Ouster(OUST) - 2023 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported record revenue of $19 million for Q2 2023, representing a 13% increase from Q1 2023 [14] - Non-GAAP gross margins improved to 26% in Q2 2023, up from 1% in the previous quarter, reflecting higher revenues and average selling prices (ASPs) [87][19] - The company achieved a book-to-bill ratio of over 2, with bookings totaling $43 million in Q2 2023, up from $33 million in Q1 2023 [32] Business Line Data and Key Metrics Changes - Industrial and robotics customers accounted for approximately 56% of total sales in Q2 2023, with continued strong demand for REV7 sensors [14] - The company shipped over 3,000 sensors in Q2 2023, with ASPs increasing to $6,300 per sensor from $5,700 in Q1 2023 [15] - The REV7 sensors now represent the majority of OS sensor revenue and bookings, indicating a successful product launch [95] Market Data and Key Metrics Changes - The company has over 200 active deployments of its software solutions, indicating strong traction in the smart infrastructure vertical [27] - The U.S. government's recognition of Lidar as a critical transportation technology is expected to drive demand for the company's products [96] Company Strategy and Development Direction - The company aims to drive new business through targeted sales, execute on its digital Lidar roadmap, develop a robust software ecosystem, and build a financially strong business [94] - The integration of Velodyne's products and the transition to outsourced manufacturing in Thailand are key components of the company's strategy to improve margins and reduce costs [34][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving revenue growth and margin improvement, with expectations for continued progression in gross margins over the next two quarters [36][19] - The company is on track to exceed its cost savings target, now estimating over $110 million in annualized savings by the end of Q4 2023 [18] Other Important Information - The company completed the integration of its first DF sensors, which are designed for the automotive industry, marking a significant milestone [21] - Management highlighted the importance of software sales, noting that each software license sold is typically accompanied by hardware sales, enhancing overall revenue potential [64] Q&A Session Summary Question: What are the expectations for gross margins throughout the rest of the year? - Management indicated that gross margins are expected to improve as cost reductions and manufacturing transitions take effect, with hopes for quarter-on-quarter expansion [50] Question: Can you provide revenue figures from the software side of the business? - Management stated that while early progress is compelling, they will wait until software revenue becomes significant enough to report as a separate metric [42] Question: How much gross margin upside is expected from transitioning to Thailand? - Management acknowledged significant expansion opportunities due to cost reductions and manufacturing transitions, but did not disclose specific product line margins [44] Question: What is the status of the automotive market engagements? - Management confirmed that they are actively engaging with automakers and expect to provide updates on progress in future quarters [75]