Q2 2026 Ouster Inc Earnings Call

August 6, 2026

Operator: Hello. Welcome to Ouster's Second 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. If you would like to ask a question during this time, simply press star followed by 11 on your telephone keypad.

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

Operator: If you would like to withdraw your question, press star 11 again. The call today is being recorded. A replay of the call will be available on the Ouster Investor Relations website an hour after the completion of this call. I'd now like to turn the conference over to Chen Geng, Senior Vice President and Strategic Finance Treasurer. Please go ahead.

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'd now like to turn the conference over to Chen Geng, Senior Vice President and Strategic Finance Treasurer. Please go ahead.

Speaker #2: Thank you, Operator, and good afternoon, everyone. Thank you for joining our second 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 Q2 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 8-K and is posted in the Investor Relations section of the Ouster website.

Chen Geng: 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: 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: 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 third 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 the Q3 of 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 Q2 2026 financial results release and in the quarterly and annual reports we filed with the Securities and Exchange Commission.

Speaker #2: 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 second quarter 2026 financial results release and in the quarterly and annual reports we filed with the Securities and Exchange Commission.

Chen Geng: 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 Q2 2026 financial results release and in the quarterly and annual reports we filed with the Securities and Exchange Commission.

Speaker #2: 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. Hello, everyone. Thank you for joining us today. I'll start with a brief recap of the quarter and an update on our strategic priorities before Ken covers our financial results in more detail. We delivered exceptional results for the Q2, generating $55 million in revenue and shipping over 17,000 sensors.

Speaker #2: In today's conference call, we will discuss both gap and non-gap financial measures. A reconciliation of gap-to-non-gap measures discussed today is included in the financial results release.

Speaker #2: I would now like to turn the call over to Angus.

Speaker #3: Hello, everyone, and thank you for joining us today. I'll start with a brief recap of the quarter and an update on our strategic priorities.

Angus Pacala: Hello, everyone. Thank you for joining us today. I'll start with a brief recap of the quarter and an update on our strategic priorities before Ken covers our financial results in more detail. We delivered exceptional results for the Q2, generating $55 million in revenue and shipping over 17,000 sensors.

Speaker #3: Before Ken covers our financial results in more detail, we delivered exceptional results for the second quarter, generating 55 million in revenue and shipping over 17,000 sensors.

Speaker #3: This marks our 14th straight quarter of product revenue growth and is a testament to the strength of our unified sensing and perception platform. We had strong contributions from our industrial and smart infrastructure verticals for use cases in warehouse automation, yard logistics, port automation, mining, and ITS.

Angus Pacala: This marks our 14th straight quarter of product revenue growth and is a testament to the strength of our unified sensing and perception platform. We had strong contributions from our industrial and smart infrastructure verticals for use cases in warehouse automation, yard logistics, port automation, mining, and ITS. Across the world, customers have continued to scale their investment in physical AI. Our smart infrastructure business continues to scale, with major deployments in New Jersey and Georgia to support the 2026 FIFA World Cup. The New Jersey DOT deployed Ouster BlueCity to create a digital traffic twin across 42 highway locations around MetLife Stadium. In Georgia, we deployed BlueCity at an additional 30 intersections across the Atlanta area, including around Mercedes-Benz Stadium.

Speaker #3: Across the world, customers have continued to scale their investment in physical AI. Our smart infrastructure business continues to scale, with major deployments in New Jersey and Georgia to support the 2026 FIFA World Cup.

Angus Pacala: Our smart infrastructure business continues to scale, with major deployments in New Jersey and Georgia to support the 2026 FIFA World Cup. The New Jersey DOT deployed Ouster BlueCity to create a digital traffic twin across 42 highway locations around MetLife Stadium. In Georgia, we deployed BlueCity at an additional 30 intersections across the Atlanta area, including around Mercedes-Benz Stadium.

Speaker #3: The New Jersey DOT deployed Ouster Blue City to create a digital traffic twin across 42 highway locations around MetLife Stadium. In Georgia, we deployed Blue City at an additional 30 intersections across the Atlanta area, including around Mercedes-Benz Stadium.

Speaker #3: Upon the conclusion of the World Cup, Blue City will continue to provide high-fidelity traffic monitoring, automated data analytics, and real-time safety alerts designed to optimize traffic and enhance the safety of everyday residents in these locations.

Chen Geng: Upon the conclusion of the World Cup, BlueCity will continue to provide high-fidelity traffic monitoring, automated data analytics, and real-time safety alerts designed to optimize traffic and enhance the safety of everyday residents in these locations. Ouster sensors are helping industrial customers like AIM Intelligent Machines improve safety and productivity for autonomous operations in complex, unstructured environments. AIM's autonomy kits retrofit heavy machinery into AI-powered fleets that maximize safety and productivity. We expanded our footprint in the defense industry with a strategic agreement with ARGUS Interception and announced a collaboration with FieldAI to leverage Rev8 to power the next generation of robotic autonomy in markets like construction, mining, and security.

Angus Pacala: Upon the conclusion of the World Cup, BlueCity will continue to provide high-fidelity traffic monitoring, automated data analytics, and real-time safety alerts designed to optimize traffic and enhance the safety of everyday residents in these locations. Ouster sensors are helping industrial customers like AIM Intelligent Machines improve safety and productivity for autonomous operations in complex, unstructured environments.

Speaker #3: Ouster's sensors are helping industrial customers like AIM Intelligent Machines improve safety and productivity for autonomous operations in complex, unstructured environments. AIM's autonomy kits retrofit heavy machinery into AI-powered fleets that maximize safety and productivity.

Angus Pacala: AIM's autonomy kits retrofit heavy machinery into AI-powered fleets that maximize safety and productivity. We expanded our footprint in the defense industry with a strategic agreement with ARGUS Interception and announced a collaboration with FieldAI to leverage Rev8 to power the next generation of robotic autonomy in markets like construction, mining, and security.

Speaker #3: We expanded our footprint in the defense industry with a strategic agreement with Argus Interception, and announced a collaboration with Field AI to leverage Revate to power the next generation of robotic autonomy in markets like construction, mining, and security.

Speaker #3: The second quarter was also a period of strategic execution and expansion for Ouster. We brought the world's first native-color LiDAR sensors to customers with Revate, and set a new standard for wrist-mount stereo vision with the ZX Nano.

Angus Pacala: The Q2 was also a period of strategic execution and expansion for Ouster. We brought the world's first native color lidar sensors to customers with Rev8 and set a new standard for wrist mount stereo vision with the ZED X Nano. We also deepened our partnership with NVIDIA, bringing Rev8 to the NVIDIA DRIVE and Jetson platforms. With dedicated NVIDIA toolkits supporting direct data ingestion and drivers designed to leverage Jetson Orin and Thor, Ouster is providing customers with a production-ready ecosystem that is critical to solve the most complex challenges in physical AI. We are actively scaling our Rev8 production lines and anticipate reaching production volumes by the end of the quarter. As previously announced, we expanded our partnership with Benchmark to support Rev8, establishing manufacturing capacity that ultimately exceeds 100,000 units per year.

Speaker #3: We also deepened our partnership with NVIDIA, bringing Revate to the NVIDIA Drive and Jetson platforms. With dedicated NVIDIA toolkits supporting direct data ingestion and drivers designed to leverage Jetson Orin and Thor, Ouster is providing customers with a production-ready ecosystem that is critical to solving the most complex challenges in physical AI.

Angus Pacala: With dedicated NVIDIA toolkits supporting direct data ingestion and drivers designed to leverage Jetson Orin and Thor, Ouster is providing customers with a production-ready ecosystem that is critical to solve the most complex challenges in physical AI.

Speaker #3: We are actively scaling our Revate production lines and anticipate reaching production volumes by the end of the quarter. As previously announced, we expanded our partnership with Benchmark to support Revate, establishing manufacturing capacity that ultimately exceeds 100,000 units per year.

Angus Pacala: We are actively scaling our Rev8 production lines and anticipate reaching production volumes by the end of the quarter. As previously announced, we expanded our partnership with Benchmark to support Rev8, establishing manufacturing capacity that ultimately exceeds 100,000 units per year.

Speaker #3: We also achieved Build America Buy America compliance for Revate, which makes Revate and Blue City eligible for deployment in U.S. government-funded infrastructure upgrades. Finally, we continue to bolster our strong operational execution with disciplined financial management.

Angus Pacala: We also achieved Build America, Buy America compliance for Rev8, which makes Rev8 and BlueCity eligible for deployment in US government-funded infrastructure upgrades. Finally, we continue to bolster our strong operational execution with disciplined financial management. Building upon an already resilient balance sheet, the additional capital we raised provides us with the ability to fully fund our current business plan while providing immense strategic flexibility. This strength gives our customers ultimate confidence in our ability to serve their needs and serve as their foundational physical AI partner. Turning to our 2026 strategic priorities, we progressed across all three key focus areas, revolutionizing our lidar camera and AI compute products, extending our leadership in physical AI solutions, and executing towards profitability. The launch of Rev8 was the most important product release in Ouster's history and a pivotal moment for physical AI.

Speaker #3: Building upon an already resilient balance sheet, the additional capital we raised provides us with the ability to fully fund our current business plan while providing immense strategic flexibility.

Speaker #3: This strength gives our customers ultimate confidence in our ability to serve their needs and serve as their foundational physical AI partner. Turning to our 2026 strategic priorities, we progressed across all three key focus areas.

Angus Pacala: This strength gives our customers ultimate confidence in our ability to serve their needs and serve as their foundational physical AI partner. Turning to our 2026 strategic priorities, we progressed across all three key focus areas, revolutionizing our lidar camera and AI compute products, extending our leadership in physical AI solutions, and executing towards profitability. The launch of Rev8 was the most important product release in Ouster's history and a pivotal moment for physical AI.

