years of Ouster innovation, strategy, and execution. In February, we acquired Stereolabs, a pioneer in AI camera vision and perception solutions, creating a world-leading sensing and perception company for physical AI. We are already seeing the strategic rationale transform into operational reality with a resoundingly positive customer response. Just yesterday, we launched Rev8, the world's first native color lidar and a paradigm shift in AI perception. To perceive the world in full context requires a combination of structure and color, Rev8 is the first sensor to unify both.

Speaker #4: In February, we acquired Stereo Labs, a pioneer in AI camera vision and perception solutions, creating a world-leading sensing and perception company for physical AI.

Speaker #4: We are already seeing the strategic rationale transform into operational reality with a resoundingly positive customer response. And just yesterday, we launched Rev8, the world's first native color LiDAR and a paradigm shift in AI perception.

Speaker #4: To perceive the world in full context requires a combination of structure and color, and Rev8 is the first sensor to unify both. With native color across our entire product portfolio of cameras and LiDARs, we have further strengthened Ouster as the foundational sensing and perception platform for physical AI as we provide unified products and solutions that accelerate customer innovation and unlock new applications that sense, think, act, and learn in the physical world.

Angus Pacala: With native color across our entire product portfolio of cameras and lidars, we have further strengthened Ouster as the foundational sensing and perception platform for Physical AI as we provide unified products and solutions that accelerate customer innovation and unlock new applications that sense, think, act, and learn in the physical world. Now turning to an update of our Q1 2026 results. Ouster had a strong start to the year, achieving our 13th straight quarter of product revenue growth with over 12,600 lidar and cameras shipped, reflecting robust demand for our expanded product portfolio. With $49 million in revenue, we achieved another record product revenue quarter on a strong 43% gross margin, overcoming headwinds from a continuing constrained supply chain environment.

Speaker #4: Now turning to an update of our Q1 2026 results. Ouster had a strong start to the year, achieving our 13th straight quarter of product revenue growth with over $12,600 LiDAR and camera shipped.

Speaker #4: Reflecting robust demand for our expanded product portfolio. With 49 million in revenue, we achieved another record product revenue quarter on a strong 43% gross margin, overcoming headwinds from a continuing constrained supply chain environment.

Speaker #4: We ended the quarter with adjusted EBITDA loss of $7 million and cash, cash equivalents, and restricted cash, and short-term investments of $175 million. Our LiDAR business grew approximately 44% year over year, with strong contributions from our industrial vertical, where we secured several large deals to power industrial automation.

Angus Pacala: We ended the quarter with adjusted EBITDA loss of $7 million and cash equivalents, and restricted cash and short-term investments of $175 million. Our lidar business grew approximately 44% year-over-year, with strong contributions from our industrial vertical, where we secured several large deals to power industrial automation. We significantly expanded our long-term relationship with a large European industrial company for port automation. In another key win, supported by our NDAA compliance centers, we secured a deal with an autonomous earthmoving company to retrofit heavy equipment to support a project with the US Department of Defense. Ouster's smart infrastructure solutions business continues to validate our end-to-end system strategy.

Speaker #4: We significantly expanded our long-term relationship with a large European industrial company for port automation. In another key win, supported by our NDAA compliance sensors, we secured a deal with an autonomous earth-moving company to retrofit heavy equipment to support a project with the US Department of Defense.

Speaker #4: Ouster's smart infrastructure solutions business continues to validate our end-to-end system strategy. We saw continued momentum from our expanded ITS distributor network as we won contracts to deploy Ouster Blue City across the United States.

Angus Pacala: We saw continued momentum from our expanded ITS distributor network as we won contracts to deploy Ouster BlueCity across the United States, securing large million-dollar deals to provide next-generation traffic actuation systems in Arizona, Michigan, and the Northeast US. We were also proud to announce the expansion of Ouster BlueCity with the Georgia Department of Transportation to modernize the region's traffic infrastructure. The turnkey Ouster BlueCity traffic management solution will be deployed at more than 30 intersections across the greater Atlanta area in preparation for the FIFA World Cup and beyond. BlueCity is bringing physical AI to smart cities around the world with over 700 contracted site deployments across intersections, mid-blocks, and highways, reinforcing Ouster's position as a leading solution for transportation departments seeking to transition from legacy traffic solutions into dynamic, digitally integrated, 3D lidar-powered traffic management solutions for actuation and analytics.

Speaker #4: Securing large million-dollar deals to provide next-generation traffic actuation systems in Arizona, Michigan, and the Northeast US. We were also proud to announce the expansion of Ouster Blue City with the Georgia Department of Transportation to modernize the region's traffic infrastructure.

Speaker #4: The turnkey Ouster Blue City traffic management solution will be deployed at more than 30 intersections across the greater Atlanta area in preparation for the FIFA World Cup and beyond.

Speaker #4: Blue City is bringing physical AI to smart cities around the world with over 700 contracted site deployments across intersections, mid-blocks, and highways, reinforcing Ouster's position as a leading solution for transportation departments seeking to transition from legacy traffic solutions into dynamic digitally integrated 3D LiDAR-powered traffic management solutions for actuation and analytics.

Speaker #4: We also saw strength from Ouster Gemini in the quarter, recognizing millions of dollars of revenue from a significant customer renewal. Leveraging our unified platform and proprietary deep learning perception model trained on over 4 million labeled objects, Gemini empowers our customers to operate more efficiently and safely at over 550 sites around the world.

Angus Pacala: We also saw strength from Ouster Gemini in the quarter, recognizing millions of dollars of revenue from a significant customer renewal. Leveraging our unified platform and proprietary deep learning perception model trained on over 4 million labeled objects, Gemini empowers our customers to operate more efficiently and safely at over 550 sites around the world. In the months since the acquisition, Stereolabs has already proven to be a perfect complement. We're seeing benefits of our unified platforms through the ability to immediately help customers combine multiple modalities of sensors and AI compute, easing the friction of combining disparate technologies and accelerating our customers' go-to-market efforts. The rapid integration and commercial success of our expanded camera vision portfolio provided tailwinds during the quarter, and business momentum exceeded our initial expectations.

Speaker #4: In the months since the acquisition, Stereo Labs has already proven to be a perfect complement. We're seeing benefits of our unified platforms through the ability to immediately help customers combine multiple modalities of sensors and AI compute, easing the friction of combining disparate technologies and accelerating our customers' go-to-market efforts.

Speaker #4: The rapid integration and commercial success of our expanded camera vision portfolio provided tailwinds during the quarter, and business momentum exceeded our initial expectations. We are seeing strong demand from companies building foundational AI models and advanced robotics platforms, and leading companies around the world are relying on our expanded product portfolio to train, scale, and deploy the next generation of autonomous delivery, advanced manipulation, and precision agriculture.

Angus Pacala: We are seeing strong demand from companies building foundational AI models and advanced robotics platforms. Leading companies around the world are relying on our expanded product portfolio to train, scale, and deploy the next generation of autonomous delivery, advanced manipulation, and precision agriculture. We continue to see large opportunities for Stereolabs to augment Ouster's perception roadmap to meet physical AI's increasing demand for sophisticated multi-sensor fusion. By merging our proprietary AI models with Stereolabs' neural depth capabilities, we are delivering the specialized perception logic and application-specific software required to revolutionize safety and efficiency across the global supply chain. Continuing the momentum and our leadership in cameras for physical AI, we released the Stereolabs ZED X Nano, which is shipping this month.

Speaker #4: We continue to see large opportunities for Stereo Labs to augment Ouster's perception roadmap to meet physical AI's increasing demand for sophisticated multisensor fusion. By merging our proprietary AI models with Stereo Labs' neural depth capabilities, we are delivering the specialized perception logic and application-specific software required to revolutionize safety and efficiency across the global supply chain.

