Ouster Q4 2025 Earnings Call - Stereolabs Buy Turns Lidar Maker into Unified Physical AI Platform, but Q4 Margins Fueled by One-Time Royalties

Operator: Welcome to Ouster’s fourth quarter 2025 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 one one on your telephone keypad. If you would like to withdraw your question, press star one one again. The call today is being recorded and a replay of the call will be available on the Ouster Investor Relations website an hour after the completion of this call. I’d like to now turn the conference over to Chen Geng, Senior Vice President of Strategic Finance and Treasurer. Please go ahead.

Chen Geng, Senior Vice President of Strategic Finance and Treasurer, Ouster: Thank you operator. Good afternoon, everyone. Thank you for joining our fourth quarter 2025 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. These include all statements about our competitive position 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, and our revenue guidance for the first quarter of 2026.

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 fourth quarter of 2025 financial results release and in the quarterly and annual reports we file with the Securities and Exchange Commission. 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.

Operator: Hello everyone, thank you for joining. I’ll start with a brief recap of the quarter and review of our strategic priorities for 2025. Ken will cover our financial results in more detail before I close with our goals for 2026. The fourth quarter capped off a year of exceptional execution for Ouster. Our fourth quarter revenue of $62 million, including $41 million of product revenue, reflects the continued demand we see across our lidar business and represents our twelfth straight quarter of product revenue growth. GAAP gross margin was strong at 60%. We set a new quarterly record with over 8,100 sensors shipped, bringing Physical AI to life across multiple applications, including warehouse automation, robotaxis, and mapping. Our strong results are a testament to our disciplined execution across our business.

This is supported by durable global growth drivers for increasing automation, efficiency and safety. These secular themes strengthened during 2025, a year where we set and executed on three strategic priorities: scaling the software attached business, transforming the product portfolio, and executing towards profitability. First, we committed to scaling our software attached business. Software attached bookings more than doubled in 2025 and represented over 15% of our sensors shipped, which is up over 120% year-over-year. I’m excited to share that today our in-house trained AI models are now running 24 hours a day at over 1,200 Gemini and BlueCity sites, spanning over 65 million sq ft of roadways and facilities around the world. We are delivering Physical AI at enterprise scale.

We drove significant Gemini renewals, including a 7-figure annual license with a leading global technology company, and secured landmark BlueCity agreements to accelerate the adoption of AI-powered lidar detection across Tennessee, Utah, and New Jersey. This growth was driven by the increased capabilities of Ouster Gemini and BlueCity, validating our continued investments in proprietary AI model training, as well as the expansion of distribution partnerships across nearly the entirety of North America. Second, we set out to further transform our product portfolio. In 2025, we introduced powerful new features, unlocked greater performance, and reshaped how our customers integrate, manage, and utilize lidar data through a series of major software releases. We launched 4 new versions of our SDK, which included revolutionary new features. This included on-sensor 3D Zone Monitoring, which is the first time perception logic has been embedded directly into 3D digital lidar.

This feature supports collision avoidance warnings, deceleration, and emergency stops. Was the result of significant demand from customers. Many of the world’s largest material handling companies are using this as a critical aspect in their collision avoidance technology. We also released real-time localization, empowering customers to track the position of their assets with centimeter-level accuracy and implement features like geofencing and automatic speed limit enforcement without requiring the installation of expensive and complex infrastructure. We continued to strategically invest in our proprietary AI model training, leveraging real world data to iterate, retrain, improve, and deliver increased capabilities to our customers. Our breakthrough multi-sensor AI model powering Ouster Gemini and BlueCity is trained on millions of labeled objects collected from hundreds of sites around the world, spanning diverse environments and weather conditions.

By dramatically improving detection accuracy, efficiency, and long-term object identity persistence, we have unlocked new use cases, allowing us to support large scale installations of 40 lidar sensors at a single site. We also advanced BlueCity features from prototype to real-world deployments with the addition of intelligent signal actuation, which catalyzes Ouster’s scaling across hundreds of intersections in 2025. Within Ouster Gemini, we released new features like Cloud Portal and Event Server. Gemini Cloud Portal allows customers to securely configure and manage deployments from any location. While Gemini Event Server creates a no-code environment that enables customers to build custom logic for applications like intrusion detection and zone occupancy without requiring heavy engineering. Finally, we made major progress in validating our next generation L4 and Kronos custom silicon as we look to redefine what’s possible with digital lidar.