Speaker #3: Revolutionizing our LiDAR camera and AI compute products, extending our leadership in physical AI solutions, and executing towards profitability. The launch of Revate was the most important product release in Ouster's history and a pivotal moment for physical AI.

Speaker #3: Featuring the world's first native-color LiDAR, Revate has set a new industry benchmark and delivers the holy grail for 3D spatial perception. Feedback from customers has been electric, calling Revate a massive leap in sensing capability that provides unprecedented situational awareness to scale next-generation physical AI solutions where it matters most.

Angus Pacala: Featuring the world's first native color lidar, Rev8 has set a new industry benchmark and delivers the holy grail for 3D spatial perception. Feedback from customers has been electric, calling Rev8 a massive leap in sensing capability that provides unprecedented situational awareness to scale next generation physical AI solutions where it matters most. Engineered for functional safety and built for scale, Rev8 is driving commercial momentum across all of our verticals. From the harsh, demanding environments of mining and construction sites to the dynamic, complex worlds of robotaxi fleets and statewide traffic networks across the country, Rev8 is cementing Ouster as a core perception partner for market leaders scaling real-world autonomy. Customer response has been immediate, highlighted by multiple million-dollar-plus orders, including the world's largest manufacturer of heavy machinery, a leading developer of autonomous agriculture equipment, and a top autonomous vehicle provider.

Speaker #3: Engineered for functional safety and built for scale, Revate is driving commercial momentum across all of our verticals. From the harsh, demanding environments of mining and construction sites to the dynamic, complex worlds of robotaxi fleets and statewide traffic networks across the country, Revate is cementing Ouster as a core perception partner for market leaders scaling real-world autonomy.

Angus Pacala: From the harsh, demanding environments of mining and construction sites to the dynamic, complex worlds of robotaxi fleets and statewide traffic networks across the country, Rev8 is cementing Ouster as a core perception partner for market leaders scaling real-world autonomy. Customer response has been immediate, highlighted by multiple million-dollar-plus orders, including the world's largest manufacturer of heavy machinery, a leading developer of autonomous agriculture equipment, and a top autonomous vehicle provider.

Speaker #3: Customer response has been immediate. Highlighted by multiple million-dollar-plus orders, including the world's largest manufacturer of heavy machinery, a leading developer of autonomous agriculture equipment, and a top autonomous vehicle provider.

Speaker #3: During the quarter, we secured a significant order to provide the Utah Department of Transportation with its largest LiDAR deployment to date, covering several hundred intersections across the state.

Angus Pacala: During the quarter, we secured a significant order to provide the Utah Department of Transportation with its largest lidar deployment to date, covering several hundred intersections across the state. With native color and industry-leading performance, Rev8 is solidifying our market leadership and deepening relationships across these and other key accounts. Our acquisition of StereoLabs is already proving strategic and financial value. The ZED X Nano was the most successful launch in StereoLabs' history and expanded our reach into industrial and robotics markets, winning new sockets requiring smaller form factors. By delivering high resolution and ultra-low latency capture pipeline and millimeter accuracy, we're giving roboticists a major upgrade to their vision systems, enabling machines to sense, think, act, and learn with unprecedented precision. With a unified lidar camera and AI compute stack, Ouster is providing customers with the world's most capable perception platform.

Speaker #3: With native-color and industry-leading performance, Revate is solidifying our market leadership and deepening relationships across these and other key accounts. Our acquisition of Stereo Labs is already proving strategic and financial value.

Angus Pacala: Our acquisition of StereoLabs is already proving strategic and financial value. The ZED X Nano was the most successful launch in StereoLabs' history and expanded our reach into industrial and robotics markets, winning new sockets requiring smaller form factors.

Speaker #3: The ZX Nano, with the most successful launch in Stereo Labs' history, and expanded our reach into industrial and robotics markets winning new sockets requiring smaller form factors.

Speaker #3: By delivering a high-resolution and ultra-low-latency capture pipeline, and millimeter accuracy, we're giving roboticists a major upgrade to their vision systems, enabling machines to sense, think, act, and learn with unprecedented precision.

Angus Pacala: By delivering high resolution and ultra-low latency capture pipeline and millimeter accuracy, we're giving roboticists a major upgrade to their vision systems, enabling machines to sense, think, act, and learn with unprecedented precision. With a unified lidar camera and AI compute stack, Ouster is providing customers with the world's most capable perception platform.

Speaker #3: With a unified LiDAR camera and AI compute stack, Ouster is providing customers with the world's most capable perception platform. We also upgraded our Gemini and Blue City software solutions with Revate.

Angus Pacala: We also upgraded our Gemini and BlueCity software solutions with Rev8, opening up a new level of spatial intelligence. This breakthrough introduces the industry's first native color lidar detection system, simultaneously capturing both color and 3D depth information without the need for complex calibration. Powered by the Rev8 OS1 Max, we released advanced detection for BlueCity, delivering double the range and resolution of previous generations and achieving multimodal detection and classification up to 500 feet. By providing unmatched situational awareness and delivering precise, high-fidelity digital traffic twins, Rev8 opens up higher speed markets and allows transportation departments to further optimize signal timing based on real-time data to improve traffic flow while reducing their total cost of ownership. Privacy is paramount for this market, and we designed BlueCity with system-level privacy features at the edge to reduce the collection of identifying features.

Speaker #3: Opening up a new level of spatial intelligence. This breakthrough introduces the industry's first native-color LiDAR detection system simultaneously capturing both color and 3D depth information without the need for complex calibration.

Speaker #3: Powered by the Revate OS1 Max, we released advanced detection for Blue City, delivering double the range and resolution of previous generations and achieving multimodal detection and classification up to 500 feet.

Speaker #3: By providing unmatched situational awareness and delivering precise, high-fidelity digital traffic twins, Revate opens up higher-speed markets and allows transportation departments to further optimize signal timing based on real-time data to improve traffic flow while reducing their total cost of ownership.

Angus Pacala: By providing unmatched situational awareness and delivering precise, high-fidelity digital traffic twins, Rev8 opens up higher speed markets and allows transportation departments to further optimize signal timing based on real-time data to improve traffic flow while reducing their total cost of ownership. Privacy is paramount for this market, and we designed BlueCity with system-level privacy features at the edge to reduce the collection of identifying features.

Speaker #3: Privacy is paramount for this market, and we designed Blue City with system-level privacy features at the edge to reduce the collection of identifying features.

Speaker #3: Ouster Blue City has quickly become a premier traffic management solution, including the three largest LiDAR-based deployments in the United States, and our goal is to be the number one provider of smart infrastructure solutions.

Angus Pacala: Ouster BlueCity has quickly become a premier traffic management solution, including the three largest lidar-based deployments in the United States. Our goal is to be the number one provider of smart infrastructure solutions. Since its launch in 2023, we have established Gemini as a standard for sensing and perception, providing the real-time digital twin necessary for our smart infrastructure customers to increase their efficiency and safety. We see an enormous opportunity in our other verticals to provide software solutions for everything that moves in the physical world. Similar to smart infrastructure, these customers need a less technical, turnkey solution that is easy to deploy. We will continue to invest in products and solutions that broaden our market opportunity and help accelerate our customers' development. Finally, our strong results are aligned with our long-term financial framework.

Speaker #3: Since its launch in 2023, we have established Gemini as a standard for sensing and perception, providing the real-time digital twin necessary for our smart infrastructure customers to increase their efficiency and safety.

Speaker #3: We see an enormous opportunity in our other verticals to provide software solutions for everything that moves in the physical world. Similar to smart infrastructure, these customers need a less technical, turn-key solution that is easy to deploy and we will continue to invest in products and solutions that broaden our market opportunity and help accelerate our customers' development.

Angus Pacala: We see an enormous opportunity in our other verticals to provide software solutions for everything that moves in the physical world. Similar to smart infrastructure, these customers need a less technical, turnkey solution that is easy to deploy. We will continue to invest in products and solutions that broaden our market opportunity and help accelerate our customers' development. Finally, our strong results are aligned with our long-term financial framework.

Speaker #3: Finally, our strong results are aligned with our long-term financial framework. We are making strategic investments to expand our addressable market, while maintaining our path to profitability.

Angus Pacala: We are making strategic investments to expand our addressable market while maintaining our path to profitability. With that, let me now turn the call over to Ken, who will provide more context on our Q2 financial results.

Speaker #3: With that, let me now turn the call over to Ken, who will provide more context on our second quarter financial results.

Speaker #1: Thank you, Angus, and hello, everyone. In the second quarter, we delivered a record quarter of revenue in number of sensors sold, and introduced multiple new products to the market.

Ken Gianella: Thank you, Angus, and hello, everyone. In Q2, we delivered a record quarter of revenue and number of sensors sold and introduced multiple new products to the market. These are important proof points in our continued execution against both our financial and operational goals. These results reinforce our confidence in the long-term financial model, supported by continued operating leverage and strong customer demand across our served markets. Turning to the Q2 financial performance. Operating results were again strong, with revenue of $55 million. This represents an increase of approximately 56% compared with Q2 last year. The industrial vertical was the largest contributor to the Q2 revenue, followed by smart infrastructure. We shipped over 17,000 sensors, a new quarterly record, which included over 9,000 lidar and over 8,000 camera sensors.

Speaker #1: These are important proof points in our continued execution against both our financial and operational goals. These results reinforce our confidence in the long-term financial model supported by continued operating leverage and strong customer demand across our served markets.

Speaker #1: Turning to the second quarter financial performance, operating results were again strong, with revenue of $55 million. This represents an increase of approximately 56% compared with the second quarter last year.