Speaker #4: Continuing the momentum and our leadership in cameras for physical AI, we released the Stereo Labs ZX Nano, which is shipping this month. This product sets a new standard for wrist-mount stereo vision, delivering 2.3 megapixels of RGB with neural depth, zero-copy capture data pipeline, and ruggedized GMSL2 connectivity in a 40% smaller form factor.

Angus Pacala: This product sets a new standard for wrist-mount stereo vision, delivering 2.3 megapixels RGB with neural depth, zero copy capture data pipeline, and ruggedized GMSL2 connectivity in a 40% smaller form factor. Like all Stereolabs cameras, the ZED X Nano comes with a purpose-trained neural depth model, specifically tuned for its capabilities and further highlighting Ouster's deep vertical integration from hardware to software. Engineered for robotic manipulation and high throughput data collection, we are helping robotics teams scale imitation and reinforcement learning for manipulation tasks. Leveraging Stereolabs' industry-leading image quality and end-to-end capture latency, our customers can now overcome critical bottlenecks by capturing high-resolution RGB and stereo camera depth images at up to 120 frames per second for training data and manipulation learning. Now turning to yesterday's highly anticipated product announcement.

Speaker #4: Like all Stereo Labs cameras, the ZX Nano comes with a purpose-trained neural depth model, specifically tuned for its capabilities, and further highlighting Ouster's deep vertical integration from hardware to software.

Speaker #4: Engineered for robotic manipulation and high-throughput data collection, we are helping robotics teams scale, imitation, and reinforcement learning for manipulation tasks. Leveraging Stereo Labs' industry-leading image quality and end-to-end capture latency, our customers can now overcome critical bottlenecks by capturing high-resolution RGB and stereo camera depth images at up to 120 frames per second for training data and manipulation learning.

Speaker #4: And now turning to yesterday's highly anticipated product announcement. I'm truly excited to introduce Rev8, the world's first native-color LiDAR sensors powered by next-generation L4 Ouster silicon.

Angus Pacala: I'm truly excited to introduce Rev8, the world's first native color lidar sensors powered by next-generation L4 Ouster Silicon. We are redefining the meaning of lidar itself with native color sensing implemented directly on the silicon. By fusing color and 3D data through physics and leveraging Fujifilm color science, our patented native color technology unlocks megapixel resolution and stunning image quality with ultra-low latency and perfect spatial temporal alignment. We worked with industry-leading camera experts to ensure Rev8 delivers uncompromising industrial-grade imaging. Delivering an exceptional 48-bit color depth and 116 dB of dynamic range, Ouster's native color data maintains performance in lighting extremes from 1 lux to 2 million lux. We live in a world where a machine's capacity to perceive is constrained by the capability of its sensors.

Speaker #4: We are redefining the meaning of LiDAR itself with native-color sensing implemented directly on the silicon. By fusing color and 3D data through physics, and leveraging Fujifilm color science, our patented native-color technology unlocks megapixel resolution and stunning image quality with ultra-low latency and perfect spatial temporal alignment.

Speaker #4: We work with industry-leading camera experts to ensure Rev8 delivers uncompromising industrial-grade imaging, delivering an exceptional 48-bit color depth and 116 dB of dynamic range, Ouster's native-color data maintains performance in lighting extremes from 1 lux to 2 million lux.

Speaker #4: We live in a world where a machine's capacity to perceive is constrained by the capability of its sensors. Rev8 is built to generate the petabytes of rich, native-color 3D information necessary to build the next generation of physical AI systems and train new world models.

Angus Pacala: Rev8 is built to generate the petabytes of rich native color 3D information necessary to build the next generation of physical AI systems and train new world models. For the first time, a single lidar sensor can understand road signs, interpret brake lights, or simply capture the richness of planet Earth in survey-grade colorized maps. Featuring radically upgraded OS0, OS1, and OSDome sensors, and the new flagship 256-channel OS1 Max, Rev8 delivers industry-leading resolution, range, and reliability designed for functional safety, affordability, and scale. Rev8 represents the culmination of years of research and development, innovative design, and rigorous testing. It is the most advanced family of lidar Ouster has ever developed and sets a new standard in sensing. All of this is a testament to Ouster's digital-first approach, which starts with our proprietary system on chip.

Speaker #4: Now, for the first time, a single LiDAR sensor can understand road signs, interpret brake lights, or simply capture the richness of planet Earth in survey-grade, colorized maps.

Speaker #4: Featuring radically upgraded OS0, OS1, and OS Dome sensors, and the new flagship 256-channel OS1 Max, Rev8 delivers industry-leading resolution, range, and reliability designed for functional safety, affordability, and scale.

Speaker #4: Rev8 represents the culmination of years of research and development, innovative design, and rigorous testing. It is the most advanced family of LiDAR Ouster has ever developed and sets a new standard in sensing.

Speaker #4: All of this is a testament to Ouster's digital-first approach, which starts with our proprietary system on chip. Rev8 is powered by our breakthrough L4 Ouster silicon, with up to 256 channels of resolution honed over years of development by our in-house silicon design team.

Angus Pacala: Rev8 is powered by our breakthrough L4 Ouster Silicon with up to 256 channels of resolution honed over years of development by our in-house silicon design team. The L4 architecture features both the 128-channel L4 and the 256-channel L4 Max, each embedded with Fujifilm color science resulting in exquisite color data and hardware-enabled high dynamic range. The L4 boasts 42.9 gigamax of processing power, detection of up to 20 trillion photons per second, a 40 kHz measurement rate with picosecond timing precision, and is capable of processing up to 10.4 million points per second and 22.4 Gb per second of data bandwidth off chip. We've paired it with a completely redesigned light engine featuring all new custom VCSEL arrays and our most advanced driver topology ever.

Speaker #4: The L4 architecture features both the 128-channel L4 and the 256-channel L4 Max. Each embedded with Fujifilm color science, resulting in exquisite color data and hardware-enabled high dynamic range.

Speaker #4: The L4 boasts 42.9 gigamax of processing power, detection of up to 20 trillion photons per second, a 40 kilohertz measurement rate, with picosecond timing precision, and is capable of processing up to 10.4 million points per second and 22.4 gigabits per second of data bandwidth off chip.

Speaker #4: And we've paired it with a completely redesigned light engine featuring all-new custom pixel arrays and our most advanced driver topology ever. Enhanced by picosecond timing precision, this architecture delivers unprecedented levels of range, resolution, and accuracy across the entire Rev8 OS family.

Angus Pacala: Enhanced by picosecond timing precision, this architecture delivers unprecedented levels of range, resolution, and accuracy across the entire Rev8 OS family. The cornerstone of the new Rev8 family is the flagship OS1 Max, a sensor without compromise. With double the resolution of the REV7 OS2 and a quarter of the size, the OS1 Max packs an incredible amount of capability into a small ruggedized form factor. The OS1 Max provides best-in-class performance with 256 channels of high-definition sensing up to 500 meters in all directions with a 45-degree vertical field of view. No other 360-degrees spinning lidar comes close. Purpose-built for high-speed autonomy, smart infrastructure, and heavy industrial applications, the OS1 Max is capable of resolving the smallest objects at long range. Like all Rev8 sensors, the OS1 Max offers exceptional native color imaging. We didn't stop there.

Speaker #4: The cornerstone of the new Rev8 family is the flagship OS 1 Max, a sensor without compromise. With double the resolution of the Rev7 OS 2 and a quarter of the size, the OS 1 Max packs an incredible amount of capability into a small, ruggedized form factor.

Speaker #4: The OS 1 Max provides best-in-class performance with 256 channels of high-definition sensing up to 500 meters in all directions, with a 45-degree vertical field of view.

