Sensor Shipments Hit Record, Ouster Shares Pop 10.7% After Earnings

Ouster (NYSE: OUST) beat on both earnings and revenue Tuesday, posting a smaller loss than expected and delivering record sensor shipments. The stock fought back all its earlier loses on day and jumped 10.7% after earnings tonight.  

Record Shipments Drive a Clean Beat

Ouster shipped 7,200 sensors in Q3, the highest quarterly volume in company history. Revenue came in at $39.5M, beating the $37.81M consensus by $1.69M. The loss per share was $0.37, narrowly better than the estimated $0.38. On the surface, it’s a solid quarter. The real story, though, is what the numbers reveal about demand and execution.

Revenue climbed 41% year over year. That’s the kind of growth rate that typically fuels investor confidence in an early-stage hardware company. Smart infrastructure, robotics, and industrial segments all drove demand. CEO Angus Pacala emphasized the scale of deployments: “Our outstanding third quarter results were driven by shipments of a record 7,200 sensors, including significant deployments in smart infrastructure.”

Margins Improve, But Not Enough

Gross margin expanded to 42%, up 400 basis points from 38% a year earlier. That’s meaningful progress on cost structure. The net loss improved by $4M year over year to $21.7M, a sign that operational discipline is taking hold. I liked the margin trajectory here. It shows the company is moving in the right direction on unit economics.

The catch: gross margin fell from 45% last quarter to 42% this quarter. Sequential margin compression, even modest, raises questions about pricing power and product mix. Operating losses still sit at $24.3M. Revenue growth hasn’t yet overcome the fixed cost base.

Guidance Suggests Modest Momentum Ahead

For Q4, Ouster guided to revenue between $39.5M and $42.5M. That’s flat to up 7.6% sequentially. It’s not aggressive. It suggests management expects steady but not explosive demand into year-end. The guidance band is narrow, which I’d read as confidence in visibility. But it’s also conservative relative to the 41% growth rate this quarter.

You’ll want to watch whether this guidance reflects real demand softness or simply cautious positioning. The company is still burning cash on operations, though the $247M cash position (including $87.1M in cash and equivalents plus $150.4M in short-term investments) provides runway.

Numbers Tell the Story

Key Figures

Revenue: $39.5M (vs. $37.81M expected); up 41% year over year
EPS: -$0.37 (vs. -$0.38 expected); beat by $0.01
Gross Margin: 42% (up 400 basis points year over year; down from 45% sequentially)
Net Loss: $21.7M (improved $4M year over year)
Operating Loss: $24.3M
Record Sensor Shipments: 7,200 units
Cash Position: $247M total

The record shipments number matters most. It validates that demand exists at scale. The margin improvement year over year is the second story. Both suggest Ouster is executing on its core business. The sequential margin decline and modest guidance are the cautions.

Leadership Strikes a Measured Tone

Pacala kept the focus on execution and long-term positioning. Beyond the shipment commentary, he highlighted the company’s strategic priorities: “We remain focused on developing our next generation of products, driving more software-attached sales, and progressing on our path to profitability.”

That phrasing is telling. He didn’t claim profitability is imminent. He said the company is “progressing on our path” to it. That’s measured language. It acknowledges the goal without overpromising timing. I’d read that as realistic positioning from management.