Our digital lidar roadmap continues to drive dramatic improvements in performance and reliability, reinforcing the core advantages of our architecture. These breakthrough chips will power our next generation sensors, which represent a major step forward in capability, scalability, and value for our customers. These advancements are expected to more than double our current addressable market for lidar, unlocking new applications and expanding opportunities across each of our industry verticals. We’re excited to share much more on this front soon. Our execution in 2025 aligned with our long-term financial framework, progressing us further on our path towards profitability. Our core business delivered on all target metrics for 2025. Excluding the benefit of royalties, full year product revenue increased by 32% year-over-year, and we successfully navigated a volatile macroeconomic environment and the headwind of tariffs to deliver 41% gross margin.

We maintained our operating expense discipline even as we absorbed the operational and compliance requirements of a growing global business. We continue to have one of the strongest balance sheets in the industry, demonstrating our ability to achieve both high growth and financial prudence. I’ll now turn the call over to Ken to discuss our financial results in detail.

Ken Gianella, Chief Financial Officer, Ouster: Thank you, Angus. Hello, everyone. As Angus mentioned, we closed fiscal 2025 with a strong finish, underscoring our continued operational execution. Our results demonstrate the resilience of our operating model and the disciplined financial management across the business as we continue to perform within our long-term financial framework, keeping us firmly on the path to profitability. Turning to the fourth quarter financial performance, operating results were strong with revenue of $62 million, GAAP gross margin of 60%, and shipments of over 8,100 sensors. During the quarter, we recorded royalties of approximately $21 million that were primarily one-time and related to long-term IP license contracts. These royalties demonstrate the strength of our IP portfolio.

For 2026, total royalty revenue is expected to be less than $5 million, with the majority of that amount expected to be recognized in the back half of the year. Looking ahead, we expect additional royalty revenue to be relatively modest, and it will be included in our revenue guidance. Turning back to our fourth quarter results, absent the impact of royalties, our fourth quarter product revenue was $41 million, representing an increase of 36% compared to the same quarter a year ago. The industrial vertical was the largest contributor to fourth quarter revenue, followed by robotics and smart infrastructure. Demand for our Gemini and BlueCity solutions remained strong and were important contributors to our quarterly results. GAAP gross margin of 60% reflected the impact of royalties, continued revenue growth in our digital lidar business, and improvements in our operational performance.

Royalties impacted our fourth quarter GAAP gross margin by approximately 20 percentage points. GAAP operating expenses were $37 million in the fourth quarter, a decrease of 6% from the same quarter last year. The decline was primarily due to a favorable employment tax refund received during the quarter. As we continue to focus on our path to profitability, we will remain diligent on managing our operating expenses. Adjusted EBITDA was a positive $11 million, which reflects the impact of the royalty payments. Our balance sheet continues to be one of the strongest in the industry, ending the quarter with cash equivalents, restricted cash, and short-term investments of $211 million and no debt.

The strength of our balance sheet gives Ouster the strategic and financial flexibility to operate our business, as it also vitally important to our customers who rely on Ouster as a key Physical AI partner on their long-term autonomy journey. Turning to our full year results, we generated revenue of $169 million, of which approximately $23 million was attributable to royalty revenue that were primarily one-time and related to long-term IP license contracts. This represents growth of 52% year-over-year, or 32% excluding the impact of royalties. We shipped over 25,000 sensors, an increase of 48% compared to 2024, with help from record bookings of $177 million, delivering a robust product book-to-bill of 1.2 times in 2025. GAAP gross margin was 49%, up 13 points year-over-year.

Royalties contributed eight points of gross margin. GAAP operating expense was $157 million, up 9% from $145 million in 2024. This reflects increased investment to support our product roadmap, expenses related to the Stereolabs acquisition, and the implementation of operational and compliance tools that support our growing business. These expenses were partially offset by proceeds received from favorable employment tax refund. Adjusted EBITDA was a loss of $12 million compared to a loss of $42 million in 2024. This reflects the benefit of royalty revenue combined with the continued operational improvement of the business. Turning to guidance. Our outlook for the first quarter of 2026, we expect to achieve total revenue between $45 million and $48 million.

This will include approximately 7 weeks of revenue from Stereolabs following the close of the transaction on February fourth. I would like to add some color to our long-term financial framework following the acquisition of Stereolabs. While Stereolabs is currently a small portion of our overall revenue mix, we expect this high growth, high margin business to be accretive to our consolidated results and anticipate it to have a positive impact on our long-term financial framework. With the combined companies, we are reiterating our long-term targets of 30%-50% annual revenue growth and 35%-40% GAAP gross margin. This outlook reflects the continued strong demand from our digital lidar products, layered with accretive growth profile of our new vision and compute portfolio. Our focus remains on driving towards profitability.