Speaker #4: No other 360-degree spinning LiDAR comes close. Purpose-built for high-speed autonomy, smart infrastructure, and heavy industrial applications, the OS 1 Max is capable of resolving the smallest objects at long range.

Speaker #4: And like all Rev8 sensors, the OS 1 Max offers exceptional native-color imaging. But we didn't stop there. We set out to build the safest family of 3D LiDAR sensors ever created.

Angus Pacala: We set out to build the safest family of 3D lidar sensors ever created. This took years of rigorous engineering work, testing, and design validation. The result, Rev8, is life-saving technology made right. Ruggedized for the real world with automotive-grade reliability that can withstand the harshest production environments. Ouster now offers a set of products to break into the multi-billion dollar market for industrial safety sensors long dominated by legacy players by replacing outdated 2D laser scanners and cameras with high-resolution 3D native color lidars. Every sensor is auto-grade, cybersecure, and designed for ASIL B, SIL 2, and PLd functional safety certifications, ensuring continuous uptime and industry-leading reliability. Importantly, this is a platform built to scale. Rev8 was designed for low-cost, high-volume production deployments to support mass market adoption. With a planned 10-year production life, Rev8 sensors provide the long-term program stability and scalability required for global commercial rollouts.

Speaker #4: This took years of rigorous engineering work, testing, and design validation. The result: Rev8 is life-saving technology made right. Ruggedized for the real world with automotive-grade reliability that can withstand the harshest production environments.

Speaker #4: Ouster now offers a set of products to break into the multibillion-dollar market for industrial safety sensors long dominated by legacy players, by replacing outdated 2D laser scanners and cameras with high-resolution 3D native-color LiDARs.

Speaker #4: Every sensor is auto-grade, cybersecure, and designed for ASIL-B, SIL-2, and PLD functional safety certifications. Ensuring continuous uptime and industry-leading reliability. Importantly, this is a platform built to scale.

Speaker #4: Rev8 was designed for low-cost, high-volume production deployments to support mass market adoption. With a planned 10-year production life, Rev8 sensors provide the long-term programs stability and scalability required for global commercial rollouts.

Speaker #4: With Rev8, we're delivering the safest, most feature-rich, secure, and reliable family of 3D LiDAR sensors we have ever built. And we hit the ground running.

Angus Pacala: With Rev8, we're delivering the safest, most feature-rich, secure, and reliable family of 3D lidar sensors we have ever built, and we hit the ground running. Earlier today, we announced the integration of our new Rev8 family across the NVIDIA Jetson platform, bringing native color lidar to the NVIDIA robotics ecosystem for the first time. With dedicated support for Rev8 across NVIDIA JetPack, Isaac Sim, and Jetson AGX Orin and Thor, we're ensuring rich, high-fidelity 3D digital lidar data is fully harnessed by NVIDIA's accelerated computing and development tools. This builds on years of integration support for previous OS sensor generations, as well as Stereolabs' own integrations across the entire ZED portfolio.

Speaker #4: Earlier today, we announced the integration of our new Rev8 family across the NVIDIA Jetson platform, bringing native-color LiDAR to the NVIDIA Robotics ecosystem for the first time.

Speaker #4: With dedicated support for Rev8 across NVIDIA Jetpack, Isaac Sim, and Jetson AGX Orin and Thor, we're ensuring rich, high-fidelity 3D digital LiDAR data is fully harnessed by NVIDIA's accelerated computing and development tools.

Speaker #4: This builds on years of integration support for previous OS sensor generations, as well as Stereo Lab's own integrations across the entire Z portfolio. Together, we are providing the essential building blocks for physical AI, enabling machines to sense, think, and act in the real world with more speed and precision than ever before.

Angus Pacala: Together, we are providing the essential building blocks for Physical AI, enabling machines to sense, think, and act in the real world with more speed and precision than ever before. Rev8 is shipping today and is being adopted by some of the world's most innovative companies. This is a testament to our close collaboration with key customers over years to ensure Rev8 met their program needs. We're already seeing early traction with dozens of technology leaders across the industrial, robotics, automotive, and smart infrastructure markets intending to adopt Rev8 OS sensors, including Google, Volvo Autonomous Solutions, Lever, Epiroc, FieldAI, Flyability, Skydio, PlusAI, Constellus, Bedrock, Castfor, Third Wave Automation, Burroughs, Seegrid, Gecko Robotics, Pratt Miller, AIM Intelligent Machines, Cyngn, Freefly Systems, ATI Industrial Automation, and SwarmFarm Robotics, among others.

Speaker #4: Rev8 is shipping today, and is being adopted by some of the world's most innovative companies. This is a testament to our close collaboration with key customers over years, to ensure Rev8 met their program needs.

Speaker #4: We're already seeing early traction with dozens of technology leaders across the industrial, robotics, automotive, and smart infrastructure markets intending to adopt Rev8 OS sensors.

Speaker #4: Including Google, Volvo Autonomous Solutions, Lieber, Epiroc, Field AI, flyability, Skydio, Plus AI, Constellus, Bedrock, Casbor, Third Wave Automation, Burrows, Seagrid, Gecko Robotics, Pratt & Miller, AAM Intelligent Machines, Syngen, FreeFly Systems, ATI Robotics, and Swarm Farm, among others.

Speaker #4: Clearly, there is overwhelming customer pull for Rev8, and this gives us confidence and incredibly strong back half of the year. We spent years developing these groundbreaking capabilities, and I am thrilled to finally introduce Rev8 to the world.

Angus Pacala: Clearly, there is overwhelming customer pull for REV8, and this gives us confidence in an incredibly strong H2. We spent years developing these groundbreaking capabilities, and I am thrilled to finally introduce REV8 to the world. With that, let me now turn the call over to Kenneth Gianella, who will provide more context on our Q1 financial results.

Speaker #4: With that, let me now turn the call over to Ken, who will provide more context on our first quarter financial results.

Speaker #2: Thank you, Angus. And hello, everyone. As you heard, our excitement over the acquisition of Stereo Labs and our new product launches look to keep the momentum we built in 2025 continuing into 2026.

Kenneth Gianella: Thank you, Angus. Hello, everyone. As you heard, our excitement over the acquisition of Stereolabs and our new product launches look to keep the momentum we built in 2025 continuing into 2026. In Q1, we are pleased with our continued progress against both our financial and operational goals, which are the cornerstones of our path to profitability. Our results demonstrate the resilience of our operating model and a disciplined financial management across the business as we continue to execute within our long-term financial framework. Turning to the Q1 financial performance. Operating results were strong, with revenue of $49 million, which included approximately 7 weeks of contribution from Stereolabs. This represents an increase of 49% compared with Q1 last year.

Ken Gianella: Thank you, Angus. Hello, everyone. As you heard, our excitement over the acquisition of Stereolabs and our new product launches look to keep the momentum we built in 2025 continuing into 2026. In Q1, we are pleased with our continued progress against both our financial and operational goals, which are the cornerstones of our path to profitability. Our results demonstrate the resilience of our operating model and a disciplined financial management across the business as we continue to execute within our long-term financial framework. Turning to the Q1 financial performance. Operating results were strong, with revenue of $49 million, which included approximately 7 weeks of contribution from Stereolabs. This represents an increase of 49% compared with Q1 last year.

Speaker #2: In the first quarter, we are pleased with our continued progress against both our financial and operational goals. Which are the cornerstones of our path to profitability.

Speaker #2: Our results demonstrate the resilience of our operating model and the disciplined financial management across the business as we continue to execute within our long-term financial framework.

Speaker #2: Turning the first quarter financial performance, operating results were strong, with revenue of $49 million which included approximately seven weeks of contribution from Stereo Labs.

