Ouster Q3 2026 Earnings Call Transcript

Ouster (NASDAQ:OUST) reported third-quarter financial results on Tuesday. The transcript from the company’s third-quarter earnings call has been provided below.

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Summary

Ouster Inc reported a record third quarter 2026 with $59 million in revenue and over 27,000 sensors shipped, marking a 50% increase in revenue from the previous year.

The company emphasized its strategic priorities, including revolutionizing its LiDAR, camera, and AI compute products, extending leadership in physical AI solutions, and progressing towards profitability.

Ouster highlighted the successful launch of Rev8, the world’s first native color LiDAR, with strong market adoption and plans to scale production capacity to over 100,000 units annually by the end of 2027.

The company expanded its product portfolio with the ZBox 2 series, targeting the robotics and industrial sectors, and reported significant demand for its Stereo Labs cameras.

Financially, Ouster achieved a GAAP gross margin of 43% and reduced adjusted EBITDA loss by 60% year-over-year, ending the quarter with $421 million in cash.

Guidance for Q4 2026 forecasts revenue between $61 million and $64 million, continuing the trajectory of strong revenue growth.

Ouster’s strategic partnerships and customer wins in diverse markets, including defense, agriculture, and mapping, underscore its expanding market presence and technological leadership.

Full Transcript

OPERATOR

Hello and welcome to Ouster’s third quarter 2026 earnings conference call. All lines have been placed on mute to prevent any background noise. After today’s presentation and remarks, 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 11 on your telephone keypad. If you would like to withdraw your question, please press star 11 again. The call today is being recorded and a replay of the call will be available on the Ouster investor relations website an hour after the completion of this call.

I’d now like to turn the conference over to Chen Geng, Senior Vice President of Strategic Finance and Treasurer. Please go ahead.

Chen Geng (Senior Vice President, Strategic Finance & Treasurer)

Good afternoon everyone. Thank you for joining Ouster’s third quarter 2026 earnings call. On today’s call we have Chief Executive Officer Angus Pacala and Chief Financial Officer Kenneth Gianella. After the market closed today, Ouster issued its financial news release and Form 8-K, which are available on our investor relations website. A webcast replay of today’s call will also be available on our website. During this call we will make certain forward-looking statements. These include all statements about our competitive position, product advantages and growth opportunities, anticipated industry trends, our business and strategic priorities, our operating expense targets, the impact of our recent acquisition, the development and expansion of our products, our product capabilities and performance, and our revenue guidance for the fourth quarter of 2026 and long-term financial targets.

Actual results may differ materially from those contemplated by these forward-looking statements. Factors that could cause actual results and trends to differ materially from those contained in or implied by these forward-looking statements are set forth in the third quarter 2026 financial results release and in the quarterly and annual reports we file with the Securities and Exchange Commission. 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, Ouster assumes no obligation to update any forward-looking statements, which speak only as of their respective dates.

In today’s call we will discuss both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in the financial results release. I would now like to turn the call over to Angus.

Angus Pacala (Cofounder, CEO)

Hello everyone and thank you for joining us today. I’ll start with a brief recap of the quarter and an update on our strategic priorities before Ken covers our financial results in more detail. We delivered a strong third quarter with 59 million in revenue and over 27,000 sensors shipped. Both records for the company. We delivered over 7,000 LiDAR sensors and 20,000 cameras, cementing our evolution into the comprehensive sensing and perception platform that meets the diverse global demands of physical AI. The industrial vertical led third quarter revenue followed by robotics, supporting customers in warehouse automation, defense, construction, and mapping. Our Stereo Labs cameras had a record quarter of shipments, unlocked by our investments in production capacity to meet the surging growth in the robotics sector.

As a leader in physical AI, Ouster is enabling our customers to sense, think, act, and learn on their autonomy journey. This quarter is a great proof point of the progress we have made across all three of our key strategic priorities: revolutionizing our LiDAR, camera, and AI compute products; extending our leadership in physical AI solutions; and executing towards profitability. Starting off with our product portfolio, Rev8 has received exceptional market reception as the world’s first native color LiDAR. Rev8 is a paradigm shift that is proving to be an undeniable competitive differentiator. Hundreds of customers have already chosen Rev8 for their mission-critical applications, and they have overwhelmingly adopted native color. Customer demand has been robust. While we ramp initial production, we have many thousands of Rev8 sensors in our backlog and we expect our delivery cadence to accelerate into 2027.