Ken Gianella: Operating results were again strong, with revenue of $55 million. This represents an increase of approximately 56% compared with Q2 last year. The industrial vertical was the largest contributor to the Q2 revenue, followed by smart infrastructure. We shipped over 17,000 sensors, a new quarterly record, which included over 9,000 lidar and over 8,000 camera sensors.

Speaker #1: The industrial vertical was the largest contributor to the second quarter revenue followed by smart infrastructure. We shipped over 17,000 sensors a new quarterly record, which included over 9,000 LiDAR and over 8,000 camera sensors.

Ken Gianella: Royalty revenue in Q2 was approximately $1.9 million, and for H1 of the year, royalty revenue was approximately $2.2 million. We continue to estimate total royalty revenue in 2026 to be around $5 million for the full year. GAAP gross margin was 49%, up from 45% in the same quarter last year. A one-time refund was included in our cost of goods sold, which positively impacted gross margin by approximately 1,000 basis points. As a reminder, in Q2 of 2025, we had a one-time refund which positively impacted us by approximately 500 basis points. We do not expect these one-time benefits to reoccur in our ongoing normal operations. GAAP operating expenses were $47 million, an increase of approximately 10% from Q2 last year.

Speaker #1: Royalty revenue in Q2 was approximately $1.9 million, and for the first half of the year royalty revenue was approximately $2.2 million. We continue to estimate total royalty revenue in 2026 to be around $5 million for the full year.

Speaker #1: GAAP gross margin was 49%, up from 45% in the same quarter last year. A one-time refund was included in our cost of goods sold, which positively impacted gross margin by approximately 1,000 basis points.

Speaker #1: As a reminder, in the second quarter of 2025, we had a one-time refund which positively impacted us by approximately $500 basis points. We do not expect these one-time benefits to reoccur in our ongoing normal operations.

Ken Gianella: As a reminder, in Q2 of 2025, we had a one-time refund which positively impacted us by approximately 500 basis points. We do not expect these one-time benefits to reoccur in our ongoing normal operations. GAAP operating expenses were $47 million, an increase of approximately 10% from Q2 last year.

Speaker #1: GAAP operating expenses were $47 million. An increase of approximately 10% from the second quarter last year. The increase was primarily due to the addition and integration of Stereo Labs for a full quarter, new product introductions with the Revate and ZX Nano, and recent investments in expanding our physical AI solution portfolio.

Ken Gianella: The increase was primarily due to the addition and integration of StereoLabs for a full quarter, new product introductions with the Rev8 and ZED X Nano, and recent investments in expanding our physical AI solution portfolio. We are closely monitoring our operating expenses and anticipate Q3 expenses to be 5% to 8% higher year over year. Our adjusted EBITDA in Q2 was -$4 million, which was an improvement of approximately $1 million from Q2 last year. Turning to our balance sheet, we ended the quarter with cash equivalents, restricted cash, and short-term investments of $263 million and no debt. This figure includes approximately $98 million raised in Q2 through our previously discussed ATM program. At the beginning of Q3, we further strengthened our cash position through a successful offering of common stock, which closed on 6 July.

Speaker #1: We are closely monitoring our operating expenses and anticipate the third quarter expenses to be 5% to 8% higher year over year. Our adjusted EBITDA in Q2 was a negative $4 million.

Speaker #1: Which was an improvement of approximately $1 million from the second quarter last year. Turning to our balance sheet, we ended the quarter with cash, cash equivalents, restricted cash, and short-term investments of $263 million and no debt.

Ken Gianella: Turning to our balance sheet, we ended the quarter with cash equivalents, restricted cash, and short-term investments of $263 million and no debt. This figure includes approximately $98 million raised in Q2 through our previously discussed ATM program. At the beginning of Q3, we further strengthened our cash position through a successful offering of common stock, which closed on 6 July.

Speaker #1: This figure includes approximately $98 million raised in the second quarter through our previously discussed ATM program. At the beginning of the third quarter, we further strengthened our cash positions through a successful offering of common stock, which closed on July 6th.

Speaker #1: Given the favorable market conditions at the time, and corresponding strong investor demand, we closed a common stock offering that generated approximately $191 million in net proceeds.

Ken Gianella: Given the favorable market conditions at the time and corresponding strong investor demand, we closed a common stock offering that generated approximately $191 million in net proceeds. Upon completion, we had approximately 72 million shares outstanding. This strategic financing decision gives us additional capital to support our growth objectives, invest in opportunities we see across our markets, and further strengthen what is already one of the industry's strongest balance sheets. Furthermore, after this most recent financing, we do not expect to need additional capital to fund our current operating plan on our path to profitability. Now, turning to our guidance. Total revenue for Q3 2026 is expected to be in the range of $54.5 million to $57.5 million, with the ramp of Rev8 to production volumes expected to occur throughout and into the latter part of Q3. Our full-year revenue expectations remain unchanged.

Speaker #1: Upon completion, we had approximately $72 million shares outstanding. This strategic financing decision gives us additional capital to support our growth objectives invest in opportunities we see across our markets and further strengthen what is already one of the industry's strongest balance sheets.

Speaker #1: Furthermore, after this most recent financing, we do not expect to need additional capital to fund our current operating plan on our path to profitability.

Ken Gianella: Furthermore, after this most recent financing, we do not expect to need additional capital to fund our current operating plan on our path to profitability. Now, turning to our guidance. Total revenue for Q3 2026 is expected to be in the range of $54.5 million to $57.5 million, with the ramp of Rev8 to production volumes expected to occur throughout and into the latter part of Q3. Our full-year revenue expectations remain unchanged.

Speaker #1: Now, turning to our guidance. Total revenue for the third quarter of 2026 is expected to be in the range of $54.5 million to $57.5 million.

Speaker #1: With the ramp of Revate to production volumes expected to occur throughout and into the latter part of the third quarter. Our full-year revenue expectations remain unchanged.

Speaker #1: The acquisition of Stereo Labs, introduction of Revate and ZX Nano, and our expanding software and AI solutions are great proof points towards our continued investment to be a leader in sensing and perception for physical AI.

Ken Gianella: The acquisition of StereoLabs, introduction of Rev8 and ZED X Nano, and our expanding software and AI solutions are great proof points towards our continued investment to be a leader in sensing and perception for physical AI. Our execution continues to build confidence in our long-term financial model. I'll now turn the call back to Angus for his closing remarks.

Speaker #1: Our execution continues to build confidence in our long-term financial model. On I'll turn the call back to Angus for his closing remarks.

Speaker #2: The second quarter continued the momentum of the most transformative year in Ouster's history. With the landmark launch of Revate and the ZX Nano, the integration of Stereo Labs, a strengthened partnership with Nvidia, and significant strategic flexibility provided by our capital raises, Ouster is further extending its leadership as the foundational end-to-end sensing and perception platform for physical AI.

Angus Pacala: The Q2 continued the momentum of the most transformative year in Ouster's history. With the landmark launch of Rev8 and the ZED X Nano, the integration of StereoLabs, a strengthened partnership with NVIDIA, and significant strategic flexibility provided by our capital raises, Ouster is further extending its leadership as the foundational end-to-end sensing and perception platform for physical AI. Our focus remains on providing the industry's most performant products and solutions, dramatically simplifying system integration, and accelerating time to market for the world's most innovative companies. The resounding customer feedback we received enforces our strategic path. With that, I'd like to open the call up for Q&A.

Speaker #2: Our focus remains on providing the industry's most performant products and solutions, dramatically simplifying system integration, and accelerating time-to-market for the world's most innovative companies.

Angus Pacala: Our focus remains on providing the industry's most performant products and solutions, dramatically simplifying system integration, and accelerating time to market for the world's most innovative companies. The resounding customer feedback we received enforces our strategic path. With that, I'd like to open the call up for Q&A.

Speaker #2: The resounding customer feedback we received reinforces our strategic path. With that, I'd like to open the call up for Q&A.

Speaker #3: 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 one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Our first question comes from the line of Colin Rusch of Oppenheimer. Your line is now open.

Speaker #3: To withdraw your question, please press star 11 again. Our first question comes from the line of call on roof of Oppenheimer. Your line is now open.

Speaker #4: Thanks so much, guys. You know, can you give us a sense you know, you mentioned some of these orders that you're talking about. You know, the bookings and kind of backlog that you guys are looking at, you know, some order magnitude or quantification of what you're looking at that's already been kind of put into your expectations for revenue ramp over the next couple of years?

Colin Rusch: Thanks so much, guys. Can you give us a sense, you mentioned some of these orders that you're talking about. The bookings and kind of backlog that you guys are looking at, some order of magnitude or quantification of what you're looking at that's already been put into your expectations for revenue ramp over the next couple of years.

Angus Pacala: Hi, Colin. Yeah, good question. We gave a bit of color as it pertains to this year, Q3, Q4, and our revenue expectation remains on track, just given the really strong reception to Rev8. It's been one quarter with Rev8 out being sold, and we've already racked up very significant wins with Fortune 500 companies, millions of dollars worth of orders, and now we're ramping the production to ship the product at volume scale this quarter. Rev8 will fuel the core of our business for, my expectation, the next five years. We have very strong signal on that being the case, just given the reaction that we've already had and how much better the Rev8 platform is and how expanded the Rev8 platform is with the long-range max sensors and RGB sensing versus REV7, which has been the core of our business for so long.

Speaker #2: Hi, Colin. Yeah, good question. So we gave a bit of color as it pertains to this year, Q3, Q4, and our revenue expectation remains on track, just given the really strong reception to Revate.

Speaker #2: So you know, we in it's been one quarter with Revate out being sold, and we've already racked up very significant wins with Fortune 500 companies, millions of dollars' worth of orders.