Speaker #2: This represents an increase of 49% compared with the first quarter last year. We shipped over 12,600 sensors, which included over 8,300 LiDAR—a new quarterly record—and over 4,300 camera sensors.

Kenneth Gianella: We shipped over 12,600 sensors, which included over 8,300 lidar, a new quarterly record, and over 4,300 camera sensors. Royalty revenue in Q1 was not material. As I mentioned in our March call, this year, we expect total royalty revenue in 2026 to be less than $5 million. The majority of this amount will be recognized in the back half of this year. Smart infrastructure vertical was the largest contributor to Q1 revenue, followed by industrial. GAAP gross margin was 43%, up 200 basis points from the same quarter last year. GAAP operating expenses were $40 million, an increase of 7% from Q1 last year. The increase was primarily due to the addition of Stereolabs' operating expenses, including $2.3 million of acquisition in integration-related charges in Q1.

Ken Gianella: We shipped over 12,600 sensors, which included over 8,300 lidar, a new quarterly record, and over 4,300 camera sensors. Royalty revenue in Q1 was not material. As I mentioned in our March call, this year, we expect total royalty revenue in 2026 to be less than $5 million. The majority of this amount will be recognized in the back half of this year. Smart infrastructure vertical was the largest contributor to Q1 revenue, followed by industrial. GAAP gross margin was 43%, up 200 basis points from the same quarter last year. GAAP operating expenses were $40 million, an increase of 7% from Q1 last year. The increase was primarily due to the addition of Stereolabs' operating expenses, including $2.3 million of acquisition in integration-related charges in Q1.

Speaker #2: Royalty revenue in Q1 was not material. As I mentioned in our March call, this year we expect total royalty revenue in 2026 to be less than $5 million.

Speaker #2: The majority of this amount will be recognized in the back half of this year. The smart infrastructure vertical was the largest contributor to first quarter revenue, followed by industrial.

Speaker #2: Gap gross margin was 43%, up 200 basis points from the same quarter last year. Gap operating expenses were $40 million. An increase of 7% from the first quarter last year.

Speaker #2: The increase was primarily due to the addition of Stereo Labs' operating expenses including $2.3 million of acquisition and integration-related charges in Q1. We continue to anticipate year-over-year operating expenses to be higher 5% to 8% with the acquisition of Stereo Labs.

Kenneth Gianella: We continue to anticipate year-over-year operating expenses to be higher 5% to 8% with the acquisition of Stereolabs. However, we continue to focus on our path to profitability and will remain diligent in managing our operating expense profile. Excluding the acquisition and integration expense of Stereolabs, our adjusted EBITDA in Q1 was -$7 million, compared with -$8 million in Q1 last year. Ouster remains one of the industry's strongest balance sheets, ending the quarter with cash equivalents, restricted cash, and short-term investments of $175 million and no debt. The strength of our balance sheet gives us the strategic and financial flexibility to operate our business and gives confidence to our customers who rely on Ouster as a key Physical AI partner on their long-term autonomy journey. Now, turning to guidance.

Ken Gianella: We continue to anticipate year-over-year operating expenses to be higher 5% to 8% with the acquisition of Stereolabs. However, we continue to focus on our path to profitability and will remain diligent in managing our operating expense profile. Excluding the acquisition and integration expense of Stereolabs, our adjusted EBITDA in Q1 was -$7 million, compared with -$8 million in Q1 last year. Ouster remains one of the industry's strongest balance sheets, ending the quarter with cash equivalents, restricted cash, and short-term investments of $175 million and no debt. The strength of our balance sheet gives us the strategic and financial flexibility to operate our business and gives confidence to our customers who rely on Ouster as a key Physical AI partner on their long-term autonomy journey. Now, turning to guidance.

Speaker #2: However, we continue to focus on our path to profitability and will remain diligent in managing our operating expense profile. Excluding the acquisition and integration expense of Stereo Labs, our adjusted EBITDA in Q1 was negative $7 million.

Speaker #2: Compared with negative $8 million in the first quarter last year. I'll still remain one of the industry's strongest balance sheets ending the quarter with cash, cash equivalents, restricted cash, and short-term investments of $175 million.

Speaker #2: And no debt. The strength of our balance sheet gives us the strategic and financial flexibility to operate our business, and gives confidence to our customers who rely on Ouster as a key physical AI partner on their long-term autonomy journey.

Speaker #2: Now, turning to guidance. For the second quarter of 2026, we expect to achieve total revenue in the range of $49.5 million, to $52.5 million.

Kenneth Gianella: For Q2 2026, we expect to achieve total revenue in the range of $49.5 million to $52.5 million. Beyond the revenue outlook for Q2, I want to reiterate the long-term financial framework I discussed last quarter, which includes revenue growth of 30% to 50%, GAAP gross margins of 35% to 40%, and GAAP operating expense growth of 5% to 8% from our 2025 levels. With our acquisition of Stereolabs, the release of Rev8, our smart infrastructure solutions, and our investment in foundational AI models, Ouster has one of the broadest range of perception and sensing products in the market. We remain confident that our innovation and go-to-market strategy will continue to bring us closer to positive operating free cash flow and profitability. I'll now turn the call back to Angus for his closing remarks.

Ken Gianella: For Q2 2026, we expect to achieve total revenue in the range of $49.5 million to $52.5 million. Beyond the revenue outlook for Q2, I want to reiterate the long-term financial framework I discussed last quarter, which includes revenue growth of 30% to 50%, GAAP gross margins of 35% to 40%, and GAAP operating expense growth of 5% to 8% from our 2025 levels. With our acquisition of Stereolabs, the release of Rev8, our smart infrastructure solutions, and our investment in foundational AI models, Ouster has one of the broadest range of perception and sensing products in the market. We remain confident that our innovation and go-to-market strategy will continue to bring us closer to positive operating free cash flow and profitability. I'll now turn the call back to Angus for his closing remarks.

Speaker #2: Beyond the revenue outlook for Q2, I want to reiterate the long-term financial framework I discussed last quarter, which includes revenue growth of 30% to 50%, gap gross margins of 35% to 40%, and gap operating expense growth of 5% to 8% from our 2025 levels.

Speaker #2: With our acquisition of Stereo Labs, the release of Rev8, our smart infrastructure solutions, and our investment in foundational AI models, Ouster has one of the broadest range of perception and sensing products in the market.

Speaker #2: We remain confident that our innovation and go-to-market strategy will continue to bring us closer to positive operating free cash flow and profitability. I'll now turn the call back to Angus for his closing remarks.

Speaker #3: Thanks, Ken. To close out, we are off to a great start executing against our 2026 strategic priorities. Revolutionizing our LiDAR camera and AI compute products, extending our leadership in physical AI solutions, and executing towards profitability.

Angus Pacala: Thanks, Ken. To close out, we are off to a great start executing against our 2026 strategic priorities, revolutionizing our lidar camera and AI compute products, extending our leadership in physical AI solutions, and executing towards profitability. We kicked off the year with strong momentum, delivering our 13th consecutive quarter of product revenue growth. We're executing on our strategy to provide physical AI's first unified sensing and perception platform, I'm excited by the transformative products we're bringing to market this year as we work to solve our customers' most complex challenges. Rev8 is redefining the meaning of lidar with fundamentally new capabilities that empower our customers to simplify their perception stacks, better train next generation world models, and scale their production deployments. On the heels of a successful Q1, Ouster is better positioned than ever as the foundational end-to-end sensing and perception platform for physical AI.

Speaker #3: We kicked off the year with strong momentum, delivering our 13th consecutive quarter of product revenue growth. We're executing on our strategy to provide physical AI's first unified sensing and perception platform, and I'm excited by the transformative products we're bringing to market this year as we work to solve our customers' most complex challenges.