Our expanded partnership with Benchmark is expected to support an annual LiDAR capacity of over 100,000 units by the end of 2027. We are investing in retooled high-volume production lines, increasing precision automation, scaling testing, and accelerating inventory purchases to meet the exceptional demand for Rev8. Our customers are selecting Rev8 because no other sensor matches its native color, increased accuracy, and extreme ruggedness. Whether navigating through smoke and dust or maneuvering through complex, cluttered warehouses, Ouster delivers the precision, autonomy, and enhanced obstacle detection required by operators around the world. Let me now share a few Rev8 proof points. In industrials, we recently announced an expansion of our multi-year strategic partnership with Forterra, the leader in military autonomous ground mission systems.

Ouster provides 360-degree situational awareness with a single sensor and industry-leading reliability in the world’s most challenging environments. Following the successful deployment of Rev7 sensors in Ukraine, Forterra plans to integrate Rev8 native color LiDAR into its future defense vehicles. Next, GUSS Automation, a subsidiary of John Deere, plans to integrate our Rev8 sensors into its next-generation autonomous orchard machine fleet. Rev8 delivers the precision obstacle detection and native color perception needed to scale safe autonomous agriculture worldwide.

In robotics, the superior performance of Rev8 is establishing a new benchmark in the aerial mapping and autonomous drone market. We announced a strategic partnership with Seneca to integrate the Rev8 into autonomous wildfire response drones. Rev8 is built to operate from minus 40 to plus 85 degrees Celsius with industry-leading durability and unique capabilities that enable Seneca to navigate smoke, dust, and severe weather during critical cargo and firefighting operations.

In addition, GeoQ, a premier provider of geospatial mapping, is integrating our NDAA- and BABA-compliant Rev8 sensors into its TrueView drone payloads for utility and infrastructure mapping. Turning to compute, we recently expanded our AI compute portfolio with the launch of the ZBox 2 series, our next generation of industrial edge AI supercomputers engineered specifically to power physical AI. This series spans both NVIDIA Jetson platforms, the Jetson Orin for neural depth tracking and multi-camera fusion in real time, and the Jetson Thor for advanced perception and generative AI models. With support for up to eight sensors, high-speed connectivity, and multi-sensor fusion, Ouster is providing customers with a scalable, production-ready compute solution that eliminates extra adapters or custom carrier boards.

We are also directly addressing some of our customers’ largest operational hurdles—compute load, memory bandwidth, and system cost—through an updated Z SDK and expanded native support for NVIDIA Isaac ROS across our entire Z camera family. Our customers can run high-performance spatial AI models at the edge with fewer processing bottlenecks, lowering latency and improving compute efficiency. Ouster is a one-stop shop for physical AI with our latest software and ready-to-deploy vision AI kits, and Ouster delivers the platform and performance the world’s leading roboticists rely on to accelerate their deployment of physical AI from prototype to the real world.

Turning to our physical AI solutions, both Ouster Gemini, our AI-enabled perception software, and Blue City, our turnkey intelligent transportation platform, have made big strides this year. We are unlocking unprecedented scale with Ouster Gemini through our redesign of our perception pipeline. By doubling edge processing speeds, Gemini can now seamlessly fuse up to 100 LiDAR sensors on a single server, more than double our prior capacity. This expanded capability is winning enterprise Gemini deployments that require the tracking of thousands of objects across massive, city-sized environments in real time.

Leading DOTs across North America are rapidly adopting Blue City Advanced Detection powered by the Rev8 OS1 Max. By delivering continuous 360-degree detection of road users up to 500 ft across lighting extremes and severe weather conditions, Ouster is providing cities with unmatched situational awareness. Advanced Detection has led to several million-dollar Blue City wins in Utah, Washington, Florida, and Ontario, Canada. In addition, we recently won an expansion with a leading DOT, securing a multimillion-dollar contract to expand our Blue City solution across 100 additional intersections.