Speaker #2: And now we're ramping up production to ship the product at volume scale this quarter. But Revate will fuel the core of our business for, you know, my expectation is the next five years.

Angus Pacala: Rev8 will fuel the core of our business for, my expectation, the next five years. We have very strong signal on that being the case, just given the reaction that we've already had and how much better the Rev8 platform is and how expanded the Rev8 platform is with the long-range max sensors and RGB sensing versus REV7, which has been the core of our business for so long.

Speaker #2: So and we have very strong signal on that being the case, just given the reaction that we've already had and how much you know, how much better the Revate platform is and all and how expanded the Revate platform is with the long-range max sensors and RGB

Speaker #1: You sensing versus Rev seven , which has been the core of our business for for so long . Adding on top of that , Stereo labs , which is having an exceptional year And , and , you know , we're sitting on 50 plus percent year over year product revenue growth as a company .

Angus Pacala: Adding on top of that, StereoLabs, which is having an exceptional year. We're sitting on 50%+ year-over-year product revenue growth as a company and feeling very bullish about both this year and the future of Ouster. Yeah. Not giving exact bookings numbers on the full year quite yet, but feeling really great about the business, for sure.

Speaker #1: And feeling very , very bullish about both this year and the future of Ouster, Inc. . So yeah , yeah , not not giving exact bookings numbers on the full year quite yet , but feeling really great about the business for sure .

Speaker #2: Thanks . And can you just talk about the competitive landscape a little bit ? You know , now that you've got a couple of very differentiated capabilities in the sensors coupled with the software capability ?

Colin Rusch: Thanks. Can you just talk about the competitive landscape a little bit? Now that you've got a couple of very differentiated capabilities in the sensors, coupled with the software capability, can you talk about how competitive some of these bid efforts are and how you're thinking about pricing on a relative basis?

Speaker #2: Can you talk about how competitive some of these bidding , you know , efforts are and how you're thinking about pricing on a relative basis

Speaker #1: Yeah . Well , I view the LiDAR is not an easy business . Physical AI is not an easy business . These are new technologies that require significant investment .

Angus Pacala: Yeah. Well, I view the lidar is not an easy business. Physical AI is not an easy business. These are new technologies that require significant investment, and I visualize this as almost as a flywheel of investment that gains momentum slowly but considerably year in and year out for any company that's able to be consistent and focused in their strategy and investment over that long time period. I think NVIDIA is such a great example of this, sticking to their guns and investing in edge compute, and we see the results. That was a strategy compounded over decades, and I view Ouster the same way. We are sticking to what we do best, cutting-edge technology and sensing perception, whether it's a camera, a lidar, the compute, and the algorithms that run on them.

Speaker #1: And I visualize this as almost as a flywheel of investment that gains momentum slowly , but but considerably year in and year out for any company that's able to be consistent and focused in their strategy and investment over that long time period , I think Nvidia is such a great example of this , sticking to their guns and investing in edge compute and , and we see the results .

Angus Pacala: I think NVIDIA is such a great example of this, sticking to their guns and investing in edge compute, and we see the results. That was a strategy compounded over decades, and I view Ouster the same way. We are sticking to what we do best, cutting-edge technology and sensing perception, whether it's a camera, a lidar, the compute, and the algorithms that run on them.

Speaker #1: But that that's that was a strategy compounded over decades . And I view Aster the same way we are sticking to our to what we do best .

Speaker #1: Cutting edge technology and sensing perception , whether it's a camera , a lidar , the compute and the algorithms that run on them .

Speaker #1: This is a virtuous cycle that has an immense amount of institutional inertia in it . That gives us an edge today . But , but accelerates and keeps that momentum for the next five years .

Angus Pacala: This is a virtuous cycle that has an immense amount of institutional inertia in it that gives us an edge today, but accelerates and keeps that momentum for the next five years. In terms of competitors coming and just catching up, given that there's this amount of investment needed, I don't see anyone just kind of jumping into the mix and being able to build what Ouster has built in a year or a couple of years for that matter, given that I've been at this for 11 years straight. Yeah. I think that Ouster is yet to have any major misstep on strategy, technology, product mix, or M&A, and that can't be said for a lot of our competitors. I'm feeling very good about how we positioned Ouster across all of our markets for the foreseeable future.

Speaker #1: So in terms of competitors coming and just catching up , given that there's this , this amount of investment needed , I don't see anyone just kind of jumping into the mix and being able to , you know , build what Oster has built in in a year or a couple years for that matter , given that I've been at this for 11 years So yeah , and , and I think that Oster has yet to kind of have any have any major misstep on strategy , technology , product mix or M&A .

Angus Pacala: I think that Ouster is yet to have any major misstep on strategy, technology, product mix, or M&A, and that can't be said for a lot of our competitors. I'm feeling very good about how we positioned Ouster across all of our markets for the foreseeable future.

Speaker #1: And , and , and that can't be said for a lot of our competitors . So I'm feeling very good about , you know , how we positioned ouster across all of our markets for the foreseeable future .

Ken Gianella: Just the only thing I'll add on to that, Angus, is the software piece of it that he discussed was taking all that infrastructure that Angus just put together and then having products like BlueCity that go end to end into the marketplace and expanding that software component with the investments that we're doing in our software. It's very hard for any company to match the investment that Ouster's done in that area. We are one of the few companies, if not only companies out there that have that end-to-end game book in play.

Speaker #3: Just the only thing I'll add on to that , Angus , is the software piece of it . That that he discussed was taking all that infrastructure that Angus just put together and then having products like Blue City that go end to end into the marketplace and expanding that software component with the investments that we're doing in our software , it's very hard for any company to match the investment that Elster has done in that area .

Speaker #3: So it's , you know , we're one of the few companies , if not only in companies out there that have that end to end game put in play .

Speaker #2: Perfect . Thanks , guys

Colin Rusch: Perfect. Thanks, guys.

Operator: As a reminder, to ask a question, you will need to press *11 on your telephone. Our next question comes from the line of Kevin Cassidy of Rosenblatt Securities. Your line is now open.

Speaker #4: As a reminder to ask a question , you will need to press star one one on your telephone Our next question comes from the line of Kevin Cassidy of Rosenblatt Securities .

Speaker #4: Your line is now open

Speaker #5: Yes . Thanks for taking my question . Congratulations on the ramp of the of Rev eight and maybe just along those lines with Rev eight , were there any orders that you could couldn't ship for the quarter because Rev eight wasn't available or let's say even for this quarter in the guidance .

Kevin Cassidy: Yeah, thanks for taking my question. Congratulations on the ramp of Rev8. Maybe just along those lines with Rev8, were there any orders that you couldn't ship for the quarter because Rev8 wasn't available? Let's say even for this quarter in the guidance, is there potential that if you could make more, you could guide for a higher revenue? You have more orders than you do product?

Speaker #5: Is they're potential that if you could make more , you could guide for a higher revenue . You know , you have more orders than you do product .

Speaker #1: Well , we always carry a backlog in our business . You know , we maintain inventory and a healthy backlog for the leader or the leader business .

Angus Pacala: Well, we always carry a backlog in our business. We maintain inventory and a healthy backlog for the lidar business and increasingly for the StereoLabs camera business. That's kind of a I can answer it technically. There could be more revenue to ship, but it's at the sacrifice of backlog, which we wouldn't want to do. We also want to uphold our lead time obligations and shipment schedules with our customers. What we're guiding to is what we think we can ship realistically in revenue each and every quarter. There's not that much wiggle room within that guide.

Speaker #1: And increasingly for the stereo labs camera business . And so that's kind of a I can answer it technically , you know , there could be more revenue to ship , but it's at the it's at the sacrifice of backlog , which we wouldn't want to do .

Speaker #1: And we also want to uphold our , our lead time obligations and shipment schedules with our customers . So , you know what , we're guiding to is what we think we can ship realistically in revenue each and every quarter .

Angus Pacala: We also want to uphold our lead time obligations and shipment schedules with our customers. What we're guiding to is what we think we can ship realistically in revenue each and every quarter. There's not that much wiggle room within that guide.

Speaker #1: And there's not that much wiggle room within that, within that guide.

Speaker #5: Okay . And maybe on Blue City , you know , it seems Utah is starting to release more orders and what , what , what is the time frame or can we expect that in Atlanta or Stamford , Connecticut , or even northern Jersey that your your foothold will will expand ?

Kevin Cassidy: Okay. Maybe on BlueCity, it seems Utah is starting to release more orders. What is the timeframe, or can we expect that in Atlanta or Stamford, Connecticut or even Northern Jersey, that your foothold will expand? Is there a timeframe expected for that, or do you just sit and wait?

Speaker #5: Is there a time frame expected for that or do you just sit and wait ?

Speaker #1: Yeah , I see the expansion happening all the time . So while I don't know exactly what will happen in Atlanta or New Jersey specifically , the trend is customers get their hands on Blue City .

Angus Pacala: Yeah. I see the expansion happening all the time. While I don't know exactly what will happen in Atlanta or New Jersey specifically, the trend is customers get their hands on BlueCity, they deploy POCs, then they deploy citywide scale or statewide scale, and it works, and then they order more and more. Utah is one of the earliest adopters. Been a really strong customer of ours, so they're furthest along perhaps in adopting the BlueCity product. When they saw the advanced detection capability that we came out with, 500 foot sensing with full RGB OS1 Max sensors, they were first in line because they knew how well it would work on Utah's big, wide open roadways.

Speaker #1: They deploy POCs . Then they deploy city wide scale or state wide scale and and it works . And then they order more and more and more .

Speaker #1: And so Utah is one of the earliest adopters . It's been a really strong customer of ours for . So their furthest along perhaps and adopting the the blue city product .