By pairing sustained top line growth, strong margins, and disciplined cost management, we remain firmly on our path to profitability. Applying the long-term framework, let me give some color to the full year 2026. Excluding the revenue and gross margin impact of royalties in 2025, we remain confident in the combined Ouster and Stereolabs 2026 revenue and margin profile to be in line with our long-term financial framework when measured against a consolidated pro forma baseline in 2025. Going forward, we will be reporting revenues on a combined basis. For some additional context, I would note that Stereolabs’ historical revenue has tended to be seasonally stronger in the second half of the year, with approximately 60% of the revenue occurring during this period. Turning to GAAP operating expense for 2026.

Factoring in Stereolabs’ operating and integration expenses, we anticipate GAAP operating expense growth at 5%-8% from our full year 2025 levels. We also expect our 2026 quarterly operating expenses to follow a similar quarterly profile as 2025. This outlook underscores the strength and durability of our digital lidar business, which remains firmly on track. As we scale the combined business, we anticipate growth, combined with improved operating leverage, provides a clear path to achieving positive operating free cash flow and profitability. Thank you for your continued interest in Ouster. I’ll now turn the call back to Angus to discuss our goals for 2026.

Operator: Thank you, Ken. Our execution on our 2025 goals has been further complemented by our recent acquisition of Stereolabs, a pioneer in AI camera vision and perception solutions. As we start the year, Ouster now offers Physical AI’s first unified sensing and perception platform, combining high-performance digital lidar with cameras, AI compute, sensor fusion and perception software, and cutting-edge AI models. Our customers can harness the precision of lidar along with the richness of vision, powered by our combined investments in AI training. By delivering seamlessly synchronized and calibrated data out of the box, we simplify and accelerate customer development and reduce costs. Stereolabs also brings deep expertise in foundational AI model training and core perception functions, along with immediate commercial scale, adding top-tier OEMs, Fortune 500 companies, and high-growth technology firms to our customer base.

This acquisition strategically positions Ouster as the foundational end-to-end sensing and perception platform for Physical AI. Initial feedback from our customer base has been resoundingly positive. Our expanded portfolio is resonating with the demands of the market. Customers are excited by the strengthened support and operational capacity of the combined company. For 2026, our roadmap is built on 3 strategic priorities designed to compound our combined competitive advantages and accelerate our financial performance. 1. Revolutionize our lidar camera and AI compute products. 2. Extend our leadership in Physical AI solutions. 3. Execute to profitability. Our first goal for 2026 is clear: to revolutionize our lidar camera and AI compute products. This year, we will commercialize the most significant product overhaul in our company’s history and release more products than ever before.

Ouster invented digital lidar, and we will continue to advance the industry with next generation sensors built on our custom silicon. This powerful digital lidar roadmap is built on silicon architecture that drives exponential improvements that compound over time, delivering industry leading performance, reliability, and scalability. Building on Stereolabs’ legacy as a pioneer in AI vision, we will continue to develop leading edge products designed to support customers building the future of physical AI. Our next generation AI compute will support real time reasoning at the edge for larger workloads that were previously too slow to run in dynamic real world environments. We will also bring expanded connectivity features to our industry leading camera portfolio to align with the market demands of our customers. Simultaneously, we will further unify our products to support plug and play sensor fusion.

With the industry’s first unified sensing and perception platform for physical AI, we are creating a one-stop shop for customers to deploy tightly integrated perception solutions out of the box. These product launches are expected to bring unprecedented new features to our portfolio, help us gain market share in billion-dollar brownfield markets, and support new use cases across industrial, robotics, automotive, and smart infrastructure. 2026 marks the beginning of a new era for our product portfolio, the broadest, most capable, and most integrated lineup we have ever delivered to further accelerate real world autonomy across industries. Our second goal is to extend our leadership in physical AI solutions, including cementing our lead in smart infrastructure and deepening our presence in industrial AI. We have already established a leading position in lidar power detection for transportation, security, logistics, and crowd analytics with Ouster BlueCity and Gemini.

In 2026, we are leveraging the partnerships we have built to further expand BlueCity across the United States, as well as launch additional pilots in Europe and the Middle East. Following recent wins, we are deploying additional Gemini pilots for perimeter security in 2026 to tap into an existing multi-billion dollar security market. We are also aggressively targeting the industrial vertical, where we see a broad swath of opportunities that can quickly realize the benefits of the Stereolabs acquisition. Stereolabs is a perfect complement to augment Ouster’s perception roadmap to meet Physical AI’s increasing demand for sophisticated multi-sensor fusion. By merging our proprietary AI models with Stereolabs’ vision capabilities, we are delivering the specialized perception logic and application specific software required to revolutionize safety and efficiency across the global supply chain. Finally, we will continue our operational execution as we drive towards profitability.

