Ouster, Inc. Q4 FY2025 Earnings Call

Thank you, operator, and good afternoon, everyone. Thank you for joining our Fourth Quarter 2025 Earnings Call. Today on the call, we have Chief Executive Officer, Angus Pacala; and Chief Financial Officer, Ken Gianella. As a reminder, after the market closed today, Ouster issued its financial news release, which was also furnished on a Form 8-K and is posted in the Investor Relations section of the Ouster website. Today's conference call will be available for webcast replay in the Investor Relations section of our website. I want to remind everyone that on this call, we will make certain forward-looking statements. These include all statements about our competitive position 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 and our revenue guidance for the first quarter of 2026. 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 fourth quarter 2025 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 the 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 conference call, we will discuss both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures discussed today is included in the financial results release. I would now like to turn the call over to Angus.

Hello, everyone, and thank you for joining. I'll start with a brief recap of the quarter and review of our strategic priorities for 2025. Ken will cover our financial results in more detail before I close with our goals for 2026. The fourth quarter capped off a year of exceptional execution for Ouster. Our fourth quarter revenue of $62 million, including $41 million of product revenue, reflects the continued demand we see across our lidar business and represents our 12th straight quarter of product revenue growth. GAAP gross margin was strong at 60%, and we set a new quarterly record with over 8,100 sensors shipped, bringing physical AI to life across multiple applications, including warehouse automation, robotaxis and mapping. Our strong results are a testament to our disciplined execution across our business. This is supported by durable global growth drivers for increasing automation, efficiency and safety. These secular themes strengthened during 2025, a year where we set and executed on three strategic priorities: scaling the software attached business, transforming the product portfolio and executing towards profitability. First, we committed to scaling our software attached business. Software attached bookings more than doubled in 2025 and represented over 15% of our sensors shipped, which is up over 120% year-on-year. In addition, I'm excited to share that today our in-house trained AI models are now running 24 hours a day at over 1,200 Gemini and BlueCity sites, spanning over 65 million square feet of roadways and facilities around the world. We are delivering physical AI at enterprise scale. We drove significant Gemini renewals, including a seven-figure annual license with a leading global technology company and secured landmark BlueCity agreements to accelerate the adoption of AI-powered lidar detection across Tennessee, Utah and New Jersey. This growth was driven by the increased capabilities of Ouster Gemini and BlueCity validating our continued investments in proprietary AI model training as well as the expansion of distribution partnerships across nearly the entirety of North America. Second, we set out to further transform our product portfolio. In 2025, we introduced powerful new features, unlocked greater performance and reshaped how our customers integrate, manage and utilize lidar data through a series of major software releases. We launched four new versions of our SDK, which included revolutionary new features. This included on sensor 3D zone monitoring, which is the first time perception logic has been embedded directly into 3D digital lidar. This feature supports collision avoidance warnings, deceleration and emergency stops and was the result of significant demand from customers. Many of the world's largest material handling companies are using this as a critical aspect of their collision avoidance technology. We also released real-time localization, empowering customers to track the position of their assets with centimeter-level accuracy and implement features like geofencing and automatic speed limit enforcement without requiring the installation of expensive and complex infrastructure. We continue to strategically invest in our proprietary AI model training, leveraging real-world data to iterate, retrain, improve and deliver increased capabilities to our customers. Our breakthrough multisensor AI model powering Ouster Gemini and BlueCity is trained on millions of labeled objects collected from hundreds of sites around the world, spanning diverse environments and weather conditions. By dramatically improving detection accuracy, efficiency and long-term object identity persistence, we have unlocked new use cases, allowing us to support large-scale installations of 40 lidar sensors at a single site. We also advanced BlueCity features from prototype to real-world deployments with the addition of intelligent signal actuation, which catalyzes Ouster scaling across hundreds of intersections in 2025. Within Ouster Gemini, we released new features like Cloud Portal and Event Server. Gemini Cloud Portal allows customers to securely configure and manage deployments from any location, while Gemini Event Server creates a no-code environment that enables customers to build custom logic for applications like intrusion detection and zone occupancy without requiring heavy engineering. Finally, we made major progress in validating our next-generation L4 and Chronos custom silicon as we look to redefine what's possible with digital lidar. Our digital lidar road map continues to drive dramatic improvements in performance and reliability, reinforcing the core advantages of our architecture. Importantly, these breakthrough chips will power our next-generation sensors, which represent a major step forward in capability, scalability and value for our customers. These advancements are expected to more than double our current addressable market for lidar, unlocking new applications and expanding opportunities across each of our industry verticals. We're excited to share much more on this front soon. Our execution in 2025 aligned with our long-term financial framework, progressing us further on our path towards profitability. Our core business delivered on all target metrics for 2025. Excluding the benefit of royalties, full year product revenue increased by 32% year-over-year, and we successfully navigated a volatile macroeconomic environment and the headwind of tariffs to deliver a 41% gross margin. We maintained our operating expense discipline even as we absorbed the operational and compliance requirements of a growing global business. We continue to have one of the strongest balance sheets in the industry, demonstrating our ability to achieve both high growth and financial prudence. I'll now turn the call over to Ken to discuss our financial results in detail.

