Ouster, Inc 10-Q for FY2026 Q3
Ouster, Inc. (OUST)
10-Q
2026-11-03
For: 2026-09-30
View Original
Added on
November 03, 2026
About this 10-Q
Ouster, Inc filed this 10-Q on November 3, 2026, covering the quarter ended September 30, 2026 (FY2026 Q3).
Headline figures
Quarter ended September 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $59.33M
- up 50.1% from $39.53M a year earlier
- Net loss
- $14.16M
- compared with a net loss of $21.73M a year earlier
- Diluted EPS
- -$0.20
- compared with -$0.37 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
FORM 10-Q
_______________________
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||||||||||||
For the quarterly period ended September 30, 2026
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||||||||||||
For the transition period from to
Commission File Number: 001-39463
_______________________
(Exact name of registrant as specified in its charter)
_______________________
(State or other jurisdiction of incorporation) | (I.R.S. Employer Identification No.) | |||||||||||||
(Address of principal executive offices) (Zip Code)
(415 ) 949-0108
(Registrant’s telephone number, including area code)
N/A
(Former name, former address, and former fiscal year, if changed since last report)
_______________________
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ | ||||||||
☒ | Smaller reporting company | ||||||||||
| Emerging growth company | |||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of October 30, 2026, the registrant had 72,997,169 shares of common stock, $0.0001 par value per share, outstanding.
1
TABLE OF CONTENTS
| Page | ||||||||
Part II - Other Information | ||||||||
2
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (“Quarterly Report”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Ouster, Inc. (the “Company”, “Ouster,” or “we”) intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements contained in this Quarterly Report other than statements of historical fact, including, without limitation, statements regarding: expected contractual obligations and capital expenditures; the capabilities of and demand for Ouster’s products; Ouster’s anticipated new product launches and developments, including software-related solutions systems, and the timing for those launches and developments; the anticipated benefits and synergies of strategic transactions, including the Stereolabs acquisition, and integration efforts; the impact of trade policy actions on Ouster’s financial results; Ouster’s ability to grow its sales and marketing organization; Ouster’s future results of operations, cash reserve and financial position; projected industry and business trends; Ouster’s future business strategy, plans, distribution partnerships, market growth and its objectives for future operations, including executing towards profitability; Ouster’s competitive market position within its industry and the impact of market conditions and other macroeconomic factors on Ouster’s business, financial condition and results of operation, foreign currency exchange rate fluctuations and the effectiveness of hedging activities, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “could,” “would,” “project,” “plan,” “potentially,” “preliminary,” “likely,” “aim,” “forecast,” “should,” “can have,” and similar expressions are intended to identify forward-looking statements. The Company has based these forward-looking statements largely on its current expectations and projections about future events and trends that it believes may affect its financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements speak only as of the date of this Quarterly Report and are subject to a number of risks, uncertainties, and assumptions that may cause actual results to differ materially from those that Ouster expected, including, but not limited to, Ouster’s limited operating history and history of losses; substantial research and development costs needed to develop and commercialize new products; Ouster’s ability to overcome its limited sales history and establish and maintain confidence in its long-term business prospects; fluctuations in its operating results; Ouster’s ability to maintain competitive average selling prices or high sales volumes or reduce product costs; conditions in its customers’ industries; the competitive environment in which Ouster operates; the negotiating power and product standards of its customers; the creditworthiness of Ouster’s customers; the ability of its lidar technology roadmap and new software solutions to catalyze growth; the selection of Ouster’s products for inclusion in target markets; risks of product delivery problems or defects; costs associated with product warranties; Ouster’s future capital needs and ability to secure additional capital on favorable terms or at all; inaccurate forecasts of market growth; Ouster’s ability to manage growth; Ouster’s ability to grow its sales and marketing organization; risks related to international operations, including international manufacturing; cancellation or postponement of contracts or unsuccessful implementations; Ouster’s ability to maintain inventory and the risk of inventory write-downs; its ability to use tax attributes; Ouster’s dependence on key third-party suppliers, in particular Benchmark Electronics, Inc. (“Benchmark”), Fabrinet and other suppliers; and its supply chain constraints and challenges; adverse conditions in the industries Ouster targets or the global economy more generally; Ouster’s ability to recruit and retain key personnel; risks related to acquisitions, including integration risks and the failure to achieve anticipated benefits; risks related to the use of AI tools by us and others, including risks related to product performance, cybersecurity and data privacy; Ouster’s ability to effectively respond to evolving regulations and standards; Ouster’s ability to adequately protect and enforce its intellectual property rights, including as it relates to Hesai; the impact of political events, trade and other international disputes and geopolitical tensions and other business interruptions on Ouster’s business; changes to trade policy, tariffs, and import/export regulations; risks related to operating as a public company; and other important factors discussed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, that are further updated from time to time in the Company’s other filings with the Securities and Exchange Commission (the “SEC”), including this Quarterly Report, that may cause its actual results, performance or achievements to differ materially and adversely from those expressed or implied by the forward-looking statements.
Any forward-looking statements made herein speak only as of the date of this Quarterly Report, and you should not rely on forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, performance, or achievements reflected in the forward-looking statements will be achieved or occur. Except as required by applicable law, we undertake no obligation to update any of these forward-looking statements for any reason after the date of this Quarterly Report or to conform these statements to actual results or revised expectations.
3
GENERAL
Unless the context otherwise requires, references in this Quarterly Report to the terms “Ouster,” “the Company,” “we,” “our” and “us” refer to the business and operations of Ouster, Inc.
We may announce material business and financial information to our investors using our investor relations website at https://investors.ouster.com. We therefore encourage investors and others interested in Ouster to review the information that we make available on our website, in addition to following our filings with the SEC, webcasts, press releases and conference calls. Information contained on our website is not part of this Quarterly Report.
4
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
OUSTER, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands, except share and per share data)
| September 30, 2026 | December 31, 2025 | ||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Restricted cash, current | |||||||||||
| Short-term investments | |||||||||||
| Accounts receivable, net | |||||||||||
| Inventory | |||||||||||
| Prepaid expenses and other current assets | |||||||||||
| Total current assets | |||||||||||
| Property and equipment, net | |||||||||||
| Operating lease, right-of-use assets | |||||||||||
| Unbilled receivable, non-current portion | |||||||||||
| Goodwill | |||||||||||
| Intangible assets, net | |||||||||||
| Restricted cash, non-current | |||||||||||
| Other non-current assets | |||||||||||
| Total assets | $ | $ | |||||||||
| Liabilities and stockholders’ equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | $ | |||||||||
| Accrued and other current liabilities | |||||||||||
| Contract liabilities, current | |||||||||||
| Operating lease liability, current portion | |||||||||||
| Total current liabilities | |||||||||||
| Operating lease liability, non-current portion | |||||||||||
| Contract liabilities, non-current portion | |||||||||||
| Deferred tax liability | |||||||||||
| Other non-current liabilities | |||||||||||
| Total liabilities | |||||||||||
Commitments and contingencies (Note 7) | |||||||||||
| Stockholders’ equity: | |||||||||||
Common stock, $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Accumulated deficit | ( | ( | |||||||||
| Accumulated other comprehensive (loss) income | ( | ( | |||||||||
| Total stockholders’ equity | |||||||||||
| Total liabilities and stockholders’ equity | $ | $ | |||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements
Note: Amounts as of December 31, 2025 are derived from the December 31, 2025 audited consolidated financial statements.
5
OUSTER, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(unaudited)
(in thousands, except share and per share data)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||
| Product revenue | $ | $ | $ | $ | |||||||||||||||||||
| Royalties | |||||||||||||||||||||||
| Total revenue | |||||||||||||||||||||||
| Cost of revenue | |||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Research and development | |||||||||||||||||||||||
| Sales and marketing | |||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||
| Total operating expenses | |||||||||||||||||||||||
| Loss from operations | ( | ( | ( | ( | |||||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||
| Interest income | |||||||||||||||||||||||
| Other income (expense), net | |||||||||||||||||||||||
| Total other income, net | |||||||||||||||||||||||
| Loss before income taxes | ( | ( | ( | ( | |||||||||||||||||||
| Provision for (benefit from) income tax expense | ( | ( | ( | ||||||||||||||||||||
| Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Other comprehensive income (loss) | |||||||||||||||||||||||
| Changes in unrealized gain (loss) on available for sale securities | ( | ( | |||||||||||||||||||||
| Foreign currency translation adjustments | ( | ||||||||||||||||||||||
| Total comprehensive loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Net loss per common share, basic and diluted | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Weighted-average shares used to compute basic and diluted net loss per share | |||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements
6
OUSTER, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(unaudited)
(in thousands, except share data)
| Common Stock | Additional Paid-in- Capital | Accumulated Deficit | Accumulated other comprehensive income (loss) | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||
| Balance — December 31, 2025 | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon exercise of stock options | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock in connection with Stereolabs acquisition | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon vesting of restricted stock units | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Common stock warrants issuable to customer | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Balance — March 31, 2026 | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon exercise of stock options | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Proceeds from at-the-market offering, net of commissions and fees of $ | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon vesting of restricted stock units | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock to employees under employee stock purchase plan | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Common stock warrants issuable to customer | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Balance — June 30, 2026 | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon exercise of stock options | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Proceeds from underwritten public offering, net of underwriting discounts, commissions and fees of $ | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon vesting of restricted stock units | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Common stock warrants issuable to customer | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Balance — September 30, 2026 | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
7
| Common Stock | Additional Paid-in- Capital | Accumulated Deficit | Accumulated other comprehensive income (loss) | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||||||||
| Balance — December 31, 2024 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||
| Issuance of common stock upon exercise of stock options | — | — | — | ||||||||||||||||||||||||||||||||||||||
| Issuance of common stock in connection with Velodyne Merger | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon vesting of restricted stock units | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Forfeited restricted stock awards | ( | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
| Common stock warrants issuable to customer | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Balance — March 31, 2025 | ( | ( | |||||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon exercise of stock options | — | — | — | ||||||||||||||||||||||||||||||||||||||
Proceeds from at-the-market offering, net of commissions and fees of $ | — | — | — | ||||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon vesting of restricted stock units | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Issuance of common stock to employees under employee stock purchase plan | — | — | — | ||||||||||||||||||||||||||||||||||||||
| Common stock warrants issuable to customer | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Balance — June 30, 2025 | ( | ( | |||||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon exercise of stock options | — | — | — | ||||||||||||||||||||||||||||||||||||||
Proceeds from at-the-market offering, net of commissions and fees of $ | — | — | |||||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon vesting of restricted stock units | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Common stock warrants issuable to customer | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Balance — September 30, 2025 | ( | ( | |||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements
8
OUSTER, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
| Nine Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||
| Net loss | $ | ( | $ | ( | |||||||
| Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
| Depreciation and amortization | |||||||||||
| (Gain) loss on write-off and disposal of property and equipment | ( | ||||||||||
| Gain on lease termination | ( | ||||||||||
| Stock-based compensation | |||||||||||
| Deferred taxes | ( | ||||||||||
| Reduction of revenue related to stock warrant issued to customer | |||||||||||
| Amortization of right-of-use asset | |||||||||||
| Accretion on short-term investments | ( | ( | |||||||||
| Change in fair value of warrant liabilities | ( | ||||||||||
| (Recovery) provision for inventory write-down | ( | ||||||||||
| Provision for doubtful accounts | |||||||||||
| Realized gain on sale of available for sale securities | ( | ( | |||||||||
| Changes in operating assets and liabilities, net of effects of business acquisition: | |||||||||||
| Accounts receivable | ( | ( | |||||||||
| Inventory | ( | ||||||||||
| Prepaid expenses and other assets | ( | ( | |||||||||
| Accounts payable | |||||||||||
| Accrued and other liabilities | ( | ||||||||||
| Contract liabilities | ( | ( | |||||||||
| Operating lease liability | ( | ( | |||||||||
| Net cash used in operating activities | ( | ( | |||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||
| Proceeds from sale of property and equipment | |||||||||||
| Purchases of property and equipment | ( | ( | |||||||||
| Purchase of short-term investments | ( | ( | |||||||||
| Proceeds from sales and maturities of short-term investments | |||||||||||
| Acquisition of Stereolabs, net of cash acquired | ( | ||||||||||
| Net cash used in investing activities | ( | ( | |||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||
| Proceeds from ESPP purchase | |||||||||||
| Proceeds from exercise of stock options | |||||||||||
| Payments received to fund employees tax obligation for vested RSUs | |||||||||||
| Proceeds from the issuance of common stock under at-the-market offering, net of commissions and fees | |||||||||||
| At-the-market offering costs for the issuance of common stock | ( | ( | |||||||||
| Proceeds from the underwritten public offering, net of underwriting discounts, commissions and fees | |||||||||||
| Underwritten public offering costs for the issuance of common stock | ( | ||||||||||
| Net cash provided by financing activities | |||||||||||
| Effect of exchange rates on cash and cash equivalents | |||||||||||
| Net increase in cash, cash equivalents and restricted cash | |||||||||||
| Cash, cash equivalents and restricted cash at beginning of period | |||||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | $ | |||||||||
| SUPPLEMENTAL DISCLOSURES OF OPERATING ACTIVITIES: | |||||||||||
| Income tax (refunds) payments, net | $ | ( | $ | ( | |||||||
| SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING INFORMATION: | |||||||||||
| Property and equipment purchases included in accounts payable and accrued liabilities | $ | $ | |||||||||
| Right-of-use assets obtained in exchange for operating lease liability | $ | $ | |||||||||
| Common stock shares issued in the acquisition of Stereolabs | $ | $ | |||||||||
| Unpaid underwritten public offering costs and at-the-market offering costs | $ | $ | |||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements
9
OUSTER, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Note 1 – Description of Business and Basis of Presentation
Description of Business
Ouster, Inc. (“Ouster” or the “Company”) was incorporated in the Cayman Islands on June 4, 2020 as “Colonnade Acquisition Corp.” Following the closing of a business combination between the Company and Ouster Technologies, Inc. (formerly, Ouster, Inc.) in March 2021, the Company domesticated as a Delaware corporation and changed its name to “Ouster, Inc.” Ouster is a leader in sensing and perception for Physical Artificial Intelligence (Physical AI). Ouster’s product offerings enable machines to “Sense, Think, Act, and Learn” and independently execute tasks without human intervention. Physical AI allows machines to move beyond fixed, preprogrammed behavior into adaptive, intelligent action by focusing on perception, understanding, and learning from the physical world. Ouster offers a unified sensing and perception platform that combines high-performance digital lidar, cameras, AI compute, sensor fusion and perception software, and cutting-edge AI models to our customers.
On February 4, 2026 (“Closing Date”), the Company completed the acquisition of Stereolabs SAS (“Stereolabs”), accounted for as a business combination. See Note 3.
Basis of Presentation and Principles of Consolidation
The unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries (all of which are wholly owned) and have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) applicable to interim periods. All intercompany balances and transactions have been eliminated in consolidation. The presentation of certain prior period amounts has been reclassified to conform with current period presentation.
The unaudited condensed consolidated financial statements include all adjustments (consisting of only normal recurring adjustments) necessary for a fair statement of the results of operations for the periods shown. The unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements as of and for the year ended December 31, 2025 and the notes related thereto, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 2, 2026. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. Certain information and note disclosures normally included in the audited financial statements prepared in accordance with U.S. GAAP have been condensed or omitted from this report, as is permitted by applicable rules and regulations. The results of operations for any interim period are not necessarily indicative of the results to be expected for the year ending December 31, 2026 or for any other future years or interim periods.
Liquidity
The Company’s principal sources of liquidity are its cash and cash equivalents, short-term investments, cash generated from sales of the Company’s products, sales of common stock under its at-the-market equity offering program and underwriting agreement. The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis. The Company has experienced recurring losses from operations, and negative cash flows from operations. As of September 30, 2026, the Company’s existing sources of liquidity included cash, cash equivalents, restricted cash and short-term investments of $421.2 million. The Company has incurred losses and negative cash flows from operations since inception. If the Company continues to incur losses in the future, it may need to improve liquidity and raise additional capital through the issuance of equity and/or debt. There can be no assurance that the Company would be able to raise such capital. However, management believes that the Company’s existing sources of liquidity are adequate to fund its operations for at least twelve months from the date the unaudited condensed consolidated financial statements were available for issuance.
Reclassification
Certain amounts within the segment disclosure in the footnote to the condensed consolidated financial statements for the three and nine months ended September 30, 2025, have been conformed to the current period presentation.
Note 2 – Summary of Significant Accounting Policies
During the three and nine months ended September 30, 2026, except as noted below there were no significant changes to the Company’s significant accounting policies as disclosed in the Company’s Annual Report on Form 10-K filed with the SEC on March 2, 2026. The Company has consistently applied the accounting policies to all periods presented in these unaudited condensed consolidated financial statements.
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Foreign Currencies
On January 1, 2026, the Company reassessed the functional currency of its foreign subsidiaries and determined it was the U.S. Dollar for all its subsidiaries. The impact of this change was not material. Foreign currency transaction gains and losses are recorded in other income (expense), net in the condensed consolidated statements of operations and comprehensive loss.
Tariff Refunds
On February 20, 2026, the U.S. Supreme Court issued a ruling striking down tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”). On April 20, 2026, the U.S. Customs and Border Protection (“CBP”) launched a system to process refund claims for certain invalidated IEEPA tariffs. During the quarter ended June 30, 2026, we submitted our claim for a refund of the IEEPA tariffs through the CBP portal established to process such claims. In accordance with Accounting Standards Codification 450-30, “Gain Contingencies,” the Company has elected to use a gain contingency model to account for recoveries of previously paid IEEPA tariffs. Under this model, a gain contingency is not recognized until the gain is realized or realizable. The tariffs at issue were previously capitalized to inventory and subsequently expensed through cost of goods sold. Accordingly, any refund represents a recovery of previously recognized costs, and recognition is limited to amounts previously recorded.