Angus Pacala: Utah is one of the earliest adopters. Been a really strong customer of ours, so they're furthest along perhaps in adopting the BlueCity product. When they saw the advanced detection capability that we came out with, 500 foot sensing with full RGB OS1 Max sensors, they were first in line because they knew how well it would work on Utah's big, wide open roadways.

Speaker #1: And so when they saw the advanced detection capability that we came out with 500 foot sensing with full RGB , OS , one max sensors , they were first in line because they knew how well , how well it would work on Utah's big wide open roadways .

Speaker #1: So that is absolutely an indication of where this market is going . And the competitiveness we bring to it . With the new OS one max Rev eight sensors .

Angus Pacala: That is absolutely an indication of where this market is going and the competitiveness we bring to it with the new OS1 Max Rev8 sensors. There's a huge part of the market that we now have broader access to because they're bigger roads, bigger, wider roads with higher speed traffic, where the longer range is pretty critical. Yeah, a lot of momentum in BlueCity, and I would say that the trend is customers get their hands on it, and they order more and more. Very few customers are kind of stagnant in this industry for us, given how good the product is.

Speaker #1: And there's a huge part of the market that we now have broader access to because they're bigger roads , bigger , wider roads with higher speed traffic where the longer range is , is pretty critical .

Speaker #1: So yeah , a lot of momentum in Blue City . And I would say that the trend is customers get their hands on it and they order more and more and more .

Angus Pacala: Yeah, a lot of momentum in BlueCity, and I would say that the trend is customers get their hands on it, and they order more and more. Very few customers are kind of stagnant in this industry for us, given how good the product is.

Speaker #1: Very few customers are kind of stagnant in this industry . For us , given how good the product is .

Speaker #3: And we gave a number at the beginning of the year . Just to add to that , , of about 15% of our sales were based off of , Blue City and Gemini based products .

Ken Gianella: We gave a number at the beginning of the year, just to add to that, Kevin, of about 15% of our sales were based off of BlueCity and Gemini-based products. We expect and would like to see that continue to grow upwards as the years go on. A bigger portion of that type of BlueCity content being a larger portion of our revenue in the years to come.

Speaker #3: We expect and , and would like to see that continue to grow upwards as the years go on . A bigger portion of that type of blue city content being a larger portion of our revenue in the years to come

Speaker #5: Okay , great . Thanks . I'll get back in the queue

Kevin Cassidy: Okay, great. Thanks. I'll get back in the queue.

Speaker #4: Thank you Our next question comes from the line of Suji de Silva of Roth . Your line is now open .

Operator: Thank you. Our next question comes from the line of Sushil Da Silva of Roth. Your line is now open.

Speaker #6: Hi , Angus . Hi , Ken . Congratulations on the progress here . Thank you . I want to follow up on the questions on its intelligent transport .

Suji Desilva: Hi, Angus, hi, Ken. Congratulations on the progress here.

Ken Gianella: Thank you.

Suji Desilva: I want to follow up on the questions on ITS, intelligent transport. I'm curious, you have a bunch of customers already. In the deal pipeline, are you seeing any exogenous factors that are maybe causing an inflection in the inbound interest or activity in terms of layering on deals and kind of growing this functionality out there beyond the initial customers you have?

Speaker #6: I'm curious . You have a bunch of customers already , but in the deal pipeline , are you seeing any any exogenous factors that are maybe causing an inflection in the inbound interest or activity activity in terms of layering on deals and , and kind of growing this functionality out there beyond the initial customers you have

Angus Pacala: That's a great question. There's a lot going on. We've actually invested a huge amount into BlueCity this year and the go-to-market, and we're starting to see the payoff of that. Rev8, I can't stress it enough, the OS1 Max advanced detection, long range detection opens up about half the market. The market, as a reminder, in North America, there are 300,000 signalized intersections in North America. We have hundreds, rapidly moving to thousands of intersections deployed. It's still a very small fraction of the total market that we can go and capture. We're not going to be gated by the market size in the foreseeable future, and we have the best product in the market. I'm convinced of that.

Speaker #1: That's a great question . There's a lot going on . We've we've actually invested a huge amount into City this year . And the go to market .

Speaker #1: And we're starting to see the payoff of that . Rev . I can't stress it enough . The advanced detection , long range detection opens up about half the market .

Speaker #1: And the market is a reminder in North America , there are 300 000 signalized intersections in North America . We have hundreds , you know , rapidly moving to to thousands of intersections deployed .

Angus Pacala: We have hundreds, rapidly moving to thousands of intersections deployed. It's still a very small fraction of the total market that we can go and capture. We're not going to be gated by the market size in the foreseeable future, and we have the best product in the market. I'm convinced of that.

Speaker #1: But , you know , it's still a very small fraction of the total market that we can go and capture . So we're not going to be gated by the market size in the foreseeable future .

Speaker #1: And we have the best product in the market . I'm convinced of that . So yeah , I think that the first six months of this year have been a huge inflection point for Blue City business , given the investments we've made in the go to market strategy and the product development on the software side , and then integrating this new Rev eight RGB , OS one max capability

Angus Pacala: Yeah, I think that the first six months of this year have been a huge inflection point for our BlueCity business, given the investments we've made in the go-to-market strategy and the product development on the software side, and then integrating this new Rev8 RGB OS1 Max capability.

Speaker #6: Okay , great . Thanks , Angus . And then just on an end market that's emerging here , robotics , just understand how that might play out for you guys .

Suji Desilva: Okay, great. Thanks, Angus. Just on an end market that's emerging here, robotics, just want to understand how that might play out for you guys, what you're seeing in initial sort of discussions and are we early in this or is there contribution already or coming soon? Just an update there where robotics is as an end market for you guys.

Speaker #6: What you're seeing in initial sort of discussions and , and you know , how are we early in this ? Or is there is there contribution already .

Speaker #6: You're coming soon . Just to update there . Where robotics is as an end market for you guys .

Speaker #1: Yeah , robotics has been an incredible business for us . We've , you know , the Q2 was the first quarter , first full quarter with stereo labs under the ouster umbrella and Stereo labs is stereo cameras that and monocular camera products , including their release of the Z nano , which is a special stereo camera for wrist mounted manipulation on humanoid and and robotic arms .

Angus Pacala: Yeah, robotics has been an incredible business for us. The Q2 was the first full quarter with StereoLabs, under the Ouster umbrella. StereoLabs is stereo cameras and monocular camera products, including their release of the ZED X Nano, which is a special stereo camera for wrist-mounted manipulation on humanoid and robotic arms. They have the most competitive set of products for this hypergrowth humanoid and robotic manipulation market. We've seen incredible kind of interest and uptake from that customer set. I feel like I'm in the thick of this industry, that it was kind of lidar adjacent. Now with StereoLabs under the umbrella, we are pushing every last camera we can through our manufacturing supply chain to get them to customers because of this voracious appetite for physical AI systems, in that category set.

Speaker #1: They have the most competitive set of products for this , like hypergrowth , humanoid and robotic manipulation market . And we've seen incredible kind of interest and uptake from that customer set .

Angus Pacala: We've seen incredible kind of interest and uptake from that customer set. I feel like I'm in the thick of this industry, that it was kind of lidar adjacent. Now with StereoLabs under the umbrella, we are pushing every last camera we can through our manufacturing supply chain to get them to customers because of this voracious appetite for physical AI systems, in that category set.

Speaker #1: So I feel like I'm in the thick of this industry that it was kind of leader adjacent . But now with stereo labs under the umbrella , we are just we are pushing every last camera we can through our manufacturing supply chain to get them to customers .

Speaker #1: Because of this voracious appetite for physical AI systems , in that that category set .

Speaker #6: Okay. Appreciate the color. Thanks, Angus. Thanks again.

Suji Desilva: Okay. Appreciate the color. Thanks, Angus. Thanks again.

Speaker #4: Thank you Our next question comes from the line of Tim Salvado of Cat capital . Your line is now open

Operator: Thank you. Our next question comes from the line of Tim Savageaux of Northland Capital. Your line is now open.

Speaker #7: Hey , good afternoon and congrats on the the revenue growth in the quarter . I'll just start with that last question , which is going to be about kind of capacity overall .

Tim Savageaux: Hey, good afternoon, and congrats on the revenue growth from the quarter. I'll just start with that last question, which was going to be about capacity overall. You mentioned the announcement with Benchmark and the 100K+, I gather, for lidar sensors. My first question was going to be, running where you are, which is below 40K currently annualized, what prompted that announcement? I think it's a Rev8 launch, but how long do you think till you get there, I guess, to that type of capacity metric from where you are currently? That's from a lidar perspective, and given your comments you just made about StereoLabs, are there similar capacity dynamics there regarding what you have currently relative to what you're shipping and where you'd like to be from a capacity standpoint?

Speaker #7: You mentioned the announcement with benchmark and the 100 K plus . I gather for leader sensors . And my first question was going to be running where you are , which is below 40 K currently annualized .

Tim Savageaux: My first question was going to be, running where you are, which is below 40K currently annualized, what prompted that announcement? I think it's a Rev8 launch, but how long do you think till you get there, I guess, to that type of capacity metric from where you are currently? That's from a lidar perspective, and given your comments you just made about StereoLabs, are there similar capacity dynamics there regarding what you have currently relative to what you're shipping and where you'd like to be from a capacity standpoint?

Speaker #7: You know what drove you know , what prompted , I guess that that announcement , I think it's a Rev eight launch , but you know , how long do you think till you get there ?

Speaker #7: I guess to , to that type of capacity metric from where you are currently . That's from a LiDAR perspective . And given your comments you just made about stereo labs , you know , what kind of are there similar capacity dynamics there regarding what you have currently relative to what you're shipping and where you'd like to be from a capacity standpoint .