Advanced Detection is enabling our customer to consolidate continuous point cloud data across multiple intersections into a single unified corridor view and unlocking advanced data for improved traffic flow and safety. Complementing these leaps in performance are improvements in our machine learning iteration cycle. By optimizing data labeling, training, and verification, we have compressed our end-to-end model training cycle by over 50% year to date. Ouster is iterating faster to more rapidly deploy improved perception software across our entire customer base, extending our lead as the foundational partner in physical AI to sense, think, act, and learn.

Finally, our strong results align with our long-term financial framework. We are making strategic investments in product innovation, manufacturing capacity, and customer success as we scale toward profitability. With that, let me now turn the call over to Ken, who will provide more context on our third quarter financial results and full year 2026 outlook.

Kenneth Gianella (Chief Financial Officer)

Thank you, Angus, and good afternoon, everyone. We delivered another record quarter of revenue while making significant progress on our strategic growth initiatives by expanding our presence in high-growth robotics and physical AI through Stereo Labs, increasing our inventory and manufacturing capacity, and driving continuous innovation in our solutions. Now turning to our third quarter financial performance, operating results were again strong with revenue of $59 million. This represents an increase of approximately 50% compared with the third quarter last year. Revenue included approximately $3 million of royalty revenues during the quarter. Industrials led our revenue mix followed by robotics, as the addition of Stereo Labs continues to strengthen our market position in robotics, manipulation, humanoids, and mobile industrial applications.

Our Stereo Labs business had a breakout quarter, shipping over 20,000 cameras and more than doubling their production quarter on quarter. Our third quarter product mix reflects the operational flexibility provided by our unified sensor platform and the ramp of our Rev8 capacity. As Angus mentioned, we are extremely pleased with Rev8 customer commitments. Since the launch in May, in Q3 customer demand began to shift towards our Rev8 product. We expect production volumes of Rev8 to continue to increase in the fourth quarter and grow throughout FY27.

GAAP gross margin was 43%, essentially flat compared with the same quarter last year. Sequentially, our gross margin was 6 points lower, primarily due to a one-time $5 million tariff refund from the prior period. GAAP operating expense was $45 million, an increase of approximately 9% from the third quarter last year. We continue to anticipate full-year 2026 operating expenses to be between 5% and 8% higher year over year, excluding the impact of favorable employment tax refund and one-time acquisition costs.

The increase in our 2026 operating expense includes approximately 11 months of Stereo Labs acquisition, investments in our product roadmap, and the expansion of our global go-to-market capabilities. Adjusted EBITDA was a loss of $3 million, a 60% year-over-year improvement compared with a loss of $8 million in Q3 of last year. We are pleased with our progress, and we remain committed to disciplined investment for growth as we continue to scale towards profitability.

Turning to our balance sheet, we ended the quarter with approximately $421 million in cash balances, which includes the net proceeds of approximately $191 million from the common stock offering we completed in early July. Cash usage for the quarter reflects planned investments in expanding manufacturing capacity, inventory, and working capital, and the continued integration and scaling of Stereo Labs. Our liquidity position remains one of the strongest in the industry and provides us with the strategic and financial flexibility to execute our current long-term model.

As we scale towards profitability, we do not expect to need additional capital to achieve our operating objectives. Now turning to our Q4 revenue guidance, total revenue for the fourth quarter of 2026 is expected to be in the range of $61 million to $64 million, including an estimated $3 million of royalties for 2026. Year-over-year revenue growth at the midpoint of guidance is expected to be approximately 48%, excluding royalties. In closing, our outlook reflects sustained strength in our unified product portfolio that positions Ouster uniquely within the rapidly growing physical AI market. We remain confident in the strength of our customer demand, the continued innovation of our products and solutions, and our ability to execute against our strategic and operational objectives. I’ll now turn the call back to Angus for his closing remarks.

