Ouster’s Earnings Call: Record Growth and Strategic Wins

Ouster, Inc. ((OUST)) has held its Q4 earnings call. Read on for the main highlights of the call.

Ouster’s latest earnings call conveyed a robust financial performance, marked by record revenue growth and improved gross margins, which contributed to a positive overall sentiment. Despite challenges such as increased operating expenses and tariff uncertainties, the company’s strategic achievements and strong financial health were the focal points, overshadowing these concerns.

Record Financial Results and Revenue Growth

Ouster reported an impressive $30 million in revenue for the fourth quarter, marking the eighth consecutive quarter of revenue growth. The company achieved a full-year revenue of $111 million, representing a 33% increase year-over-year, underscoring its strong market position and growth trajectory.

Strong Gross Margins

The company’s gross margin improved significantly in the fourth quarter to 44%, with a full-year margin of 36%. This aligns with Ouster’s long-term target range of 35% to 40%, reflecting efficient cost management and pricing strategies.

Significant Software Growth

Ouster experienced substantial growth in its software segment, with software attached bookings increasing by over 60% in 2024 compared to 2023. This growth contributed a double-digit percentage of total bookings each quarter, highlighting the expanding role of software in Ouster’s business model.

Largest Software Deal Ever

A notable highlight was Ouster securing its largest software deal with a leading global technology company. The renewal of the Ouster Gemini annual license for over $1 million per year marks a significant milestone in the company’s software business.

Strong Balance Sheet

Ouster concluded the year with $175 million in cash and equivalents and zero debt, maintaining one of the strongest balance sheets in the industry. This financial strength provides a solid foundation for future investments and growth initiatives.

Major Contract in Intelligent Transportation Systems

The company won a $2 million contract to deploy its Blue City traffic management solution in Chattanooga, Tennessee. This marks the largest deployment of lidar detection technology for traffic and pedestrian safety in the U.S., showcasing Ouster’s leadership in intelligent transportation systems.

Increased Operating Expenses

Operating expenses rose to $39 million in the fourth quarter, primarily due to higher litigation expenses of $6 million. While this represents a challenge, it is part of the company’s strategic investments to protect and expand its market position.

Uncertain Tariff Environment

The evolving tariff environment poses potential risks; however, Ouster’s supply chain is currently positioned to mitigate significant impacts. This proactive approach helps safeguard the company’s operations against external economic pressures.

Forward-Looking Guidance

Looking ahead, Ouster aims for revenue growth between 30% to 50% in 2025, with a gross margin target of 35% to 40%. The company plans to focus on scaling its software attached business and transforming its product portfolio, building on its 2024 achievements of a 50% increase in OS sensor volumes and a 60% growth in software attached bookings.

In summary, Ouster’s earnings call highlighted a strong financial performance with record revenue growth and strategic achievements. Despite some challenges, the company’s robust financial health and forward-looking strategies position it well for continued success in the coming year.