Speaker #1: Yeah . So the we need to be investing in the capacity plan for the lidar . Because if you actually look at our leader unit volumes , they're up 70% year over year .

Angus Pacala: Yeah. We need to be investing in the capacity plan for the lidar because if you actually look at our lidar unit volumes, they're up 70% year-over-year. They're way up, and I expect that to continue. This adoption of physical AI systems has really caught us by storm, and we're shipping a lot more lidars year-over-year, and that compounds very quickly from 40,000 unit-a-year run rate on up to 100,000. We'll have to be expanding beyond 100,000 because we always want to have excess capacity to make sure that we can meet last-minute product SKU changes in our customer set. We have a really good handle on it because of the long-term relationship we've had with Benchmark.

Speaker #1: So they're way up . And I expect that to continue . I mean , this this adoption of physical AI systems has really caught us by storm .

Speaker #1: And we're shipping a lot more leaders year over year . And that compounds very , very quickly from , you know , 40,000 units a year runway run rate on up to to 100,000 .

Speaker #1: So , you know , we'll probably , we'll have to be expanding beyond 100,000 because we always want to have excess capacity to make sure that we can meet last minute , you know , as product changes and our customer .

Angus Pacala: We'll have to be expanding beyond 100,000 because we always want to have excess capacity to make sure that we can meet last-minute product SKU changes in our customer set. We have a really good handle on it because of the long-term relationship we've had with Benchmark.

Speaker #1: So but we have a really good handle on it because of the long term relationship we've had with Bet , with benchmark on stereo labs , you know , part of the rationale of the merger from , from that team was finding a partner like ouster that knew how to scale production and , and that's really playing out .

Angus Pacala: On StereoLabs, part of the rationale of the merger from that team was finding a partner like Ouster that knew how to scale production, and that's really playing out. We have a major focus on maturing their manufacturing strategy and their capacity because of the explosion in demand that we're seeing out of their customer base. It couldn't have come at a better time for them that we now have the entire Ouster operations team and our COO, Darian Spencer, hyper-focused on this scaling effort. Yeah, there's definitely a lot of work we're doing to just meet the demand on the StereoLabs side.

Speaker #1: So we have a major focus on maturing their manufacturing strategy and their capacity because of the explosion in demand that we're seeing out of their customer base .

Speaker #1: So it couldn't have come at a better time for them that , that we now have the entire ouster operations team and our COO , Darian Spencer , you know , hyper focused on this scaling effort .

Angus Pacala: It couldn't have come at a better time for them that we now have the entire Ouster operations team and our COO, Darian Spencer, hyper-focused on this scaling effort. Yeah, there's definitely a lot of work we're doing to just meet the demand on the StereoLabs side.

Speaker #1: So yeah , there's definitely a lot of work we're doing to just meet the demand on the stereo lab side

Speaker #7: Okay . And sticking with that for the moment , I know , you know , a full quarter here , but it's , you know , pretty , pretty big stub last quarter seemed to be a pretty sharp uptick in , you know , stereo lab sensor unit shipments .

Tim Savageaux: Okay. Sticking with that for the moment, I know a full quarter here, but it's a pretty big stub last quarter. Seemed to be a pretty sharp uptick in StereoLabs sensor unit shipments that goes well beyond the inclusion of a full quarter. Was that ahead of your expectations, and is it fair to tie that to humanoid robotics demand, or are there other drivers there?

Speaker #7: That goes well beyond the inclusion of a full quarter . Was that ahead of your expectations ? And is it fair to to tie that to humanoid robotics demand , or are there other drivers there ?

Speaker #3: I mean , I think the first thing is , is it's within the plan that we have for the full year for them .

Angus Pacala: I think the first thing is it's within the plan that we have for the full year for them. We're really excited in how we looked at that. We anticipated this ramp-up once we got ahold of them heading into the back half of the year. The capacity piece of it, and especially in this marketplace with as hot as robotics is right now, you have to have the capacity to serve as the demand comes in. You don't want that order slipping or pushing to another provider, potentially. We are investing this quarter, and we're going to continue to invest the next couple quarters in building their capacity to ramp expectations, not just what we've already laid out for this calendar year. We guided at the beginning of the year, we expect that to grow at least at the midpoint on a year-over-year basis, 40%.

Speaker #3: We're really excited . And , and how we looked at that , we anticipated this ramp up once we got Ahold of them heading into the back half of the year , the capacity piece of it and especially in this marketplace with as hot as robotics is right now , you have to have the capacity to serve as the demand comes in .

Speaker #3: You don't want that order slipping or pushing to another provider , potentially . So we are investing this quarter and we're continuing to invest the next couple quarters in building their capacity to ramp expectations , not just what we've already laid out for this calendar year .

Angus Pacala: You don't want that order slipping or pushing to another provider, potentially. We are investing this quarter, and we're going to continue to invest the next couple quarters in building their capacity to ramp expectations, not just what we've already laid out for this calendar year.

Speaker #3: You know , we guided at the beginning of the year , we expect that to grow , at least at the midpoint on a year over year basis , at 40% .

Angus Pacala: We guided at the beginning of the year, we expect that to grow at least at the midpoint on a year-over-year basis, 40%. We see this progressing as a multi-year thing. Having that capacity to go into 2027 and beyond is important to start driving that now.

Speaker #3: But we see this progressing as a multiyear thing . So having that capacity to go into 27 and beyond is , is important to start driving that .

Angus Pacala: We see this progressing as a multi-year thing. Having that capacity to go into 2027 and beyond is important to start driving that now.

Speaker #3: Now

Speaker #7: Okay , last question for me and mentioned you talked about humanoid robotics more in the context of cameras , but at least certain configurations or certain units seem to have , you know , in some cases , a couple of LiDAR sensors on them .

Tim Savageaux: Okay, last question from me. You talked about humanoid robotics more in the context of cameras, but at least certain configurations or certain units seem to have, in some cases, a couple of lidar sensors on them. Is there a lidar sensor opportunity here as well in humanoid robotics, or should we think of that more focused on cameras?

Speaker #7: Is there a LiDAR sensor opportunity here as well in humanoid robotics , or should we think of that more focused on cameras ?

Speaker #1: Well , I'm just looking at the humanoid platforms and there's upwards of 100 to 200 of them that I've seen . Every one of them has 6 to 12 cameras .

Angus Pacala: Well, I'm just looking at the humanoid platforms, there's upwards of 100 to 200 of them that I've seen. Every one of them has six to 12 cameras, sometimes more, then a small subset have lidar. Yes, there is absolutely an opportunity for lidar, as we continue to build different form factors of our lidars, there could be better fits in terms of form, fit, and function for the humanoid market. Right now, that's a solidly camera-first market. The broader question, we have seen a lot of cross-selling opportunities within the customer set outside of just humanoids. StereoLabs has a lot of industrial customers, a lot of heavy equipment customers. There, we're getting inbound saying, Hey, we're already buying a StereoLabs Camera, we are looking at layering in lidar or safety lidar of some kind. Can we just buy Ouster?

Speaker #1: Sometimes more . And then a small subset have lidar . And so yes , there is absolutely an opportunity for LiDAR . And as we continue to build different form factors of our leaders , there could be better , you know , better fits in terms of form fit and function for the humanoid market .

Speaker #1: But right now that's a solidly camera first market . And , but , but the broader question , we have seen a lot of cross selling opportunities within the customer set outside of just humanoids , you know , stereo labs has a lot of industrial customers , a lot of heavy equipment customers .

Angus Pacala: Right now, that's a solidly camera-first market. The broader question, we have seen a lot of cross-selling opportunities within the customer set outside of just humanoids. StereoLabs has a lot of industrial customers, a lot of heavy equipment customers. There, we're getting inbound saying, Hey, we're already buying a StereoLabs Camera, we are looking at layering in lidar or safety lidar of some kind. Can we just buy Ouster?

Speaker #1: And there we're getting inbound saying, "Hey, we're already buying a Stereo Labs camera. We're looking at layering in LiDAR or safety LiDAR or some kind."

Speaker #1: Can we just buy ouster and vice versa ? Huge number of customers in the lidar domain . Traditional ouster customers that have been sourcing cameras somewhere .

Angus Pacala: Vice versa. Huge number of customers in the lidar domain, traditional Ouster customers that have been sourcing cameras somewhere, now they're coming to us saying, Hey, we'd much rather source this all from one reputable partner, so can we buy these stereo cameras now? The cross-selling has emerged organically, which is great to see. It's just part of the thesis that customers would prefer a business combination of two companies like StereoLabs and Ouster. Then there's obviously some inorganic outbound stuff that we're doing with the sales teams to cross-sell.

Speaker #1: And and now they're coming to us saying , hey , we'd much rather , you know , source this all from one reputable partner .

Speaker #1: And so can we buy these stereo cameras now ? So the cross-selling has emerged organically , which is great to see . It's just part of the thesis that customers would prefer a business combination of two companies , like Stereo Labs and Ouster .

Angus Pacala: It's just part of the thesis that customers would prefer a business combination of two companies like StereoLabs and Ouster. Then there's obviously some inorganic outbound stuff that we're doing with the sales teams to cross-sell.

Speaker #1: And then there's obviously some inorganic outbound stuff that we're doing with the sales teams to to cross-sell

Tim Savageaux: Okay, thanks very much.

Speaker #7: Hey , thanks very much

Speaker #4: Thank you Our next question comes from the line of Andres Shepherd of Cantor Fitzgerald . Your line is now open .

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

Speaker #8: Hey , everyone . Good afternoon . Congratulations on the quarter and all the great progress . Thank you for taking our questions . You know , I think a lot of the things we wanted to touch on have been asked , but maybe a two part question .

