Ouster Q3 Earnings Call Highlights

Key Points

• Record growth: Ouster reported third-quarter revenue of $59 million, up about 50% year over year, after shipping more than 27,000 sensors, including over 20,000 cameras.
• Rev8 ramp: The company said Rev8 lidar has “many thousands” of units in backlog and expects production to rise from hundreds of units in Q3 to thousands in Q4. Its expanded Benchmark partnership targets annual lidar capacity above 100,000 units by the end of 2027.
• Outlook and finances: Ouster forecast fourth-quarter revenue of $61 million to $64 million and ended the quarter with about $421 million in cash. Adjusted EBITDA loss narrowed to $3 million from $8 million a year earlier.

Ouster NASDAQ: OUST reported third-quarter revenue of $59 million, a company record and an increase of approximately 50% from a year earlier, as the lidar and perception technology company expanded shipments of both sensors and cameras.

Chief Executive Officer Angus Pacala said Ouster shipped more than 27,000 sensors during the quarter, including more than 7,000 lidar units and 20,000 cameras. Industrial applications led revenue, followed by robotics, with customers using the company’s products in warehouse automation, defense, construction and mapping.

The company said its Stereolabs camera business posted a record shipment quarter after Ouster expanded production capacity. Chief Financial Officer Ken Gianella said Stereolabs shipped more than 20,000 cameras and more than doubled production sequentially, supporting Ouster’s presence in robotics manipulation, humanoids and mobile industrial applications.

Rev8 Ramp and Manufacturing Expansion

Pacala highlighted customer adoption of the company’s Rev8 lidar platform, which Ouster describes as the first native-color lidar product. He said hundreds of customers have selected Rev8 for mission-critical applications and that the company has “many thousands” of units in backlog as it ramps initial production.

Ouster expects Rev8 deliveries to accelerate into 2027. Its expanded partnership with Benchmark is intended to support annual lidar manufacturing capacity of more than 100,000 units by the end of 2027. The company is investing in retooled production lines, precision automation, testing capacity and inventory purchases to support the ramp.

Management cited several customer programs involving Rev8, including Forterra’s planned integration of the sensor into future defense vehicles, GUSS Automation’s plans to use the lidar in next-generation autonomous orchard machines, and partnerships with Seneca and GeoCue for drone and mapping applications.

During the question-and-answer session, Gianella said Rev8 production is expected to move from hundreds of units in the third quarter to thousands in the fourth quarter and tens of thousands by the end of 2027. Ouster said it will continue to ship products from its broader portfolio, including Rev6 and Rev7 units, alongside Rev8 offerings.

Physical AI Products and Software

Ouster also discussed its efforts to build a broader sensing, compute and software platform for physical artificial intelligence applications. The company introduced the ZED Box 2 series of industrial edge AI computers, which use NVIDIA Jetson Orin and Jetson Thor platforms and support up to eight sensors.

The company said updated ZED software and expanded support for NVIDIA Isaac ROS are designed to help customers run spatial AI models at the edge with lower latency and improved compute efficiency. Pacala characterized Ouster’s offerings as a combination of lidar, cameras, AI compute and perception software serving robotics, drones, industrial automation and smart infrastructure markets.

In software, Ouster said it redesigned the processing pipeline for its Gemini perception platform, doubling edge-processing speeds. The company said Gemini can now fuse as many as 100 lidar sensors on a single server, more than twice its prior capacity, to track thousands of objects in large environments.

Ouster also cited demand for its BlueCity intelligent transportation platform. Pacala said advanced detection deployments have contributed to several million-dollar wins in Utah, Washington, Florida and Ontario, Canada. The company additionally secured a multiyear expansion with a transportation department customer covering 100 additional intersections.

Margins, Expenses and Liquidity

GAAP gross margin was 43% in the third quarter, essentially unchanged from the prior-year period. Sequentially, gross margin declined six percentage points, which Gianella attributed primarily to a one-time $5 million tariff refund recorded in the preceding quarter.

GAAP operating expenses were $45 million, up approximately 9% from a year earlier. Ouster maintained its expectation that full-year 2026 operating expenses will rise between 5% and 8% year over year, excluding favorable employment-tax refunds and one-time acquisition costs. The company said the increase reflects approximately 11 months of Stereolabs operations, investments in its product roadmap and expansion of global go-to-market capabilities.

Adjusted EBITDA was a loss of $3 million, improving from a loss of $8 million in the third quarter of 2025. Gianella said Ouster remains focused on disciplined investments as it works toward profitability.

The company ended the quarter with approximately $421 million of cash, including about $191 million in net proceeds from a common-stock offering completed in early July. Ouster said cash use during the quarter reflected planned investments in manufacturing capacity, inventory, working capital and the integration and scaling of Stereolabs. Gianella said the company does not expect to need additional capital to achieve its operating objectives.

Fourth-Quarter Outlook

For the fourth quarter, Ouster forecast total revenue of $61 million to $64 million, including an estimated $3 million of royalty revenue. At the midpoint of its outlook, the company expects full-year 2026 revenue growth of about 48%, excluding royalties.

Pacala said the third quarter represented Ouster’s 15th consecutive quarter of product revenue growth. He said the company expects demand to continue across robotics, drone, industrial and infrastructure applications as customers seek sensing and perception technologies for autonomous systems.

About Ouster (NASDAQ:OUST)

Ouster, Inc is a technology company that develops and manufactures digital lidar sensors and related software. Its lidar systems use laser light to detect and measure surrounding objects, supporting applications that require real-time perception, mapping, and automation.

The company's products are designed for customers in the automotive, industrial automation, robotics, infrastructure, mapping, security, and smart-city markets. Ouster provides lidar sensors for uses such as autonomous and assisted driving, warehouse and industrial operations, traffic monitoring, asset inspection, and other machine-perception applications.

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