Thank you, Angus, and hello, everyone. As Angus mentioned, we closed fiscal 2025 with a strong finish, underscoring our continued operational execution. Our results demonstrate the resilience of our operating model and the disciplined financial management across the business as we continue to perform within our long-term financial framework, keeping us firmly on the path to profitability. Turning to the fourth quarter financial performance. Operating results were strong with revenue of $62 million, GAAP gross margin of 60% and shipments of over 8,100 sensors. During the quarter, we recorded royalties of approximately $21 million that were primarily one-time and related to long-term IP license contracts. These royalties demonstrate the strength of our IP portfolio. For 2026, total royalty revenue is expected to be less than $5 million, with the majority of that amount expected to be recognized in the back half of the year. Looking ahead, we expect additional royalty revenue to be relatively modest, and it will be included in our revenue guidance. Turning back to our fourth quarter results. Absent the impact of royalties, our fourth quarter product revenue was $41 million, representing an increase of 36% compared to the same quarter a year ago. The industrial vertical was the largest contributor to fourth quarter revenue, followed by robotics and smart infrastructure. Demand for our Gemini and BlueCity solutions remained strong and were important contributors to our quarterly results. GAAP gross margin of 60% reflected the impact of royalties, continued revenue growth in our digital lidar business and improvements in our operational performance. Royalties impacted our fourth quarter GAAP gross margin by approximately 20 percentage points. GAAP operating expenses were $37 million in the fourth quarter, a decrease of 6% from the same quarter last year. The decline was primarily due to a favorable employment tax refund received during the quarter. As we continue to focus on our path to profitability, we will remain diligent on managing our operating expenses. Adjusted EBITDA was a positive $11 million, which reflects the impact of the royalty payments. Next, our balance sheet continues to be one of the strongest in the industry, ending the quarter with cash, cash equivalents, restricted cash and short-term investments of $211 million and no debt. The strength of our balance sheet gives Ouster the strategic and financial flexibility to operate our business as it's also vitally important to our customers who rely on Ouster as a key physical AI partner on their long-term autonomy journey. Turning to our full year results. We generated revenue of $169 million, of which approximately $23 million was attributable to royalty revenue that was primarily one-time and related to long-term IP license contracts. This represents growth of 52% year-over-year or 32% excluding the impact of royalties. We shipped over 25,000 sensors, an increase of 48% compared to 2024, with help from record bookings of $177 million, delivering a robust product book-to-bill of 1.2x in 2025. GAAP gross margin was 49%, up 13 points year-over-year. Royalties contributed 8 points of gross margin. GAAP operating expense was $157 million, up 9% from $145 million in 2024. This reflects increased investment to support our product roadmap, expenses related to the StereoLabs acquisition, and the implementation of operational and compliance tools that support our growing business. These expenses were partially offset by proceeds received from favorable employment tax refund. Adjusted EBITDA was a loss of $12 million compared to a loss of $42 million in 2024. This reflects the benefit of royalty revenue combined with the continued operational improvement of the business. Now turning to guidance. Our outlook for the first quarter of 2026, we expect to achieve total revenue between $45 million and $48 million. This will include approximately seven weeks of revenue from StereoLabs following the close of the transaction on February 4. Next, I would like to add some color to our long-term financial framework following the acquisition of StereoLabs. While StereoLabs is currently a small portion of our overall revenue mix, we expect this high-growth, high-margin business to be accretive to our consolidated results and anticipate it to have a positive impact on our long-term financial framework. With the combined companies, we are reiterating our long-term targets of 30% to 50% annual revenue growth and 35% to 40% GAAP gross margin. This outlook reflects the continued strong demand from our digital lidar products layered with the accretive growth profile of our new vision and compute portfolio. Our focus remains on driving towards profitability. By pairing sustained top line growth, strong margins, and disciplined cost management, we remain firmly on our path to profitability. Finally, applying the long-term framework, let me give some color to the full year 2026. Excluding the revenue and gross margin impact of royalties in 2025, we remain confident in the combined Ouster and StereoLabs 2026 revenue and margin profile to be in line with our long-term financial framework when measured against the consolidated pro forma baseline in 2025. Going forward, we will be reporting revenues on a combined basis. However, for some additional context, I would note that StereoLabs' historical revenue has tended to be seasonally stronger in the second half of the year with approximately 60% of the revenue occurring during this period. Next, turning to GAAP operating expense for 2026 factoring in StereoLabs operating and integration expenses, we anticipate GAAP operating expense growth at 5% to 8% from our full year 2025 levels. We also expect our 2026 quarterly operating expenses to follow a similar quarterly profile as 2025. This outlook underscores the strength and durability of our digital lidar business, which remains firmly on track. As we scale the combined business, we anticipate growth, combined with improved operating leverage, provides a clear path to achieving positive operating free cash flow and profitability. Thank you for your continued interest in Ouster. I'll now turn the call back to Angus to discuss our goals for 2026.