Speaker #3: Rev8 is redefining the meaning of LiDAR with fundamentally new capabilities that empower our customers to simplify their perception stacks. Better train next-generation world models, and scale their production deployments.

Speaker #3: On the heels of a successful first quarter, Ouster is better positioned than ever as the foundational end-to-end sensing and perception platform for physical AI.

Speaker #3: With that, I'd like to open up the call for Q&A.

Angus Pacala: With that, I'd like to open up the call for Q&A.

Speaker #1: Thank you. At this time, we will conduct the question-and-answer session. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced.

Operator: Thank you. At this time, we will conduct the question-and-answer session. As a reminder, to ask a question, you will need to press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Colin Rusch of Oppenheimer & Co.. Your line is now open.

Speaker #1: To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Colin Rush.

Speaker #1: Of Oppenheimer & Co. Your line is now open.

Colin Rusch: Thanks so much, guys, and congratulations on getting REV8 out. You know, I guess I have a two-part question to start with that introduction. Obviously, you've been working very closely with a lot of customers, I'm curious about two things. One, you know, how many of them have been waiting for this product to move into series production with some of their products, given some of the range and the functional safety pieces to this? Then the second part is really about which new applications are you seeing as material opportunities for you guys to move into given the, you know, the functionality improvements that you're seeing with this next generation product?

Speaker #4: Thanks so much, guys, and congratulations on getting Rev8 out. I guess I have a two-part question to start with that introduction. Obviously, you’ve been working very closely with a lot of customers, and I’m curious about two things.

Speaker #4: One, how many of them have been waiting for this product to move into series production with some of their products given some of the range and the functional safety pieces to this?

Speaker #4: And then the second part is really about which new applications are you seeing as material opportunities for you guys to move into given the functionality improvements that you're seeing with this next-generation product?

Speaker #2: Hey, Colin, thanks for the question. So while we don't pre-announce we held on to the Rev8 announcement until it was ready to ship this quarter.

Angus Pacala: Hey, Colin. Thanks for the question. While we don't pre-announce, we held on to the REV8 announcement until it was ready to ship this quarter. Behind the scenes, we worked incredibly closely with a set of key customers for more than a year to make sure that REV8 met their needs, both their current needs and future needs to expand business with us over time. It's no surprise that we had a really compelling list of over 20 customers that I announced, and I'm gonna spare reading through them again. It spans the gamut of existing customers doing things that they've always done, but doing them much more capably with a colorized point cloud, to all new applications. A great example of that would be high-altitude drone surveying.

Speaker #2: Behind the scenes, we were incredibly closely with a set of key customers for more than a year to make sure that Rev8 met their needs both their current needs and future needs to expand business with us over time.

Speaker #2: So it's no surprise that we had a really compelling list of over 20 customers that I announced and I'm going to spare reading through them again but it spans the gamut of existing customers doing things that they've always done but doing them much more capably with a colorized point cloud.

Speaker #2: To all new applications, so a great example of that would be high-altitude drone surveying. The OS1 Max is the perfect sensor for simplifying a drone payload, and we have a great interested customer, Skydio, who is very interested in the OS1 Max and gave some great comments about how the combination of payload into a single platform makes it a game changer for their type of surveying application, where weight is at a premium and quality of data is at a premium.

Angus Pacala: The OS1 Max is the perfect sensor for simplifying a drone payload. You know, we have a great, interested customer, Skydio, who is very interested in the OS1 Max and gave some great comments about how the combination of payload into a single platform makes it a game changer for their type of surveying application, where weight is at a premium and quality of data is at a premium. We absolutely have new applications with the OS1 Max for things like that, for high-speed applications and driving on the highway or heavy machinery where you need to see small things at long range.

Speaker #2: So we absolutely have new applications with the OS1 Max for things like that, for high-speed applications and driving on the highway or heavy machinery where you need to see small things at long range.

Speaker #2: And then obviously the multibillion-dollar opportunity for functionally safe devices. Is brand new area for us to expand and our customer base and start to finally capture some of that significant value.

Angus Pacala: Obviously the multi-billion dollar opportunity for functionally safe devices is brand new area for us to expand in our customer base, and start to finally capture some of that significant value with these sensors. If you step back long term, I expect the vast majority of our customer base to adopt REV8 over time and to be operating with native color lidar data. I think the entire industry is going through a paradigm shift with this, and we're going to end up on the other side with native color REV8 lidars across the vast majority of customers.

Speaker #2: With these sensors. So but if you step back long-term, I expect the vast majority of our customer base to adopt Rev8 over time and to be operating with native color LiDAR data.

Speaker #2: I think the entire industry is going through a paradigm shift with this. And we're going to end up on the other side with native color Rev8 LiDARs across the vast majority of customers.

Speaker #4: Super helpful. Thank you for that. And I guess the second question is really now that you've got a fairly rapidly evolving portfolio of offerings, including the edge compute, I guess I'm curious about a couple of things.

Colin Rusch: Super helpful. Thank you for that. You know, I guess the second question is really now that you've got, you know, a fairly rapidly evolving portfolio of offerings, you know, including, you know, the edge compute, you know, I guess I'm curious about a couple of things. One, how we should be thinking about mix on a go-forward basis. Secondly, how much leverage you're getting from that edge compute capability in premise, you know, given some of the escalating data transfer expenses that we're starting to see for things like, you know, intersections where, you know, it can be upwards of, you know, $800,000 or $1 million of expense just to transfer data back to a data center if you're transferring all of it. Just curious how you're seeing that play out as well.

Speaker #4: One, how we should be thinking about mix and go forward basis and then secondly, how much leverage you're getting from that edge compute capability in-premise given some of the escalating data transfer expenses that we're starting to see for things like intersections where it can be upwards of 800,000 or a million dollars of expense just to transfer data back to a data center if you're transferring all of it.

Speaker #4: Just curious how you're seeing that play out as well.

Speaker #2: Yeah, sure. So in terms of the product portfolio, that's ever-expanding. I mean, I also want to highlight we released the ZX Nano during the quarter, which is a big deal.

Angus Pacala: Sure. In terms of the product portfolio, that's ever-expanding. I mean, I also want to highlight we released the ZED X Nano during the quarter, which is a big deal, and also a brand new use case in these wrist-mounted robotic manipulation. On the question of mix going forward, you know, we haven't split out exactly how we see that long-term unit basis or revenue basis, but we expect both of our businesses to grow very significantly. Obviously we had an incredibly strong quarter with 44% year-over-year growth for lidar-only business. Overall, we were up significantly year-over-year, especially with the Stereolabs acquisition. We expect to have very significant and strong growth across all of our product lines over time.

Speaker #2: And also a brand new use case in these wrist-mounted robotic manipulation. So on the question of mix going forward, the we haven't split out exactly how we see that long-term unit basis or revenue basis.

Speaker #2: But we expect both of our businesses to grow very significantly. And obviously, we had an incredibly strong quarter with 44% year-over-year growth for LiDAR-only business.

Speaker #2: And overall, we were up significantly year-over-year, especially with the stereo labs acquisition. So we expect to have very significant and strong growth across all of our product lines over time.

Speaker #2: And to the question around edge compute, I do expect that to start to contribute more to our overall business. Right now, I mean, we're really fresh off of acquiring stereo labs that compute was something that had good traction and still has good traction with their customer base.

Angus Pacala: To the question around edge compute, I do expect that to start to contribute more to our overall business. Right now, I mean, we're really fresh off of acquiring Stereolabs. The compute was something that had good traction and still has good traction with their customer base. We're going to invest more into the compute line that they started. I can't say that it's having a significant impact on, you know, the Ouster customers at this point. We're still getting our feet under us on exactly how to position that compute line up with the other customers. I do think it'll be a big opportunity for Ouster going forward.

