Ouster, Inc.

There will be an opportunity to ask questions. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. The call today is being recorded and a replay of the call will be available on the Elster Investor Relations website an hour after the completion of this call. I'd now like to turn the conference over to Jim Finucchi, Investor Relations. Please go ahead.

Good afternoon, everyone. Thank you for joining us for our fourth quarter 2024 earnings call. I am joined today by Ouster's Chief Executive Officer, Angus McCalla, and Interim Chief Financial Officer, Chen Gun. Before we begin to prepare remarks, we would like to remind you that earlier today, Ouster issued a press release announcing its fourth quarter 2024 results. An investor presentation was published and is available on the investor relations section of Ouster's website. Today's earnings call and press release reflect management's views as of today only and will include statements related to our competitive position, anticipated industry trends, our business and strategic priorities, our financial outlook, and our revenue guidance for the first quarter of 2025, all of which constitute forward-looking statements under the federal securities laws. Actual results may differ materially from those contained in or implied by these forward-looking statements, due to risks and uncertainties associated with our business. For a discussion of the material risks and other important factors that could impact our actual results, please refer to the company's SEC filings and today's press release, both of which can be found on our investor relations website. Any forward-looking statements that we make on this call are based on assumptions as of today. and other than as may be required by law, we undertake no obligation to update these statements as a result of new information or future events. Information discussed in this call concerning Oster's industry, competitive position in the markets in which it operates is based on information from independent industry and research organizations, other third-party sources, and management's estimates. These estimates are derived from publicly available information released by independent industry analysts and other third-party sources, as well as data from Oster's internal research. These estimates are based on reasonable assumptions and computations made upon reviewing such data and Oster's experience in and knowledge of such industry and markets. By definition, assumptions are subject to uncertainty and risk, which could cause results to differ materially from those expressed in the estimates. During this call, we will discuss certain non-GAAP financial measures. These non-GAAP financial measures should be considered as a supplement to and not a substitute for measures prepared in accordance with GAAP. For a reconciliation of non-GAAP financial measures discussed during this call to the most directly comparable GAAP measures, please refer to today's press release. I would now like to turn the call over to Angus.

Hello, everyone, and thank you for joining us today. I'll start with a brief recap of the quarter and review of our execution against our 2024 strategic priorities. Chen Geng, our interim CFO, will cover our financial results in more detail before I close with our 2025 objectives and some final thoughts. The fourth quarter capped off a year of consistent execution, record financial results, and delivering increased value for our customers. For the quarter, we generated $30 million in revenue and gross margins of 44%, reinforcing our position as a leader in the LiDAR industry. This is the eighth straight quarter we have met or exceeded our guidance. We continue to have one of the strongest balance sheets in the industry, ending the year with $175 million of cash and equivalents with zero debt. We also won a $2 million contract to deploy our Blue City traffic management solution in Chattanooga, Tennessee to improve roadway safety and reduce congestion. Chattanooga is expanding Blue City to over 120 intersections covering the downtown area and will be the largest deployment of LIDAR detection technology for traffic and pedestrian safety in the United States. We have launched Blue City across the United States, from Tennessee to Washington, tapping into the massive opportunity presented by the Intelligent Transportation Systems, or ITS, market. There are 300,000 signalized intersections in the United States, and we see a similarly sized opportunity in both Europe and Asia. With each intersection supporting two or more LiDAR sensors, we estimate this market can drive demand for over 1 million units. Ouster is also working closely with several of the world's largest heavy equipment manufacturers, such as John Deere, to support their automation efforts in agriculture and construction. These companies manufacture millions of machines every year, and their customers face a significant challenge to fill positions that are often strenuous and dangerous. The automation technology powered by our LiDAR solutions helps make the global supply chain safer, their operations more efficient, and alleviate chronic labor constraints. These highlights wrapped a year in which our OS sensor volumes increased by over 50%, our software attached bookings grew by over 60%, and we deployed sensors at iconic events like the Paris Olympics. We also reached major milestones in our next generation custom silicon chips, and developed new software tools to accelerate LIDAR adoption. We also successfully executed against each of our 2024 business priorities, which were, one, expand software solutions and grow the installed base, two, advance the development of digital LIDAR hardware, and three, progress on our long-term financial framework. Starting with software. We saw impressive growth in our software-attached bookings in 2024, which increased by over 60% versus 2023 and exceeded a double-digit percentage of our total bookings in each quarter of 2024. We defined software-attached bookings as a sale of either our Ouster Gemini perception platform or our Blue City traffic management solution, along with sensors and associated accessories and services. Our software solutions currently serve the smart infrastructure vertical, which we see as a $19 billion market opportunity spread across ITS, security, logistics, and crowd analytics. Our 2024 bookings for Ouster Gemini and Blue City are expected to expand our cumulative deployments to more than 700 sites. Blue City successfully passed the requirements of NEMA TS2, and we integrated Ouster Gemini and Genetech Security Center. We also expanded our distribution network, bringing on traffic technology partners covering nearly 20 states across the country to sell Blue City to states and local governments, which should fast track the adoption of our intelligent traffic control solution. I'm also excited to announce that shortly after the end of the fourth quarter, a leading global technology company renewed its Oster Gemini annual license for over $1 million per year. This amazing milestone represents our largest software deal ever, and we have just scratched the surface of this potential opportunity as we increase our penetration with new and existing customers across the globe. Moving to LIDAR development. In 2024, we made significant advancements on our digital LIDAR roadmap. On the firmware side, we introduced firmware 3.1 with zero minimum range along with improvements to accuracy and better obscuring penetration. We also spent much of the year developing Firmware 3.2, which we announced earlier this week and brings a powerful new set of features to our customers. We are also accelerating LiDAR adoption with two developer tools, Ouster SDK and Ouster Studio. Over the past 12 months, we have released four new versions of our SDK that include real-time localization, multi-sensor support, and up to 4x faster data visualization. We also added new features to Astro Studio, our LiDAR visualization tool. The new Astro Studio web offers customers 250 gigabytes of free LiDAR data storage, making it easy to store, access, organize, and collaborate across an organization. No other LiDAR company provides such a robust software development ecosystem. Since launching in late 2022, REV7 quickly became our best-selling sensor as customers recognize its superior performance and enhanced reliability. Throughout 2024, we worked to upgrade select components in REV7 to improve reliability and thermal performance even further. We also taped out both our next generation L4 and Kronos custom silicon. Our L4 sensor prototypes are generating rich point clouds and have moved into validation testing. Our Chronos chip is back from the fab and is undergoing bring-up. Finally, we delivered results in line with our long-term framework. We achieved revenue of $111 million, up 33% year-over-year, and aligned with our 30% to 50% growth target. Our full year margin of 36% sits squarely within our target range of 35 to 40%. Operating expenses reflect our continued focus on maintaining our cost structure, and our average quarterly OpEx in 2024 was 7% below third quarter 2023 levels. In summary, I'm pleased with our accomplishments in 2024. In 2025, Ouster, like other businesses, will be navigating the volatility and uncertainty in the current climate. We are encouraged by the opportunities to empower global industries with high-performance, reliable, and accessible 3D sensing solutions. I'll now turn the call over to Chen, who will provide more context on our fourth quarter financial results. Thank you, Angus, and good afternoon, everyone.