Andres Sheppard: Hey, everyone. Good afternoon. Congratulations on the quarter and all the great progress. Thank you for taking our questions. I think a lot of the things we wanted to touch on have been asked, but maybe a two-part question. Angus, are you able to share, how should we be thinking about cadence and unit mix going forward between lidars and cameras? Not looking for a specific number, but just maybe percentage-wise, or just how are you thinking about that and how we should be thinking about that going forward in terms of the split. The second part of that question is if you could maybe highlight what you see as the key upcoming catalyst that investors should be aware of. Thank you.

Speaker #8: You know, Angus, are you able to share, like, how should we be thinking about cadence and unit mix going forward between lidars and cameras?

Speaker #8: You know , not not looking for a specific number , but just maybe percentage wise or just kind of how are you thinking about that and how we should be thinking about that going forward in terms of the split ?

Andres Sheppard: Not looking for a specific number, but just maybe percentage-wise, or just how are you thinking about that and how we should be thinking about that going forward in terms of the split. The second part of that question is if you could maybe highlight what you see as the key upcoming catalyst that investors should be aware of. Thank you.

Speaker #8: And then the second part of that question is , if you could maybe highlight , you know , what do you see as the key upcoming catalysts that investors should be aware of ?

Speaker #8: Thank

Speaker #1: Yeah . So thanks for the question , Andres . The so the , the unit mix expectation somewhat follows the ASP difference between these , these technologies .

Angus Pacala: Yeah. Thanks for the question, Andres. The unit mix expectation somewhat follows the ASP difference between these technologies. Cameras at much lower ASPs than the lidar sensors. They're also, cameras are directional versus our lidars are 360, so you need more of them to cover the field of view of a robot. Right now, StereoLabs is a smaller company that's now becoming a midsize kind of entity within Ouster. I see their unit volumes increasing and outpacing the unit volume increase of lidar just because of the dynamics. More cameras are deployed on these robots because they're at lower ASPs, and they need to be positioned to cover the field of view of the robot differently than a lidar. That's good news for us. Doesn't mean we're going to sell fewer lidars.

Speaker #1: So cameras at much lower ASPs than the LiDAR sensors . They're also cameras are directional versus our leaders are 360 . So you need more of them to cover cover the field of view of a robot .

Speaker #1: So right now , you know , Stereo labs is a smaller company that's now becoming a midsize company , midsize kind of entity within ouster .

Angus Pacala: Right now, StereoLabs is a smaller company that's now becoming a midsize kind of entity within Ouster. I see their unit volumes increasing and outpacing the unit volume increase of lidar just because of the dynamics. More cameras are deployed on these robots because they're at lower ASPs, and they need to be positioned to cover the field of view of the robot differently than a lidar. That's good news for us. Doesn't mean we're going to sell fewer lidars.

Speaker #1: And I see their unit volumes increasing and outpacing the unit volume increase of LiDAR . Just because of the dynamics . More cameras are deployed on these robots because they're at lower ASPs , and they need to be positioned to cover the field of view of the robot differently than a LiDAR .

Speaker #1: That's good news for us. It doesn't mean we're going to sell fewer LIDARs. We see our LIDAR unit demand also accelerating, but just accelerating at a slightly slower pace than the cameras.

Angus Pacala: We see our lidar unit demand also accelerating, just accelerating at a slightly slower pace than the cameras. In terms of catalysts for the business, there's so many things that we're doing right, and we're just starting to feel the positive effects of the Rev8 release across all of our verticals. I've talked a ton about that, native color is such a big deal to this customer base. It really blew away my expectations, the customer reaction to native color lidar. We have almost universal adoption of native color in the Rev8 customer set. Then you layer on that the stereo cameras and the ZED X Nano that was released and the future roadmap that we have there. Finally, the unified sensing and perception stack that we're building has resonated with customers.

Speaker #1: And then in terms of catalyst for the business , I mean , there's so many things that we're doing , right . And I mean , we're just starting to feel the positive effects of the Rev eight release across all of our verticals .

Speaker #1: I've talked a ton about that , but I mean , native color is such a big deal to this customer base it really blew away my expectations .

Angus Pacala: I've talked a ton about that, native color is such a big deal to this customer base. It really blew away my expectations, the customer reaction to native color lidar. We have almost universal adoption of native color in the Rev8 customer set. Then you layer on that the stereo cameras and the ZED X Nano that was released and the future roadmap that we have there. Finally, the unified sensing and perception stack that we're building has resonated with customers.

Speaker #1: The customer reaction to native color lidar . We have almost universal adoption of native color in the Rev eight . Customer set . And then you layer on that .

Speaker #1: The stereo cameras and the Z nano . That was released and the future roadmap that we have there . And , and finally , the unified sensing and perception stack that we're building is resonating with customers .

Speaker #1: So if we talk about a catalyst , that's a little further in the future , it's the ability to bundle all of this technology , compute cameras and leaders and the software that runs it together in a way that speeds customers time to market , you know , gets practical , physical AI that's safe , efficient , capable in the hands of the thousands of customers that were already serving today with just with just hardware .

Angus Pacala: If we talk about a catalyst that's a little further in the future, it's the ability to bundle all of this technology, compute cameras and lidars and the software that runs it together in a way that speeds customers' time to market. Gets practical physical AI that's safe, efficient, capable in the hands of the thousands of customers that we're already serving today with just hardware. That's the mission of the company, or one of the big missions of the company going forward for the next couple of years is transitioning from a fantastic ecosystem supplier of these parts to a solutions provider that's providing the full stack software that underlies all of physical AI. That's going to be a big catalyst for us in the next five years.

Speaker #1: So that's the mission of the company . You know , or one of the big missions of the company going forward for the next couple of years is transitioning from a fantastic ecosystem supplier of these parts to a solutions provider that's , you know , providing the full stack software that underlies all the physical AI that's going to be a big catalyst for us in the next five years .

Angus Pacala: That's the mission of the company, or one of the big missions of the company going forward for the next couple of years is transitioning from a fantastic ecosystem supplier of these parts to a solutions provider that's providing the full stack software that underlies all of physical AI. That's going to be a big catalyst for us in the next five years.

Speaker #8: Excellent . Thank you very much , Angus . And maybe just as a quick follow up , you know , I think we we talked a lot about robotics and humanoids .

Andres Sheppard: Excellent. Thank you very much, Angus. Maybe just as a quick follow-up. I think we talked a lot about robotics and humanoids. I wanted to come back maybe to drones following your previous certification there. Just curious if you could maybe give us some color, what kind of near-term or medium-term opportunities you might be pursuing as it pertains to drones, and maybe how material do you expect this segment to be going forward. Thank you.

Speaker #8: I wanted to come back maybe to drones following your your previous certification . There . So just curious if you could maybe give us some color , you know , what kind of near term or medium term opportunities you might be pursuing as it pertains to drones and maybe how material do you expect this segment to be going forward ?

Speaker #8: Thank you .

Speaker #1: Yeah . So drones are very interesting for us . I think Rev eight , we have a couple things that a couple capabilities in Rev eight , native color , improved accuracy , precision and range that are very specific or useful in the drone surveying market and drone navigation market .

Angus Pacala: Drones are very interesting for us. I think Rev8, we have a couple capabilities in Rev8, native color, improved accuracy, precision, and range, that are very specific or useful in the drone surveying market and drone navigation market. I've been talking with a lot of drone customers lately, just getting Rev8 in their hands, and there's been an extremely positive reaction to what Rev8 can do, either as a surveying payload or as a navigation payload on drones. Obviously things like a Build America, Buy America certification is helping immensely in that market. We previously have the Blue UAS certification on REV7 products. You can anticipate maybe that's where we could invest more in Rev8 as well.

Speaker #1: And so , you know , I've been talking with a lot of drone customers lately , just getting Rev eight in their hands .

Speaker #1: And there's been an extremely reaction to what Rev eight can do , either as a serving payload or as a navigation payload on , on drones .

Speaker #1: And , you know , obviously things like a by build American certification is helping immensely in that market . We previously have the blue UAS certification on Rev seven products .

Angus Pacala: Obviously things like a Build America, Buy America certification is helping immensely in that market. We previously have the Blue UAS certification on REV7 products. You can anticipate maybe that's where we could invest more in Rev8 as well.

Speaker #1: You can anticipate . Maybe that's where , where we could invest more in Rev eight as well . So there's a lot of things that are going to be tailwinds in that market .

Angus Pacala: There's a lot of things that are going to be tailwinds in that market, the customer reaction to Rev8 has been really good in the drone market. I definitely see it as a growth area for us through the end of the year.

Speaker #1: And then the customer reaction to Rev eight has been really , really good in the drone market . So I definitely see it as a as a growth area for us through the end of the year .

Speaker #8: Well said . Thank you so much , everyone . And congrats again on the quarter . We'll pass it on

Andres Sheppard: Well said. Thank you so much, everyone, and congrats again on the quarter. We'll pass it on.

Speaker #4: Thank you Our next question comes from the line of Richard Shannon of Craig-hallum . Your line is now open

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

Speaker #6: Well, thanks, Angus and Ken, for letting me ask a couple of questions. Apologies if I'm asking questions that have already been asked.

Richard Shannon: Well, thanks, Angus and Ken. Let me ask a couple questions. Apologies for potentially asking questions that have already been asked. I got on the call a little bit late here. I did want to follow up on REV-8. We've heard a couple of questions and answers so far, and it sounds like the reaction's been at least as strong as you were hoping for when you announced it last Q here. Angus, I'd love to get a sense from you of what kind of pace of adoption we're seeing here. Can you talk about, as an example, how much of your revenue base was REV-8 in Q2? I know it's early, I'd love to get a sense. Do you have any idea of how long of a timeframe to look for when REV-8 crosses over REV-7?