Speaker #2: We're going to invest more into the compute line that they started. But I can't say that it's having a significant impact on the Ouster customers at this point.

Speaker #2: We're still getting our feet under us on exactly how to position that compute lineup with the other customers. But I do think it'll be a big opportunity for ouster going forward.

Speaker #4: Fantastic. Thanks, guys.

Colin Rusch: Fantastic. Thanks, guys.

Speaker #1: Thank you. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced to withdraw your question.

Operator: Thank you. As a reminder, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. One moment while we wait for our next question. Thank you. Our next question comes from the line of Kevin Cassidy of Rosenblatt Securities. Your line is now open.

Speaker #1: Please press star 11 again. One moment while we wait for our next question. Thank you. Our next question comes from the line of Kevin Cassidy of Rosenblatt Securities.

Speaker #1: Your line is now open.

Kevin Cassidy: Thanks for taking my question. Congratulations on launching Rev8 and continuing this high growth. Maybe along those lines, questions around Rev8, and you touched on it slightly, I think. Would REV7 continue to go in production? If, you know, what's the transition look like for the two different lidars?

Speaker #5: Thanks for taking my question, and congratulations on launching Rev8 and continuing this high growth. So, maybe along those lines, a question around Rev8—you touched on it slightly, I think.

Speaker #5: Would Rev7 continue to go in production? What's the transition look like for the two different LiDARs?

Speaker #2: Yeah, great question. So we are fully committed to continuing to produce and support Rev7 for established customer base. I mean, Rev7 has been out for three years now.

Angus Pacala: Yeah, great question. We're fully committed to continuing to produce and support REV7 for established customer base. I mean, REV7 has been out for three years now, and we have a lot of customers that have fully qualified and are in active production with the REV7 lineup. It's a great set of products. I mean, they really established Ouster as a performance technology and reliability leader in the lidar space, and we don't wanna change any of that. While Rev8 is designed to be a seamless upgrade for any customer that wants to, we wanna make sure that customers that have qualified REV7 can continue to operate their businesses with it. We're being customer friendly here and making sure that it's their choice when they transition.

Speaker #2: And we have a lot of customers that have fully qualified and are in active production with the Rev7 lineup. And it's a great set of products.

Speaker #2: I mean, they are really established ouster. As a performance technology and reliability leader in the LiDAR space. And we don't want to change any of that.

Speaker #2: So while Rev8 is designed to be a seamless upgrade for any customer that wants to, we want to make sure that customers that have qualified Rev7 can continue to operate their businesses with it.

Speaker #2: So this is we're being customer-friendly here and making sure that it's their choice when they transition.

Speaker #5: Oh, great. Okay. And yeah, I remember when Rev7 came out, it was an inflection point for you, especially on ASP increases. Are they similar ASPs between Rev7 and Rev8, or maybe even talk about the manufacturing and the gross margins between the two?

Kevin Cassidy: Oh, great. Okay. Yeah, I remember when REV7 came out, it was an inflection point for you, especially on ASP increases. Are they similar ASPs between REV7 and Rev8? Maybe even talk about the manufacturing and the gross margins between the two.

Speaker #2: Yeah, that's another great question about so Rev8 was designed to be more affordable than Rev7 and more scalable than Rev7. We want to make sure that we're enabling our customers to continue to scale.

Angus Pacala: That's another great question about Rev8 was designed to be more affordable than Rev7 and more scalable than Rev7. We wanna make sure that we're enabling our customers to continue to scale and to bring this technology to the broader Physical AI ecosystem. The Rev7 was a different scenario where we were introducing a fundamentally new capability, and ASPs went up. Here, it will be a little bit more of a mix because we have vastly more customers in production, and we can't disrupt the economics of their production. Yes, we have new products that are incredible, like the OS1 Max, that probably will command premium ASPs in certain domains.

Speaker #2: And to bring this technology to the broader physical AI ecosystem. So the Rev7 was a different scenario where we were introducing a fundamentally new capability, and ASPs went up.

Speaker #2: Here, it will be a little bit more of a mix because we have vastly more customers in production. And we can't disrupt the economics of their production.

Speaker #2: So yes, we have new products that are incredible like the OS1 Max that probably will command premium ASPs in certain domains. But we also want to make sure that a customer that wants to upgrade to Rev8 can do so without having a significant economic disruption or commercial disruption to the end business that they've created around a Rev7 product.

Angus Pacala: We also wanna make sure that a customer that wants to upgrade to Rev8 can do so without having a significant economic disruption or commercial disruption to the end business that they've created around a Rev7 product. Just going back again, highlighting Rev8 was built to be more scalable and more affordable than Rev7.

Speaker #2: And just going back again, highlighting Rev8 was built to be more scalable and more affordable than Rev7.

Speaker #5: Great. Okay. Sounds like a good strategy. Thank you.

Kevin Cassidy: Great. Okay. Sounds like a good strategy. Thank you.

Speaker #1: Thank you. One moment for our next question. Thank you. Our next question comes from the line of Andres Shepherd of Cantor Fitzgerald. Your line is now open.

Operator: Thank you. One moment for our next question. Thank you. Our next question comes from the line of Andres Sheppard of Cantor Fitzgerald. Your line is now open.

Speaker #6: Hey, guys. This is Anandan for Andres. Congrats on the quarter and thanks for taking our questions. It's really great to see an update on the L4 chip with the Rev8 announcement.

[Analyst] (Cantor Fitzgerald): Hey, guys. This is Anand on for Andres. Congrats on the quarter, and thanks for taking our questions. It's really great to see an update on the L4 chip with the Rev8 announcement. You know, based on the customer interest, as I know you disclosed a really long list of prospects on the call, maybe what type of opportunities there do you see in automotive, especially with robo taxis ramping up, you know, with Motional as your customer, et cetera? Who do you see interested there? What type of opportunities? Thank you.

Anand Balaji: Hey, guys. This is Anand on for Andres. Congrats on the quarter, and thanks for taking our questions. It's really great to see an update on the L4 chip with the Rev8 announcement. You know, based on the customer interest, as I know you disclosed a really long list of prospects on the call, maybe what type of opportunities there do you see in automotive, especially with robo taxis ramping up, you know, with Motional as your customer, et cetera? Who do you see interested there? What type of opportunities? Thank you.

Speaker #6: And based on the customer interest, as I know you disclosed, they're really long list of prospects on the call. Maybe what type of opportunities there do you see in automotive, especially with the Robotaxis ramping up with motional as your customer?

Speaker #6: Etc. Who do you see interested there? What type of opportunities? Thank you.

Speaker #2: So Rev8 is a big deal when it comes to the automotive world because Rev8 is an autograde sensor. They're designed for functional safety. So the ASIL-B functional safety spec in automotive is incredibly important whether you're whether it's LiDAR going into a consumer car or into Robotaxi or Robotruck.

Angus Pacala: Rev8 is a big deal when it comes to the automotive world because Rev8 is an auto-grade sensor. They're designed for functional safety, so the ASIL B functional safety spec in automotive is incredibly important, whether you're, you know, whether it's a lidar going into a consumer car or into robo taxi or a robo truck. Rev8, the OS1 Max, the OS0, purpose designed to be ideal sensors for that market. I'm expecting some pretty significant things there just because it's the first time that we'll have a full suite of lidars that blankets. You know, you can outrig an entire car in Ouster digital lidars and be a one-stop shop.

Speaker #2: So Rev8, the OS1 Max, the OS0—purpose-designed to be ideal sensors for that market. I’m expecting some pretty significant things there just because it’s the first time that we’ll have a full suite of LiDARs that blankets.

Speaker #2: You can outrig an entire car and ouster digital LiDARs and be a one-stop shop. So and we obviously, we worked in the background with a number of customers, many of which I couldn't name, around the Rev8 spec for the automotive domain.