Thank you, Ken. Our execution on our 2025 goals has been further complemented by our recent acquisition of StereoLabs, a pioneer in AI camera vision and perception solutions. As we start the year, Ouster now offers physical AI's first unified sensing and perception platform, combining high-performance digital lidar with cameras, AI compute, sensor fusion, and perception software and cutting-edge AI models. Our customers can harness the precision of lidar along with the richness of vision, powered by our combined investments in AI training. By delivering seamlessly synchronized and calibrated data out of the box, we simplify and accelerate customer development and reduce costs. StereoLabs also brings deep expertise in foundational AI model training and core perception functions, along with immediate commercial scale, adding top-tier OEMs, Fortune 500 companies, and high-growth technology firms to our customer base. This acquisition strategically positions Ouster as the foundational end-to-end sensing and perception platform for physical AI, and initial feedback from our customer base has been resoundingly positive. Our expanded portfolio is resonating with the demands of the market, and customers are excited by the strengthened support and operational capacity of the combined company. For 2026, our roadmap is built on three strategic priorities designed to compound our competitive advantages and accelerate our financial performance. One, revolutionize our lidar camera and AI compute products; two, extend our leadership in physical AI solutions; and three, execute to profitability. Our first goal for 2026 is clear: to revolutionize our lidar camera and AI compute products. This year, we will commercialize the most significant product overhaul in our company's history and release more products than ever before. Ouster invented digital lidar, and we will continue to advance the industry with next-generation sensors built on our custom silicon. This powerful digital lidar roadmap is built on silicon architecture that drives exponential improvements that compound over time, delivering industry-leading performance, reliability, and scalability. Building on StereoLabs' legacy as a pioneer in AI vision, we will continue to develop leading-edge products designed to support customers building the future of physical AI. Our next-generation AI compute will support real-time reasoning at the edge for larger workloads that were previously too slow to run in dynamic real-world environments. We will also bring expanded connectivity features to our industry-leading camera portfolio to align with the market demands of our customers. Simultaneously, we will further unify our products to support plug-and-play sensor fusion. With the industry's first unified sensing and perception platform for physical AI, we are creating a one-stop shop for customers to deploy tightly integrated perception solutions out of the box. These product launches are expected to bring unprecedented new features to our portfolio, help us gain market share in billion-dollar brownfield markets, and support new use cases across industrial, robotics, automotive, and smart infrastructure. 2026 marks the beginning of a new era for our product portfolio, the broadest, most capable, and most integrated lineup we have ever delivered to accelerate real-world autonomy across industries. Our second goal is to extend our leadership in physical AI solutions, including cementing our lead in smart infrastructure and deepening our presence in industrial AI. We have already established a leading position in lidar-powered detection for transportation, security, logistics, and crowd analytics with Ouster BlueCity and Gemini. In 2026, we are leveraging the partnerships we have built to further expand BlueCity across the United States as well as launch additional pilots in Europe and the Middle East. Following recent wins, we are deploying additional Gemini pilots for perimeter security in 2026 to tap into an existing multibillion-dollar security market. We are also aggressively targeting the industrial vertical, where we see a broad swath of opportunities that can quickly realize the benefits of the StereoLabs acquisition. StereoLabs is a perfect complement to augment Ouster's perception roadmap to meet physical AI's increasing demand for sophisticated multi-sensor fusion. By merging our proprietary AI models with StereoLabs' vision capabilities, we are delivering the specialized perception logic and application-specific software required to revolutionize safety and efficiency across the global supply chain. Finally, we will continue our operational execution as we drive towards profitability. Through a growing addressable market served by our expanded portfolio, disciplined cost management, and clear operational priorities, we have a line of sight to deliver on our long-term financial framework. The strength of our digital lidar business, combined with the acquisition of StereoLabs, positions Ouster as the foundational sensing and perception platform for physical AI. By expanding our capabilities across the entire stack from sensors and software to specialized applications and AI modeling, we will continue to drive our business on a path of sustainable growth. We are uniquely equipped to accelerate customer development of solutions that sense, think, act, and learn in the physical world. The era of physical AI is here, and Ouster is powering it. With that, I'd like to now open up the call for Q&A.

