Al Root
Lidar maker Ouster reported a smaller-than-expected fourth-quarter loss. In addition, its strong sales guidance shows the benefits of its more diversified strategy compared with its peers.
Lidar is essentially short for laser-based radar and can serve as the eyes for a number of things -- such as a car needing to see down the highway to enable its adaptive cruise control, or a humanoid robot being trained to complete basic tasks with the help of AI.
(Some of the robots seen at Nvidia's recent event had eyes provided by Ouster lidar, according to Ouster.)
Most lidar start-ups have focused on the automotive market. Size is one reason: Some 80 million light vehicles are sold around the world each year.
Ouster has taken a slightly different approach. It focuses on four different markets: cars, industrial, smart infrastructure, and robotics applications.
On Tuesday evening, the company reported fourth-quarter earnings before interest taxes, depreciation, and amortization, or Ebitda, of minus $15 million. In other words, it was an Ebitda loss, which is how Wall Street tends to put it.) Analysts were looking for a loss of about $20 million for the December quarter.
Sales came in at about $24 million, in line with estimates. That wasn't a surprise, because Ouster had updated investors about its fourth-quarter sales in January.
Looking ahead, Ouster expects first-quarter sales between $25 million and $26 million, up both quarter over quarter and year over year.
The guidance looks solid relative to the Street, with analysts projecting $25 million in sales.
The guidance also looks solid compared with peers. In late February, Innoviz Technologies guided to first-quarter sales of $5 million to $6 million, down from the $14.9 million reported for the fourth quarter of 2023. Wall Street was projecting $10 million for the first quarter at the time of the report. Shares dropped 4.2% in response.
In early March, Chinese lidar maker Hesai provided first-quarter sales guidance of about $45 to $49 million after reporting fourth-quarter sales of $78.2 million. Wall Street was projecting closer to $55 million going into the report. Shares dropped 3.9% in response.
Luminar Technologies didn't provide 2024 guidance when it reported fourth-quarter numbers in late February. It plans to update investors about 2024 later this year. For the fourth quarter, Luminar reported sales of $22.1 million. Wall Street was looking for $27.3 million. Shares fell 4.8% in response.
For the first quarter, Wall Street expects Luminar sales to come in at about $22 million, flat with the fourth-quarter number.
One key difference, however, is that Luminar, Hesai, and Innoviz focus more on automotive end markets. Seasonality can affect their numbers, in part because car production tends to drop in the first quarter of the year. It has also been harder to penetrate the car market than lidar companies had forecast. When Luminar was raising money in a special purpose acquisition company presentation in 2020, it projected 2024 sales of $418 million. Wall Street expects $131 million in sales this year.
As for Ouster, management is happy with how the year turned out and how 2024 is shaping up.
We "had a transformative year...we successfully completed the merger with Velodyne, which solidified our balance sheet, expanded our patent portfolio, and streamlined our cost structure," said CEO Angus Pacala in a news release. "I'm excited to continue this momentum in 2024 as we execute our plan towards profitability."
Ouster closed its merger with Velodyne in February 2023. The combined company has cut annual operating expenses by roughly $100 million. Ouster ended the quarter with about $192 million in cash on the books.
Through Tuesday's trading, Ouster stock was down about 36% over the past 12 months. Innoviz, Hesai, and Luminar shares were down about 61%, 69%, and 73%, respectively.
It has been tough for shares of lidar start-ups. Still, those four are some of the most valuable lidar companies, trading with a combined market capitalization of almost $2 billion.
Write to Al Root at allen.root@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
March 26, 2024 16:15 ET (20:15 GMT)
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