Ouster Achieves Q2 2023 Revenue Guidance; Increases Cost Savings

Ouster Achieves Q2 2023 Revenue Guidance; Increases Cost Savings Target

In addition, see information below concerning non-GAAP financial measures.

Non-GAAP Financial Measures

In addition to its results determined in accordance with generally accepted accounting principles in the United States (“GAAP”), Ouster believes the non‑GAAP measures of Non-GAAP Gross Profit, Non-GAAP Gross Margin and Adjusted EBITDA are useful in evaluating its operating performance. Ouster calculates Non-GAAP Gross Profit as gross profit (loss) excluding amortization of acquired intangibles, certain excess and obsolete expenses and losses on firm purchase commitments, and stock-based compensation expenses. Non-GAAP Gross Margin is calculated as Non-GAAP Gross Profit divided by revenues. Ouster calculates Adjusted EBITDA as net loss excluding interest expense (income), net, other expense (income), net, stock-based compensation expense, provision for income tax expense, goodwill impairment charges, amortization of acquired intangible assets, depreciation expenses, certain restructuring costs excluding stock-based compensation expenses, certain excess and obsolete expenses and losses on firm purchase commitments, certain litigation and litigation related expenses and merger and acquisition related expenses. Ouster believes that Non-GAAP Gross Profit, Non-GAAP Gross Margin, and Adjusted EBITDA may be helpful to investors because it provides consistency and comparability with past financial performance and may be helpful in comparison with other companies, some of which use similar non‑GAAP information to supplement their GAAP results. The non-GAAP financial information is presented for supplemental informational purposes only, and should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from similarly titled non‑GAAP measures used by other companies. Reconciliation tables of the most comparable GAAP financial measures to the non-GAAP financial measures are included at the end of this press release.


OUSTER, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands)

	June 30, 2023			December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	91,237		$	122,932
Restricted cash, current		528			257
Short-term investments		133,176			—
Accounts receivable, net		15,106			11,233
Inventory		27,812			19,533
Prepaid expenses and other current assets		12,565			8,543
Total current assets		280,424			162,498
Property and equipment, net		12,739			9,695
Operating lease, right-of-use assets		21,069			12,997
Unbilled receivable, long-term portion		7,433			—
Goodwill		—			51,152
Intangible assets, net		27,951			18,165
Restricted cash, non-current		1,090			1,089
Other non-current assets		3,079			541
Total assets	$	353,785		$	256,137
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	10,296		$	8,798
Accrued and other current liabilities		39,843			17,071
Contract liabilities		9,776			402
Operating lease liability, current portion		7,317			3,221
Total current liabilities		67,232			29,492
Operating lease liability, long-term portion		22,455			13,400
Debt		40,135			39,574
Contract liabilities, long-term portion		5,264			342
Other non-current liabilities		1,708			1,710
Total liabilities		136,794			84,518
Commitments and contingencies
Stockholders’ equity:
Common stock		39			19
Additional paid-in capital		959,111			613,665
Accumulated deficit		(741,929	)		(441,916	)
Accumulated other comprehensive loss		(230	)		(149	)
Total stockholders’ equity		216,991			171,619
Total liabilities and stockholders’ equity	$	353,785		$	256,137

OUSTER, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(unaudited)
(in thousands, except share and per share data)

	Three Months Ended June 30,						Six Months Ended June 30,
		2023			2022			2023			2022
Revenue	$	19,396		$	10,329		$	36,626		$	18,887
Cost of revenue		19,210			7,547			36,816			13,514
Gross (loss) profit		186			2,782			(190	)		5,373
Operating expenses:
Research and development		26,447			15,893			58,906			31,799
Sales and marketing		11,666			7,563			25,199			14,653
General and administrative		17,842			12,515			49,167			26,298
Goodwill impairment charges		67,266			—			166,675			—
Total operating expenses		123,221			35,971			299,947			72,750
Loss from operations		(123,035	)		(33,189	)		(300,137	)		(67,377	)
Other (expense) income:
Interest income		2,245			344			3,964			498
Interest expense		(1,728	)		(444	)		(3,397	)		(444	)
Other income (expense), net		(165	)		5,326			(111	)		7,010
Total other income, net		352			5,226			456			7,064
Loss before income taxes		(122,683	)		(27,963	)		(299,681	)		(60,313	)
Provision for income tax expense		50			37			332			84
Net loss	$	(122,733	)	$	(28,000	)	$	(300,013	)	$	(60,397	)
Other comprehensive loss
Changes in unrealized gain (loss) on available for sale securities	$	(74	)	$	—		$	(24	)	$	—
Foreign currency translation adjustments	$	23		$	(76	)	$	(57	)	$	(88	)
Total comprehensive loss	$	(122,784	)	$	(28,076	)	$	(300,094	)	$	(60,485	)
Net loss per common share, basic and diluted	$	(3.19	)	$	(1.60	)	$	(8.84	)	$	(3.49	)
Weighted-average shares used to compute basic and diluted net loss per share		38,448,241			17,505,736			33,937,505			17,296,583

OUSTER, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)