Through a growing addressable market served by our expanded portfolio, disciplined cost management, and clear operational priorities, we have a line of sight to deliver on our long-term financial framework. The strength of our digital lidar business, combined with the acquisition of Stereolabs, positions Ouster as the foundational sensing and perception platform for physical AI. By expanding our capabilities across the entire stack from sensors and software to specialized applications and AI modeling, we will continue to drive our business on a path of sustainable growth. We are uniquely equipped to accelerate customer development of solutions that sense, think, act, and learn in the physical world. The era of physical AI is here, and Ouster is powering it. With that, I’d like to now open up the call for Q&A.

Operator: Thank you. As a reminder to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. One moment for our first question. Our first question will come from the line of Colin Rusch from Oppenheimer. Your line is open.

Colin Rusch, Analyst, Oppenheimer: Thanks so much, guys, and appreciate all the detail on the perception platform, you know, into the software side. I guess that’s the heart of what I’m interested in here is really looking at how you guys can quantify the pace of learning with those systems. Obviously, with all these sensors deployed at various places, you know, both on traffic lights as well as some of the perimeter sites. Just curious, you know, how quickly you can actually optimize those systems and really monetize some of that efficiency.

Operator: Thanks for the question, Colin. Yeah, this is a great point. The idea of sense, think, act, learn, it’s really a virtuous cycle of improvement and iterative development that has been embraced by any company that is doing cutting edge AI development. You really have to iterate to your solution because of the massive amounts of data collection and retraining that are required to achieve cutting-edge, safety-critical, capable Physical AI in real-world deployments. I can speak from experience now having over 1,200 sites deployed with this technology over the last couple of years across Gemini and BlueCity deployments, that we see the pace of improvement accelerating over these last couple of years simply by investing in the machine that builds the machine.

That iterative cycle of sense, think, act, and learn, collecting data from the field, annotating it, retraining, and building new insight into the capabilities of our system. It’s an absolute acceleration. I think that you can measure it in how quickly you can deploy new versions of the product out to the field. We probably have another order of magnitude of iteration speed that we can still build into this set of products, specifically Gemini and BlueCity. Now the opportunity is both to continue that iterative speed of development on those products, but also to bring that iteration to our industrial AI and broader ecosystem. That’s where Stereolabs acquisition comes in, the ability to provide autonomous intelligence systems that are iterating very rapidly based on our core investments into machine learning training.

An order of magnitude at least to go and a brand-new greenfield opportunity in industrial AI to bring exactly that mentality to that product set.

Colin Rusch, Analyst, Oppenheimer: That’s super helpful. You know, I just wanna get a sense of the trend lines in terms of customer engagement in the defense sector. Obviously, you guys went through the Blue UAS approval last year, and it’s pretty topical now in terms of thinking about automated warfare. Just wanna get a sense of, you know, how those engagements have trended over the last year or so, and how quickly we might start to see a real inflection point on some of the revenue growth that seems like is pretty available to you guys here.

Operator: Yeah. I think, here. You know, there’s a lot of interest in the automation on the battlefield. There’s a big difference between what is happening today in Ukraine and which is robotics, but it’s actually still human-controlled, remote-operated vehicles and fully autonomous systems. Actually, there’s a really wide gap. The sphere where we play fully automated systems is still in the research and development phase, whether it’s in defense or, you know, just looking across our broader swath of customers. Whereas what is fielded on the battlefield today is, you know, glorified remote-operated vehicles with increasing intelligence, but still they’re remote-operated vehicles.

I think it’s gonna be a number more years before there’s a significant shift in that composition, just given the development cycles in defense. They roughly resemble the development cycles that happen in the automotive industry, for instance. It’s more like that versus, you know, what we just talked about with rapid iteration in something like Gemini or BlueCity. It’s an important industry. It’s one that Ouster definitely plays in. We have some great evidence of that, things like the Blue UAS certification for drone payloads. But there’s a big divide between what exists today and the automation that is under development and will be here in. It’s gonna be a couple more years for sure.

Colin Rusch, Analyst, Oppenheimer: Excellent. Thanks so much, guys.

Operator: One moment for our next question. Next question comes line of Kevin Cassidy from Rosenblatt Securities. Your line is open.

Kevin Cassidy, Analyst, Rosenblatt Securities: Yeah. Thanks for taking my question. Congratulations on the great year. You know, just as you’re looking at your backlog and looking out to 2026, which one of the industries that you service, which one do you think is gonna grow the fastest?