Angus Pacala (Cofounder, CEO)

The third quarter marked the 15th straight quarter of product revenue growth, delivering sense, think, act, and learn capabilities to the world’s leading physical AI companies. The standout performance of Stereo Labs and the overwhelming demand for Rev8 are early proof points that our vision of a unified sensing and perception platform is exactly what the market demands. From farms and distribution centers to last mile delivery, the world’s most innovative companies are choosing Ouster. We provide the complete stack of LiDAR, vision, compute, and software required to bring physical AI into the real world. With that, I’d like to open up the call for Q&A.

OPERATOR

Thank you. At this time, we will conduct the question-and-answer session. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Again, please stand by. Our first question comes from Andres Shepherd from Cantor Fitzgerald. Please go ahead.

Andres Shepherd (Analyst at Cantor Fitzgerald)

Hey everyone, good afternoon. Congratulations on the Quarter and thanks for taking our questions. You know, I guess to start, Angus, it’s clear that Ouster by now is much more than a lidar company with also cameras, AI compute, sensor fusion and perception software as you mentioned. So I guess I’m trying to understand which applications do you perhaps expect the most near-term growth, maybe excluding industrials. Is it autonomous vehicles, is it drones, is it perhaps humanoids now with cameras? So just looking for an update there.

And separately, maybe you can also share a bit more granularity on the opportunities with the DoD after the certification. Thanks.

Angus Pacala (Cofounder, CEO)

Yeah, thanks for the question, Andres. Well, I guess my answer to your question is yes. That was a good summary of many of the applications that are exploding right now in robotics, autonomous vehicles. I mean the thesis here is everything that moves is becoming robotic and autonomous. And certainly there are form factors that are exploding right now like humanoids and drones. And we have a really unique set of offerings to bring to the table for both those and, you know, humanoids are a camera-centric platform but need these powerful AI computers.

Embedded drones are more of a lidar-centric platform when we’re talking about surveying and kind of precision surveying applications where the Rev8 and the OS1 Max are incredibly good fits and then that just extends into industrials. So a ton of activity in robotics and we really are a one-stop shop for anyone that’s trying to build the visual cortex of all those applications. I would note that smart infrastructure is another growth area for us. We’re seeing a huge appetite for our Blue City and our Gemini offerings. And again these are the same fundamental building blocks: sense, think, act and learn. It just turns out that these aren’t moving vehicles, they’re fixed infrastructure that still needs the same type of physical intelligence.

As to the question on the DoD, I think you’re referring to NDAA-compliant offerings for Ouster. And previously, last year we also had a Blue UAS certification for Rev7. So, you know, we’re doing great on that front. These are really targeted at drone payloads for surveying applications. We’re doing great. Rev8 is a perfect fit for the drone surveying market. We highlighted a couple customers there and I think there’s more to come. Obviously we want to get certifications like what we’ve gotten on Rev7 on Rev8, so there’s definitely more to come there.

Andres Shepherd (Analyst at Cantor Fitzgerald)

Wonderful, very helpful. Appreciate all that detail. Maybe as a quick follow-up, can you help remind us how big of a moat would you say is the qualification on Nvidia’s platform? You know, what should investors be aware of here? And then maybe lastly, can you remind us what are the key catalysts that we should be aware of maybe in the near or medium term? Thank you.

Angus Pacala (Cofounder, CEO)

Yeah. In terms of the Nvidia platform, there are a couple ways that we work and partner with Nvidia today. Now, one of the things we mentioned on the call is the release of an expanded set of AI computers that are based on Nvidia Thor chipsets. So there’s a moat there just in terms of the investment that we’ve put into that hardware and the software that runs on that hardware seamlessly. So the unified sensing and perception platform that spans cameras, lidars, interfacing with our own purpose-built AI computers using Nvidia chipsets.

Big moat there. We also have a lot of work that we’ve announced previously with the Nvidia automotive and Jetson ecosystems. So many different touch places there. I’ve said before, if Nvidia is the brain of a robot, then we are the eyes and the visual cortex. And so I think that still holds true.

Andres Shepherd (Analyst at Cantor Fitzgerald)

Wonderful. Thank you so much. Congrats again. We’ll pass it on.

Angus Pacala (Cofounder, CEO)

Thank you.

OPERATOR

Thank you. Our next question comes from Colin Rush from Oppenheimer and Company. Please go ahead.