Our first question will come from Colin Rusch from Oppenheimer.

And I appreciate all the detail on the perception platform into the software side. And I guess that's the heart of what I'm interested in here is really looking at how you guys can quantify the pace of learning with those systems, obviously, with all these sensors deployed at various places, both on traffic lights as well as some of the perimeter sites. Just curious how quickly you can actually optimize those systems and really monetize some of that efficiency.

Thank you for the question, Colin. Yes, you’ve raised a great point. The concept of 'Sense, Think, Act, Learn' represents a continuous cycle of improvement and iterative development that leading AI companies have adopted. It's essential to iterate towards your solution due to the extensive data collection and retraining necessary for achieving top-tier, safety-critical AI and real-world applications. From my experience with over 1,200 sites deployed using this technology in the last couple of years through Gemini and BlueCity, we’ve noticed an acceleration in our pace of improvement by investing in the infrastructure that enhances our capabilities. This iterative cycle of 'Sense, Think, Act, and Learn' involves gathering data from the field, annotating it, retraining our models, and gaining new insights into our system's capabilities. This acceleration is evident when looking at how quickly we can release new product versions. We likely have another level of iteration speed we can integrate into Gemini and BlueCity. The goal now is to maintain that rapid development pace for these products while also applying that iterative approach to our industrial AI and broader ecosystem. This is where the StereoLabs acquisition plays a role, enabling us to create autonomous intelligent systems that evolve quickly based on our core machine learning investments. We see significant potential for growth and an exciting new opportunity in industrial AI to apply this mindset to our product lines.

That's super helpful. And then I just want to get a sense of the trend lines in terms of customer engagement in the defense sector. Obviously, you guys went through the Blue UAS approval last year, and it's pretty topical now in terms of thinking about automated warfare. Just want to get a sense of how those engagements have trended over the last year or so and how quickly we might start to see a real inflection point on some of the revenue growth that seems like is pretty available to you guys here.