Angus Pacala: We obviously work in the background with a number of customers, many which I couldn't name, around the Rev8 spec for the automotive domain. Yeah, a lot of things to come there. I think that just highlighting the long range, high resolution aspect of the OS1 Max and combining that with the colorized point clouds is pretty game changing in the automotive domain, where advanced AI algorithms go hand in hand with the kind of flexible physical AI progress that's been made in the ADAS sector. We think these are really good sensors for that domain, and I can't wait to get them in customers' hands.

Speaker #2: But yeah, so a lot of things to come there. I think that just highlighting the long-range, high-resolution aspect of the OS1 Max, and combining that with the colorized point clouds, is pretty game-changing in the automotive domain.

Speaker #2: Where advanced AI algorithms go hand in hand with the kind of flexible physical AI progress that's been made in the ADAS sector. So we think these are really good sensors for that domain, and I can't wait to get them in customers' hands.

Speaker #6: Got it. Thanks. Appreciate the caller. And I guess maybe a question for Ken. As we think about the gross margins and the EBITDA improving that, and as we go through the financials, what's the most important remaining steps to hit break-even?

[Analyst] (Cantor Fitzgerald): Got it. Thanks. Appreciate the color. I guess maybe a question for Ken. As we think about the gross margins and the EBITDA improving that, as we go through the financials, what's the most important remaining steps to hit breakeven? Is it the revenue scale, the gross margins, OpEx, or is it a mix of these things to improve the EBITDA? Thank you.

Anand Balaji: Got it. Thanks. Appreciate the color. I guess maybe a question for Ken. As we think about the gross margins and the EBITDA improving that, as we go through the financials, what's the most important remaining steps to hit breakeven? Is it the revenue scale, the gross margins, OpEx, or is it a mix of these things to improve the EBITDA? Thank you.

Speaker #6: Is it the revenue scale? The gross margins, OPEX, or is it a mix of these things to improve the EBITDA? Thank you.

Speaker #2: Well, I think number one, the continued innovation that we've been doing is a great stepping stone to showing how our long-term model that consistency that we've brought over the last three years it's just another proof point of us as a company ouster continuing to hit those proof points year after year after year.

Kenneth Gianella: Well, I think number 1, the continued innovation that we've been doing is a great stepping stone to showing how our long-term model, the consistency that we've brought over the last three years, it's just another proof point of us as a company, Ouster, continuing to hit those proof points year after year after year. That long-term model, the 30% to 50% growth, you know, obviously with the acquisition it was high. Even with XX acquisition, 44% growth year on year, that's just a proof point of our underlying innovation continuing to that long-term model. You know, if you do the math on that and you look at our gross margins even staying, you know, we had another strong tailwind that we overcame some economic challenges and constraints in the quarter for a strong GAAP gross margin quarter.

Ken Gianella: Well, I think number 1, the continued innovation that we've been doing is a great stepping stone to showing how our long-term model, the consistency that we've brought over the last three years, it's just another proof point of us as a company, Ouster, continuing to hit those proof points year after year after year. That long-term model, the 30% to 50% growth, you know, obviously with the acquisition it was high. Even with XX acquisition, 44% growth year on year, that's just a proof point of our underlying innovation continuing to that long-term model. You know, if you do the math on that and you look at our gross margins even staying, you know, we had another strong tailwind that we overcame some economic challenges and constraints in the quarter for a strong GAAP gross margin quarter.

Speaker #2: And that long-term model, the 30 to 50 percent growth, obviously with the acquisition, it was high. But even with XX acquisition, 44% growth year on year, that's just a proof point of our underlying innovation continuing to that long-term model.

Speaker #2: If you do the math on that and you look at our gross margins, even saying we had another strong tailwind that we overcame—some economic challenges and constraints in the quarter—it was a strong GAAP gross margin quarter.

Speaker #2: That 35 to 40 percent coupled with the growth rate and our discipline on the OPEX, the innovation we've done with little to no OPEX growth, that 5 to 8 percent with stereo labs and the 2.3 million dollar acquisition in the Q1.

Kenneth Gianella: That 35% to 40%, coupled with the growth rate and our discipline on the OpEx, you know, the innovation we've done with little to no OpEx growth, you know, that 5% to 8% with Stereolabs and the $2.3 million acquisition in the Q1. That combined together shows that we're on a strong path for, you know, somewhere within 2027 starting to hit that profitability stride. The model is holding true. We're gonna continue to execute towards that. It's a very important milestone for us to get to that. you know, this innovation is key to unlocking that continued long-term growth.

Ken Gianella: That 35% to 40%, coupled with the growth rate and our discipline on the OpEx, you know, the innovation we've done with little to no OpEx growth, you know, that 5% to 8% with Stereolabs and the $2.3 million acquisition in the Q1. That combined together shows that we're on a strong path for, you know, somewhere within 2027 starting to hit that profitability stride. The model is holding true. We're gonna continue to execute towards that. It's a very important milestone for us to get to that. you know, this innovation is key to unlocking that continued long-term growth.

Speaker #2: That combined together shows that we're on a strong path for somewhere within 27 starting to hit that profitability stride. So the model is holding true.

Speaker #2: We're going to continue to execute towards that. It's a very important milestone for us to get to that. But this innovation is key to unlocking that continued long-term growth.

Speaker #6: Gotcha. Thanks for all the color. Congrats again on the progress and on Rev8. I'll pass it on.

[Analyst] (Cantor Fitzgerald): Gotcha. Thanks for all the color. Congrats again on the progress and on Rev8. I'll pass it on.

Anand Balaji: Gotcha. Thanks for all the color. Congrats again on the progress and on Rev8. I'll pass it on.

Speaker #2: Thank you.

Kenneth Gianella: Thank you.

Ken Gianella: Thank you.

Speaker #1: Thank you. One moment for our next question. Thank you. Our next question comes from the line of Richard Shannon of Craig-Hallum. Your line is now open.

Operator: Thank you. One moment for our next question. Thank you. Our next question comes from the line of Richard Shannon of Craig-Hallum. Your line is now open.

Speaker #5: Well, hi, guys. Thanks for getting me here in the queue. Apologies—I just jumped on the call. I've got like four or five earnings here tonight, so I have no idea if this question was asked.

Richard Shannon: Well, hi guys. Thanks for getting me in here in the queue here. Apologies, I just jumped on the call. I got like four or five earnings here tonight, I have no idea if this question was asked, but I want to ask it anyway, which is, the new Rev8 product is quite interesting in many ways. A lot of performance improvements here, but the interesting one here is the ability to do color. I'm curious, Angus, if you can tell us a little bit more about that, how you did that, as I assume this is something in the detector. Wondering if this is, you know, in technology that's exclusive, inherent to Ouster or, are you the first one to try to implement this?

Speaker #5: But I want to ask it anyway, which is the new Rev8 product is quite interesting in many ways. A lot of performance improvements here.

Speaker #5: But the interesting one here is the ability to do color. I'm curious, Angus, if you can tell us a little bit more about that, how you did that.

Speaker #5: I assume this is something in the detector. Wondering if this is in technology that's exclusive and inherent to ouster or are you the first one to try to implement this?

Speaker #5: Just any ideas to help us understand how you're doing this? And then maybe throw in a follow-on what applications do you expect to be adopting that first?

Richard Shannon: Just any ideas to help us understand how you're doing this. Maybe if you wanna follow on, what applications do you expect to be adopting that first?

Speaker #2: Absolutely. Thanks, Richard. So I mean, the Rev8 native color point clouds are a genuine world-first invention. This is a really significant milestone for the LiDAR industry in general.