Government Credits
The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), enacted on March 27, 2020, provided for an employee retention credit (“ERC”) that was a refundable credit against certain employment taxes equal to 50% of the qualified wages an eligible employer paid to employees from March 17, 2020 to December 31, 2020. The Disaster Tax Relief Act, enacted on December 27, 2020, extended the ERC availability under Section 2301 of the CARES Act for qualified wages paid from January 1, 2021 to June 30, 2021 and the credit was increased to 70% of qualified wages an eligible employer paid to employees during the extended period. The American Rescue Plan Act of 2021, enacted on March 11, 2021, further extended the ERC availability through December 31, 2021. The Company qualified for the ERC for the period between March 17, 2020 and September 30, 2021. The Company recognizes government credits for which there is a reasonable assurance of compliance with credit conditions and receipt of credits. The Company received credits in the amount of $5.5 million in the nine months ended September 30, 2025. For the nine months ended September 30, 2025, the ERC was recorded as follows: $1.7 million as a reduction in cost of revenue, $2.2 million as a reduction in research and development expense, $0.7 million as a reduction in sales and marketing expense and $0.8 million as a reduction to general and administrative expense in the condensed consolidated statement of operations. The qualified wages and health insurance benefits paid by the Company were related to the first and second quarters of 2021.
Recently Issued and Adopted Accounting Pronouncements
In July 2025, the FASB issued Accounting Standards Update (“ASU”) 2025-05, Measurement of Credit Losses for Accounts Receivable and Contract Assets ("ASU 2025-05"). This standard introduces a practical expedient that companies can choose to apply when determining allowances for credit losses. Specifically, it permits companies to assume that the current conditions as of the balance sheet date remain unchanged throughout the remaining life of the assets. Effective January 1, 2026, the Company adopted the amendments in this update for the annual period beginning fiscal year 2026 and applied the new requirements prospectively to the current annual period. The implementation of ASU 2025-05 did not have a material impact on the condensed consolidated financial statements.
Recently Issued Accounting Pronouncements Not Yet Adopted
The Company considers the applicability and impact of all ASUs. ASUs not referenced below were assessed and determined to be not applicable and are not expected to have a material impact on the Company’s consolidated financial statements.
In September 2025, the FASB issued ASU 2025-06, "Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40) Targeted Improvements to the Accounting for Internal-Use Software (ASU 2025-06)", which is intended to simplify the capitalization guidance for internal-use software by removing references to project stages and clarifying when the capitalizing of eligible costs is required. The new guidance is effective for annual periods beginning after December 15, 2027, and interim periods within those fiscal years, with early adoption permitted. ASU 2025-06 may be applied retrospectively or prospectively.
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The Company is in the process of evaluating the impact of this new guidance on its consolidated financial statements and related disclosures.
In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810) ("ASU 2025-03"), which clarifies the requirements for determining the accounting acquirer in the acquisition of a variable interest entity. ASU 2025-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. The amendments in this update require that an entity apply the new guidance prospectively to any acquisition transaction that occurs after the initial application date. Early adoption is permitted as of the beginning of an interim or annual reporting period. The Company is currently evaluating the disclosure impact that ASU 2025-03 may have on its financial statement presentation and disclosures.
In May 2025, the FASB issued ASU 2025-04, Compensation - Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606) ("ASU 2025-04"), which clarifies the requirements for share-based consideration payable to a customer. The amendments in this update are effective for all entities for annual reporting periods (including interim reporting periods within annual reporting periods) beginning after December 15, 2026. Early adoption is permitted for all entities. The Company is currently evaluating the disclosure impact that ASU 2025-04 may have on its financial statement presentation and disclosures.
In November 2024, the FASB issued ASU 2024-03, “Disaggregation of Income Statement Expenses.” The new standard requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures. The guidance is effective for public business entities for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted. The guidance is to be applied prospectively, with the option for retrospective application. The Company is currently evaluating the impact of the ASU on the disclosures within the consolidated financial statements.
Concentrations of Credit Risk
Financial instruments that subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents, restricted cash, short-term investments and accounts receivable. Although the Company deposits its cash, cash equivalents, restricted cash and short-term investments with financial institutions that Company believes are of high credit quality, its deposits, at times, may exceed federally insured limits. As of September 30, 2026 and December 31, 2025, the Company had cash, cash equivalents, short-term investments and restricted cash with financial institutions in the U.S. of $402.0 million and $201.3 million, respectively. As of September 30, 2026 and December 31, 2025, the Company also had cash with financial institutions in countries other than the U.S. of approximately $19.3 million and $9.9 million, respectively, that was not federally insured.
The Company generally does not require collateral or other security deposits for accounts receivable.
Accounts receivable from the Company’s major customers representing 10% or more of total accounts receivable and unbilled receivable was as follows:
| September 30, 2026 | December 31, 2025 | ||||||||||
| Customer A | % | % | |||||||||
| Customer B | * | % | |||||||||
| Customer D | * | % | |||||||||
| Customer E | % | * | |||||||||
*Customer accounted for less than 10% of total accounts receivable in the period.
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Revenue from the Company’s major customers representing 10% or more of total revenue was as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||
| Customer E | % | % | % | % | ||||||||||||||||||||||||||||
Concentrations of Supplier Risk
Purchases from the Company’s suppliers and vendors representing 10% or more of total purchases were as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||
| Supplier A | * | * | * | % | |||||||||||||||||||||||||||||||
| Supplier B | % | % | % | % | |||||||||||||||||||||||||||||||
*Supplier accounted for less than 10% of total purchases in the period.
Accounts payable to the Company’s major suppliers and professional services vendors representing 10% or more of total accounts payable were as follows:
| September 30, 2026 | December 31, 2025 | ||||||||||
| Supplier A | * | % | |||||||||
| Supplier B | % | % | |||||||||
Supplier C | * | % | |||||||||
*Supplier accounted for less than 10% of total accounts payable.
Note 3. Business Combination and Related Transactions
On the Closing Date, the Company acquired 100 % of the outstanding share capital of Stereolabs, a privately-held developer, manufacturer and seller of vision systems headquartered in France. The acquisition expanded the Company's product portfolio, and is expected to further strengthen its software capabilities and accelerate customer development.
Shareholders of Stereolabs received cash consideration of $32.4 million and 1,847,677 newly issued shares of the Company’s common stock, of which 660,005 shares are subject to a staggered lock-up arrangement lasting through a four-year period, whereby twenty-five (25 %) percent will be released upon each anniversary of the completion date contingent upon employees remaining employed by the Company. See Note 9.
The consideration paid was comprised of cash and common stock, as follows (in thousands):
| Consideration: | |||||
| Cash consideration | $ | ||||
Fair value of common stock issued, less shares subject to continued employment requirements(1) | |||||
| $ | |||||
(1)Calculated based upon 1,187,672 shares at the stock price of $19.18 per share on the Closing Date.
The Company accounted for the acquisition of Stereolabs as a business combination under ASC 805. This accounting treatment requires that assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. In accordance with ASC 805, the total purchase price was allocated to identifiable tangible and intangible assets acquired and liabilities assumed based on their respective estimated fair values using management’s best estimates and assumptions to assign fair value as of the acquisition date. The allocation of the purchase price to the assets acquired and liabilities assumed is subject to further adjustment within the measurement period which extends up to one year from the acquisition date.
The Company incurred $5.0 million in acquisition costs for Stereolabs, of which $3.9 million was incurred in the year ended December 31, 2025, and $1.2 million was incurred in the nine months ended September 30, 2026. These costs were expensed as incurred. Acquisition-related costs are presented within general and administrative expenses in the Company’s condensed consolidated statement of operations. In addition, the sellers incurred transaction costs of $3.0 million which were paid by the Company on the Closing Date.
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The following table provides the assets acquired and liabilities assumed as of the date of acquisition (in thousands):
| Estimated Fair Value | |||||
| Purchase consideration | $ | ||||
| Amounts of identifiable assets and liabilities assumed | |||||
| Cash and cash equivalents | $ | ||||
| Accounts receivable, net | |||||
| Inventory | |||||
Prepaid expenses and other current assets (1) | |||||
| Property and equipment, net | |||||
| Operating lease, right-of-use assets | |||||
| Intangible assets, net | |||||
| Other non-current assets | |||||
| Accounts payable | ( | ||||
| Accrued and other current liabilities | ( | ||||
| Contract liabilities, current | ( | ||||
| Operating lease liability, current portion | ( | ||||
| Operating lease liability, non-current portion | ( | ||||
| Deferred tax liability | ( | ||||
| Total identifiable net assets | $ | ||||
| Goodwill | |||||
| $ | |||||
(1) Prepaid expenses and other current assets includes a $1.9 million indemnification asset, with the underlying indemnified liability of $6.3 million recorded within accrued and other current liabilities.
Identified intangible assets acquired and their estimated useful lives as of February 4, 2026, were (in thousands, except years):
| Estimated Useful Life (in years) | Estimated Fair Value | ||||||||||
| Trade name | $ | ||||||||||
| Developed technology | |||||||||||
| Customer relationships | |||||||||||
| Intangible assets, net | $ | ||||||||||
Developed technology relates to Stereolabs’ vision-based perception and Artificial Intelligence (“AI”) platform that provides real-time depth sensing, 3D mapping, and object detection in complex real-world environments.Management estimated the fair value of the acquired intangible assets using the income approach, including the multi-period excess earnings method for the customer relationships and relief from royalty method for the developed technology. Management’s significant assumptions used in valuing these intangible assets included the customer attrition rate for customer relationships, revenue growth rates for the customer relationships and developed technology, and the royalty rate for the developed technology.
The estimated fair value of the trade name was determined using the relief-from-royalty method under the income approach, which involved assumptions related to the economic life and discount rate. The Stereolabs trade name is expected to be in use for the foreseeable future and the economic life was determined based on the branding strategy, benchmarking analysis, and the projected cash flows over the forecasted period.
The excess of the purchase consideration and the fair value of identifiable assets acquired and liabilities assumed at the acquisition date over the fair value of net tangible and identified intangible assets acquired was recorded as goodwill, which is deductible for tax purposes. Goodwill is primarily attributable to the assembled workforce and the anticipated operational synergies expected from the Stereolabs acquisition.
Approximately $1.9 million of the cash consideration is held in an escrow account to cover estimated claims arising from pre-closing tax accruals related to certain historical foreign sales transactions and other taxes (“the Specific Tax Loss”). Any remaining portion of the escrow amount that is not required to cover the Specific Tax Loss amounts will be paid to the former shareholders of Stereolabs at December 31, 2027 (the escrow release date). The indemnification of the Specific Tax Loss is
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capped at $1.9 million, the amount of the escrow fund balance. At the acquisition date, the associated Specific Tax Loss was recorded at the estimated fair value of $6.3 million within accrued and other current liabilities and the Company recorded an indemnification asset up to the amount of the escrow fund balance of $1.9 million.
The unaudited supplemental pro forma information below presents the combined historical results of operations of the Company and Stereolabs as if Stereolabs had been acquired as of January 1, 2025 (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Net loss | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||
The unaudited supplemental pro forma information above includes the following adjustments to net loss in the appropriate pro forma periods (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||
| An increase in amortization expense related to the fair value of acquired identifiable intangible assets, net of the amortization expense already reflected in actual historical results. | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||
A decrease (increase) in expenses related to the transaction expenses. This amount includes $ | $ | $ | $ | $ | ( | ||||||||||||||||||||||||
| An increase in additional stock-based compensation expense related to shares issued to key Stereolabs employees in the acquisition that are considered compensatory in the post business combination periods due to the additional service requirement, net of the stock compensation expense already reflected in actual historical results. | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||
A decrease (increase) in additional stock-based compensation expense related to the impact of the acceleration of Stereolabs warrants that vested at the close of the Stereolabs acquisition. | $ | $ | $ | $ | ( | ||||||||||||||||||||||||
The unaudited supplemental pro forma information has been presented for illustrative purposes only and is not necessarily indicative of results of operations that would have been achieved had the Stereolabs taken place on the date indicated, or of the Company’s future consolidated results of operations. The supplemental pro forma information presented above has been derived from the Company’s historical consolidated financial statements and from historical consolidated financial statements and the historical accounting records of Stereolabs.
Note 4. Fair Value of Financial Instruments
The following tables provides information by level for the Company’s assets that were measured at fair value on a recurring basis (in thousands):
| September 30, 2026 | |||||||||||||||||||||||
| Level 1 | Level 2 | Total | |||||||||||||||||||||
| Assets | |||||||||||||||||||||||
| Cash and cash equivalents: | |||||||||||||||||||||||
| Money market funds | $ | $ | $ | ||||||||||||||||||||
| Commercial paper | |||||||||||||||||||||||
| Short-term investments: | |||||||||||||||||||||||
| Commercial paper | |||||||||||||||||||||||
| Corporate debt securities | |||||||||||||||||||||||
| Total short-term investments | |||||||||||||||||||||||
| Total financial assets | $ | $ | $ | ||||||||||||||||||||
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| December 31, 2025 | |||||||||||||||||||||||
| Level 1 | Level 2 | Total | |||||||||||||||||||||
| Assets | |||||||||||||||||||||||
| Cash and cash equivalents: | |||||||||||||||||||||||
| Money market funds | $ | $ | $ | ||||||||||||||||||||
| Short-term investments: | |||||||||||||||||||||||
| Commercial paper | |||||||||||||||||||||||
| Corporate debt securities | |||||||||||||||||||||||
| Total short-term investments | |||||||||||||||||||||||
| Total financial assets | $ | $ | $ | ||||||||||||||||||||
Money market funds are included within Level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets.
The value of securities included in Level 2 are based on other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
The value and changes in Level 3 liabilities measured at fair value on a recurring basis are immaterial.
Non-Recurring Fair Value Measurements
The Company has certain assets, including intangible assets, which are measured at fair value on a non-recurring basis and are adjusted to fair value only if an impairment charge is recognized. The categorization of the framework used to measure fair value of the assets is considered to be within the Level 3 valuation hierarchy due to the subjective nature of the unobservable inputs used.
Disclosure of Fair Values
The Company’s financial instruments that are not re-measured at fair value include accounts receivable, accounts payable, accrued and other current liabilities. The carrying values of these financial instruments approximate their fair values. Unrealized gains and losses on the Company’s short-term investments were not significant as of September 30, 2026 and December 31, 2025, and therefore, the amortized cost of the Company’s short-term investments approximated its fair value.
Note 5. Balance Sheet Components
Cash and Cash Equivalents
The Company’s cash and cash equivalents consist of the following (in thousands):
| September 30, 2026 | December 31, 2025 | ||||||||||
| Cash | $ | $ | |||||||||
| Cash equivalents: | |||||||||||
Money market funds(1) | |||||||||||
| Commercial paper | |||||||||||
| Total cash and cash equivalents | $ | $ | |||||||||
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Restricted Cash
Restricted cash consists of collateral to merchant credit card, deposit account to secure foreign entity closure costs, issuances of deposit performance guarantee issued in favor of a customer, and certificates of deposit held by a bank as security for outstanding letters of credit. The Company had a restricted cash balance of $1.4 million and $2.6 million as of September 30, 2026 and December 31, 2025, respectively, which has been excluded from the Company’s cash and cash equivalents balances. The Company presented $0.3 million and $1.5 million of the total amount of restricted cash within current assets on the unaudited condensed consolidated balance sheets as of September 30, 2026 and December 31, 2025, respectively. The remaining restricted cash balance of $1.1 million and $1.1 million is included in non-current assets on the condensed consolidated balance sheets as of September 30, 2026 and December 31, 2025, respectively.
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported in the unaudited condensed consolidated balance sheets to the total of the amounts reported in the unaudited condensed consolidated statements of cash flows (in thousands):
| September 30, 2026 | September 30, 2025 | ||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Restricted cash, current | |||||||||||
| Restricted cash, non-current | |||||||||||
| Total cash, cash equivalents and restricted cash | $ | $ | |||||||||
Inventory
Inventory, consisting of material, direct and indirect labor, and manufacturing overhead, consists of the following (in thousands):
| September 30, 2026 | December 31, 2025 | ||||||||||
| Raw materials | $ | $ | |||||||||
| Work in process | |||||||||||
| Finished goods | |||||||||||
| Total inventory | $ | $ | |||||||||
Prepaid expenses and other current assets
Prepaid expenses and other current assets consist of the following (in thousands):
| September 30, 2026 | December 31, 2025 | ||||||||||
| Prepaid expenses | $ | $ | |||||||||
| Prepaid inventory | |||||||||||
| Prepaid insurance | |||||||||||
| Receivable from contract manufacturer | |||||||||||
| IRS Income tax refund receivable | |||||||||||
| Indemnification asset (See Note 3.) | |||||||||||
| Other current assets | |||||||||||
| Total prepaid expenses and other current assets | $ | $ | |||||||||
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Property and Equipment, net
Property and equipment consists of the following (in thousands):
| Estimated Useful Life (in years) | September 30, 2026 | December 31, 2025 | |||||||||||||||
| Land | Not depreciated | $ | $ | ||||||||||||||
| Building | |||||||||||||||||
| Machinery and equipment | |||||||||||||||||
| Computer equipment | |||||||||||||||||
| Automotive and vehicle hardware | |||||||||||||||||
| Software | |||||||||||||||||
| Furniture and fixtures | |||||||||||||||||
| Construction in progress | |||||||||||||||||
| Leasehold improvements | Shorter of useful life or lease term | ||||||||||||||||
| Less: Accumulated depreciation | ( | ( | |||||||||||||||
| Property and equipment, net | $ | $ | |||||||||||||||
Depreciation expense associated with property and equipment was $3.8 million and $2.3 million during the nine months ended September 30, 2026 and 2025, respectively.
Goodwill and Acquired Intangible Assets, Net
The changes in the carrying amount of goodwill are as follows (in thousands):
| Amount | |||||
| Balance at December 31, 2025 | $ | ||||
| Goodwill addition related to Stereolabs acquisition | |||||
| Balance at September 30, 2026 | $ | ||||
Annually, and/or upon the identification of a triggering event, management is required to perform an assessment of fair value relative to carrying value of goodwill. Triggering events potentially warranting an interim goodwill impairment test include, among other factors, declines in historical or projected revenue, operating income or cash flows, and sustained declines in the Company’s stock price or market capitalization, considered both in absolute terms and relative to peers. There were no triggering events during the three and nine months ended September 30, 2026.