Yes. There is significant interest in automation on the battlefield. However, there is a notable distinction between the current situation in Ukraine, which involves robotics, and fully autonomous systems. Currently, we are seeing remote-operated vehicles that are human-controlled, and there is a substantial gap in technology. The fully automated systems we engage with are still in the research and development stage, both in defense and for our wider range of customers. What is being used in combat zones today are essentially advanced remote-operated vehicles that are becoming more intelligent but remain controlled by humans. It will take several more years before we see a meaningful change in this dynamic, given the long development cycles in the defense sector, which are similar to those found in the automotive industry. This contrasts with the rapid iteration seen with projects like Gemini or BlueCity. While this is an important industry where Ouster is active, as evidenced by achievements like the Blue UAS certification for drone payloads, there remains a significant divide between current offerings and what is in development. We anticipate that it will be a couple more years before we see substantial progress.

Next question will come from the line of Kevin Cassidy from Rosenblatt Securities.

Congratulations on the great year. Just as you're looking at your backlog and looking out to 2026, which one of the industries that you service, which one do you think is going to grow the fastest?

That's a great question, Kevin. I have been very optimistic about smart infrastructure because of the comprehensive solutions we've been providing for the past year. At the beginning of 2025, I mentioned that due to our investments in Gemini and BlueCity solutions for traffic management, security, and yard logistics, I expected smart infrastructure to significantly impact our revenue and growth. This has indeed been the case over the last year. I remain very positive about our success in this area and its ongoing potential, as we are tapping into large new markets for lidar that have previously been underexplored, totaling billions of dollars. Our execution in this field has proven effective. Additionally, the StereoLabs acquisition enhances our capabilities in physical AI for mobile and industrial robotics. Just as smart infrastructure has gained traction by offering total solutions and expediting market entry for our customers, we are now achieving the same with the combined strengths of StereoLabs and Ouster. We now offer an integrated sensing and perception platform that serves as an alternative to outdated systems in industrial and robotics applications. Customers can now obtain AI compute, lidars, cameras, and software from Ouster to accelerate their market readiness. Our vision for Ouster involves a dual strategy that focuses on solutions for smart infrastructure through fixed installations and mobile autonomy for physical AI, covering sectors like industrial, automotive, and robotics.

Great. Yes. And that kind of plays into what was going to be my second question was how you're training models using both the StereoLabs and Ouster's lidar, whether that combine those 2 models, if that's going to be much more robust than what your competitors would be offering?

Yes, I believe there is a lot to explore with the advancements in AI over the past few years. There are opportunities for us to advance the field significantly. StereoLabs has developed neural depth models that generate impressive point clouds from stereo cameras, outperforming competitors, and we aim to further this area. Ouster has also made investments in our neural perception algorithms for BlueCity and Gemini to enhance environmental understanding. There’s a natural synergy here, allowing us to share insights from these core competencies with each other's clients and to begin multimodal AI training. The integration of lidar and cameras for combined training is the clear next step if we want to create the most advanced machine learning-driven perception solutions. There is much to discuss, but I will leave it at that. I am truly excited about the future of our AI training.

The next question will come from the line of Tim Savageaux from Northland Capital Markets.

I wanted to ask if you found CES to be an important show from a customer perspective, with significant focus on autonomy for both large and small machines. I'm curious about any takeaways you had from the show regarding market opportunities or specific customer developments.

Yes, definitely. Ken and I attended CES and walked around with several investors and analysts. It was a strong showcase of physical AI, featuring robots, industrial machines, and autonomous systems visible throughout the venue. My key takeaway from observing those machines, whether they were autonomous forklifts, humanoid robots, or large industrial mining equipment, was their common features. They all utilized lidar sensors, cameras, and likely an NVIDIA GPU AI computer, along with similar software for robotic perception, localization, path planning, and object detection. This presents a significant opportunity for Ouster in both hardware and software. With the acquisition of StereoLabs, we aim to establish ourselves as the comprehensive provider for lidar, cameras, and potentially other sensors, AI computers, and the software that powers intelligent autonomous machines. CES exemplified the direction of our future and highlighted Ouster's business model for the coming decade.