Operator: That’s a, that’s a great question, Kevin. I think that, you know, I have been very bullish on smart infrastructure because of the full solutions that we’ve been bringing to the table for the past year. You know, I think I said at the beginning of 2025 that given all the investment we’ve made into Gemini and BlueCity solutions for traffic management, for security, for yard logistics, that I expected smart infrastructure to start to play a much more significant role in our revenue composition and our growth trajectory. I think that that’s definitely played out in the last year.

I’m still incredibly bullish on the success we’ve had there and its continued success ’cause these are major new opportunities for lidar, places where lidar has never played before that are multi-billion dollar industries, and we’ve just shown that we are able to execute in this domain. That being said, the Stereolabs acquisition is our ability to inflect the Physical AI sphere for mobile robotics, for industrial robotics. The same for the same reasons why smart infrastructure has taken off, basically, that we’re providing total solutions and speeding the time to market for our customers because they can buy something off the shelf from Ouster. Now we’re doing that with Stereolabs and Ouster combined.

A unified sensing and perception platform that is a drop-in replacement for the legacy systems that have been used in the industrial and robotic sphere. Now you can come to Ouster, buy AI compute, lidars and cameras, and the software and perception software suite that goes on top of those and get to market quicker. The vision for where Ouster is going is really this two-pronged approach of solutions and smart infrastructure, where it’s fixed installations and solutions in mobile autonomy for physical AI, things like industrial, automotive, and robotics.

Kevin Cassidy, Analyst, Rosenblatt Securities: Great. Yeah. That kind of plays into what was gonna be my second question, was how your trained models using both the Stereolabs and Ouster’s lidar, whether that combine those two models, if that’s gonna be, you know, much more robust than what your competitors would be offering.

Operator: Yeah. I think that, there’s so much to do with the advancements in AI, in the last couple of years. There’s both opportunities for us to push the frontier of... Stereolabs, they built neural depth models that produce an incredible point clouds from stereo cameras better than the competition, and to push that domain forward. Ouster has invested in our neural perception algorithms for BlueCity and Gemini to perceive what’s going on in the environment. There’s a natural cross-pollination at play where we can bring, you know, the insights from each one of those, core competencies to each other’s customers, but also start to do multimodal, AI, training.

lidar and cameras fused and trained together is the obvious next step if you really wanna build the world’s most capable perception, machine learning-driven perception solutions. There’s a ton we could talk about there, but I’ll leave it at that. I’m definitely excited about what the future holds for our AI training.

Kevin Cassidy, Analyst, Rosenblatt Securities: Okay, great. Thank you.

Operator: One moment for our next question. Next question comes line of Tim Savageaux from Northland Capital Markets. Your line is open.

Tim Savageaux, Analyst, Northland Capital Markets: Hey, good afternoon. wanted to ask, if you had a pretty, Well, at least from a customer standpoint, CES seemed to be a pretty important show for you guys. A lot of focus on autonomy there, for machines both large and small. I wonder if you had any takeaways from that show in terms of market opportunities coming out or specific customer developments. Thanks.

Operator: Absolutely. We were just, Ken and I were both at CES, walking around with a number of investors, analysts. It was a great embodiment of Physical AI, like literal robots, industrial machines, autonomous systems, just ubiquitous on the show floor. No matter where you went, Physical AI was in your face as real hardware. I think the takeaway for me is when you actually looked at those machines, whether it was an autonomous forklift or a humanoid robot or a big industrial mining machine, what were the commonalities between those systems?

They had lidar sensors, they had cameras, they had almost certainly an NVIDIA GPU AI computer, there was a suite of software that was largely similar in the underpinnings of robotic perception, localization, path planning, perception of objects around the vehicle. The commonality is that’s the play for Ouster with this, both on the hardware and on the software. We think that with the Stereolabs acquisition, we can become the one-stop shop for lidar, cameras, potentially other sensors in the future, AI computers, and all the software that runs the underpinning of an intelligent autonomous machine. That’s where Ouster wants to play, and that’s where we’ve made a major step forward. I mean, it’s CES was just the perfect representation of where the future is going, and also the representation of Ouster’s business model for the next 10 years.

Ken Gianella, Chief Financial Officer, Ouster: I’ll add to it, Tim. You know, seeing our customers’ success and their time to market and getting out there quicker, that’s our success. The quicker that these things get out of prototype and into production, that’s the growth that we follow along with those partners.

