After its merger with rival lidar manufacturer Velodyne, Ouster is poised to save over $75 million annually.
After the merger, and as it launches new products, the company anticipates that its revenues will grow substantially in 2023.
The lidar company posted a loss of 23c per share for its fourth quarter on $11 million in revenue.
It stated on Thursday that it is on track to achieve more than $75,000,000 in annual cost savings by 2023.
Fusion with Velodyne competitor
CNBC interviewed CEO Angus Pacala following the company's fourth quarter.
Ouster is already integrating Velodyne’s people and technology into its business. This has resulted in the elimination of about 200 employees from the post merger business.
Ouster expects to reach about $50 million of the $75 million annualized cost savings that he promised by the end the first quarter. This is based on the standalone costs of the two companies as of the third quarter 2022.
The company posted a loss of 23c per share on $11 million in revenue for its fourth quarter. This is based on Ouster's prior results. This compares to a loss per share in the same period last year of 17c on revenue of $11.9million.
Ouster had $41 million in revenue for the year. It also reported a 27% gross profit, which was consistent with previous guidance. Although the company shipped more than 8,600 lidar sensors by 2022, it reported a net loss in excess of $139 million or 70 cents per share for the entire year.
After-market trading saw shares fall by 9% on Thursday.
Pacala stated that he would encourage Ouster’s investors to look forward.
He said, "We also booked $70 millions in business in 2022." That number is an excellent indicator of the business's health. This year, we have a lot of backlog."
Lidar is shorthand for "light detection, ranging," and it's a sensor technology that uses invisible lasers to create detailed 3D images of the surrounding environment. Ouster's lidar software and units are designed for a variety of industries, such as automotive, robotics, and smart infrastructure. These sensors and data can be used to manage energy networks and public water supply systems.
Ouster shipped more than 2,900 lidar sensors during the fourth quarter of 2018, up 23% over the previous year. However, its gross margins, which are a measure of the company's progress towards profitability, dropped to 17% from 30% during the previous year. Pacala stated that the company's gross margin was affected by discounts on large-volume sales to customers and increased production of Ouster’s REV7 sensor platform.
Pacala stated that the REV7 platform has received positive feedback from customers so far. Although the fourth-quarter results were not as good, Pacala believes that the investment to launch it will be a wise decision.
At year-end, Ouster & Velodyne had a total cash balance of approximately $315 million. The combined company is expected to generate between $15 million and $17 million in revenue during the first quarter. This does not include Velodyne's revenue before the merger was completed in February 10.
Ouster has not yet announced when it will publish its first quarter results.