Colin Rush (Analyst at Oppenheimer)

Thanks so much, guys. Can you talk a little bit about some of the unique characteristics of Rev8 and what you can do from a software perspective that are really enabling a little bit deeper relationships with your customers and your ability to just remain stickier with those folks as you go forward?

Angus Pacala (Cofounder, CEO)

Yeah, absolutely, Colin, thanks for the question. The headline feature that we keep talking about is this native color technology and it really is a first of its kind, complete paradigm shift for the entire lidar industry. We’re providing fused, colorized 3D information out of a single device. Never been possible before in lidar. And now we have a couple quarters, many thousands of Rev8 lidars that have been purchased by customers and we’re seeing overwhelming uptake in the RGB feature.

We’re actually offering a backwards-compatible non-RGB version of Rev8, but overwhelming preference towards adopting the new native color technology. So I see that as a huge technological moat that took a major investment to get it to a point where it could be adopted across a broad swath of our customer base. So that’s a headline feature. It’s deeply valuable in training better neural networks with more context — both 3D and color information. You can read road signs instead of just understanding their shape. You can read the state of a traffic light. Or you can provide amazing survey-grade maps that do color and lidar.

You know, it’s just you need to sense the world in both color and 3D to make a robot navigate it successfully. Other than that, I mean, Rev8 hits on so many different capabilities simultaneously. And I think that’s, like, just stepping back, why is Rev8, why are we so confident it’s going to be successful across our, really, our entire lidar customer base? It’s because it’s got incredible robustness, it’s got functional safety, it’s got incredible range and resolution. With the new OS1 Max, it’s got this RGB capability. It’s got the point cloud quality itself — accuracy and precision is best-in-class in many cases.

Yeah, the ruggedization, the thermal profile. So it’s just kind of if you made a spider plot of it, it would be maxed out on almost all of the features that you would care about in a lidar. And to do that all in one platform just means that it’s useful on a John Deere GUSS automation vehicle, it’s also useful in a drone, and it’s useful in a Blue City traffic infrastructure installation. So yeah, when you do it all, it’s useful everywhere.

Colin Rush (Analyst at Oppenheimer)

Okay, thanks. And, you know, you guys have maintained a very strict level of financial discipline here as you’ve grown revenue and maintained cost structure here. Can you talk a little bit about the potential to drive material cost out of the sensors and start driving some incremental gross margin and how you might use some of that cost savings to expand the market?

Kenneth Gianella (Chief Financial Officer)

Well, I can take that first. I mean, I think there’s always opportunities to drive cost out of the lidar technology. I mean, lidar is still not a mature technology from my perspective, and we expect to be marching down a cost curve for many years to come. So that is ongoing activity. It happens each and every day at Ouster. There’s also a major volume component to this. You know, our volumes — lidar volumes — go up every year. We expect them to continue to go up every year.

We’re talking about 100,000-unit type of capacity at the end of 2027. Volume is still a big lever. So no question, we’re really focused on that. And then, you know, just the backdrop here is the whole lidar technology is built on a Moore’s Law curve of silicon at the very fundamental level. So another way that we drive out costs is by innovating at the chip level and packing more capability into our custom silicon and saving that cost elsewhere in the system as a result.

So lots of levers. In terms of gross margins, we’ve really committed to our long-term financial framework and the 35% to 40% gross margin is still where we’re committed to for the time being. Obviously we’ve come in a little above those for a while now, but still that’s where we see the future for now. From an investment standpoint, it’s definitely taking and looking to beat the top end of the margins and then investing that. Right now it’s about capacity for us, Colin.

It’s how can we make sure that we can ramp capacity. We did a great job with Stereolabs — you saw that in spades this quarter, taking them the last two quarters and building out capacity for them to hit these numbers. We’re doing the same thing with Rev8 this quarter and next quarter and ramping that into FY27. So in the near term it’s the more capacity we get, we can lower overall per-unit cost and start getting leverage from the rest of the business.

So the goal is to continue to drive leverage both from our operational standpoint, but also from our opex.

Colin Rush (Analyst at Oppenheimer)

Thanks so much, guys.

OPERATOR

Thank you. Our next question comes from Suji DaSilva from Roth Capital. Please go ahead.