Tim Savageaux, Analyst, Northland Capital Markets: Great. Thanks. If I could, if I could follow up, separate topic, that is on the royalties in the quarter. I wonder if you had any more color about, you know, what’s, whether it’s a certain type of technology or application. I don’t know if that has anything to do with the litigation ongoing, any more color? You know, it’s a pretty good number. Looking for any more details on what drove that and whether that was anticipated, I guess.

Ken Gianella, Chief Financial Officer, Ouster: First off, you know, it highlights the strength of our IP portfolio, Tim. You know, it was predominantly one time, as we mentioned, and we also talked about it’ll be de minimis going forward. Strategically, we, you know, we’re looking prioritize on, you know, this sense, think, run, learn, and driving our own product portfolio forward. You know, we have the royalty piece behind us, and I think all those litigation items in the past are all behind us. Now it’s really focused on our strategic priorities and growth.

Tim Savageaux, Analyst, Northland Capital Markets: Okay, thanks.

Operator: One moment for our next question. Our next question will come from line of Andres Sheppard from Cantor Fitzgerald. Your line is open.

Andres Sheppard, Analyst, Cantor Fitzgerald: Hey, everyone. Congratulations on the strong quarter and thanks so much for taking our questions. You know, I think a lot of our questions have been asked, but Angus, I was hoping to maybe have you elaborate a bit further on the opportunities that you see regarding drones and humanoids and particularly, you know, following the recent certification and the recent acquisition. Can you maybe help quantify opportunities that you see there in the near term and maybe medium term, or just any granularity as to how we should be thinking about these industries translating into revenue? Thank you.

Operator: Thanks, Andres. Yeah. The common thread for drones and humanoids is really the volume. They’re generally industrial adjacent, more robotics than industrial, and there’s a volume increase from things, you know, the smaller, the cheaper, the more ubiquitous the technology, you know, the more the types of payloads and sensors and AI compute that goes on those robots is different than a big mining machine. Some humanoids use lidar, some don’t use lidar. Every humanoid uses cameras. That’s part of the play for Ouster and the same goes for drones. Some drones use lidar, some drones and all drones use cameras.

This is part of, you know, investing and becoming a combined lidar and camera sensing company, is just being able to play across all Physical AI applications by providing the two most pervasive sensor modalities that are out there. Then we layer on top the fact that Ouster is invested in things like the Blue UAS certification, it just builds more opportunity for us in the sphere. I see drones and humanoids. Drones is a much more of a proven technology and market opportunity for Ouster, and that’s why we have things like a certification. Humanoids are an emerging opportunity that, you know, we are playing in today because of the Stereolabs acquisition and because of some of the lidar sensors and customers we have there.

I think the timeline is a little longer for humanoids to reach market in the scale that’s gonna start to impact our top-line revenue. I liken this to 10 years ago with the robotaxi industry. It’s an emerging technology, it’s an exciting technology, and it will happen, but the timeline is less known because it’s pioneering research, getting humanoid robotics out into the market, and it’s also a pioneering business model. It’s a new business model to do it. There are categories of things where Ouster builds a business on today, and there are categories of pans in the fire that we’ll hit eventually and help Ouster build the business of the future.

You know, we’re playing across both, but it’s definitely exciting times and the Stereolabs acquisition is a key to making sure that we can go to both those use cases and provide something valuable to those customers.

Ken Gianella, Chief Financial Officer, Ouster: Wrapping numbers around it, if you look at the prior three quarters coming off of 40% year-over-year growth, this quarter, just our core product line with the digital lidar growing 36% year-over-year, we continue to see that core underlying business, you know, continuing to trend in that, you know, 36 range plus. We’re really proud of what the core business is doing. Now you combine in, you know, the tailwinds of a really high growth, high margin business such like Stereolabs, makes us really excited for that future.

Andres Sheppard, Analyst, Cantor Fitzgerald: Wonderful. That’s super helpful. Really appreciate all that color. Maybe just as a quick follow-up, Ken, maybe a quick one for you. Can you just remind us, you know, liquidity, capital needs, cash burn, or, you know, are you still targeting to remain active in the M&A market? How are you thinking about future capital needs and cash runway? Thank you.

Ken Gianella, Chief Financial Officer, Ouster: We ended the year at 211 before the Stereolabs acquisition. You know, we gave the number out there, roughly around $35 million in cash for that. On a strict operating basis, even, you know, we talked prior calls, having the dry powder to be strategic, was very, very important in this current marketplace. I think this acquisition demonstrated having that, you know, that dry powder on hand allowed us to act quickly and take advantage of a very unique strategic situation. Even after that strategic acquisition, we still have plenty of operating runway until we’re operating cash flow positive. You know, if you look at the numbers out there, it’s somewhere in the, you know, the 4 or 5 year range.