The following tables present acquired intangible assets, net as of September 30, 2026 and December 31, 2025 (in thousands):
| September 30, 2026 | |||||||||||||||||||||||
| Estimated Useful Life (in years) | Gross Carrying Amount | Accumulated Amortization | Net Book Value | ||||||||||||||||||||
| Trade name | $ | $ | ( | $ | |||||||||||||||||||
| Developed technology | ( | ||||||||||||||||||||||
| Vendor relationship | ( | ||||||||||||||||||||||
| Customer relationships | ( | ||||||||||||||||||||||
| Intangible assets, net | $ | $ | ( | $ | |||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||
| Estimated Useful Life (in years) | Gross Carrying Amount | Accumulated Amortization | Net Book Value | ||||||||||||||||||||
| Developed technology | $ | $ | ( | $ | |||||||||||||||||||
| Vendor relationship | ( | ||||||||||||||||||||||
| Customer relationships | ( | ||||||||||||||||||||||
| Intangible assets, net | $ | $ | ( | $ | |||||||||||||||||||
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Amortization expense was $5.9 million and $3.4 million during the nine months ended September 30, 2026 and 2025, respectively.
The following table summarizes estimated future amortization expense of finite-lived intangible assets-net (in thousands):
| Years: | Amount | ||||
| Remainder of 2026 | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| Thereafter | |||||
| Total | $ | ||||
Accrued and Other Current Liabilities
Accrued and other current liabilities consist of the following (in thousands):
| September 30, 2026 | December 31, 2025 | ||||||||||
| Accrued legal fees and contingencies | $ | $ | |||||||||
| Uninvoiced receipts | |||||||||||
| Accrued compensation | |||||||||||
| Warranty reserve | |||||||||||
Sales, use, value-added taxes, customs duties and other taxes(1) | |||||||||||
| Other | |||||||||||
| Total accrued and other current liabilities | $ | $ | |||||||||
(1) Includes indemnified Specific Tax Loss Liabilities of $6.3 million from the Stereolabs acquisition. The indemnification of the Specific Tax Loss is capped at $1.9 million. See Note 3.
Note 6. Amazon Warrant
On February 10, 2023, as part of the Velodyne Merger, the Company assumed a warrant agreement and a transaction agreement, pursuant to which Velodyne agreed to issue to Amazon.com NV Investment Holdings LLC, a wholly-owned subsidiary of Amazon.com Inc. (“Amazon”), a warrant to acquire, following customary antidilution adjustments, up to an aggregate of 3,263,898 shares of the Company’s common stock at an exercise price of $50.71 per share (the “Amazon Warrant”). The exercise price and the warrant shares issuable upon exercise of the Amazon Warrant are subject to further antidilution adjustments, including in the event the Company makes certain sales of common stock (or securities exercisable or convertible into or exchangeable for shares of the Company’s common stock) at a price less than the exercise price of the Amazon Warrant. During the nine months ended September 30, 2026, the Company issued an additional 1,847,677 shares of common stock pursuant to the Stereolabs acquisition at effective prices below the exercise price of the Amazon Warrant, resulting in an antidilution adjustment to the terms of the Amazon Warrant with an increase in the number of shares issuable under the Amazon Warrant by 5,185 shares of common stock and a reduction to the original strike price of the Amazon Warrant to $50.49 per share.
As a result of the issuance and sale by the Company of an additional 3,649,000 shares of common stock in the nine months ended September 30, 2026 pursuant to a Sales Agreement (the “ATM Agreement”), dated May 8, 2026, by and among the Company, Oppenheimer & Co. Inc., Northland Securities, Inc., Rosenblatt Securities Inc., and Roth Capital Partners, LLC, at prices below the exercise price of the Amazon Warrant, an antidilution adjustment to the terms of the Amazon Warrant occurred (see Note 8), resulting in the increase in the number of shares issuable under the Amazon Warrant by 12,939 shares of common stock and a reduction to the original strike price of the Amazon Warrant to $50.30 per share.
As of September 30, 2026, there were 3,290,094 shares of common stock issuable under the Amazon Warrant.
The Amazon Warrant shares vest in multiple tranches over time based on payments of up to $100.0 million by Amazon or its affiliates (directly or indirectly through third parties) to the Company in connection with Amazon’s purchase of goods and services. The fair value of the unvested Amazon Warrant will be recognized as a non-cash stock-based reduction to revenue when Amazon makes payments and vesting conditions become probable of being achieved.
19
The fair value of the Amazon Warrant shares was estimated on February 10, 2023, the date of completion of the Velodyne Merger, using the Black-Scholes option pricing model on the remaining contractual term of 6.98 years, an expected volatility of 53.7 %, a 3.86 % risk-free interest rate and a 0 % expected dividend yield.
The right to exercise the Amazon Warrant and receive the warrant shares that have vested expires February 4, 2030.
In the three months ended September 30, 2026, 64,366 Amazon Warrant shares vested. In the nine months ended September 30, 2026, 496,746 Amazon Warrant shares vested. As of September 30, 2026, there were 3,225,731 Amazon Warrant shares vested.
Note 7. Commitments and Contingencies
Letters of Credit
In connection with certain office leasehold interests in real property located in San Francisco (350 Treat Ave. and 2741 16th Street), the Company obtained letters of credit from certain banks as required by the lease agreements. If the Company defaults under the terms of the applicable lease, the lessor will be entitled to draw upon the letters of credit in the amount necessary to cure the default. The amounts covered by the letters of credit are collateralized by certificates of deposit, which are included in restricted cash on the condensed consolidated balance sheets as of September 30, 2026 and December 31, 2025. The amount collateralizing the 2741 16th Street lease letter of credit following the purchase of the property and the termination of the 2741 16th Street lease was released during the first fiscal quarter of 2026. The outstanding amount of the letters of credit was $0.3 million and $1.4 million as of September 30, 2026 and December 31, 2025, respectively.
Non-cancelable purchase commitments
As of September 30, 2026, the Company had non-cancelable purchase commitments to third-party contract manufacturers for approximately $26.4 million and other vendors for approximately $23.8 million.
Contingencies
From time to time, the Company may be involved in legal and administrative proceedings arising in the ordinary course of business. The Company records a liability in its consolidated financial statements for these matters when a loss is known or considered probable and the amount can be reasonably estimated. Management reviews these estimates in each accounting period as additional information becomes known and adjusts the loss provision when appropriate. If the loss is not probable or cannot be reasonably estimated, a liability is not recorded in the consolidated financial statements. If a loss is probable but the amount of loss cannot be reasonably estimated, the Company discloses the loss contingency and an estimate of possible loss or range of loss (unless such an estimate cannot be made). Legal costs incurred in connection with loss contingencies are expensed as incurred.
Litigation
The Company is involved in various legal proceedings arising in the ordinary course of business. Significant judgment is required in both the determination of probability and the determination as to whether any exposure is reasonably estimable. Actual outcomes of these legal and regulatory proceedings may materially differ from our current estimates.
Velodyne Legacy Litigation
In 2022, David and Marta Hall filed a lawsuit against current and former officers and directors of Velodyne, which proceeded through arbitration. In addition, in 2023, David and Marta Hall filed a separate complaint against Velodyne seeking indemnification for legal fees in California state court. The parties agreed to a confidential settlement, without any admission or concession of wrongdoing or liability, for both matters and executed the definitive agreement on April 16, 2025. The Company paid an immaterial amount in settlement expenses in the second quarter of fiscal 2025. An insurance receivable allowed the Company to recover the majority of the settlement expenses, resulting in a net charge that was immaterial to its consolidated statement of operations
In 2023, a putative shareholder class action suit was filed in Delaware against former officers and directors of Graf Acquisition LLC (Velodyne was not named as a defendant in Berger v. Graf Acquisition, LLC., No. C.A.2023-0873-LWW (Del. Ch.). The parties agreed to a settlement without any admission or concession of wrongdoing or liability. The Company paid an immaterial amount in settlement expenses in the third quarter of fiscal 2025. An insurance receivable allowed the Company to recover the majority of the expected settlement expenses, resulting in a net charge that was immaterial to its consolidated statement of operations. The court approved the settlement and entered final judgment on October 8, 2025.
20
Ouster Litigation
On April 11, 2023, the Company filed a complaint in the District of Delaware alleging patent infringement of certain claims of the Company’s U.S. Patent Nos. 11,175,405, 11,178,381, 11,190,750, 11,287,515, and/or 11,422,236 against Hesai Group and Hesai Technology Co., Ltd. Subject to the terms of a confidential decision in the arbitration described below, the Company dismissed without prejudice this case on April 11, 2025.
On May 17, 2023, Hesai Photonics Technology Co. Ltd. and Hesai Group (collectively “Hesai Photonics”) filed a request for arbitration with JAMS against the Company, Velodyne Lidar, Inc., Velodyne, LLC, and Oban Merger Sub II LLC. Hesai Photonics alleges that the Company is bound as a result of the Company’s 2023 merger with Velodyne Lidar, Inc. by the terms and conditions, including an obligation to arbitrate disputes, of a long-term, global cross-licensing settlement agreement signed in 2020 between Hesai Photonics and Velodyne Lidar, Inc. (“Velodyne-Hesai Settlement Agreement”). On June 13, 2023, the Company responded to the arbitration demand and denied all allegations. On March 28, 2025, the tribunal issued a confidential interim decision, finding that the Company was subject to the Velodyne-Hesai Photonics Settlement Agreement. On September 15, 2025, the tribunal issued a confidential final decision, affirming the earlier finding of a global licensing settlement agreement that requires Hesai Photonics to pay royalties and deciding on fees in the amount of approximately $6.4 million, which the Company paid in the fourth quarter of fiscal 2025.
On September 14, September 25, and September 26, 2023, Hesai filed Petitions for Inter Partes Review with the Patent Trial and Appeal Board (“PTAB”) challenging the validity of the Company’s patents asserted in the ITC and Delaware patent actions. The Company provided preliminary responses to those petitions in late December 2023 and early January 2024. On March 19, 2024, March 28, 2024, and April 1, 2024, the PTAB issued decisions to institute inter partes review for four
Indemnification
From time to time, the Company enters into agreements in the ordinary course of business that include indemnification provisions. Generally, in these provisions the Company agrees to defend, indemnify, and hold harmless the indemnified parties for claims and losses suffered or incurred by such indemnified parties for which the Company is responsible under the applicable indemnification provisions. The terms of the indemnification provisions vary depending upon negotiations between the Company and its counterpart; however, typically, these indemnification obligations survive the term of the contract and the maximum potential amount of future payments the Company could be required to make pursuant to these provisions are uncapped.
The Company has also entered into indemnity agreements pursuant to which it has indemnified its directors and officers, to the extent legally permissible, against all liabilities reasonably incurred in connection with any action in which such individual may be involved by reason of such individual being or having been a director or executive officer, other than liabilities arising from willful misconduct of the individual. To date, the Company is indemnifying and has incurred costs to defend lawsuits or settle claims described above under the heading “Litigation” pursuant to the indemnity agreements of former directors and officers.
Note 8. Common Stock
Pursuant to the terms of our Certificate of Incorporation (as amended, the “Certificate of Incorporation”), the Company is authorized to issue the following shares and classes of capital stock, each with a par value of $0.0001 200,000,000 shares of common stock; (ii) 100,000,000 shares of preferred stock. The holder of each share of common stock is entitled to one vote.
21
On June 17, 2026, the Company's stockholders approved an amendment to our Certificate of Incorporation to increase our number of authorized shares of common stock from 100,000,000 to 200,000,000 , and the Company filed a Certificate of Amendment to its Certificate of Incorporation to effect this amendment on the same date.
On May 12, 2025, the Company entered into an At-Market-Issuance Sales Agreement (the “Former ATM Agreement”) with Oppenheimer & Co. Inc., pursuant to which the Company could offer and sell shares of the Company’s common stock, having an aggregate offering price of up to $100.0 million.
The Company terminated the Former ATM Agreement in May 2026.
From the date of the Former ATM Agreement to its termination, the Company sold 4,671,406 shares at a weighted-average sales price of $20.88 per share, resulting in cumulative gross proceeds to the Company totaling approximately $97.5 million before deducting offering costs, sales commissions and fees. Cumulative net proceeds to the Company totaled approximately $95.6 million after deducting offering costs, sales commissions and fees.
On May 8, 2026, the Company entered into the ATM Agreement with Oppenheimer & Co. Inc., Northland Securities, Inc., Rosenblatt Securities Inc., and Roth Capital Partners, LLC (each, an “Agent” and, collectively the “Agents”), pursuant to which the Company could offer and sell, from time to time, through or to the Agents, acting as agent or principal, shares of the Company’s common stock, having an aggregate offering price of up to $100.0 million.
During the nine months ended September 30, 2026, 3,649,000 shares of common stock were sold under the ATM Agreement at a weighted-average sales price of $27.40 per share, resulting in cumulative gross proceeds to the Company totaling approximately $100.0 million before deducting offering costs, sales commissions and fees. Cumulative net proceeds to the Company totaled approximately $98.0 million after deducting offering costs, sales commissions and fees. We plan to use the net proceeds from this offering for working capital and general corporate purposes. As of September 30, 2026, the ATM offering is complete and there are no remaining funds available under the ATM Agreement.
On November 9, 2025, the Company agreed to issue shares of common stock for the acquisition of Stereolabs. See Note 3. Upon the closing of the Stereolabs transaction on February 4, 2026, the Company issued 1,847,677 shares, inclusive of 660,005 shares which will be released over a four-year period. The Company sold the foregoing securities in transactions not involving an underwriter and not requiring registration under Section 5 of the Securities Act of 1933, as amended (the “Securities Act”) in reliance on the exemptions afforded by Section 4(a)(2) and/or Regulation S of the Securities Act and the rules and regulations promulgated thereunder.
On July 2, 2026, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Northland Securities, Inc. as underwriter (the “Underwriter”), pursuant to which the Company issued and sold on July 6, 2026, an aggregate of 3,621,876 shares of its common stock to the Underwriter (the “Offering”). The price to the public in the Offering was $55.22 per share. The Company received net proceeds of approximately $191.8 million, after deducting the underwriter’s discounts, commissions, and fees. Additionally, under the terms of the Underwriting Agreement, the Company granted the Underwriter a 30-day option, solely for the purpose of covering over-allotments, if any, to purchase up to an additional 543,281 shares of common stock. The exercise price of the over-allotment option was $53.0112 per share. On August 1, 2026, the option expired unexercised.
Note 9. Stock-based Compensation
As of September 30, 2026, the Company maintains five equity incentive plans: its Amended and Restated 2015 Stock Plan (the “2015 Plan”), the Sense Photonics, Inc. 2017 Equity Incentive Plan (the “Sense Plan”), the Velodyne Lidar, Inc. 2020 Equity Incentive Plan (the “Velodyne Plan”), its 2021 Incentive Award Plan (the “2021 Plan”) and its Amended and Restated 2022 Employee Stock Purchase Plan (the “2022 ESPP” and, collectively with the 2015 Plan, the Sense Plan, the Velodyne Plan and the 2021 Plan, the “Plans”).
The Plans, other than the 2022 ESPP, provide for the grant of stock options, stock appreciation rights, restricted stock awards (“RSAs”), restricted stock units (“RSUs”), performance stock unit awards and other forms of equity compensation (collectively, “equity awards”). In addition, the 2021 Plan provides for the grant of performance bonus awards. New equity awards may only be granted under the 2021 Plan and Velodyne Plan. Awards under the 2021 Plan and Velodyne Plan can be granted to employees, including officers, directors and consultants of the Company and its subsidiaries, in each case, within the limits provided in the 2021 Plan and Velodyne Plan, respectively.
The Company’s 2022 ESPP has been offered to all eligible employees since August 2022 and generally permits certain employees to purchase shares of our common stock at a discount through payroll deductions of up to 15 % of their compensation during each offering period, subject to certain limitations.
22
The 2022 ESPP provides offering periods that have a duration of 24 months in length and are comprised of purchase periods of six months in length. The offering periods are scheduled to start on the first trading day on or after May 16 and November 16 of each year. Under the 2022 ESPP, the purchase price of a share equals 85 % of the lesser of the fair market value of a share of common stock on either the first or last day of the applicable offering period or the last day of the applicable purchase period.
During the nine months ended September 30, 2026, there were 98,430 shares of common stock issued under the 2022 ESPP.
The stock-based compensation expense for the 2022 ESPP is based on the estimated grant date fair value utilizing the Black-Scholes option valuation model of the 2022 ESPP shares and the number of shares that can be purchased as of the grant date, which is recognized as expense on a straight line expense attribution method over the length of an offering period.
Stock Options
Stock option activity for the nine months ended September 30, 2026 was as follows:
| Number of Shares Underlying Outstanding Options | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value | ||||||||||||||||||||
| Outstanding—December 31, 2025 | $ | $ | |||||||||||||||||||||
| Options exercised | ( | ||||||||||||||||||||||
| Outstanding—September 30, 2026 | $ | $ | |||||||||||||||||||||
| Vested —September 30, 2026 | $ | $ | |||||||||||||||||||||
| Exercisable—September 30, 2026 | $ | $ | |||||||||||||||||||||
The following table summarizes information about stock options outstanding and exercisable at September 30, 2026.
| Options Outstanding | Options Exercisable | |||||||||||||||||||
| Exercise Price | Options Outstanding | Weighted Average Remaining Contractual Life (Years) | ||||||||||||||||||
| $ | ||||||||||||||||||||
| $ | ||||||||||||||||||||
| $ | ||||||||||||||||||||
| $ | ||||||||||||||||||||
As of September 30, 2026, there was no remaining unamortized stock-based compensation expense related to unvested stock options.