Suji DaSilva (Analyst at Roth Capital)

Hi Angus. Hi Ken. Congratulations on the progress here. Maybe, Angus, you could talk about the robotics market and what’s the framework for your content opportunity as various robot form factors come out? I know it’s primarily camera today. Maybe you can help us kind of think about where that can go.

Angus Pacala (Cofounder, CEO)

Yeah, it’s a good question because there’s a lot of diversity in the way that robotics companies are designing these next generation systems. But right now, the AI computer — we focused a product roadmap on common building blocks or common technology sets. I would say cameras, lidar, compute, and then focus on building a portfolio or a family within each one of those technology sets that absorbs the diversity of approach for each one of our customers.

So if you look at one humanoid robot versus another, there are some humanoid robots that have their primary sensing in their chest versus in the head. Most of them have in the head. But that’s a pretty good example of how different some companies are. Some companies put a palm-mounted camera in the palm of the robot, others put a wrist-mounted stereo camera for doing grasping and manipulation. So there’s a wide diversity of, even in cameras, what types of cameras — mono, stereo — where they go all on the robot, and that dictates the resolution, the size, the power draw and the cost of the cameras that go into something like a humanoid.

Our goal is to sell every flavor of camera that is practical, that is going into these robots, and to do it in a competitive way so that when a customer has choice, they are actually coming back to Ouster for all those different flavors. Same is true on lidar. That’s why we have announced many different SKUs of the Rev8. And it’s also true on the AI compute. There’s potentially a one-size-fits-all technology — these powerful edge GPU devices. But there’s not a one-size-fits-all chipset because some things are small drones, other things are big industrial vehicles, and you need a family of products.

So we’re very much, you know, our product roadmap is built on these families of products, but it’s still three technologies: AI compute, cameras and lidar.

Suji DaSilva (Analyst at Roth Capital)

That’s good insight in your strategy there. And my other question is on the, you talked about an application that has 100 lidars, thousand objects you’re trying to track, maybe in an urban environment. It sounds intriguing. I really hadn’t heard of these sort of large content-at-once opportunities. I’d be curious if you could frame that — are those niche applications or could that be sort of a unit kind of accelerator for you guys?

Angus Pacala (Cofounder, CEO)

This is definitely not a niche use case. I mean we have been building and deploying Gemini now for almost five years, I think four years at this point. And we’re achieving a level of maturity with some of our long term customers that is now scaling to 100 LiDAR sites. Thousands of objects being tracked in real time. But it’s also maturity on the breadth of deployment. So we have some customers operating over 500 sites in North America right now. So the scale on the Gemini front, this is apart again from Blue City.

Blue City is a whole other story of success. But yeah, we’re seeing a lot of really positive trends in the uptick of physical AI technology for, for fixed infrastructure.

OPERATOR

Thank you. Our next question comes from Kevin Cassidy from Rosenblatt Securities. Please go ahead.

Maddie (Analyst at Rosenblatt Securities)

Hi, this is Maddie calling on behalf of Kevin. Is there any more color you could provide on the LiDAR product mix in the quarter and going forward between Rev8 and Rev7 and then also just whether the two carry similar gross margins.

Kenneth Gianella (Chief Financial Officer)

I’ll start with that. So when you think about the mix, we’re at a point of where we’re just ramping Rev8. So Rev8 is going from hundreds this quarter to thousands next quarter to tens of thousands by the end of FY27. So we fully anticipate, just on the demand that we’re seeing today, that that mix is going to continue. As I said in my part of the script, we’re continuing to see that demand rotate more towards Rev8. So that capacity both to deliver it and the demand, we expect that to grow through 27.

Maddie (Analyst at Rosenblatt Securities)

Okay, awesome. Thank you guys.

OPERATOR

Thank you. As a reminder to ask a question, you can press star11 on your telephone and wait for your name to be announced. Our next question comes from Tim Savageaux from Northland Capital Markets. Please go ahead.