Yes. And I'll add to it, Tim, seeing our customers' success and their time to market and getting out there quicker, that's our success. So the quicker that these things get out of prototype and into production, that's the growth that we follow along with those partners.

Great. I'd like to follow up on a different topic regarding the royalties for the quarter. Could you provide more insight into whether it's related to a specific type of technology or application? I'm not sure if this ties into the ongoing litigation, but any additional details about what contributed to that figure, and whether it was expected, would be appreciated.

First off, it highlights the strength of our IP portfolio, Tim. And it was predominantly one-time, as we mentioned, and we also talked about it will be de minimis going forward. Strategically, we are looking to prioritize on this sense, think, run, learn and driving our own product portfolio forward. So we have the royalty piece behind us. And I think all those litigation items in the past are all behind us. And so now it's really focused on our strategic priorities and growth.

Our next question will come from the line of Andres Sheppard from Cantor Fitzgerald.

Congratulations on the strong quarter. I think a lot of our questions have been asked. But Angus, I was hoping to maybe have you elaborate a bit further on the opportunities that you see regarding drones and humanoids in particular following the recent certification and the recent acquisition. Can you maybe help quantify opportunities that you see there in the near term and maybe medium term? Or just any granularity as to how we should be thinking about these industries translating into revenue?

Thank you, Andres. The key aspect connecting drones and humanoids is the volume. Both are generally more robotic than strictly industrial. As technology becomes smaller, cheaper, and more widespread, the payloads, sensors, and AI computational capabilities used in these robots differ from those found in large mining machinery. Some humanoids utilize lidar while others do not, but all of them are equipped with cameras. This is essential for Ouster's strategy. The same applies to drones; while some use lidar, all of them have cameras. Our goal is to invest in both lidar and camera sensing technology to cover all physical AI applications by offering the most commonly used sensor types. Additionally, Ouster's investment in Blue UAS certification expands our opportunities in this area. Drones represent a more established technology and market potential for us, which is why we have pursued certification. In contrast, humanoids are still in the early stages of development. We are currently involved in this space due to the StereoLabs acquisition and the lidar sensors and clients we have there. However, the timeline for humanoids to make a significant impact on our revenue is longer. I compare this to the robotaxi industry a decade ago; it’s an innovative and promising area, but the timeline is uncertain because it involves pioneering research and a new business model. There are existing categories where Ouster is successfully building our business today, as well as future categories that we are developing. It's an exciting time for us, and the StereoLabs acquisition plays a critical role in enabling us to cater to both use cases and deliver value to our customers.

Yes. And wrapping numbers around it, if you look at the prior three quarters coming off of 40% year-over-year growth this quarter, just our core product line with the digital lidar growing 36% year-over-year. We continue to see that core underlying business continuing to trend in that 36% range plus. And so we're really proud of what the core business is doing. And so now you combine in the tailwinds of a really high-growth, high-margin business such as StereoLabs, it makes us really excited for that future.

Our next question will come from Richard Shannon from Craig-Hallum.

This is Tyler on for Richard. I was just wondering how the customer conversations shifted since the acquisition? Are you getting new customers or existing customers looking for new opportunities to either combine the sensors or thinking of other use cases to get their hands on the sensor that they don't have? Just any color on that would be helpful.

Yes, I can say that since acquiring StereoLabs, the feedback from customer calls has been overwhelmingly positive. Ouster and StereoLabs have built outstanding brands recognized for quality, trust, and product performance, along with excellent support. When two strong companies unite, it allows customers to purchase from a more reliable and resourceful entity, which is very appealing to them. This partnership enables us to address customers' critical technology needs more effectively and creates opportunities for future growth. We are actively considering customer feedback regarding their complete sensing requirements and developing the software and system capabilities they desire. What has surprised me most is the strong demand for combined systems. Now that we are equipped to offer integrated solutions including compute, software, and sensors, customers are eager for these offerings. It's encouraging that we have genuine interest from customers asking when they can start purchasing our full range of hardware and software together. I'm very satisfied with how this process has unfolded, and it has been very well received by our customers.