Restricted Stock Units
A summary of RSU activity for the nine months ended September 30, 2026 was as follows:
| Number of Shares | Weighted Average Grant Date Fair Value (per share) | ||||||||||
| Unvested—December 31, 2025 | $ | ||||||||||
| Granted | |||||||||||
| Canceled | ( | ||||||||||
| Vested | ( | ||||||||||
| Unvested—September 30, 2026 | $ | ||||||||||
Stock-based compensation expense is recognized on a straight-line basis over the vesting period of each award of RSUs. As of September 30, 2026, total compensation expense related to unvested RSUs granted to employees, but not yet recognized, was $80.2 million, with a weighted-average remaining vesting period of 2.1 years. RSUs settle into shares of common stock upon vesting.
23
Stereolabs Acquisition
In connection with the acquisition of Stereolabs (Note 3), several Stereolabs key employees entered into agreements with the Company whereby these key employees are eligible to receive an aggregate of 660,005 shares of common stock subject to their continued employment with the Company. These shares are excluded from the above restricted stock units table. These shares are considered compensatory in the post-business combination periods due to the additional service requirement for these key employees. These shares are subject to a staggered lock-up arrangement lasting through a four-year period, whereby twenty-five (25 %) percent will be released upon each anniversary of the completion date as long as the key employees are still employees of the Company. As of September 30, 2026, there were 660,005 unvested shares outstanding with a grant date fair value of $19.18 per share subject to future service periods. The Company recognized stock-based compensation expense of $0.8 million during the three months ended September 30, 2026, and stock-based compensation expense of $2.1 million during the nine months ended September 30, 2026, related to the 660,005 shares. As of September 30, 2026, there is $10.6 million remaining unamortized compensation expense that will be recognized over a weighted average remaining period of 3.4 years.
Additionally during the nine months ended September 30, 2026, the Company recognized $0.2 million in stock-based compensation expense related to the impact of the acceleration of Stereolabs warrants that vested at the close of the Stereolabs acquisition.
Stock-Based Compensation Expense
The Company recognized stock-based compensation expense for all share-based awards in the unaudited condensed consolidated statements of operations and comprehensive loss as follows (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||
| Cost of revenue | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
| Research and development | |||||||||||||||||||||||||||||||||||
| Sales and marketing | |||||||||||||||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||||||||||||||
| Total stock-based compensation | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
The following table summarizes stock-based compensation expense by award type (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||
| RSUs | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
| Employee stock purchase plan | |||||||||||||||||||||||||||||||||||
| RSAs | |||||||||||||||||||||||||||||||||||
| Stereolabs post‑combination compensation expense | |||||||||||||||||||||||||||||||||||
| Total stock-based compensation | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
Note 10. Net Loss Per Common Share
The following table sets forth the computation of basic and diluted net loss per common share attributable to common stockholders (in thousands, except share and per share data):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||||||||||||||
| Denominator: | |||||||||||||||||||||||||||||||||||||||||||||||
| Weighted average shares used to compute basic and diluted net loss per share | |||||||||||||||||||||||||||||||||||||||||||||||
| Net loss per common share—basic and diluted | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||||||||||||||
The weighted average number of shares used to compute basic and diluted net loss per share excludes unvested early exercised common stock options subject to repurchase.
24
The following outstanding shares of potentially dilutive securities were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been antidilutive:
| September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Options to purchase common stock | |||||||||||
| Public and private common stock warrants | |||||||||||
| Restricted Stock Units | |||||||||||
| Shares issued to Stereolabs employees and subject to vesting | |||||||||||
| Share purchase rights under the ESPP | |||||||||||
| Total | |||||||||||
Note 11. Income Taxes
The Company’s income tax provision for interim periods is determined using an estimate of the Company’s annual effective tax rate, adjusted for discrete items arising in the quarter. The income tax benefit for the three months ended September 30, 2026 was $0.7 million. The income tax benefit for the nine months ended September 30, 2026 was not significant. The income tax provision for the nine months ended September 30, 2026 includes $0.9 million of discrete items primarily related to withholding taxes on sales to customers. Discrete items for the three months ended September 30, 2026, were not significant. The income tax provision for the three months ended September 30, 2025 was $0.1 million and the income tax benefit for the nine months ended September 30, 2025 was $3.3 million, respectively. The income tax benefit recorded for the nine months ended September 30, 2025 primarily related to the resolution of an IRS examination of the Company’s 2017 and 2018 tax years offset by income taxes for its foreign operations.
Note 12. Revenue
The majority of the Company’s revenue is recognized at the point in time when the customer obtains control of the respective lidar sensors, cameras and AI compute systems. Revenue recognized over time is immaterial to total revenue recognized for any given period.
Revenue for all periods presented includes patent royalty revenues generated from long-term intellectual property (“IP”) license agreements primarily in the Asia and Pacific region. Patent royalty for the three months ended September 30, 2026 was $3.3 million. Patent royalty revenue for the three months ended September 30, 2025, was not significant. Revenue for the nine months ended September 30, 2026 and 2025, respectively, includes patent royalty revenues in the amount of $5.5 million and $1.6 million. The Company also expects to record future revenue from these agreements as it satisfies its performance obligations.
The following table presents total revenues by geographic area based on the location products were shipped to and services provided (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||
| Americas | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
| Asia and Pacific | |||||||||||||||||||||||||||||||||||
| Europe, Middle East and Africa | |||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
25
Countries that accounted for more than 10% of total revenue were as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||
| United States | % | % | % | % | |||||||||||||||||||||||||||||||
Revenue contract balances
Timing of revenue recognition may differ from the timing of invoicing to customers. An unbilled receivable is recorded in instances when revenue is recognized prior to invoicing, and amounts collected in advance of services being provided are recorded as deferred revenue. Contract assets and liabilities are generated when contractual billing schedules differ from revenue recognition timing.
Unbilled receivables
A receivable for multi-year licensing services is generally recorded upon invoicing. A receivable for multi-year license agreements is recorded upon delivery, whether or not invoiced, to the extent the Company has an unconditional right to receive payment in the future related to those licenses. As of September 30, 2026, the current portion of these unbilled receivables in the amount of $6.4 million, primarily consisting of unbilled receivables from multi-year license contracts, is included in “Accounts receivable, net” on the unaudited condensed consolidated balance sheet.
Contract Assets
Contract assets arise when revenue is recognized prior to billing customers and payment is contingent upon a future event, other than the passage of time. Contract assets primarily relate to the Company’s rights to consideration under a long-term IP license agreement when the licenses have been transferred to the customers, but payment is conditional on factors other than the passage of time.
Contract Liabilities
Contract liabilities consist of deferred revenue, advanced payments and deposits from customers for goods and services that are yet to be provided. Deferred revenue includes billings in excess of revenue recognized related to product sales, licenses, extended warranty and other services revenue, and is recognized as revenue when the Company performs under the contract. The long-term portion of deferred revenue, mostly related to obligations under license arrangements and extended warranty, is classified as non-current contract liabilities in the Company’s unaudited condensed consolidated balance sheets. Customer advanced payments represent required customer payments in advance of product shipments according to customer’s payment term. Customer advance payments are recognized as revenue when control of the performance obligation is transferred to the customer. Customer deposits represent consideration received from a customer which can be applied to future product or service purchases, or refunded.
Contract assets and liabilities are presented net at the individual contract level in the unaudited condensed consolidated balance sheet and are classified as current or non-current based on the nature of the underlying contractual rights and obligations.
| September 30, 2026 | December 31, 2025 | ||||||||||||||||
| Contract assets, current | $ | $ | |||||||||||||||
| Contract assets, non-current portion | |||||||||||||||||
| Total contract assets | $ | $ | |||||||||||||||
| Contract liabilities, current | |||||||||||||||||
| Deferred revenues from multi-year licensing agreements | $ | $ | |||||||||||||||
| Other contract liabilities | |||||||||||||||||
| Contract liabilities, non-current portion | |||||||||||||||||
| Deferred revenues from multi-year licensing agreements | $ | $ | |||||||||||||||
| Other contract liabilities | |||||||||||||||||
| Total contract liabilities | $ | $ | |||||||||||||||
26
Deferred revenues from multi-year licensing agreements mainly represent minimum royalty payments received from licensees relating to long-term IP license agreements for which the Company has future obligations. Royalties from the IP license agreements are recognized at the later of the period the sales occur or the satisfaction of the performance obligations to which some or all of the royalties have been allocated.
Other contract liabilities primarily relate to a multi-year contract entered in 2023 with a customer to sell the Company’s products. During the three and nine months ended September 30, 2026, respectively, the Company recognized $5.4 million and $11.6 million in revenue associated with this contract from other contract liabilities. As of September 30, 2026, $0.9 million remained deferred until a future product delivery date.
The following table provides information about contract liabilities (remaining performance obligations) and the significant changes in the balances (in thousands):
| Nine Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Beginning balance | $ | $ | |||||||||
| Net revenue deferred in the period | |||||||||||
| Contract liabilities acquired in the Stereolabs acquisition | |||||||||||
| Revenue recognized that was included in the contract liability balance at the beginning of the period | ( | ( | |||||||||
| Ending balance | $ | $ | |||||||||
Note 13. Segment
The Company’s chief operating decision maker (“CODM”) is the Chief Executive Officer. The Chief Executive Officer reviews financial information including revenue, expenses and net loss presented on a consolidated basis, accompanied by certain supplemental information about significant expense categories for purposes of allocating resources and evaluating the Company’s financial performance. The Company operates as one
The following table reflects the significant expenses of our reportable segment (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Total revenue | $ | $ | $ | $ | |||||||||||||||||||
Less(1): | |||||||||||||||||||||||
| Product manufacturing costs | |||||||||||||||||||||||
| Stock based compensation and amortization expense | |||||||||||||||||||||||
Other costs(2) | |||||||||||||||||||||||
| Research and development | |||||||||||||||||||||||
| Sales and marketing | |||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||
| Total other income, net | ( | ( | ( | ( | |||||||||||||||||||
| Provision for (benefit from) income tax expense | ( | ( | ( | ||||||||||||||||||||
| Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
(1) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.
27
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our results of operations and financial condition of Ouster, Inc. (“we,” “us,” “our,” the “Company,” “Ouster”) should be read together with the information set forth in our unaudited condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report, as well as our audited consolidated financial statements and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Ouster’s Annual Report on Form 10-K (the “2025 Annual Report”) filed with the SEC on March 2, 2026. This discussion contains forward-looking statements based upon current plans, expectations and beliefs involving risks and uncertainties, including with respect to the potential future impact of tariffs and other trade measures on the Company’s business and results of operations. Ouster’s actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in the section titled “Risk Factors” in Ouster’s 2025 Annual Report and as may be further updated from time to time in the Company’s other filings with the SEC. The Company assumes no obligation to revise or update any forward-looking statements for any reason, except as required by law.
Overview
Ouster was founded in 2015 with the invention of its high-performance digital lidar and is headquartered in San Francisco, California. We are a leader in sensing and perception for Physical AI across industrial, robotics, automotive, and smart infrastructure. With a unified platform of high-performance digital lidar, cameras, AI compute, sensor fusion and perception software, and AI models, Ouster delivers solutions that improve quality of life by enabling machines to sense, think, act, and learn in the physical world. To grow our business, we have introduced new product lines and made several acquisitions to accelerate growth. We continue to invest in growing our hardware product portfolio, increasing the capabilities of our software solutions, and opportunistically expanding our sales and marketing efforts.
We are a leading global provider of lidar sensors and solutions. We design and manufacture high-resolution digital lidar sensors that offer advanced 3D vision to machinery, vehicles, robots, and fixed infrastructure assets, which allows each to understand and visualize the surrounding world and enable safe operation and autonomy. We believe our sensors are one of the highest-performing, lowest-cost lidar solutions available today.
Our wholly-owned subsidiary, Stereolabs, which we acquired on February 4, 2026, is a pioneer in AI vision and perception solutions that has developed a leading portfolio of industrial-grade ZED-cameras, AI compute powered by NVIDIA’s platform, and in-house AI vision software to power solutions across robotics, industrials, and smart infrastructure. Its high-performance ZED cameras provide best-in-class 2D and 3D color data with ultra-low latency, and its embedded AI compute hardware facilitates native, real-time sensor fusion at the edge. We believe Stereolabs’s perception software, built on proprietary AI models, is the foundation for thousands of developers’ autonomy workflows. The Stereolabs acquisition positions Ouster as the foundational end-to-end sensing and perception platform for Physical AI.
We have invested heavily in patents since our inception, pursuing comprehensive coverage of invention families and use cases, with broad international coverage.
We believe that our extensive patent coverage creates material barriers to entry.
Products and Solutions
Ouster's hardware product offerings include a broad portfolio of digital lidar sensors, monocular and stereo cameras, and AI compute. On May 4, 2026, we announced the launch of the Rev8 OS family of digital lidar sensors. Powered by our next-generation L4 and L4 Max Ouster Silicon, the Rev8 family features upgraded OS0, OS1, and OSDome sensors and adds the flagship 256-channel OS1 Max. Rev8 introduces the world’s first native color lidar sensors, provides up to double the range and resolution of the previous generation, and is designed for functional safety, reliability, affordability, and scale. Within our OS sensor models, we offer numerous customization options, all enabled by embedded software.
In addition, our portfolio has expanded to include Stereolabs’s growing product line, which now includes the ZED X, ZED X Mini, and ZED X Nano stereo cameras, the ZED X One monocular camera, and the ZED Box edge compute. We are currently developing our solid-state digital flash (“DF”) sensors, which is a suite of short, mid, and long-range solid-state digital lidar sensors that provide uniform precision imaging without motion blur across an entire field of view.
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Ouster provides Physical AI solutions tailored for smart infrastructure applications. Our software solutions, built on proprietary AI models, enable real-time people and object detection, classification, and tracking for actionable, intuitive, and customizable insights while preserving personally identifiable information. Ouster Gemini is our digital lidar powered perception platform designed for security and crowd analytics, logistics, and intelligent transportation systems. Ouster BlueCity is our turnkey real-time traffic management solution for analytics and signal actuation to improve traffic flow, road safety, and urban planning.
Factors Affecting Our Performance
Commercialization of Our Product Offerings. As our customers continue research and development projects that rely on lidar, or a combination of lidar, camera, and AI compute for Physical AI, it is difficult to estimate the timing of ultimate end market and customer adoption. As a result, we expect that our results of operations, including revenue and gross margins, will improve over time but may fluctuate on a quarterly and annual basis for the foreseeable future. As more customers reach a commercialization phase with solutions that rely on our technology, the fluctuations in our operating results may become less pronounced. Our strategic business objectives also include growing the software-attached business, transforming the product portfolio, and executing towards profitability.
Number of Customers in Production. For certain strategic customers and markets, our products must be integrated into a broader platform, which then must be tested and validated to achieve system-level performance and reliability thresholds that enable commercial production and sales. The time necessary to reach commercial production varies from six months to several years, based on the market and application. For example, the production cycle in the automotive market tends to be substantially longer than in our other target markets. It is critical to our future success in each of our target end markets that our customers reach commercial production and select our products in their commercial production applications, and that we avoid unexpected cancellations of major purchases of our products. Because the timelines to reach production vary significantly and the revenue generated by each customer in connection with commercial production is unpredictable, it is difficult for us to reliably predict our financial performance.
Customers’ Sales Volumes. Our customer base is diversified, and we aim to continue to penetrate diverse end markets to increase our sales volumes. Ultimately, widespread adoption of our customers’ products that incorporate our lidar solutions will depend on many factors, including the size of our customers’ end markets, market penetration of our customers’ products that incorporate our digital lidar solutions, our customers’ ability to sell their products, and the financial stability and reputation of our customers.
Average Selling Prices (“ASPs”), Product Costs and Margins. Our product costs and gross margins depend largely on the volumes of sensors shipped, the mix of existing and new products sold and the number and variety of solutions we provide to our customers. We expect that our selling prices will vary by target end market and application due to market-specific supply and demand dynamics. We expect to continue to experience some downward pressure on prices from signing anticipated large multi-year agreements in the near term with multi-year negotiated pricing. We expect that these customer-specific selling price fluctuations combined with our volume-driven product costs may drive fluctuations in revenue and gross margins on a quarterly basis. In addition, we expect that the current uncertainty surrounding U.S. trade relationships may impact our future product costs and margins, particularly to the extent there are significant tariffs or trade restrictions imposed on goods imported from Thailand, Canada, Taiwan or China that are used in our products. We may be able to offset or avoid such costs in full. In addition, our contractual arrangements generally provide that our customers will pay the costs of tariffs. These costs could impact customer demand and adoption as described above under “Customers’ Sales Volumes.”
Competition. Lidar is an emerging technology, and there are many competitors for this growing market which has created downward pressure on our ASPs. Absent the introduction of new technology, we expect this pressure to continue to push our ASPs lower in the coming years. However, we believe that because of the simplicity of our digital lidar technology, the increasing capabilities of our software solutions, the value of a complete end-to-end sensing and perception platform, and efficiencies created by our established manufacturing partnerships and suppliers, including Benchmark and Fabrinet,we are well-positioned to scale a set of differentiated offerings that allows us to sustain and potentially increase our gross margins and mitigate pricing pressure over time.
Continued Investment and Innovation. We believe that we are a leading 3D sensing provider. Our financial performance is significantly dependent on our ability to maintain this leading position, which is further dependent on the investments we make in research and development. We believe it is essential that we continue to identify and respond to rapidly evolving customer requirements, including successfully progressing our sensing and perception platform roadmap and developing technologies that will enhance the operating performance of our products. We recently announced our Rev8 family of products. Our “Chronos” chip has been fabricated by our foundry partner and is now undergoing in-house testing. If we fail to continue our innovation, our market position and revenue may be adversely affected, and our investments in that area will not be recovered.
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Supply Chain Continuity. Some of the key components in the products we have designed or are currently designing come from limited or single source suppliers. If these third parties experience financial, operational, manufacturing capacity or other difficulties, or experience shortages in required components, or if they are otherwise unable or unwilling to continue to manufacture these components in required volumes or at all, our supply may be disrupted or be on less favorable terms. For example, we may be required to seek alternate manufacturers or suppliers for our products. It would be time-consuming, and could be costly and impracticable, to begin to use and qualify new manufacturers, components or designs, and such changes could cause significant interruptions in supply and could have an adverse effect on our ability to meet our scheduled product deliveries and may subsequently lead to the loss of sales.