Tim Savageaux (Analyst at Northland Capital Markets)

Hey, good afternoon and congrats on the results. Did have a question on the capacity front as well. You mentioned exiting the year with 100,000. I guess that’s annual unit volume capacity on the LIDAR side. Obviously that implies some pretty significant quarterly revenue numbers. Probably over $100 million relative to where we are now, more than double that. Is that a target or as you look at that capacity, where do you expect to be relative to that exiting the year compared to where you are now?

I guess any color on that would be appreciated.

Kenneth Gianella (Chief Financial Officer)

Yeah. And Tim, we’re talking about the end of 2027, just to be clear. So yeah, we’re installing. Yes, this is at the end of 2027, working with Benchmark to have installed capacity of 100,000 annualized units a year for LiDAR. These supply chain management manufacturing takes time to put all this equipment in place. And we just want to make sure that we are getting ahead of any concerns about us being able to deliver the expanded volumes that we see each and every year and especially as we’re ramping Rev8 along the way. So there’s major investments going in this quarter through the end of 2027. On the capex side, on just the technology that we’re bringing to bear for manufacturing. We’re just upping our game all across the board when it comes to manufacturing and making also the capacity investment at the same time.

And yeah, to get more at the unit volume question. This is not a commitment to 100,000 unit annualized volume at some point next year. We always want to have more capacity than we are shipping at any given moment because we want to be able to meet demand spikes that happen in every in our business. But stepping back, will we hit those types of annualized demands in the company’s near future? Absolutely. We grow our unit volumes every year and we expect to continue to do so.

Yeah, and you’ve heard the diversity that he talked about on the earlier question. We are really prided ourselves on ramping Stereo Labs and what we could ship. They have a very robust portfolio. Being able to ship at the increased volumes that they did quarter over quarter was a big accomplishment. That’s through all of our manufacturing partners. But then the LiDAR side of it, as we grow our portfolio, we’re still shipping some Rev6 and Rev7s. So there is going to be a continuation of all of our portfolio on this good, better, best approach to the marketplace.

Being able to offer the diversity of product and pricing to meet the market demands. You need that capacity.

Tim Savageaux (Analyst at Northland Capital Markets)

Great, Appreciate that. And you mentioned Stereo Labs. Obviously a big uptick here in the quarter. I know you’d had a target for, for calendar 26 revenue that you might have already hit. I wonder if you expect that type of elevated level of business to continue into Q4 at Stereo Labs and whether you have an increased view of where you might be able to come in this year in terms of revenue.

Kenneth Gianella (Chief Financial Officer)

Yeah, but I think we gave guidance for the quarter for the company. 61 to 64 million in expected revenue in Q4. And I, I think I’m incredibly happy with the performance from Stereo Labs. I do think that there’s just a fundamental shift in the demand for these types of camera products. And Stereo Labs is a leading brand in stereo camera and monocular camera products for these industries. So there’s definitely a step change in demand versus if you look back a year or two in what the company was doing, that holds.

But when you get into the details of the ins and outs of each quarter, I think we’re not going to go there.

Tim Savageaux (Analyst at Northland Capital Markets)

Okay, thanks very much.

OPERATOR

Thank you. Our next question comes from Casey Ryan from AmerX. Please go ahead.

Casey Ryan (Analyst at AmerX)

Good afternoon, everybody. Terrific quarter and update. I just had a few questions. I’m wondering about the life of sensors, particularly since maybe inception. Have they performed and been more durable than you expected? Maybe initially, maybe these are internal estimates. But I’m curious as maybe the sensors move into more active environments like a robot in a warehouse that maybe slams into things or something. How you think about the life of the sensor may or may not change, I guess.

Angus Pacala (Cofounder, CEO)

Yeah, that’s a great question, Casey. I think durability is one of the key differentiators for Ouster LiDARs. Many of our customers are still learning what it takes to field reliable autonomy hardware in their environments. Humanoid robots, turns out they fall down and they have incredible shock loads and so. And we see our customers kind of learning in real time about their own use cases. So. But I think the summary here is that Ouster has separated itself on the LiDAR side with extraordinarily durable systems.

I hear, you know, we have the internal data to prove it. But I also hear anecdotes all the time. Actually, I just heard one today that there was a Beijing robotics Olympics and if you’ve seen any of the clips, the robots were slamming themselves into walls at the end of the 100 meter dash. And I got an anecdote today that the only thing that continued to work on one of the robots was the Ouster LiDAR on the winning robot after it crashed. So you get that kind of thing all the time.