Speaker #6: I got on the call a little bit late here , but I didn't want to follow up on on Rev eight . I've heard a couple of questions and answers so far , and it sounds like the reaction has been at least as strong as you were hoping for when you announced it last quarter here .

Speaker #6: But Angus , I'd love to get a sense from you of what kind of pace of adoption we're seeing here . Can you talk about , as an example , how much of your revenue base was Rev eight in the second quarter ?

Richard Shannon: Angus, I'd love to get a sense from you of what kind of pace of adoption we're seeing here. Can you talk about, as an example, how much of your revenue base was REV-8 in Q2? I know it's early, I'd love to get a sense. Do you have any idea of how long of a timeframe to look for when REV-8 crosses over REV-7?

Speaker #6: I know it's early , but I'd love to get a sense . And do you have any idea of of how long of a time frame to look for when .

Speaker #6: Rev 8 crosses over Rev 7.

Speaker #1: You know , I have I have an expectation . Well , I guess we have we've done this now this will be the eighth or seventh product transition that we've done at Ouster, Inc. .

Angus Pacala: I have an expectation. We've done this now, this will be the eighth or seventh product transition that we've done at Ouster, right? REV-8, seven times we've transitioned the customer base across revisions. We do have really good information on how quickly customers transition. REV-7 has been a product out in the market for three years, homologated into customer designs, certified by end customers. There are going to be reasons completely unrelated to the benefits of REV-8 why customers may stick with REV-7. It's core to our strategy that we actually remain a dependable source of REV-7 sensors for years and years to come. That's good for our customers because, again, they've spent money homologating into REV-7.

Speaker #1: Rev eight , seven , seven times . We've transitioned the customer base across revisions . So we do have really good information on how quickly customers transition and rev .

Speaker #1: Rev seven has been a product out in the market for three years . Homologated into customer designs , certified by end customers . And so there are going to be reasons completely unrelated to the benefits of Rev eight .

Angus Pacala: There are going to be reasons completely unrelated to the benefits of REV-8 why customers may stick with REV-7. It's core to our strategy that we actually remain a dependable source of REV-7 sensors for years and years to come. That's good for our customers because, again, they've spent money homologating into REV-7.

Speaker #1: Why customers may stick with Rev Seven, and it's core to our strategy that we actually remain a dependable source of Rev Seven sensors for years and years to come.

Speaker #1: So that's good for our customers because again , they've spent money homologating into Rev seven . Now there are also new customers that see Rev eight as the solution to a problem they could never solve before , and are rapidly adopting it or , you know , totally new customers that we've never served before , that now , now that we're capturing because of its unique capabilities .

Angus Pacala: Now, there are also new customers that see Rev8 as the solution to a problem they could never solve before and are rapidly adopting it, or totally new customers that we've never served before that now that we're capturing because of Rev8's unique capabilities, et cetera. This will be a 2-year transition, is my expectation for the entire customer base, but it rapidly becomes a critical part of our revenue. We're entering volume production and at that point it's a critical part of our revenue. That's happening in H2 of this year, no question. I think it's less important to track the exact mix of REV7 to Rev8 over the next 18 months, so long as the adoption is in the direction of Rev8, which I'm absolutely confident it will be, just given all the value it brings.

Speaker #1: ET cetera . ET cetera . So this will be a two year transition is my expectation for the entire customer base . But it rapidly becomes a critical part of our revenue .

Speaker #1: And , you know what ? We're entering volume production because it is . And at that point , it's a it's a critical part of our revenue .

Angus Pacala: We're entering volume production and at that point it's a critical part of our revenue. That's happening in H2 of this year, no question. I think it's less important to track the exact mix of REV7 to Rev8 over the next 18 months, so long as the adoption is in the direction of Rev8, which I'm absolutely confident it will be, just given all the value it brings.

Speaker #1: So that's happening in the second half of this year . No question . And I think it's less important to track the exact mix of Rev seven to rev eight over the next 18 months .

Speaker #1: So long as the adoption is in the direction of Rev eight , which I'm absolutely confident it will be just given all the value it brings .

Speaker #1: So yeah , managing a customer's transition in this kind of market is , is really critical . And it's one of the additional benefits we bring to the table .

Angus Pacala: Managing a customer's transition in this kind of market is really critical and it's one of the additional benefits we bring to the table. We've spent a lot of time in the background making sure Rev8 is backwards compatible with a lot of REV7 capabilities for the customers that need that so they can adopt and I won't bore you with all the details, but there's a lot of work that goes on here.

Speaker #1: And we spent a lot of time in the background making sure Rev eight is backwards compatible with a lot of Rev seven capabilities for the customers that need that .

Speaker #1: So they can adopt, and I won't bore you with all the details, but there's a lot of work that goes on here.

Speaker #3: Yeah. And I'll answer your other part of the question real quick. It was minor prototype sales that we had in Q2 that were in our numbers, but we expect that with production ramp to increase quarter over quarter into the back half.

Ken Gianella: Yeah, I'll answer your other part of the question real quick. It was minor prototype sales that we had in Q2 that were in our numbers, but we expect that with production ramp to increase quarter-over-quarter into H2.

Speaker #6: Okay . Angus , that was great perspective . Thanks for that help there with Ken as well . Second question is on gross margins here .

Richard Shannon: Okay. Angus, that was great perspective. Thanks for that help there with Ken as well. Second question is on gross margins here. I missed some of the prepared remarks here, and I know there's some amount of non-product revenues in here that probably has a different gross margin to it, but how do we think about the product gross margins in the quarter that makes it comparable with the last few here? They've been very healthy, well above or notably above your range for a while here, I want to get a sense of trend here. Do you still think that 35% to 40% is the right range, or can we see it consistently above there? Thank you.

Speaker #6: I missed some of the prepared remarks here, and I know there was some amount of non-product revenue in here that probably has a different gross margin to it.

Speaker #6: But how do we think about the product gross margins in the quarter that makes it comparable with the last few here . They've been very healthy well above or notably above your range for a while here .

Richard Shannon: They've been very healthy, well above or notably above your range for a while here, I want to get a sense of trend here. Do you still think that 35% to 40% is the right range, or can we see it consistently above there? Thank you.

Speaker #6: So I want to get a sense of trend here . And and do you still think 35 to 40% is the right range , or can we see it consistently above there ?

Speaker #6: Thank you .

Speaker #3: Yeah , we think it's the it's the right range in the near term . I know it may not feel like it with the last so many quarters being 40% and plus a lot of that's come from revisions and cost downs that made was very aggressive .

Ken Gianella: We think it's the right range in the near term. I know it may not feel like it with the last so many quarters being 40% and plus. A lot of that's come from revisions and cost downs that was very aggressive, a couple bluebirds that we've gotten into there. On a normalized basis, the reason why I called out this year and then prior year numbers was both of them had one-time elements that pushed us well into the north 40s. We want to be in the high 30s to 40s. We do see potential that you could go higher than that. We want to keep everyone's expectations in check as we start getting into more production orders in the out years for the models. We would see that to come back into that 35% to 40% range, like on a normalized basis.

Speaker #3: A couple Bluebirds that we've gotten into there , you know , on a normalized basis . You know , the reason why I called out the last this year and then prior year numbers was both of them had one time elements that pushed us well into the north 40s .

Speaker #3: You know, we want to be in the high 30s to 40s. We do see potential that you could go higher than that.

Ken Gianella: We want to be in the high 30s to 40s. We do see potential that you could go higher than that. We want to keep everyone's expectations in check as we start getting into more production orders in the out years for the models. We would see that to come back into that 35% to 40% range, like on a normalized basis.

Speaker #3: We want to keep everyone's expectations in check as we start getting into more production orders in the out years for the models , we would see that to come back into that 35 to 40% range , like on a normalized basis , you know , this quarter would have been in the in the high 30s , right ?

Ken Gianella: This quarter would've been in the high 30s, right? We just want to keep the overall models, realizing that we know production and different competitive market dynamics with supply chain are always going to be things that we're going to be fighting against year on year. As we get more of a mix into our software strategy and more into our solutions like BlueCity, those definitely are higher than that range that we gave, and that's going to help bolster that into the future and potentially pull us higher as those mix of solutions come more of a play in the out years.

Speaker #3: So we just want to keep the overall models, realizing that we know production and, you know, different competitive market dynamics with the supply chain are always going to be things that we're going to be fighting against year on year.

Speaker #3: But as we get more of a mix into , you know , our software strategy and more into our solutions , like Blue City , those definitely are higher than that .

Ken Gianella: As we get more of a mix into our software strategy and more into our solutions like BlueCity, those definitely are higher than that range that we gave, and that's going to help bolster that into the future and potentially pull us higher as those mix of solutions come more of a play in the out years.

Speaker #3: That range that we gave. And that's going to help bolster that into the future and potentially pull us higher as those mix of solutions come, come more into play in the out years.

Speaker #6: All right. I appreciate that detail, and congratulations on your great results, guys. That's all from me.

Richard Shannon: All right. Appreciate that detail and congratulations on your great results, guys. That's all for me.

Speaker #4: This does conclude the question and answer session. I would now like to turn it back to Angus for closing remarks.

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

Operator: This does conclude the question-and-answer session. I would now like to turn it back to Angus for closing remarks.

Speaker #1: All right. Thank you all for joining the call. We look forward to speaking with you again during the third quarter. Have a good day.

Angus Pacala: All right. Thank you all for joining the call. We look forward to speaking with you again during the Q3. Have a good day.

Angus Pacala: All right. Thank you all for joining the call. We look forward to speaking with you again during Q3. Have a good day.

Operator: For your participation in today's conference, this does conclude the program. You may now disconnect.

Q2 2026 Ouster Inc Earnings Call

Request DemoDemo

Ouster

Earnings