We continue to monitor the impact of tariff and trade policy actions taken by the United States and foreign governments on our supply chain. During the nine months ended September 30, 2026, the Company received cash refunds in the amount of $5.4 million plus interest relating to IEEPA import duties. We continue to review the potential impact of the global duty, tariff and value-added tax landscape on the Company and any available mitigation strategies.
Market Trends and Uncertainties. We anticipate increasing demand for our sensing and perception platform. We estimate a multi-billion dollar total addressable market (“TAM”) for our solutions in the future. We define our TAM as applications in the automotive, industrial, robotics, and smart infrastructure end markets where we actively engage and maintain customer relationships. Each of our target markets is potentially a significant global opportunity, and these markets have historically been underserved by limited or inferior technology or not served at all. We believe we are well-positioned in our market as a leading provider of high-performance digital lidar, cameras, AI compute, sensor fusion and perception software, and AI models.
We may not be able to take advantage of demand if we are unable to anticipate regulatory changes and adapt quickly enough to meet such new regulatory standards or requirements applicable to us or to our customers’ products in which our lidar sensors are used. Market acceptance of lidar technology and active safety technology depend upon many factors, including cost, performance, quality and reliability, safety performance, regulatory requirements and international taxes or tariff and trade policy actions of governments related to such technologies. These factors may impact the ultimate market acceptance of our lidar technology.
International Expansion. We view international expansion as an important element of our strategy to increase revenue and achieve profitability. We continue to position ourselves in geographic markets that we expect to serve as important sources of future growth. We have an existing presence in three regions: Americas; Asia and Pacific; and Europe, Middle East and Africa. We intend to expand our presence in these regions over time including through distribution partnerships. Expanded global reach will require continued investment and may expose us to additional foreign currency risk, international taxes, tariff and trade policy actions of foreign governments, legal obligations, geopolitical conflict, including war in the Middle East, export/import regulations and additional operational costs. These risks and challenges may impact our ability to meet our projected sales volumes, revenues, and gross margins. In addition, the current uncertainty surrounding U.S. trade relationships may impact our future international sales, particularly to the extent there are significant tariffs or trade restrictions imposed on goods imported from the United States.
Components of Results of Operations
Revenue
The majority of our revenue comes from the sale of our lidar sensors, cameras, and AI compute systems both directly to end users and through distributors both domestically and internationally. We recognize revenue from product sales when the performance obligation of transferring control of the product to the customer has been met, generally when the product is shipped. We also recognize revenue by performing services or obligations related to product development, validation, IP license agreements, maintenance under our extended warranty contracts, and shipping. We do not expect these services to be material components of revenue, cost of revenue or gross margin in the near future. Performance obligations related to services are generally recognized over time, based on cost-to-cost input basis or straight-line over time. Amounts billed to customers related to shipping and handling are classified as revenue, and we have elected to recognize the cost of shipping activities that occur after control has transferred to the customer as a fulfillment cost rather than a separate performance obligation. All related costs are accrued and recognized within cost of revenue when the related revenue is recognized.
Most of our customers are innovators and early technology adopters incorporating our products into their solutions. Currently, our product revenue consists of both customers ordering small volumes of our products that are in an evaluation phase and customers that order larger volumes of our products and have more predictable long-term production schedules. However, we believe we are still at the very beginning of the adoption curve, and some customers are still learning their growth and demand rates which can impact the timing of purchase orders quarter to quarter. As we grow our business, we expect to continue to improve our own understanding of our customers’ needs and timelines, and expect the timing of orders will have a less notable impact on our quarterly results.
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Cost of Revenue
Cost of revenue consists of the manufacturing cost components, personnel-related expenses, including salaries, benefits, and stock-based compensation directly associated with our manufacturing organization, and amounts paid to our third-party contract manufacturer and vendors. Our cost of revenue also includes depreciation of manufacturing equipment, amortization of intangible assets, an allocated portion of overhead, facility and information technology (“IT”) costs, warranty expenses, excess and obsolete inventory, tariffs, shipping costs and merchant fees.
Gross Profit and Gross Margin
Our gross profit equals total revenues less our total cost of revenues, and our gross margin is our gross profit expressed as a percentage of total revenue. Our gross margin is subject to quarterly fluctuations in product mix, price and volume.
Operating Expenses
Research and Development Expenses
Research and development (“R&D”) activities are primarily conducted at our San Francisco headquarters and our additional R&D facilities in France, Scotland and Canada and consist of the following activities:
•Design, prototyping, and testing of proprietary electrical, optical, and mechanical subsystems for our products;
•Robust testing for safety certifications;
•Development of new products and enhancements to existing products in response to customer requirements including firmware and software development of lidar and camera integration products;
•Custom SoC design for Ouster’s digital lidar products; and
•Development of custom manufacturing equipment.
R&D expenses consist of personnel-related expenses, including salaries, benefits, and stock-based compensation, for all personnel directly involved in R&D activities, third-party engineering and contractor costs, prototype expenses, amortization of intangible assets, and an allocated portion of overhead, facility and information technology (“IT”) costs that support R&D activities.
R&D costs are expensed as they are incurred. Our investment in R&D will continue to grow as we invest in new lidar technology and related software. Our absolute amount of R&D expenses is expected to grow over time; however, we expect R&D as a percentage of revenue to decrease as our business grows.
Sales and Marketing Expenses
Our business development, customer support and marketing teams are located in offices worldwide. Selling and marketing expenses consist of personnel-related expenses, including salaries, commissions, benefits, and stock-based compensation, for all personnel directly involved in business development, customer support, and marketing activities, and marketing expenses including trade shows, advertising, and demonstration equipment. Sales and marketing expenses also include amortization expense of intangible assets related to customer relationships and a trade name associated with the acquisitions and an allocated portion of facility and IT costs that support sales and marketing activities. We expect sales and marketing expenses as a percentage of revenue to decrease over time as our business grows.
General and Administrative Expenses
General and administrative expenses consist of personnel-related expenses, including salaries, benefits, and stock-based compensation, of our executives and members of the board of directors, finance, human resources, an allocated portion of facility and IT costs that support general and administrative activities, as well as amortization of intangible assets, legal fees, patent prosecution, accounting, finance and professional services, as well as insurance and bank fees. We have experienced and may in the near-term experience additional increases in general and administrative expenses related to legal, accounting, finance and professional services costs associated with acquisition-related transaction and integration costs, litigation activities, hiring more personnel and consultants to support our international expansion and compliance with the applicable provisions of the Sarbanes-Oxley Act and other SEC rules and regulations as a result of being a public company. Our absolute amount of general and administrative expenses will grow over time; however, we expect general and administrative expenses as a percentage of revenue to decrease as our business grows.
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Interest Income and Other Income (Expense), Net
Interest income consists primarily of income earned on our cash and cash equivalents and short-term investments. These amounts will vary based on our respective balances and market rates. Other income (expense), net consists primarily of change in fair value with foreign currency forward contracts, realized and unrealized gains and losses on foreign currency transactions and balances, realized gains and losses related to sales of our available-for-sale investments.
Income Taxes
Our income tax provision consists of federal, state and foreign current and deferred income taxes. Our income tax provision for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items arising in the quarter. Our effective tax rate differs from the U.S. statutory tax rate primarily due to valuation allowances on deferred tax assets as it is more likely than not that some, or all, of our deferred tax assets will not be realized. We continue to maintain a full valuation allowance against our U.S. Federal, state and certain foreign deferred tax assets, excluding specific balances related to the Stereolabs acquisition. The income tax benefit for the three months ended September 30, 2026 was $0.7 million.The income tax benefit for the nine months ended September 30, 2026 was not significant. The income tax provision for the nine months ended September 30, 2026 includes $0.9 million of discrete items primarily related to withholding taxes on sales to customers. Discrete items for the three months ended September 30, 2026, were not significant. The income tax provisions for the three months ended September 30, 2025 was $0.1 million. The income tax benefit for the nine months ended September 30, 2025 was $3.3 million and is primarily related to the resolution of an IRS examination of the Company’s 2017 and 2018 tax years offset by income taxes for its foreign operations.
Results of Operations:
The results of operations presented below should be reviewed in conjunction with the unaudited condensed consolidated financial statements and notes included elsewhere in this Quarterly Report. The following table sets forth our unaudited condensed consolidated results of operations data for the periods presented:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||||||||||||||
| Product revenue | $ | 56,032 | $ | 39,487 | $ | 157,026 | $ | 105,607 | |||||||||||||||||||||||||||
| Royalties | 3,293 | 38 | 5,503 | 1,599 | |||||||||||||||||||||||||||||||
| Total revenue | 59,325 | 39,525 | 162,529 | 107,206 | |||||||||||||||||||||||||||||||
Cost of revenue(1) | 34,066 | 22,866 | 89,747 | 61,222 | |||||||||||||||||||||||||||||||
| Gross profit | 25,259 | 16,659 | 72,782 | 45,984 | |||||||||||||||||||||||||||||||
Operating expenses(1): | |||||||||||||||||||||||||||||||||||
| Research and development | 18,563 | 17,777 | 53,986 | 49,909 | |||||||||||||||||||||||||||||||
| Sales and marketing | 9,641 | 7,441 | 26,667 | 20,842 | |||||||||||||||||||||||||||||||
| General and administrative | 16,315 | 15,692 | 50,646 | 50,136 | |||||||||||||||||||||||||||||||
| Total operating expenses | 44,519 | 40,910 | 131,299 | 120,887 | |||||||||||||||||||||||||||||||
| Loss from operations | (19,260) | (24,251) | (58,517) | (74,903) | |||||||||||||||||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||||||||||||||
| Interest income | 4,159 | 2,414 | 8,603 | 6,739 | |||||||||||||||||||||||||||||||
| Other income (expense), net | 226 | 176 | 137 | 453 | |||||||||||||||||||||||||||||||
| Total other income, net | 4,385 | 2,590 | 8,740 | 7,192 | |||||||||||||||||||||||||||||||
| Loss before income taxes | (14,875) | (21,661) | (49,777) | (67,711) | |||||||||||||||||||||||||||||||
| Provision for (benefit from) income tax expense | (719) | 72 | (42) | (3,349) | |||||||||||||||||||||||||||||||
| Net loss | $ | (14,156) | $ | (21,733) | $ | (49,735) | $ | (64,362) | |||||||||||||||||||||||||||
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The following table sets forth the components of our unaudited condensed consolidated statements of operations and comprehensive loss data as a percentage of total revenue for the periods presented:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||
| (% of total revenue) | |||||||||||||||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||||||||||||||
| Product revenue | 94 | % | 100 | % | 97 | % | 99 | % | |||||||||||||||||||||||||||
| Royalties | 6 | — | 3 | 1 | |||||||||||||||||||||||||||||||
| Total revenue | 100 | 100 | 100 | 100 | |||||||||||||||||||||||||||||||
Cost of revenue(1) | 57 | 58 | 55 | 57 | |||||||||||||||||||||||||||||||
| Gross profit | 43 | 42 | 45 | 43 | |||||||||||||||||||||||||||||||
Operating expenses (1) | |||||||||||||||||||||||||||||||||||
| Research and development | 31 | 45 | 33 | 47 | |||||||||||||||||||||||||||||||
| Sales and marketing | 16 | 19 | 16 | 19 | |||||||||||||||||||||||||||||||
| General and administrative | 28 | 40 | 31 | 47 | |||||||||||||||||||||||||||||||
| Total operating expenses | 75 | 104 | 81 | 113 | |||||||||||||||||||||||||||||||
| Loss from operations | (32) | (62) | (36) | (70) | |||||||||||||||||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||||||||||||||
| Interest income | 7 | 6 | 5 | 6 | |||||||||||||||||||||||||||||||
| Other income (expense), net | — | — | — | — | |||||||||||||||||||||||||||||||
| Total other income, net | 7 | 6 | 5 | 6 | |||||||||||||||||||||||||||||||
| Loss before income taxes | (25) | (56) | (31) | (64) | |||||||||||||||||||||||||||||||
| Provision for (benefit from) income tax expense | (1) | — | — | (3) | |||||||||||||||||||||||||||||||
| Net loss | (24) | % | (56) | % | (31) | % | (61) | % | |||||||||||||||||||||||||||
(1) Includes stock-based compensation expense as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||||||||||
| Cost of revenue | $ | 1,276 | $ | 1,618 | $ | 3,497 | $ | 4,553 | |||||||||||||||||||||||||||
| Research and development | 4,554 | 5,583 | 11,502 | 16,191 | |||||||||||||||||||||||||||||||
| Sales and marketing | 1,199 | 1,285 | 3,142 | 4,124 | |||||||||||||||||||||||||||||||
| General and administrative | 4,457 | 3,343 | 12,224 | 8,685 | |||||||||||||||||||||||||||||||
| Total stock-based compensation | $ | 11,486 | $ | 11,829 | $ | 30,365 | $ | 33,553 | |||||||||||||||||||||||||||
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Comparison of the three months ended September 30, 2026 and 2025
Revenue
| Three Months Ended September 30, | Change | Change | |||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||
| Revenue by geographic location: | |||||||||||||||||||||||
| Americas | $ | 34,765 | $ | 26,348 | $ | 8,417 | 32 | % | |||||||||||||||
| Asia and Pacific | 15,307 | 7,455 | 7,852 | 105 | |||||||||||||||||||
| Europe, Middle East and Africa | 9,253 | 5,722 | 3,531 | 62 | |||||||||||||||||||
| Total | $ | 59,325 | $ | 39,525 | $ | 19,800 | 50 | % | |||||||||||||||
Revenue
Revenue increased by $19.8 million or 50%, to $59.3 million for the three months ended September 30, 2026 from $39.5 million for the comparable period in the prior year. The increase in revenue was primarily driven by the inclusion of revenue from products acquired through the Stereolabs acquisition, for which there was no comparable revenue contribution in the prior-year period. as well as increased sensor volumes as customers increased their purchase levels compared to the prior year period, offset in part by decreased ASPs.
We recorded $3.3 million in patent royalty revenue for the three months ended September 30, 2026. Patent royalty revenue for the three months ended September 30, 2025, was not significant.
Cost of Revenue
| Three Months Ended September 30, | Change | Change | |||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||
| Cost of revenue | $ | 34,066 | $ | 22,866 | $ | 11,200 | 49 | % | |||||||||||||||
Cost of revenue increased by $11.2 million, or 49%, to $34.1 million for the three months ended September 30, 2026 from $22.9 million for the comparable period in the prior year. The increase in cost of revenue was primarily attributable to higher shipments, the inclusion of manufacturing costs from our recently-acquired subsidiary, Stereolabs, higher amortization costs from acquired intangible assets and higher excess and obsolete inventory charges.
Gross margin of 43% for the three months ended September 30, 2026 was relatively flat compared to 42% in the prior year period.
Operating Expenses
| Three Months Ended September 30, | Change | Change | |||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Research and development | $ | 18,563 | $ | 17,777 | $ | 786 | 4 | % | |||||||||||||||
| Sales and marketing | 9,641 | 7,441 | 2,200 | 30 | |||||||||||||||||||
| General and administrative | 16,315 | 15,692 | 623 | 4 | |||||||||||||||||||
| Total operating expenses | $ | 44,519 | $ | 40,910 | $ | 3,609 | 9 | % | |||||||||||||||
Research and Development
Research and development expenses increased by $0.8 million, or 4%, to $18.6 million for the three months ended September 30, 2026 from $17.8 million for the comparable period in the prior year. The increase was primarily attributable to the inclusion of Stereolabs and the increase in compensation expenses for employees engaged in research and product development function, higher depreciation and higher software-related expenses, offset in part by lower prototype materials, lower stock compensation expense and the reversal of an accrual related to the resolution of a sales tax audit.
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Sales and Marketing
Sales and marketing expenses increased by $2.2 million, or 30%, to $9.6 million for the three months ended September 30, 2026 from $7.4 million for the comparable period in the prior year. The increase was primarily attributable to the inclusion of Stereolabs, the increase in the amortization of acquisition-related intangible assets, and costs associated with the launch of the Rev8 OS family of digital lidar sensors offset in part by lower stock compensation expense.
General and Administrative
General and administrative expenses increased by $0.6 million, or 4%, to $16.3 million for the three months ended September 30, 2026 from $15.7 million for the comparable period in the prior year. The increase was primarily attributable to integration costs associated with the Stereolabs acquisition, higher software-related expenses and increased stock compensation expense offset in part by lower litigation and settlement activities, and lower transactions costs associated with the Stereolabs acquisition.
Interest Income and Other Income (Expense), Net
| Three Months Ended September 30, | Change | Change | |||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||
| Interest income | $ | 4,159 | $ | 2,414 | $ | 1,745 | 72 | % | |||||||||||||||
Other income (expense), net | 226 | 176 | 50 | 28 | |||||||||||||||||||
| Total interest income and other income (expense), net | $ | 4,385 | $ | 2,590 | $ | 1,795 | 69 | % | |||||||||||||||
The year-over-year change in interest income is primarily due to a higher average investment balance during the three months ended September 30, 2026.
Income Taxes
We were subject to income taxes in the United States and miscellaneous foreign jurisdictions for the three months ended September 30, 2026 and 2025. The Company’s income tax provision for interim periods is determined using an estimate of the Company’s annual effective tax rate, adjusted for discrete items arising in the quarter.
The Company’s effective tax rate differs from the U.S. statutory tax rate primarily due to valuation allowances on the deferred tax assets as it is more likely than not that some, or all, of the Company’s deferred tax assets will not be realized. The Company continues to maintain a full valuation allowance against our U.S. Federal, state and certain foreign deferred tax assets, excluding specific balances related to the Stereolabs acquisition.
The income tax benefit for the three months ended September 30, 2026 was $0.7 million primarily related to income taxes from our Stereolabs operations. For the three months ended September 30, 2025, the Company recorded an income tax provision of $0.1 million primarily related to income taxes for its foreign operations.
