Ouster Clocks 8% Revenue Decline In Q4, Notes Margin Pressure; On Track To Drive Cost Synergies From Velodyne Merger

On March 23, Ouster, Inc OUST reported a fourth-quarter revenue decline of 8% year-on-year to $10.94 million, missing the consensus of $15.84 million.
EPS loss of $(0.23) missed the consensus loss of $(0.18).
Ouster shipped a record of over 2,950 sensors for revenue in Q4, up 23% Y/Y.
The gross margin contracted by 1,300 bps to 17%. Large unit volume sales to customers with lower average selling prices and higher transition expenses to the REV7 sensor platform affected the margins.
Net loss widened to $(42) million in Q4 FY22, down from $(28) million a year ago.
Ouster held $315 million in cash and equivalents.
Ouster expects Q1 revenue of $15 million - $17 million (consensus $20.1 million), excluding revenue from Velodyne products before the merger.
Ouster completed the merger with Velodyne on February 10, 2023, likely to drive cost synergies and value creation.
Ouster remains on track to exceed previously projected annualized cost synergies of $75 million within nine months.
By the end of Q1, Ouster expects to reduce approximately $50 million in annual run-rate costs.
Ouster expects to deliver higher margins over time as it completes the Velodyne integration and increases shipments of the REV7 sensors.
CEO Angus Pacala told CNBC in an interview following the company's Q4 that Ouster has already begun integrating Velodyne's people and technology into its existing business, cutting about 200 employees from the post-merger business.
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Price Action: OUST shares traded lower by 7.65% at $0.84 premarket on the last check Friday.

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