And, by the way, it's available today. They're not waiting because one of the great things that we announced at the launch was that our platforms are already unified and people can buy our unified sensing platform today.

That's great to hear. You had also mentioned enhanced connectivity features. Could you expand on that and specifically what that enables for customers?

This is regarding the StereoLabs unified platform. Yes, absolutely. The connectivity features are focused on creating an ecosystem that works with various subcomponents of a physical AI system. While we currently provide lidar, cameras, AI compute, and the software to operate them, we want to ensure that our AI compute and its software are compatible with many other sensors, such as GPS, inertial measurement units, and even basic radio connectivity or RTK systems. There are numerous auxiliary systems needed to create a domain-specific robot, and we aim to provide all the necessary connections in our software, allowing you to build your complete solution on our platform. We want to avoid any restrictions in our offerings, encouraging customers to use their existing GPS receivers without hesitation, and we will implement the low-level drivers for them. The goal here is to reduce time to market. A significant challenge for many customers in robotics and industrial sectors is the lengthy development time required to introduce products. We are helping to alleviate that by handling much of the work for them.

Okay. That just begets another question real quick for me. So when you're adding these different sensors, are these drivers something that are universal such that you can develop the drivers in your system for one type of GPS, but that works with any of the GPS providers or the inertial providers?

No, this is all hard work. Every single implementation is unique, and that’s where the value comes in. Someone has to do the work, and the companies that excel at providing high-quality interoperability deliver that value.

Our next question will come from the line of Casey Ryan from WestPark Capital.

It's a great quarterly update. Yes, I just want to follow up a little more on this software component Angus that you're laying out. I mean it sounds like you guys start to move into being the operating system for any industrial manufacturer of physical AI systems. But does this sort of change the competitor matrix, I guess? And do we start competing with Open Mind and the Google Intrinsic thing and other kind of operating system for physical AI companies?

There's a lot of opportunity right now, so I wouldn't say it's changing the competitive landscape. Many companies are pushing the boundaries of this technology in new and unexpected ways. Ouster is focused on becoming a unified sensing and perception platform, which could eventually evolve into a complete operating system for these robots. However, I can't say today that there's immediate overlap between our future success and that of the companies you mentioned, as there are many different ways to address the current research and deployment challenges. Ouster has always excelled at finding the balance between research and real-world solutions that can generate revenue and drive business growth today. We are currently honing in on sensing and perception, which certainly gives us the opportunity, with success, to potentially become the operating system for these robots in the future.

Yes. So maybe being more modest, I think maybe the company's vision of what it could accomplish has been expanded in some sense with what you're sharing with us today.

No question. The same way that lidar was our opening to build strong relationships with our customers. This is the next step in building an even stronger cohesive relationship, and that may be a jumping-off point for a future where we're even more deeply embedded.

Right. Okay. Terrific. And then just sort of simply on the hardware, it sounds like what you're saying is we want to work with all and make it easy to use any kind of hardware components ultimately. Is it part of your vision that Ouster would want to provide at least one version of that, say, radar or GPS or something? Or were cameras kind of unique in terms of its importance to combined solutions, I guess?

Yes, we are committed to collaborating with peripheral components. However, lidar and cameras hold a special significance as they are the most essential and capable sensory inputs for these robots. They also present unique challenges in development to meet the quality standards necessary for physical AI. Thus, we are highly focused on ensuring we offer the best-in-class lidar and camera combined sensing systems. While we are working on interoperability with other components, lidar and cameras remain the primary focus in these systems.

And the fusing of the two together to operate simultaneously, that is one of the toughest problems that all of our customers have today. And so being able to offer that unified platform with those two sensors together, it's a game changer.

Yes. Okay. That clarification is helpful. But I think putting a stake in the ground, it feels like the vision has gotten a little bit bigger, which is exciting. So I'm looking forward to '26. And yes, great job, obviously, in Q4 and looking forward.

I'm not showing any further questions in the queue at this moment. I'd like to turn it over to Angus Pacala for any closing remarks.

Well, thank you all for joining the call. We look forward to speaking with you again when we report our first quarter earnings. So have a good day.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Everyone, have a great day.