Comparison of the nine months ended September 30, 2026 and 2025
Revenue
| Nine Months Ended September 30, | Change | Change | |||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||
| Revenue by geographic location: | |||||||||||||||||||||||
| Americas | $ | 102,990 | $ | 66,312 | $ | 36,678 | 55 | % | |||||||||||||||
| Asia and Pacific | 35,863 | 26,092 | 9,771 | 37 | |||||||||||||||||||
| Europe, Middle East and Africa | 23,676 | 14,802 | 8,874 | 60 | |||||||||||||||||||
| Total | $ | 162,529 | $ | 107,206 | $ | 55,323 | 52 | % | |||||||||||||||
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Revenue
Revenue increased by $55.3 million, or 52%, to $162.5 million for the nine months ended September 30, 2026, from $107.2 million for the comparable period in the prior year. The increase in revenue was primarily driven by increased sensor volumes as customers increased their purchase levels compared to the prior year period, offset in part by decreased ASPs. The increase was also attributable, in part, to the inclusion of revenue from products acquired through the Stereolabs acquisition, for which there was no comparable revenue contribution in the prior-year period.
We recorded $5.5 million and $1.6 million, respectively in patent royalty revenue for the nine months ended September 30, 2026 and nine months ended September 30, 2025.
Cost of Revenue
| Nine Months Ended September 30, | Change | Change | |||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||
| Cost of revenue | $ | 89,747 | $ | 61,222 | $ | 28,525 | 47 | % | |||||||||||||||
Cost of revenue increased by $28.5 million, or 47%, to $89.7 million for the nine months ended September 30, 2026 from $61.2 million for the comparable period in the prior year. The increase in cost of revenue was primarily attributable to higher product shipments, the inclusion of manufacturing costs from our recently-acquired subsidiary, Stereolabs, higher amortization costs from acquired intangible assets and higher excess and obsolete inventory charges, partially offset by IEEPA import duty refunds. Cost of revenue for the nine months ended September 30, 2026 included a $5.4 million cost reduction associated with IEEPA import duty refunds. Cost of revenue for the nine months ended September 30, 2025 included a $1.7 million cost reduction associated with the employee retention credit (“ERC”) that was received during the period. See Note 2. Summary of Significant Accounting Policies to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report for a discussion of the ERC.
Gross margin of 45% for the nine months ended September 30, 2026 was relatively flat compared to 43% in the prior year period.
Operating Expenses
| Nine Months Ended September 30, | Change | Change | |||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Research and development | $ | 53,986 | $ | 49,909 | $ | 4,077 | 8 | % | |||||||||||||||
| Sales and marketing | 26,667 | 20,842 | 5,825 | 28 | |||||||||||||||||||
| General and administrative | 50,646 | 50,136 | 510 | 1 | |||||||||||||||||||
| Total operating expenses | $ | 131,299 | $ | 120,887 | $ | 10,412 | 9 | % | |||||||||||||||
Research and Development
Research and development expenses increased by $4.1 million, or 8%, to $54.0 million for the nine months ended September 30, 2026 from $49.9 million for the comparable period in the prior year. The increase is primarily attributable to the inclusion of Stereolabs, the Company’s continuing investment in the research and development of new product offerings, and higher salaries and wages, higher depreciation and higher software-related expenses, offset in part by lower prototype materials expense, lower stock compensation expense and the reversal of an accrual related to the resolution of a sales tax audit. Additionally, in the nine months ended September 30, 2025, the Company recognized $2.2 million in benefits resulting from an ERC as a reduction to research and development expenses.
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Sales and Marketing
Sales and marketing expenses increased by $5.8 million, or 28%, to $26.7 million for the nine months ended September 30, 2026 from $20.8 million for the comparable period in the prior year. The increase was primarily attributable to the inclusion of Stereolabs and the increase in the amortization of acquisition-related intangible assets, and costs associated with the launch of the Rev8 OS family of digital lidar sensors, offset in part by lower stock compensation and commission expenses. Additionally, in the nine months ended September 30, 2025, the Company recognized $0.7 million benefits that were received resulting from an ERC as a reduction to the sales and marketing expenses.
General and Administrative
General and administrative expenses increased by $0.5 million to $50.6 million for the nine months ended September 30, 2026 from $50.1 million for the comparable period in the prior year. The increase was primarily attributable to integration costs associated with the Stereolabs acquisition, higher software-related expenses and higher stock compensation expense, offset in part by lower litigation and settlement activities and the reversal of an accrual related to the resolution of a sales tax audit. Additionally, in the nine months ended September 30, 2025, the Company recognized $0.8 million ERC benefits, that were received as a reduction to the general and administrative expenses.
Interest Income and Other Income (Expense), Net
| Nine Months Ended September 30, | Change | Change | |||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||
| Interest income | $ | 8,603 | $ | 6,739 | $ | 1,864 | 28 | % | |||||||||||||||
| Other income (expense), net | 137 | 453 | (316) | (70) | |||||||||||||||||||
| Total interest income and other income (expense), net | 8,740 | 7,192 | 1,548 | 22 | |||||||||||||||||||
The year-over-year interest income earned increased due to higher cash and short-term invested balances offset by lower average rate of interest earned on held balances. During the nine months ended September 30, 2026, the Company recognized $0.6 million interest income earned on an IRS income tax refund received during the period and $0.2 million interest income earned on IEEPA import duty refunds. During the nine months ended September 30, 2025, the Company recognized $0.8 million in interest income earned on a delayed IRS payment related to ERC claims.
Other income (expense), net was not material for the nine months ended September 30, 2026 and 2025.
Income Taxes
The Company’s income tax provision for interim periods is determined using an estimate of the Company’s annual effective tax rate, adjusted for discrete items arising in the quarter. The Company’s effective tax rate differs from the U.S. statutory tax rate primarily due to valuation allowances on the deferred tax assets as it is more likely than not that some, or all, of the Company’s deferred tax assets will not be realized. The Company continues to maintain a full valuation allowance against our U.S. Federal, state and certain foreign deferred tax assets, excluding specific balances related to the Stereolabs acquisition.
The tax benefit for the nine months ended September 30, 2026, was not significant. The tax benefit was reduced by $0.9 million of discrete items primarily related to withholding taxes on sales to customers. For the nine months ended September 30, 2025, the Company recorded an income tax benefit of $3.3 million primarily related to the resolution of the Company’s IRS examination of its 2017 and 2018 tax years offset by income taxes for its foreign operations.
Liquidity and Capital Resources
Our principal sources of liquidity have been our cash and cash equivalents and short-term investments, cash generated from sales of our products, and sales of common stock.
Our primary requirements for liquidity and capital are to finance working capital, inventory management, capital expenditures and general corporate purposes. We expect these needs to continue as we develop and grow our business.
As of September 30, 2026, we had an accumulated deficit of $1.0 billion and cash, cash equivalents, restricted cash and short-term investments of $421.2 million. Management believes that our existing sources of liquidity will be sufficient to fund our operations for at least twelve months from the date of this Quarterly Report.
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We manage our cash and cash equivalents with financial institutions that we believe have high credit quality and, at times, such amounts exceed federally insured limits. The failure of any bank with which we maintain a commercial relationship could cause us to lose our deposits in excess of the federally insured or protected amounts. We have experienced recurring losses from operations, and negative cash flows from operations, and we expect to continue operating at a loss and to have negative cash flows from operations for the foreseeable future. Because we are in the growth stage of our business and operate in an emerging field of technology, we expect to continue to invest in research and development and opportunistically expand our sales and marketing teams worldwide. We may require additional capital to respond to technological advancements, competitive dynamics or technologies, customer demands, business opportunities, challenges, acquisitions, or unforeseen circumstances and in either the short-term or long-term may determine to engage in equity or debt financings, or may choose to raise additional capital opportunistically if we believe market conditions are favorable. If we are unable to obtain adequate financing or financing on terms satisfactory to us, when we require it, our ability to continue to grow or support our business and to respond to business challenges could be significantly limited. In particular, current macroeconomic conditions, including elevated inflation rates and high interest rates, have resulted in, and may continue to result in, significant disruption of global financial markets, reducing our ability to access capital. If we are unable to raise additional funds when or on the terms desired, our business, financial condition and results of operations could be adversely affected.
ATM Agreement
On May 12, 2025, the Company entered into an At-Market-Issuance Sales Agreement (the “Former ATM Agreement”) with Oppenheimer & Co. Inc., pursuant to which the Company could offer and sell shares of the Company’s common stock, having an aggregate offering price of up to $100.0 million.
The Company terminated the Former ATM Agreement in May 2026.
From the date of the Former ATM Agreement to its termination, the Company sold 4,671,406 shares at a weighted-average sales price of $20.88 per share, resulting in cumulative gross proceeds to the Company totaling approximately $97.5 million before deducting offering costs, sales commissions and fees. Cumulative net proceeds to the Company totaled approximately $95.6 million after deducting offering costs, sales commissions and fees.
On May 8, 2026, the Company entered into an At Market Issuance Sales Agreement (the “ATM Agreement”) with Oppenheimer & Co. Inc., Northland Securities, Inc., Rosenblatt Securities Inc., and Roth Capital Partners, LLC (each, an “Agent” and, collectively the “Agents”), pursuant to which the Company may offer and sell, from time to time, through or to the Agents, acting as agent or principal, shares of the Company’s common stock, having an aggregate offering price of up to $100.0 million.
During the nine months ended September 30, 2026, 3,649,000 shares of common stock were sold under the ATM Agreement at a weighted-average sales price of $27.40 per share, resulting in cumulative gross proceeds to the Company totaling approximately $100.0 million before deducting offering costs, sales commissions and fees. Cumulative net proceeds to the Company totaled approximately $98.0 million after deducting offering costs, sales commissions and fees. We plan to use the net proceeds from this offering for working capital and general corporate purposes. As of September 30, 2026, the ATM offering is complete and there are no remaining funds available under the ATM Agreement.
July 2026 Offering
On July 2, 2026, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Northland Securities, Inc. as underwriter (the “Underwriter”), pursuant to which the Company issued and sold on July 6, 2026 an aggregate of 3,621,876 shares of common stock to the Underwriter (the “Offering”). The price to the public in the Offering was $55.22 per share. The Company received net proceeds of approximately $191.8 million, after deducting the Underwriter’s discounts, commissions, and fees.Additionally, under the terms of the Underwriting Agreement, the Company granted the Underwriter a 30-day option, solely for the purpose of covering over-allotments, if any, to purchase up to an additional 543,281 shares of common stock. On August 1, 2026, the option expired unexercised.
Material Cash Requirements
We are a party to many contractual obligations involving commitments to make payments to third parties. These obligations impact our short-term and long-term liquidity and capital resource needs. Certain contractual obligations are reflected on the unaudited condensed consolidated balance sheet as of September 30, 2026, while others are considered future commitments. Our contractual obligations primarily consist of non-cancelable purchase commitments with various parties to purchase goods or services, primarily inventory, entered into in the normal course of business and operating leases. For information regarding our other contractual obligations, refer to Note 7. Commitments and Contingencies to our unaudited condensed consolidated financial statements included in this Quarterly Report as well as Note 7. Leases and Note 8. Commitments and Contingencies Part II, Item 8 of our 2025 Annual Report.
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Cash Flow Summary
The following table summarizes our cash flows from continuing operations for the periods presented:
| Nine Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| (in thousands) | |||||||||||
| Net cash (used in) provided by: | |||||||||||
| Operating activities | $ | (49,388) | $ | (24,530) | |||||||
| Investing activities | $ | (226,174) | $ | (31,567) | |||||||
| Financing activities | $ | 295,916 | $ | 97,328 | |||||||
Operating Activities
During the nine months ended September 30, 2026, operating activities used $49.4 million in cash. The primary factors affecting our operating cash flows during this period were our net loss of $49.7 million, offset by our non-cash charges of $41.4 million, primarily consisting of depreciation and amortization of $9.7 million, stock-based compensation of $30.4 million, amortization of right-of-use asset of $2.5 million, partially offset by accretion on short-term investments of $2.7 million. The changes in our operating assets and liabilities of $41.1 million were primarily due to an increase in accounts receivable of $6.8 million, increase in inventory of $11.0 million, an increase in prepaid expenses and other assets of $6.4 million, an increase in accounts payable of $1.4 million, a decrease in accrued and other liabilities of $3.6 million, a decrease in contract liabilities of $11.9 million and decrease in operating lease liability of $2.9 million.
During the nine months ended September 30, 2025, operating activities used $24.5 million in cash. The primary factors affecting our operating cash flows during this period were our net loss of $64.4 million, offset by our non-cash charges of $42.4 million, primarily consisting of depreciation and amortization of $5.7 million, stock-based compensation of $33.6 million and amortization of right-of-use asset of $3.9 million, partially offset by accretion or amortization on short-term investments of $2.4 million. The changes in our operating assets and liabilities of $2.5 million were primarily due to an increase in accounts receivable of $2.9 million, a decrease in inventory of $0.5 million, an increase in prepaid expenses and other assets of $5.9 million, an increase in accounts payable of $9.2 million, an increase in accrued and other liabilities of $6.1 million, a decrease in contract liabilities of $4.4 million and decrease in operating lease liability of $5.0 million.
Investing Activities
During the nine months ended September 30, 2026, cash used by investing activities was $226.2 million, consisting primarily of $315.6 million purchases of short-term investments and $27.5 million used for the acquisition of Stereolabs, net of cash acquired, partially offset by $127.7 million in proceeds from the sale and maturities of short-term investments.
During the nine months ended September 30, 2025, cash used by investing activities was $31.6 million, consisting primarily of purchases of short-term investments of $118.4 million, partially offset by $90.0 million proceeds from sales and maturities of short-term investments.
Financing Activities
During the nine months ended September 30, 2026, cash provided by financing activities of $295.9 million was primarily related to the issuance of $191.8 million in common stock from the Underwriting Agreement and $98.0 million in common stock under the ATM Agreement.
During the nine months ended September 30, 2025, cash provided by financing activities was $97.3 million, primarily from the issuance of common stock under the Former ATM Agreement.
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Critical Accounting Policies and Estimates
Our critical accounting estimates are described in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2025 Annual Report. There have been no significant changes to our critical accounting policies and estimates since the filing of our 2025 Annual Report.
The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions. Certain of these policies require the application of subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. These estimates and assumptions are based on historical experience, changes in the business environment and other factors that we believe to be reasonable under the circumstances. Different estimates that could have been applied in the current period or changes in the accounting estimates that are reasonably likely can result in a material impact on our financial condition and operating results in the current and future periods.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
We are exposed to market risks in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily the result of fluctuations in interest rates, foreign currency exchange rates and to a lesser extent, inflation risk. The following analysis provides quantitative and qualitative information regarding these risks.
Inflation Risk
General inflation in the U.S., Europe and other geographies has risen significantly in recent years. To date, we do not believe that inflation has had a material effect on our business, financial condition, or results of operations, other than its impact on the general economy. However, we are monitoring the current inflationary environment, particularly as it may be impacted by proposed and/or newly implemented tariffs. If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases, and our inability or failure to do so could harm our business, financial condition and results of operations.
Interest Rate Risk
As of September 30, 2026, we had cash and cash equivalents, restricted cash and short-term investments of $421.2 million, of which $56.6 million consisted of institutional money market funds, $180.3 million consisted of commercial paper, and $160.6 million consisted of corporate debt securities, all of which carries a degree of interest rate risk. The primary goals of our investment policy are liquidity and capital preservation. We do not enter into investments for trading or speculative purposes.
These investments are subject to interest rate risk, as sharp increases in market interest rates could have an adverse impact on their fair value. Although the fair values of these instruments can fluctuate, we believe that the short-term, highly liquid nature of these investments, and our ability to hold these instruments to maturity, reduces our risk for potential material losses. A hypothetical 100 basis point change in interest rates would not have a material impact on our financial condition or results of operations due to the short-term nature of our investment portfolio.
As of September 30, 2026, we had no debt outstanding and therefore are not exposed to interest rate risk with respect to debt.
Foreign Currency Exchange Risk
Our results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates. Substantially all of our revenue is generated in U.S. dollars. Our expenses are generally denominated in the currencies of the jurisdictions in which we conduct our operations, which are primarily in the U.S. and to a lesser extent in Asia and Europe.
The effect of a hypothetical 10% change in foreign currency exchange rates applicable to our business would not have a material impact on our historical consolidated financial statements.
As our international operations grow, we will continue to reassess our approach to managing our risk relating to fluctuations in currency rates. However, no strategy can completely insulate us from risks associated with such fluctuations and our currency exchange rate risk management activities could expose us to substantial losses if such rates move materially differently from our expectations.
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Item 4. Controls and Procedures
Limitations on Effectiveness of Controls and Procedures
Disclosure controls and procedures include controls and other procedures that are designed to ensure that information required to be disclosed in the reports filed or submitted under the Securities Exchange Act of 1934, as amended, (“Exchange Act”) is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to management of the Company, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2026. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of September 30, 2026.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended September 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
We are, from time to time, party to various claims and legal proceedings arising in the ordinary course of our business. See Note 7. Commitments and Contingencies to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report for a discussion of material legal proceedings.
Item 1A. Risk Factors
Investing in our securities involves a high degree of risk. You should carefully consider the risks described under the heading “Risk Factors” in Part I, Item 1A. of our 2025 Annual Report, the other information in this Quarterly Report, including our unaudited condensed consolidated financial statements and the related notes, as well as our other public filings with the SEC, before deciding to invest in our securities. There have been no material changes to the Company’s risk factors previously disclosed in our 2025 Annual Report. The occurrence of any of the events described therein could harm our business, financial condition, results of operations, liquidity or prospects. In such an event, the market price of our common stock could decline, and you may lose all or part of your investment.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
(a) Disclosure in lieu of reporting on a Current Report on Form 8-K.