And it’s, you know, we know why, because we put in the years of effort to make these things ultra reliable.

Casey Ryan (Analyst at AmerX)

Okay, that’s great to hear. And then, you know, would that sort of be fair to sort of assign that to Stereo Lab, that sort of trait, that sort of Ouster trait to those sensors as well?

Angus Pacala (Cofounder, CEO)

Yeah, I think that’s one of the, you know, one of the places where there’s synergy. We have a lot of learning in those kind of use cases and we’re bringing that to bear into their engineering roadmap. You know, it’ll trickle into everything that we do with them for the future.

Casey Ryan (Analyst at AmerX)

Okay, all right, terrific. And then on Rev8, you know, I think there’s a lot of excitement about the capabilities sort of globally, at least from our perspective. Right. We’ve, we’ve sort of bifurcated the sensor market sort of China and row sort of ex China. But can the capability set start to let you win even if there is, you know, some price, you know, sort of a value price difference when customers start to think about how much value is sort of contained in the Rev8 feature set?

Angus Pacala (Cofounder, CEO)

Yeah, I mean, yes, on the margin, absolutely. And actually we have a business in China that we maintain. We have some great customers there today. Just anecdote, we were on the podium for the Beijing Robotic Olympics many, many times without sensors. So I think that. But it’s important to separate out the automotive industry in China. China from everything else. We really don’t expect to be a player in the Chinese automotive market, but on in the other verticals, industrials and robotics especially, you know, we’re a player today and I expect to continue to be

Kenneth Gianella (Chief Financial Officer)

and we can win head to head. I mean, I’m answering your other question. On the margin, we have no problem going there because not only all the attributes that Angus listed earlier that people are choosing us for, the longevity, the ruggedness, the differentiation with what we bring, with the colorized LiDAR to bear we actually get a premium on that from many of our customers because the technological differentiation. But now you add in that we’re getting the volumes and we can be competitive on a margin standpoint too.

So we have no problem taking the Chinese on head to head in Western markets.

Casey Ryan (Analyst at AmerX)

Okay, good. That’s actually a terrific answer. Both pieces that are very encouraging. And then the last thing, a little philosophical, but, Angus, you did just separate automotive from, say, robotics and humanoids, but from a selling to a customer and a solution sale. Do those markets look that different? You know, forever, long term in your mind, and maybe there’s some connection to like the vision system software piece of this, but do you start to treat them the same and like, you know, I’m thinking about Hyundai’s bought Boston Dynamics, they’re building humanoids, they’re building cars.

You know, Tesla’s building, humans are building cars. Do those segments always stay separate because of what they want from you, or do you think of them as being someday being the same segment? I guess

Angus Pacala (Cofounder, CEO)

I. You know, it’s an interesting question. I’m not sure I have an answer for you, but I would say today the automotive customers are fundamentally different in how they behave. And we have a lot of them today versus everyone else. And I’m not sure that there’s going to be much convergence there. There’s 100 years of learnings in auto that maybe don’t all apply to the new industries in robotics. But that said, we have a portfolio that is ready and willing to go meet that automotive segment.

We have no problems participating within the robo taxi segment, especially with the new Rev8 and the products that we have coming out. We are geared and ready. When the automotive industry in the Western world is ready to go tackle that problem, we will be there for it.

Casey Ryan (Analyst at AmerX)

Okay, great. Well, terrific quarter, terrific outlook and thanks for taking my questions.

OPERATOR

Thank you. As a reminder, to ask a question, you will need to press Star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by.

Angus Pacala (Cofounder, CEO)

If there’s no additional questions. Operator, we can turn it back.

OPERATOR

Okay, sounds good. I am showing no further questions at this time. I would now like to turn it back to Angus for closing remarks.

Angus Pacala (Cofounder, CEO)

All right, well, thank you all for joining the call. We look forward to speaking with you again during our fourth quarter. Have a good day.

OPERATOR

Thank you for your participation in today’s conference. This does conclude the program and you may now disconnect.

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