From a continuing in the marketplace, you know, we’re gonna take it day by day and see what results with it. Our current cash position, we feel is strategically right where it needs to be, as I mentioned for our customers. ’Cause these customers that we work with, they’re running 3 to 5-year programs, and they want a partner that can be out there operating with them in that space. We feel really good about our capitalization. We’re always continue to look for what the future brings and, you know, from the M&A, just answering your last question, if the right strategic opportunity comes along like it did with Stereolabs, we’re really happy to be in a place that we can act on it.

Andres Sheppard, Analyst, Cantor Fitzgerald: Wonderful. Thanks again, and congrats on the quarter. We’ll pass it on.

Operator: Thank you. As a reminder to ask a question, that’s star one one. One moment for our next question. Our next question will come from the line of Richard Shannon from Craig-Hallum. Your line is open.

Tyler (Richard Shannon), Analyst, Craig-Hallum: Hi, everyone. This is Tyler on for Richard. I was just wondering how the customer conversation shifted since the acquisition. Are you getting new customers or existing customers looking for new opportunities to either combine the sensors or are thinking of other use cases to get their hands on the sensor that they don’t have? Just any color on that would be helpful.

Operator: Yeah. I can say having been on a number of customer calls since acquiring Stereolabs, that the reception to this acquisition has been resoundingly positive. I can’t stress that enough. Ouster and Stereolabs have each built incredible brands, built on quality, trust, and performance of the products and the support that they provide. And by, you know, when you have two great companies combining, and it allows a customer to then purchase from one even more dependable and well-resourced company, I mean, that’s music to their ears. There’s just the ability to work with one great company sourcing critical technology like we are.

Then there’s all the opportunity of building to the future, with taking more of the feedback from customers around their total sensing needs and actually building the software and system capabilities that they have this enormous appetite for. I think that’s probably the most surprising thing for me is how much appetite there has been for buying combined systems. Now that we’re positioned and capable of selling combined systems, compute software and the sensors, customers are asking for it. That’s just a great place to be. It’s one thing to say we’re going to do it. It’s another for there to be a pull from the end customer now that they’re aware we’re capable of doing it.

Had customers literally ask us, "Well, why, you know, when can we just start buying the whole suite of hardware and software from you guys?" Couldn’t happen soon enough. I’m really pleased with how this has gone. Yeah, it’s been extremely well received by customers.

Ken Gianella, Chief Financial Officer, Ouster: Oh, by the way, it’s available today. They’re not waiting because one of the great things that we announced at the launch was that our platforms are already unified, and people can buy our unified sensing platform today.

Operator: Absolutely. Yeah. I mean, we’re actually able to tell them, "Well, you can get started immediately.

Tyler (Richard Shannon), Analyst, Craig-Hallum: That’s great to hear. You’d also mentioned enhanced connectivity features. Could you expand on that and specifically what that enables for customers?

Operator: This is with respect to the Stereolabs unified? Yeah.

Tyler (Richard Shannon), Analyst, Craig-Hallum: You said for this year what you wanted to focus on.

Operator: Yeah, absolutely. The connectivity features is this is all about building an ecosystem that is interoperable with many different subcomponents of a Physical AI system. While we are today positioned to provide lidar cameras and AI compute and the software that runs them, we also wanna make sure that the AI compute and the, and the, and the software on it is interoperable with all manner of other sensors, maybe GPS, maybe inertial measurement units, maybe just it’s something as simple as radio connectivity or RTK systems or the wheel encoders.

There are just so many auxiliary systems that are required to build a domain-specific robot, you know, that we wanna make sure that we really are providing all those little connectors in our software, so that we can really be that platform that you can build your entire solution on. We don’t wanna have caveats when we’re selling saying, "Oh, you can’t go and use that existing GPS receiver that you’ve already selected and qualified." Quite the opposite. We’re, we’re focused on saying, "You can use it, and we’re implementing the low-level drivers for you." That’s kind of the vision there, and that all goes back to speeding time to market.

The biggest thing holding back a lot of these customers in robotics and industrial is their development time to bring products to market, and we’re cutting that down significantly by doing the work for them.

Tyler (Richard Shannon), Analyst, Craig-Hallum: Okay. That just begets another question real quick for me. When you’re adding these different sensors, are these drivers something that are universal such that you can develop the drivers in your system for one type of GPS, but that works with any of the GPS providers or the inertial providers?