Adoption of Severance Plan
On October 29, 2026, the board of directors of the Company adopted and approved the Ouster, Inc. Executive Change in Control and Severance Plan (the “Severance Plan”), effective October 29, 2026, pursuant to which certain of the Company’s executives, including the Company’s named executive officers Angus Pacala, the Company’s Chief Executive Officer; Kenneth P. Gianella, the Company’s Chief Financial Officer; and Mark Frichtl, the Company’s Chief Technology Officer, may elect to participate and become eligible to receive certain benefits in the event of certain qualifying terminations. The Severance Plan provides for severance payments and benefits in the event the executive’s employment with the Company is terminated by the Company without Cause or the executive resigns for Good Reason (each as defined in the Severance Plan and each a “Covered Termination”), as follows: (i) the continued payment of the executive’s base salary for a period of 12 months, (ii) a pro-rated annual bonus payable based on actual performance at the same time annual bonuses are paid to other executives and (iii) Company-paid COBRA premiums for up to 12 months.
In lieu of the foregoing severance payments and benefits, in the event the executive experiences a Covered Termination within the 3-month period preceding and the 12-month period following a Change in Control (as defined in the Severance Plan) the executive will be eligible to receive the following: (i) a cash severance payment equal to 150% (200% with respect to the Company’s Chief Executive Officer) of the executive’s base salary and 100% of the executive’s target annual bonus; (ii) Company-paid COBRA premiums for up to 18 months (up to 24 months with respect to the Company’s Chief Executive Officer); and (iii) full vesting acceleration of equity awards subject to time-based vesting and vesting acceleration of equity awards subject to performance-based vesting with performance deemed achieved at the “target” level.
The receipt of any benefits under the Severance Plan is subject to the executive timely executing and not revoking a general release of claims against the Company and its affiliates.
As a condition to participation in the Severance Plan, executives are required to execute a participation agreement (the “Participation Agreement”), which supersedes any pre-existing severance protection.
The foregoing descriptions of the Severance Plan and Participation Agreement do not purport to be complete and are qualified in their entirety by reference to the full text of the Severance Plan and Participation Agreement, copies of which are attached as Exhibits 10.1 and 10.2 to this Quarterly Report on Form 10-Q and incorporated herein by reference..
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(b) Material changes to the procedures by which security holders may recommend nominees to the board of directors.
None.
(c) Insider trading arrangements and policies.
On August 15, 2026, Cyrille Jacquemet, the Company’s Chief Revenue Officer, executed a Rule 10b5-1 instruction letter that constitutes a “Rule 10b5-1 trading arrangement” intended to satisfy the affirmative defense of Rule 10b5-1(c)(1) of the Exchange Act, providing for the sale of the number of shares necessary to satisfy his tax withholding obligations upon the future settlement of all restricted stock units or vesting of restricted stock granted to Mr. Jacquemet. The instruction letter becomes effective on November 14, 2026 and does not include a termination date.
On August 17, 2026 Darien Spencer Chief Operating Officer termination of the prior arrangement and the adoption of a new Rule 10b5-1 trading arrangement intended to satisfy the affirmative defense of Rule 10b5-1(c). The modified arrangement provides for the periodic sale of up to 235,836 shares of common stock between December 15, 2026 and August 17, 2028 .
On August 24, 2026 , Stephen Skaggs , a member of the Company’s Board of Directors , adopted a “Rule 10b5-1 trading arrangement” as defined in Item 408(a) of Regulation S-K. The plan provides for the periodic sale of up to 18,803 shares of common stock between January 4, 2027 and February 21, 2028 .
On September 4, 2026 , Kenneth Gianella , the Company’s Chief Financial Officer , adopted a “Rule 10b5-1 trading arrangement” as defined in Item 408(a) of Regulation S-K. The plan provides for the periodic sale of up to 40,000 shares of common stock between March 15, 2027 and September 3, 2027 .
On September 16, 2026 , Cyrille Jacquemet , the Company’s Chief Revenue Officer , adopted a “Rule 10b5-1 trading arrangement” as defined in Item 408(a) of Regulation S-K. The plan provides for the periodic sale of up to 36,280 shares of common stock between December 16, 2026 and September 15, 2027 .
Other than as described above, during the three months ended September 30, 2026, no director or officer of the Company, as defined in Rule 16a-1(f) of the Exchange Act, adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
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Item 6. Exhibits.
| Exhibit Number | Description | Incorporated by Reference | ||||||||||||||||||||||||||||||||||||
| Form | File No. | Exhibit | Filing Date | Filed/ Furnished herewith | ||||||||||||||||||||||||||||||||||
| S-4 POS | 333-251611 | 3.1 | 3/10/2021 | |||||||||||||||||||||||||||||||||||
| 8-K | 001-39463 | 3.1 | 4/20/2023 | |||||||||||||||||||||||||||||||||||
8-K | 001-39463 | 3.1 | 4/22/2024 | |||||||||||||||||||||||||||||||||||
| 8-K | 001-39463 | 3.1 | 6/18/2026 | |||||||||||||||||||||||||||||||||||
| 8-K | 001-38703 | 4.1 | 2/7/2022 | |||||||||||||||||||||||||||||||||||
| * | ||||||||||||||||||||||||||||||||||||||
| * | ||||||||||||||||||||||||||||||||||||||
| * | ||||||||||||||||||||||||||||||||||||||
| * | ||||||||||||||||||||||||||||||||||||||
| ** | ||||||||||||||||||||||||||||||||||||||
| ** | ||||||||||||||||||||||||||||||||||||||
| 101.INS | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data file because its XBRL tags are embedded within the Inline XBRL document. | * | ||||||||||||||||||||||||||||||||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | * | ||||||||||||||||||||||||||||||||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | * | ||||||||||||||||||||||||||||||||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | * | ||||||||||||||||||||||||||||||||||||
| 101.LAB | Inline XBRL Taxonomy Label Linkbase Document | * | ||||||||||||||||||||||||||||||||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | * | ||||||||||||||||||||||||||||||||||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | * | ||||||||||||||||||||||||||||||||||||
____________
| * | Filed herewith. | ||||
| ** | Furnished herewith. | ||||
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Ouster, Inc. | ||||||||
Date: November 3, 2026 | By: | /s/ Kenneth P. Gianella | ||||||
| Name: | Kenneth P. Gianella | |||||||
| Title: | Chief Financial Officer (principal financial officer and principal accounting officer) | |||||||
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Exhibit 10.1 1 OUSTER, INC. EXECUTIVE CHANGE IN CONTROL AND SEVERANCE PLAN (AND SUMMARY PLAN DESCRIPTION) Effective October 29, 2026 This Ouster, Inc. Executive Change in Control and Severance Plan (as may be amended and/or restated from time to time, this “Plan”) is effective as of October 29, 2026 (the “Effective Date”). The purpose of this Plan is to provide severance benefits to certain eligible employees of Ouster, Inc. (the “Company”) whose employment with the Company is terminated under the circumstances described below. This Plan is an employee welfare benefit plan subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). This Plan document is also the summary plan description of this Plan. References in this Plan to “you” or “your” are references to a Covered Employee (as defined below). Capitalized terms not otherwise defined herein shall have the meanings set forth in Section 5 below. 1. General Eligibility. In order to be eligible for benefits under this Plan, you must be, on your date of termination of employment, an employee of the Company employed in the United States in one of the positions identified on Appendix A, which may be updated and supplemented by the Company from time to time, and have executed a participation agreement in a form reasonably acceptable to the Company (a “Covered Employee”). 2. Covered Termination Outside of a Change in Control Period. If you experience a Covered Termination at any time other than during a Change in Control Period and deliver to the Company a general release of all claims against the Company and its affiliates substantially in a form reasonably acceptable to the Company (a “Release of Claims”) that becomes effective and irrevocable within 60 days, or such shorter period of time specified by the Company, following such Covered Termination, then in addition to any accrued but unpaid salary, bonus, benefits, vacation and expense reimbursement payable in accordance with applicable law: (a) Severance. You shall be entitled to receive continued payment of your base salary at the rate in effect as of the Termination Date for a period of 12 months paid less required withholding taxes in accordance with the Company’s regular payroll practices with the first installment to be made on the first payroll date following the date the Release of Claims becomes effective and irrevocable and inclusive of any installment that would have been paid had the Release of Claims been effective on the Termination Date. In addition, you will be entitled to a lump sum cash payment of your annual bonus for the year of termination, calculated based on actual achievement, as determined by the Board or its Compensation Committee, and prorated based on the number of days during the performance period that have passed as of the Termination Date, such amount to be paid less required withholding taxes at the same time annual bonuses are paid to executives of the Company. (b) Continued Healthcare. If you elect to receive continued healthcare coverage pursuant to the provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company shall directly pay, or reimburse you for, the premium for you and your covered dependents during the period (the “COBRA Period”) commencing on the first day of the month following the Termination Date and ending on the earlier of (i) the 12-month anniversary of the Termination Date and (ii) the date you and your covered dependents, if any, become eligible for healthcare coverage under another employer’s plan(s); provided, however, that if (1) any plan pursuant to which such benefits are provided is not, or ceases prior to the expiration of the continuation coverage period to be, exempt from the application of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), under Treasury
Regulation Section 1.409A-1(a)(5), (2) the Company is otherwise unable to continue to cover you or your dependents under its group health plans, or (3) the Company cannot provide the benefit without violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), then, in any such case, an amount equal to each remaining Company subsidy shall thereafter be paid to you in substantially equal monthly installments over the COBRA Period (or remaining portion thereof). After the Company ceases to pay or reimburse premiums pursuant to the preceding sentence, you may, if eligible, elect to continue healthcare coverage at your expense in accordance with the provisions of COBRA. 3. Covered Termination During Change in Control Period. If you experience a Covered Termination during a Change in Control Period and deliver to the Company a Release of Claims in a form reasonably acceptable to the Company that becomes effective and irrevocable within 60 days, or such shorter period of time specified by the Company, following such Covered Termination, then in addition to any accrued but unpaid salary, bonus, benefits, vacation and expense reimbursement payable in accordance with applicable law: (a) Severance. You shall be entitled to receive a severance payment equal to the sum of (i) 24 months (if you are a Tier 1 Participant) or 18 months (if you are a Tier 2 Participant) of your annual base salary and (ii) your full annual bonus for the year of termination, calculated based on achievement at target level and not prorated, in each case, at the rate in effect immediately prior to the Termination Date (without giving effect to any reductions imposed on or following the Change in Control), payable in a cash lump sum, less applicable withholdings, on the first payroll date following the date the Release of Claims becomes effective and irrevocable. (b) Continued Healthcare. If you elect to receive continued healthcare coverage pursuant to the provisions of COBRA, the Company shall directly pay, or reimburse you for, the premium for you and your covered dependents during the period (the “CIC COBRA Period”) commencing on the first day of the month following the Termination Date through the earlier of (i) the 24-month (if you are a Tier 1 Participant) or the 18-month (if you are a Tier 2 Participant) anniversary of the Termination Date and (ii) the date you and your covered dependents, if any, become eligible for healthcare coverage under another employer’s plan(s); provided, however, that if (1) any plan pursuant to which such benefits are provided is not, or ceases prior to the expiration of the continuation coverage period to be, exempt from the application of Section 409A of the Code, under Treasury Regulation Section 1.409A-1(a)(5), (2) the Company is otherwise unable to continue to cover you or your dependents under its group health plans, or (3) the Company cannot provide the benefit without violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), then, in any such case, an amount equal to each remaining Company subsidy shall thereafter be paid to you in substantially equal monthly installments over the CIC COBRA Period (or remaining portion thereof). After the Company ceases to pay or reimburse premiums pursuant to the preceding sentence, you may, if eligible, elect to continue healthcare coverage at your expense in accordance with the provisions of COBRA. (c) Equity Awards. Except as otherwise specifically provided in an individual equity award agreement, each outstanding and unvested Equity Award held by you as of the Termination Date shall automatically become vested and, if applicable, exercisable, in each case, with respect to 100% of the number of unvested shares underlying the Equity Award as of the Termination Date with any performance goal applicable thereto deemed achieved at target (and if the Termination Date precedes the Change in Control, all such unvested Equity Awards shall remain outstanding and eligible to vest in accordance with this Section 3(c) if a Change in Control occurs within three months after the Termination Date, provided that in no event will any such award remain outstanding beyond the final expiration date of the award set forth in the individual equity agreement governing such award).
(d) Release. In the event you experience a Covered Termination during a Change in Control Period and the Company fails to deliver to you a reasonable form of Release of Claims within ten days following your Termination Date, then the Company will be deemed to have waived the Release of Claims requirement and you will be entitled to receive the benefits set forth in Sections 3(a), (b) and (c) hereof. 4. Certain Reductions. Notwithstanding anything herein to the contrary, the Company shall reduce your severance benefits under this Plan, in whole or in part, by any other severance benefits, pay in lieu of notice, or other similar benefits payable to you by the Company in connection with your termination, including but not limited to payments or benefits pursuant to (a) any applicable legal requirement, including, without limitation, the Worker Adjustment and Retraining Notification Act, or (b) any other Company agreement, arrangement, policy or practice relating to your termination of employment with the Company. The benefits provided under this Plan are intended to satisfy, to the greatest extent possible, any and all statutory obligations that may arise out of your termination of employment. Such reductions shall be applied on a retroactive basis, with severance benefits previously paid being recharacterized as payments pursuant to the Company’s statutory obligation. 5. Definitions. For the purposes of this Plan, the following terms shall have the following meanings: (a) “Board” means the board of directors of the Company. (b) “Cause” means your (i) unauthorized use or disclosure of the confidential information or trade secrets of the Company or any of its affiliates, (ii) material breach of any agreement with the Company or any of its affiliates, (iii) material failure to comply with the written policies or rules of the Company or any of its affiliates, (iv) conviction of, or plea of “guilty” or “no contest” to, a felony under the laws of the United States or any State involving fraud, embezzlement or any other act of moral turpitude, (v) gross negligence or willful misconduct related to the business of the Company or any of its affiliates, (vi) willful and repeated failure to perform reasonably assigned and essential duties, or (vii) failure to cooperate in good faith with a governmental or internal investigation of the Company or any of its affiliates, or any of its or their respective directors, officers or employees, if the Company or any of its affiliates has requested such cooperation. For purposes of this definition, Cause shall not exist unless the Company or any of its affiliates delivers written notice to you specifically identifying the conduct, events or circumstances that may provide grounds for Cause, in reasonable detail. To the extent curable, you will have ten business days following receipt of the notice to cure or remedy such conduct, events or circumstances before such conduct, events or circumstances shall constitute Cause. (c) “Change in Control” has the meaning ascribed to such term under either Equity Plan. Notwithstanding the foregoing, a Change in Control must also constitute a “change in control event,” as defined in Treasury Regulation Section 1.409A-3(i)(5), with respect to any compensation or benefit that is subject to Section 409A of the Code. (d) “Change in Control Period” means the period commencing three months prior to a Change in Control and ending 12 months following such Change in Control. (e) “Covered Termination” means the termination of your employment with the Company effected by the Company other than for Cause or your resignation of employment with the Company for Good Reason, and does not include your termination of employment due to death or disability.
(f) “Equity Award” means any stock option, restricted stock unit, restricted stock or other equity-based award granted by the Company under the Ouster 2021 Plan, the Velodyne Plan or any other Company equity plan (together, the “Equity Plans”, and each, an “Equity Plan”). (g) “Good Reason” means any of the following occurs without your express written consent: (i) a reduction in your total target annual cash compensation by more than 10%, other than a general reduction that is part of a cost-reduction program that affects all similarly situated employees in substantially the same proportions, (ii) a relocation of your principal workplace by more than 25 miles from its location prior to such relocation or (iii) a material reduction of your responsibilities, authority or duties; provided, that a reduction in your authorities, duties or responsibilities solely by virtue of the Company being acquired and made part of a larger entity, whether as a subsidiary, business unit or otherwise (as, for example, when the Chief Executive Officer of the Company or any of its affiliates remains the Chief Executive Officer of the Company or such affiliate following a Change in Control where the Company or such affiliate becomes a wholly owned subsidiary of the acquiror, but is not made the Chief Executive Officer of the acquiring corporation) will not, by itself, constitute grounds for Good Reason. In addition, you will not have Good Reason unless you give the Company written notice of the condition within 90 days after the condition comes into existence, the Company and any applicable affiliate fail to remedy the condition within 30 days after receiving such written notice and your resignation for Good Reason is effective within 12 months following the date the action(s) giving rise to Good Reason first occurred; provided, however, that the Company will be deemed to have waived such cure period if the Company has communicated that it does not intend to cure such condition. (h) “Ouster 2021 Plan” means the Ouster, Inc. 2021 Incentive Award Plan, as amended and/or restated from time to time. (i) “Plan Administrator” means the Board or its Compensation Committee. (j) “Plan Sponsor” means the Company. (k) “Termination Date” means the date on which you experience a Covered Termination. (l) “Tier 1 Participant” means a Covered Employee identified as a Tier 1 Participant on Appendix A. (m) “Tier 2 Participant” means a Covered Employee identified as a Tier 2 Participant on Appendix A. (n) “Velodyne Plan” means the Velodyne Lidar, Inc. 2020 Equity Incentive Plan, as amended and/or restated from time to time. 6. Taxes. All payments to be made under this Plan will be subject to appropriate tax withholding and other deductions. 7. Amendment of Plan. Prior to the consummation of a Change in Control, the Plan Administrator shall have the power to amend or terminate this Plan from time to time in its discretion and for any reason (or no reason). On or following the consummation of a Change in Control, the Plan may not be terminated or amended until the later of the first anniversary of the consummation of the Change in Control or the date all payments and benefits eligible to be received hereunder shall have been paid. 8. Claims Procedures.