Angus Pacala: Absolutely. Thanks, Richard. The Rev8 native color point clouds are a genuine world first invention. This is a really significant milestone for the lidar industry in general, and it's a first of its kind technology, no question. The core innovation happens at the silicon level, and this just goes back to Ouster inventing digital lidar. We've continued to innovate at the silicon architecture level now by fusing in silicon color and lidar data so that customers don't have to think about this and getting an absolutely incredible result for the end customer. Absolutely, this is a world first direct innovation. Basically, the result of ten years of pushing on silicon innovation at Ouster and building it into the L4 and L4 Max chips.

Speaker #2: And it's a first-of-its-kind technology, no question. So the core innovation happens at the silicon level, and this just goes back to Ouster inventing digital LiDAR.

Speaker #2: And we've continued to innovate at the silicon architecture level, now by fusing in-silicon color and LiDAR data so that customers don't have to think about this, and getting absolutely incredible results.

Speaker #2: For the end customer. So absolutely, this is a world-first direct innovation, basically the result of 10 years of pushing on silicon innovation at Ouster.

Speaker #2: And building it into the L4 and L4 Max chips. In terms of the applications, I mean, the most the clearest opportunity here is simply more context to train the next generation of physical AI models.

Angus Pacala: In terms of the applications, I mean, the clearest opportunity here is simply more context to train the next generation of physical AI models. The world truly cannot be described with just 3D information or just color. It really is a combination of those two attributes that allows you to both sense the position of a street sign and read what it's saying, or sense the location of a car and knowing that it's just slammed on its brakes with the brake lights. Training AI models with a colorized point cloud data set is the final frontier that so many of our customers have been trying to reach. It's literally they call it the Holy Grail. I've heard that many times from our customer base.

Speaker #2: The world truly cannot be described with just 3D information or just color. It really is a combination of those two attributes that allows you to both sense the position of a street sign and read what it's saying.

Speaker #2: Or sense the location of a car and knowing that it's just slammed on its brakes with the brake lights. So training AI models with a colorized point cloud dataset is the final frontier that so many of our customers have been trying to reach.

Speaker #2: It's literally they call it the holy grail. I've heard that many times from our customer base. This is the holy grail colorized point clouds unified.

Angus Pacala: This is the Holy Grail, colorized point clouds unified, and trained into new AI algorithms. That's the most obvious use case, and that just gives better, safer, more capable AI systems. There's also one in 3D surveying. Almost all surveying applications require a combination of structure and color or texture to assess the quality and status of a bridge, right? If a bridge is degrading, you wanna know that it's structurally sagging, but you also wanna see that the concrete has cracked. Color and lidar data give you that. There are obvious applications with a customer set that really span every single customer use case.

Speaker #2: And trained for, trained in new AI algorithms. So that's the most obvious use case, and that just gives better, safer, more capable AI systems.

Speaker #2: There's also one in 3D surveying. So almost all surveying applications require a combination of structure and color or texture to assess the quality and status of a bridge, right?

Speaker #2: If you if a bridge is degrading, you want to know that it's structurally sagging, but you also want to see that the concrete has cracked.

Speaker #2: And so color and LiDAR data give you that. So there are obvious applications with a customer set that really span every single customer use case.

Speaker #2: It's hard to identify. Any customer that won't benefit from this which is why I said I think every customer effectively will adopt the Rev8 colorized capability eventually.

Angus Pacala: It's hard to identify any customer that won't benefit from this, which is why I said I think every customer effectively will adopt a Rev8 colorized capability eventually. Yeah, again, this just comes back to 10 years pushing silicon and innovation into our products, and this is the end result.

Speaker #2: So again, this just comes back to 10 years pushing silicon and innovation into our products. And this is the end result.

Speaker #5: Yeah. And Richard, I just want to point out to the last piece of it. This is over almost a dozen patents just on the RGB colorization alone.

Kenneth Gianella: Yeah, Richard, I just wanna point out to the last piece of it, you know, this is over, almost a dozen patents just on the RGB colorization alone. Then the underlying Rev8 technology, building not just from the REV7, but it's almost 200 patents underneath supporting the Rev8. You know, that technology and effort that we've put in to bring out there, is also covered with, you know, real innovation with those patents, for the company.

Ken Gianella: Yeah, Richard, I just wanna point out to the last piece of it, you know, this is over, almost a dozen patents just on the RGB colorization alone. Then the underlying Rev8 technology, building not just from the REV7, but it's almost 200 patents underneath supporting the Rev8. You know, that technology and effort that we've put in to bring out there, is also covered with, you know, real innovation with those patents, for the company.

Speaker #5: And then the underlying Rev8 technology, building not just from the Rev7, but it's almost 200 patents underneath supporting the Rev8. So that technology and effort that we've put in to bring out there is also covered with real innovation with those patents.

Speaker #5: For the company.

Speaker #6: Okay. That's helpful perspective and one quick follow-up again on this topic here. As you add in color to applications that are previously using LiDAR, how do we think about the upsize and value and price that you're able to charge for these sorts of things?

Richard Shannon: Okay. That's helpful perspective. One quick follow-up again on this topic here. As you add in color to applications that were previously using lidar, how do we think about the upsize and in value and price that you're able to charge for these sorts of things? Thank you.

Speaker #6: Thank you.

Speaker #2: Well, I think that did that goes back to another question that was asked around ASPs and how this filters down into costs and value capture.

Angus Pacala: Well, I think that did that goes back to another question that was asked around ASPs and how this filters down into costs and value capture. This here really depends on the application. We always try to price our products to enable our customer's commercial application. It's one of the key strategies that we've done really well with, maintaining strong gross margins, but also working with customers to make sure that the pricing works for their business at scale. I'm giving you an unsatisfying answer. Rev8, the technology and getting color into our customers' hands, the pricing depends on the customer application. We do wanna make sure that customers don't have price as an impediment to adopting an incredible capability that actually enables their long-term viability as a company.

Speaker #2: And this here really depends on the application. We always try to price our products to enable our customers' commercial application. It's one of the key strategies that we've done really well with—maintaining strong gross margins, but also working with customers to make sure that the pricing works for their business at scale.

Speaker #2: And so I'm giving you an unsatisfying answer. Rev8, the technology and getting color into our customers' hands, the pricing depends on the customer application.

Speaker #2: We do want to make sure that customers don't have prices and impediment to adopting an incredible capability that actually enables their long-term viability as a company.

Speaker #2: So I think the key takeaway is Rev8 is a drop-in compatible replacement for Rev7. So the adoption can be quick and seamless to getting that value.

Angus Pacala: I think the key takeaway is Rev8 is a drop-in compatible replacement for REV7. The adoption can be quick and seamless to getting that value. That's a huge, you know, that's a huge benefit to these customers.

Speaker #2: And that's a huge that's a huge benefit to these customers.

Speaker #6: Okay. Great perspective. I will jump on the line, guys. Thank you.

Richard Shannon: Okay. Great perspective. I will jump on the line, guys. Thank you.

Speaker #1: Thank you. This concludes the question and answer session. I would now like to turn it back to Angus for closing remarks.

Operator: Thank you. This concludes the question and answer session. I would now like to turn it back to Angus for closing remarks.

Speaker #2: Well, I want to thank everyone for joining the call and really want to thank the ouster team for the push that they made to get Rev8 out.

Angus Pacala: Well, I wanna thank everyone for joining the call, and really wanna thank the Ouster team for the push that they made to get Rev8 out. This is a paradigm shift for the industry. We have incredible customer demand for the Rev8 product, and I can't wait to continue to update everyone that joined the call for the rest of the year on Rev8's adoption through the year. Thank you all.

Speaker #2: This is a paradigm shift for the industry. We have incredible customer demand for the Rev8 product, and I can't wait to continue to update everyone that joined the call for the rest of the year on Rev8's adoption throughout the year.

Speaker #2: Thank you all.

Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.