Operator: No, this is all hard work. It just every single implementation is unique, and that’s where the value comes in. someone has to do the work, and the companies that do that well and provide high-quality interoperability is where the value comes in.

Tyler (Richard Shannon), Analyst, Craig-Hallum: Awesome. Thank you.

Operator: Thank you. One moment for our next question. Our next question will come from the line of Casey Ryan from WestPark Capital. Your line is open.

Casey Ryan, Analyst, WestPark Capital: Good evening, everybody. It’s a great quarterly update. I just wanna follow up a little more on this software component, Angus, that you’re laying out. It sounds like you guys start to move into being the operating system for any industrial manufacturer of Physical AI systems. Does this sort of change the competitive competitor matrix, I guess, and do we start competing with OpenMind and the Google Intrinsic thing and other kind of operating system Physical AI companies?

Operator: You know, I there’s so much opportunity right now that I wouldn’t call it changing the competitive landscape. There’s a lot of companies pushing the frontier of this technology in ways, you know, in new and unexpected ways. Ouster is focused on being a unified sensing and perception platform, which could.

Casey Ryan, Analyst, WestPark Capital: Mm-hmm

Operator: eventually become a complete operating system for these robots. That’s definitely.

Casey Ryan, Analyst, WestPark Capital: Mm-hmm.

Operator: I couldn’t tell you today that there’s immediate overlap of our, you know, our eventual success with some of the companies that you mentioned.

Casey Ryan, Analyst, WestPark Capital: Mm-hmm

Operator: ...because there’s just so many different ways to approach these problems that are being researched right now, let alone deployed. Ouster has always done a good job of finding the line between research and real deployed, you know, solutions that can generate revenue and grow a business today. That’s what we’re doing right now. We’ve narrowed down the solution to sensing and perception.

Casey Ryan, Analyst, WestPark Capital: Mm-hmm

Operator: ... that gives us opportunity certainly with success, it gives us the opportunity to become more of the operating system of these robots in the future.

Casey Ryan, Analyst, WestPark Capital: Yeah. maybe being more modest, I think maybe the company’s vision of what it could accomplish has been expanded in some sense.

Operator: No question.

Casey Ryan, Analyst, WestPark Capital: what you’re sharing with us today. Okay.

Operator: No question.

Casey Ryan, Analyst, WestPark Capital: Okay.

Operator: The same way that lidar was our opening to build strong relationships with our customers, this is the next step in building an even stronger cohesive relationship, and that may be a jumping-off point for a future where we’re even more deeply embedded.

Casey Ryan, Analyst, WestPark Capital: Right. Okay. Terrific. Just sort of simply on the hardware, it sounds like what you’re saying is we wanna work with all and make it easy to use any kind of hardware components ultimately. Is it part of your vision that Ouster would want to provide at least one version of that, say radar or GPS or something, or we’re cameras kind of unique in terms of its importance to, you know, combined solutions, I guess?

Operator: Yeah. We’ve really focused. The answer is yes to both things you asked. We both want to work, we wanna work well with peripheral components.

Casey Ryan, Analyst, WestPark Capital: Mm-hmm

Operator: there’s a good reason why lidar and cameras have a special place.

Casey Ryan, Analyst, WestPark Capital: Okay

Operator: ...they really are the most important, most capable sensory inputs to these robots, and they’re also the most unique and difficult to develop to the quality standard required by Physical AI. Yes, we’re so focused on making sure that we have the best-in-class lidar and camera combined sensing systems. There’s a lot of detail work to be interoperable with other things.

Casey Ryan, Analyst, WestPark Capital: Mm-hmm

Operator: ...secondary in these systems to the lidar and the cameras. In the fusing of the two together to operate simultaneously, that is one of the toughest problems that all of our customers have today.

Casey Ryan, Analyst, WestPark Capital: Mm-hmm.

Operator: Being able to offer that unified platform with those two sensors together, it’s a game changer.

Casey Ryan, Analyst, WestPark Capital: Yeah. Okay. That clarification’s helpful, but I think, you know, putting a stake in the ground, it feels like the vision has gotten a little bit bigger, which is exciting. I’m looking forward to 2026. Yeah, great job obviously on Q4 and looking forward. Thank you.

Operator: Thanks, Casey.

Operator: Thank you. I’m not showing any further questions in the queue at this moment. I’d like to turn it over to Angus Pacala for any closing remarks.

Operator: Well, thank you all for joining the call. We look forward to speaking with you again when we report our first quarter earnings. Have a good day.

Operator: Thank you for your participation in today’s conference. This does conclude the program. You may now disconnect. Everyone, have a great day.