	Six Months Ended June 30,
		2023			2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(300,013	)	$	(60,397	)
Adjustments to reconcile net loss to net cash used in operating activities:
Goodwill impairment charges		166,675			—
Depreciation and amortization		10,605			4,739
Loss on write-off of construction in progress and right-of-use asset impairment		1,423			—
Stock-based compensation		38,246			16,869
Reduction of revenue related to stock warrant issued to customer		61			—
Change in right-of-use asset		2,012			1,358
Interest expense		889			402
Amortization of debt issuance costs and debt discount		125			42
Accretion or amortization on short-term investments		(2,097	)		—
Change in fair value of warrant liabilities		(126	)		(7,134	)
Inventory write down		5,065			447
Provision for doubtful accounts		541			—
Loss/(Gain) from disposal of property and equipment		(248	)		(100	)
Changes in operating assets and liabilities, net of acquisition effects:
Accounts receivable		3,420			1,341
Inventory		(3,644	)		(10,180	)
Prepaid expenses and other assets		(1,126	)		(1,957	)
Contract assets		—			—
Accounts payable		(1,741	)		1,094
Accrued and other liabilities		(4,779	)		(329	)
Contract liabilities		759			—
Operating lease liability		(2,525	)		(1,588	)
Net cash used in operating activities		(86,478	)		(55,393	)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property and equipment		560			275
Purchases of property and equipment		(1,973	)		(1,277	)
Purchase of short-term investments		(48,554	)		—
Proceeds from sales of short-term investments		72,481			—
Cash and cash equivalents acquired in the Velodyne Merger		32,137			—
Net cash provided by (used in) investing activities		54,651			(1,002	)
CASH FLOWS FROM FINANCING ACTIVITIES
Repurchase of common stock		—			(43	)
Proceeds from ESPP purchase		310			—
Proceeds from exercise of stock options		150			252
Proceeds from borrowings, net of debt discount and issuance costs		—			19,077
Proceeds from the issuance of common stock under at-the-market offering, net of commissions and fees		—			14,568
At-the-market offering costs for the issuance of common stock		—			(196	)
Taxes paid related to net share settlement of restricted stock units		—			(59	)
Net cash provided by financing activities		460			33,599
Effect of exchange rates on cash and cash equivalents		(56	)		(88	)
Net decrease in cash, cash equivalents and restricted cash		(31,423	)		(22,884	)
Cash, cash equivalents and restricted cash at beginning of period		124,278			184,656
Cash, cash equivalents and restricted cash at end of period	$	92,855		$	161,772

OUSTER, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(unaudited)
(in thousands)
	Three Months Ended June 30,						Six Months Ended June 30,
		2023			2022			2023			2022
GAAP net loss	$	(122,733	)	$	(28,000	)	$	(300,013	)	$	(60,397	)
Interest expense (income), net		(517	)		100			(567	)		(54	)
Other expense (income), net		165			(5,326	)		111			(7,010	)
Stock-based compensation ⁽¹⁾		16,466			8,119			38,246			16,869
Provision for income tax expense		50			37			332			84
Goodwill impairment charge		67,266			—			166,675			—
Amortization of acquired intangibles ⁽²⁾		1,702			1,122			3,213			2,244
Restructuring costs, excluding stock-based compensation expense		3,342			—			15,977			—
Excess and obsolete expenses and loss on firm purchase commitments		3,750			—			7,380			—
Depreciation expense ⁽²⁾		2,744			1,232			7,392			2,495
Litigation expenses ⁽³⁾		3,364			92			3,901			592
Merger and acquisition related expenses ⁽⁴⁾		—			—			6,058			—
Adjusted EBITDA	$	(24,401	)	$	(22,624	)	$	(51,294	)	$	(45,177	)

⁽¹⁾ Includes stock-based compensation expense as follows:
	Three Months Ended June 30,						Six Months Ended June 30,
		2023			2022			2023			2022
Cost of revenue	$	654		$	146		$	1,428		$	365
Research and development		8,204			3,806			15,709			7,566
Sales and marketing		3,500			1,839			6,381			3,362
General and administrative		4,108			2,328			14,728			5,576
Total stock-based compensation	$	16,466		$	8,119		$	38,246		$	16,869

⁽²⁾ Includes depreciation and amortization expense as follows:
	Three Months Ended June 30,						Six Months Ended June 30,
		2023			2022			2023			2022
Cost of revenue	$	1,772		$	310		$	3,522		$	690
Research and development		892			823			3,856			1,613
Sales and marketing		258			75			440			150
General and administrative		1,524			1,146			2,787			2,286
Total depreciation and amortization expense	$	4,446		$	2,354		$	10,605		$	4,739

⁽³⁾ Litigation expenses and litigation-related expenses outside of the Company’s ordinary business operations
⁽⁴⁾ Merger and acquisition related expenses represent transaction costs for the Velodyne Merger which include legal and accounting professional service fees
	Three Months Ended June 30,						Six Months Ended June 30,
		2023			2022			2023			2022
Gross profit (loss) on GAAP basis	$	186		$	2,782		$	(190	)	$	5,373
Stock-based compensation		654			146			1,428			365
Amortization of acquired intangible assets		412			—			661			—
Excess and obsolete expenses and loss on firm purchase commitments		3,750			—			7,380			—
Gross profit on non-GAAP basis	$	5,002		$	2,928		$	9,279		$	5,738

Gross margin on GAAP basis		1	%		27	%		(1	)%		28	%
Gross margin on non-GAAP basis		26	%		28	%		25	%		30	%

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