Ouster, a leading lidar maker that merged with Velodyne in February 2023, announced its financial results for the fourth quarter and full year of 2022 on Friday. The company reported $11 million in revenue for Q4, down 8% year-over-year, but in line with the Wall Street consensus estimate. The company also reported a 17% gross margin for Q4, down from 30% in the same period last year, but slightly above the analyst expectation of 16%.
The company attributed its revenue decline to the global electronics downturn, which affected the demand and supply of its lidar sensors, especially in the automotive and smart infrastructure verticals. The company also said that its gross margin decline was mainly due to some large-volume sales to certain customers with lower average selling prices, as well as higher costs associated with the transition to its new REV7 sensor platform.
Ouster achieves $41 million revenue and 27% gross margin for 2022
Ouster also announced its financial results for the full year of 2022, which met its revised guidance targets. The company achieved $41 million in revenue for 2022, up 22% year-over-year, and delivered an industry-leading 27% gross margin for 2022, up from 26% in 2021.
The company said that its revenue growth was driven by strong demand for its lidar sensors across various end markets, especially in the industrial and robotics verticals, which accounted for 69% of its revenues in 2022. The company also said that its gross margin improvement was driven by operational efficiencies and economies of scale.
The company also highlighted some of its achievements and milestones in 2022, such as:
- Securing a record $70 million in bookings with new and existing customers in 2022.
- Shipping over 8,650 sensors for revenue in 2022, totaling over 18,500 sensors shipped to date.
- Launching its new REV7 sensor platform, which offers double the range and resolution of its previous generation sensors.
- Completing its merger of equals with Velodyne, which strengthened its financial position and expanded its product portfolio and customer base.
Ouster guides lower revenue and gross margin for Q1 and 2023
Despite meeting Wall Street expectations for Q4 and 2022, Ouster disappointed investors with its lower-than-expected guidance for Q1 and 2023. The company expects to generate $9 million to $10 million in revenue for Q1, down from $11 million in Q4, and below the analyst estimate of $12 million. The company also expects to report a 15% to 16% gross margin for Q1, down from 17% in Q4, and below the analyst expectation of 18%.
For the full year of 2023, the company expects to generate $50 million to $55 million in revenue, up from $41 million in 2022, but below the analyst estimate of $58 million. The company also expects to report a 25% to 26% gross margin for 2023, down from 27% in 2022, and below the analyst estimate of 28%.
The company explained that its lower guidance was due to several factors, such as:
- The continued impact of the global electronics downturn on its lidar sensor demand and supply.
- The increased competition and pricing pressure from other lidar players in the market.
- The integration challenges and costs associated with the Velodyne merger.
- The investments required to support its growth initiatives and innovation efforts.
Ouster stock drops more than 10% on weak outlook
The stock market reacted negatively to Ouster’s weak outlook, sending its shares down more than 10% on Friday. The stock closed at $13.72 per share, down from $15.36 per share on Thursday. The stock has lost more than half of its value since reaching a high of $29.75 per share on March 9.
Analysts said that Ouster’s guidance reflected the challenges and uncertainties facing the lidar industry, which is undergoing rapid changes and disruptions amid technological innovations and competitive pressures. They also said that Ouster’s valuation was too high compared to its peers and its growth prospects.
“Ouster’s guidance is disappointing and shows that the lidar market is not as rosy as some investors may think,” said Craig Irwin, an analyst at Roth Capital Partners. “Ouster is trading at a premium to other lidar players like Luminar (LAZR) or AEye (LIDR), but it does not have a clear competitive edge or differentiation. We remain cautious on Ouster’s stock until we see more evidence of sustainable growth and profitability.”