(a) Normally, you do not need to present a formal claim to receive benefits payable under this Plan. (b) If any person (the “Claimant”) believes that benefits are being denied improperly, that this Plan is not being operated properly, that fiduciaries of this Plan have breached their duties, or that the Claimant’s legal rights are being violated with respect to this Plan, the Claimant must file a formal claim, in writing, with the Plan Administrator. (c) A formal claim must be filed within 90 days after the date the Claimant first knew or should have known of the facts on which the claim is based, unless the Plan Administrator in writing consents otherwise. The Plan Administrator shall provide a Claimant, on request, with a copy of the claims procedures established under subsection (d). (d) The Plan Administrator has adopted procedures for considering claims (which are set forth in Appendix B), which it may amend from time to time, as it sees fit. These procedures shall comply with all applicable legal requirements. These procedures may provide that final and binding arbitration shall be the ultimate means of contesting a denied claim (even if the Plan Administrator or its delegates failed to follow the prescribed procedures with respect to the claim such that the claim was deemed denied). The right to receive benefits under this Plan is contingent on a Claimant using the prescribed claims and arbitration procedures to resolve any claim. 9. Plan Administration. (a) The Plan Administrator is responsible for the general administration and management of this Plan and shall have all powers and duties necessary to fulfill its responsibilities, including, but not limited to, the discretion to interpret and apply this Plan and to determine all questions relating to eligibility for benefits. This Plan shall be interpreted in accordance with its terms and their intended meanings. However, the Plan Administrator and all Plan fiduciaries shall have the discretion to interpret or construe ambiguous, unclear, or implied (but omitted) terms in any manner they deem to be appropriate in their sole discretion, and to make any findings of fact needed in the administration of this Plan. The validity of any such interpretation, construction, decision, or finding of fact shall not be given de novo review if challenged in court, by arbitration, or in any other forum, and shall be upheld unless clearly arbitrary or capricious. (b) All actions taken and all determinations made in good faith by the Plan Administrator or by Plan fiduciaries will be final and binding on all persons claiming any interest in or under this Plan. To the extent the Plan Administrator or any Plan fiduciary has been granted discretionary authority under this Plan, the Plan Administrator’s or Plan fiduciary’s prior exercise of such authority shall not obligate it to exercise its authority in a like manner thereafter. (c) If, due to errors in drafting, any Plan provision does not accurately reflect its intended meaning, as demonstrated by consistent interpretations or other evidence of intent, or as determined by the Plan Administrator in its sole discretion, the provision shall be considered ambiguous and shall be interpreted by the Plan Administrator and all Plan fiduciaries in a manner consistent with its intent, as determined in the sole discretion of the Plan Administrator. The Plan Sponsor may amend this Plan retroactively to cure any such ambiguity. (d) No Plan fiduciary shall have the authority to answer questions about any pending or final business decision of the Company or any affiliate that has not been officially announced, to make disclosures about such matters, or even to discuss them, and no person shall rely on any unauthorized, unofficial disclosure. Thus, before a decision is officially announced, no fiduciary is authorized to tell any
employee, for example, that the employee will or will not be laid off or that the Company will or will not offer exit incentives in the future. Nothing in this subsection shall preclude any fiduciary from fully participating in the consideration, making, or official announcement of any business decision. (e) This Section 9 may not be invoked by any person to require this Plan to be interpreted in a manner inconsistent with its interpretation by the Plan Administrator or other Plan fiduciaries. 10. Plan Application. This Plan shall be the only plan, agreement or arrangement with respect to which benefits may be provided to a Covered Employee upon a termination of employment and supersedes all prior agreements, arrangements or related communications of the Company relating to separation benefits or accelerated vesting benefits for the Covered Employees, whether formal or informal, or written or unwritten. Subject to the foregoing, any benefits under this Plan will be provided to Covered Employees in lieu of benefits under any other separation plan or agreement (including any employment agreement or offer letter). 11. Funding and Payment of Benefits. This Plan shall be maintained in a manner to be considered “unfunded” for purposes of ERISA. The Company shall be required to make payments only as benefits become due and payable. No person shall have any right, other than the right of an unsecured general creditor against the Company, with respect to the benefits payable hereunder, or which may be payable hereunder, to any employee. If the Company, acting in its sole discretion, establishes a reserve or other fund associated with this Plan, no person shall have any right to or interest in any specific amount or asset of such reserve or fund by reason of amounts which may be payable to such person under this Plan, nor shall such person have any right to receive any payment under this Plan except as and to the extent expressly provided in this Plan. The assets in any such reserve or fund shall be part of the general assets of the Company, subject to the control of the Company. 12. Successors. Any successor to the Company (whether direct or indirect and whether by purchase, lease, merger, consolidation, liquidation or otherwise) to all or substantially all of the Company’s business and/or assets shall assume the obligations under this Plan and agree expressly to perform any of the Company’s obligations under this Plan. For the avoidance of doubt, any successor to any affiliate of the Company, including without limitation, a successor to a subsidiary of the Company (whether direct or indirect and whether by purchase, lease, merger, consolidation, liquidation or otherwise), to all or substantially all of such affiliate’s business and/or assets shall assume the obligations under this Plan and agree expressly to perform any of the Company’s obligations under this Plan as such obligations relate to the employees eligible under this Plan employed by the affiliate of the Company. For all purposes under this Plan, the term “Company” shall include any successor to the Company’s and/or any of its affiliates’ business and/or assets which executes and delivers an assumption agreement or which becomes bound by the terms of the Plan by operation of law. All of your rights hereunder shall inure to the benefit of, and be enforceable by, your personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. 13. Limitation On Employee Rights; At-Will Employment. This Plan shall not give any employee the right to be retained in the service of the Company or interfere with or restrict the right of the Company to discharge or retire the employee. All employees of the Company are employed at will. 14. No Third-Party Beneficiaries. This Plan shall not give any rights or remedies to any person other than eligible employees hereunder (or their estates or beneficiaries, in the event of an eligible employee’s death) and the Company.
15. Governing Law. This Plan is a welfare plan subject to ERISA and it shall be interpreted, administered, and enforced in accordance with that law. To the extent that state law is applicable, the statutes and common law of the State of California shall apply, excluding any that mandate the use of another jurisdiction’s laws. 16. No Assignment of Benefits. The rights of any person to payments or benefits under this Plan shall not be made subject to option or assignment, either by voluntary or involuntary assignment or by operation of law, including (without limitation) bankruptcy, garnishment, attachment or other creditor’s process, and any action in violation of this Section 16 shall be void. 17. Miscellaneous. Where the context so indicates, the singular will include the plural and vice versa. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Plan. Unless the context clearly indicates to the contrary, a reference to a statute or document shall be construed as referring to any subsequently enacted, adopted, or executed counterpart. 18. Section 409A. (a) The payments and benefits under this Plan are intended to comply with or be exempt from Section 409A of the Code and, accordingly, to the maximum extent permitted, this Plan shall be interpreted to be in compliance therewith. Notwithstanding any provision of this Plan to the contrary, in the event that the Plan Administrator determines that any amounts payable hereunder would be immediately taxable to you under Section 409A of the Code, the Plan Administrator may (without any obligation to do so or to indemnify you for failure to do so) (i) adopt such amendments to this Plan or adopt such other policies and procedures (including amendments, policies and procedures with retroactive effect) that it determines to be necessary or appropriate to preserve the intended tax treatment of the benefits provided by this Plan or the economic benefits of this Plan and (ii) take such other actions it determines to be necessary or appropriate to exempt the amounts payable hereunder from Section 409A of the Code or to comply with the requirements of Section 409A of the Code and thereby avoid the application of penalty taxes thereunder (b) Notwithstanding any provision to the contrary in this Plan, no amount deemed deferred compensation subject to Section 409A of the Code shall be payable pursuant to this Plan unless your termination of employment constitutes a “separation from service” with the Company within the meaning of Section 409A of the Code and the Department of Treasury regulations and other guidance promulgated thereunder (“Separation from Service”). (c) Notwithstanding any provision to the contrary in this Plan, if you are deemed at the time of your Separation from Service to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code, to the extent delayed commencement of any portion of the benefits to which you are entitled under this Plan is required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code, such portion of your benefits shall not be provided to you prior to the earlier of (A) the expiration of the six-month period measured from the date of your Separation from Service or (B) the date of your death. Upon the first business day following the expiration of the applicable Code Section 409A(a)(2)(B)(i) period, all payments deferred pursuant to this Section 18 shall be paid in a lump sum to you, and any remaining payments due under this Plan shall be paid as otherwise provided herein. (d) To the extent that any reimbursements or in-kind benefits provided pursuant to this Plan are subject to the provisions of Section 409A of the Code, any such reimbursements payable to you pursuant to this Plan shall be paid to you no later than December 31 of the year following the year in which the expense was incurred, the amount of expenses reimbursed or in-kind benefits provided in one year shall not affect the amount eligible for reimbursement or in-kind benefits to be provided in any subsequent year,
and your right to reimbursement or in-kind benefits under this Plan will not be subject to liquidation or exchange for another benefit. (e) For purposes of Section 409A of the Code (including, without limitation, for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii)), your right to receive any installment payments under this Plan shall be treated as a right to receive a series of separate payments and, accordingly, each such installment payment shall at all times be considered a separate and distinct payment. To the extent necessary to comply with Section 409A of the Code, if the designated payment period for any payment provided pursuant to this Plan begins in one taxable year and ends in the next taxable year, the payment will commence or otherwise be made in the later taxable year. 19. Limitation on Payments. Notwithstanding anything in this Plan to the contrary, if any payment or distribution you would receive pursuant to this Plan or otherwise (“Payment”) would (a) constitute a “parachute payment” within the meaning of Section 280G of the Code and (b) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment shall either be (i) delivered in full, or (ii) delivered as to such lesser extent which would result in no portion of such Payment being subject to the Excise Tax, whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the Excise Tax, results in the receipt by you on an after-tax basis of the largest payment, notwithstanding that all or some portion of the Payment may be taxable under Section 4999 of the Code. The accounting firm engaged by the Company for general audit purposes as of the day prior to the effective date of the Change in Control shall perform the foregoing calculations. The Company shall bear all expenses with respect to the determinations by such accounting firm required to be made hereunder. The accounting firm shall provide its calculations to you and the Company within 15 calendar days after the date on which your right to a Payment is triggered (if requested at that time by you or the Company) or such other time as requested by you or the Company. Any good faith determinations of the accounting firm made hereunder shall be final, binding and conclusive upon you and the Company. Any reduction in payments and/or benefits pursuant to this Section 19 will occur in the following order: (1) reduction of cash payments; (2) cancellation of accelerated vesting of equity awards other than stock options; (3) cancellation of accelerated vesting of stock options; and (4) reduction of other benefits payable to you.
Appendix A-1 APPENDIX A COVERED EMPLOYEES Tier 1 Participant Chief Executive Officer Tier 2 Participants Chief Operating Officer Chief Financial Officer Chief Technology Officer General Counsel Chief Revenue Officer Chief People Officer
Appendix B-1 APPENDIX B DETAILED CLAIMS AND ARBITRATION PROCEDURES 1. Claims Procedure Claims for benefits under the Plan shall be administered in accordance with Section 503 of ERISA and the Department of Labor Regulations thereunder. The Plan Administrator shall make all determinations as to the rights of any Claimant. A Claimant may authorize a representative to act on his or her behalf with respect to any claim under the Plan. 2. Initial Claims All claims shall be presented to the Plan Administrator in writing at the address in Appendix C. Within 90 days after receiving a claim, a “claims official” appointed by the Plan Administrator shall consider the claim and issue his or her determination thereon in writing. If the Plan Administrator or claims official determines that an extension of time is necessary, the claims official may extend the determination period for up to an additional 90 days by giving the Claimant written notice indicating the special circumstances requiring the extension of time prior to the termination of the initial 90-day period. Any claims that the Claimant does not pursue in good faith through the initial claims stage shall be treated as having been irrevocably waived. 3. Claims Decisions If the claim is granted, the benefits or relief the Claimant seeks shall be provided. If the claim is wholly or partially denied, the claims official shall, within 90 days (or a longer period, as described above), provide the Claimant with written notice of the denial, setting forth, in a manner calculated to be understood by the Claimant: (1) the specific reason or reasons for the denial; (2) specific references to the provisions on which the denial is based; (3) a description of any additional material or information necessary for the Claimant to perfect the claim, together with an explanation of why the material or information is necessary; and (4) an explanation of the procedures for appealing denied claims and time limits applicable to such procedures, including a statement of the Claimant’s right to submit a request for arbitration after the appeal is denied or deemed denied. If the Claimant can establish that the claims official has failed to respond to the claim in a timely manner, the Claimant may treat the claim as having been denied by the claims official. 4. Appeals of Denied Claims Each Claimant shall have the opportunity to appeal the claims official’s denial of a claim. All appeals shall be presented to the Plan Administrator in writing at the address in Appendix C. The appeal will be reviewed by the Plan Administrator or its designee (the “appeals official”). A Claimant must appeal a denied claim within 60 days after receipt of written notice of denial of the claim, or within 60 days after it was due if the Claimant did not receive it by its due date, subject to the temporary extension of deadlines described in the paragraph below. The Claimant shall have the opportunity to submit written comments, documents, records and other information relating to the Claimant’s claim. The Claimant (or the Claimant’s duly authorized representative) shall be provided upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the Claimant’s claim. The appeals official shall take into account during its review all comments, documents, records and other information submitted by the Claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefits review. Any claims that the Claimant does not pursue in good faith through the appeals stage, such as by failing to file a timely appeal request, shall be treated as having been irrevocably waived.
Appendix B-2 5. Appeals Decisions The decision by the appeals official shall be made not later than 60 days after the written appeal is received by the Plan Administrator, however, if the appeals official determines that an extension of time is necessary, the appeals official may extend the determination period for up to an additional 60 days by giving the Claimant written notice indicating the special circumstances requiring the extension of time prior to the termination of the initial 60-day period. However, if the appeals official is a committee that meets at least quarterly, then the decision by the appeals official shall be made not later than the date of the meeting that immediately follows the Plan’s receipt of an appeal request, unless the appeal request is filed within 30 days preceding the date of such meeting. In such case, a benefit determination may be made by no later than the date of the second meeting following the Plan’s receipt of the appeal request. If special circumstances require a further extension of time for processing, a benefit determination shall be rendered no later than the third meeting of the appeals official following the Plan’s receipt of the appeal request. If such an extension of time for review is required, the appeals official shall provide the Claimant with written notice of the extension, describing the special circumstances and the date as of which the benefit determination will be made, prior to the commencement of the extension. The appeals official shall notify the Claimant of the benefit determination as soon as possible but not later than five days after it has been made. The appeal decision shall be in writing, shall be set forth in a manner calculated to be understood by the Claimant and shall include the following: (1) the specific reason or reasons for the denial; (2) specific references to the Plan provisions on which the denial is based; (3) a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the Claimant’s claim, and (4) a statement of the Claimant’s right to submit a request for arbitration and the deadline for doing so. If a Claimant does not receive the appeal decision by the date it is due, the Claimant may deem the appeal to have been denied. Subject to applicable law, any decision made in accordance with the claims procedures in this Appendix B is final and binding on all parties and shall be given the maximum possible deference allowed by law. 6. Procedures The Plan Administrator shall adopt procedures by which initial claims shall be considered and appeals shall be resolved; different procedures may be established for different claims. All procedures shall be designed to afford a Claimant full and fair consideration of his or her claim and appeal. 7. Arbitration of Rejected Appeals If a Claimant has pursued a claim through the appeal stage of these claims procedures, the Claimant may contest the actual or deemed denial of that claim through arbitration, as described below. In no event shall any denied claim be subject to resolution by any means (such as in a court of law) other than arbitration in accordance with the following provisions. 8. Arbitration Procedure Request for Arbitration A Claimant must submit a request for arbitration to the Plan Administrator within 60 days after receipt of the written denial of an appeal (or within 60 days after he or she should have received the determination). The Claimant or the Plan Administrator may bring an action in any court of appropriate jurisdiction to compel arbitration in accordance with these procedures.
Appendix B-3 Applicable Arbitration Rules If the Claimant has entered into a valid arbitration agreement with the Company, the arbitration shall be conducted in accordance with that agreement. If not, the rules set forth in the balance of this Appendix B shall apply: The arbitration shall be held under the auspices of the Judicial Arbitration and Mediation Service (“JAMS”). Except as provided below, the arbitration shall be in accordance with JAMS’ then-current employment dispute resolution rules. A copy of the rules currently in effect can be found at https://www.jamsadr.com/rules-employment-arbitration. The Arbitrator (as defined below) shall apply the Federal Rules of Evidence and shall have the authority to entertain a motion to dismiss or a motion for summary judgment by any party and shall apply the standards governing such motions under the Federal Rules of Civil Procedure. The Federal Arbitration Act shall govern all arbitrations that take place under these Detailed Claims and Arbitration Procedures (or that are required to take place under them), and shall govern the interpretation or enforcement of these Procedures or any arbitration award. To the extent that the Federal Arbitration Act is inapplicable, California law pertaining to arbitration agreements shall apply. Arbitrator The arbitrator (the “Arbitrator”) shall be an attorney familiar with employee benefit matters who is licensed to practice law in the state in which the arbitration is convened. The Arbitrator shall be selected in the following manner from a list of eleven arbitrators drawn by the sponsoring organization under whose auspices the arbitration is being conducted and taken from its panel of labor and employment arbitrators. Each party shall designate all arbitrators on the list whom they find acceptable; the parties shall then alternately strike arbitrators from the list of arbitrators acceptable to both parties, with the party who did not initiate the arbitration striking first. If only one arbitrator is acceptable to both parties, he or she will be the Arbitrator. If none of the arbitrators is acceptable to both parties, a new panel of arbitrators shall be obtained from the sponsoring organization and the selection process shall be repeated. Location The arbitration will take place in or near the city in which the Claimant is or was last employed by the Company or in which the Plan is principally administered, whichever is specified by the Plan Administrator, or in such other location as may be acceptable to both the Claimant and the Plan Administrator. Authority of Arbitrator The Arbitrator shall have the authority to resolve any factual or legal claim relating to the Plan or relating to the interpretation, applicability, or enforceability of these arbitration procedures, including, but not limited to, any claim that these procedures are void or voidable. The Arbitrator may grant a Claimant’s claim only if the Arbitrator determines that it is justified because: (1) the appeals official erred on an issue of law; or (2) the appeals official’s findings of fact, if applicable, were not supported by substantial evidence. The arbitration shall be final and binding on all parties. Limitation on Scope of Arbitration The Claimant may not present any evidence, facts, arguments, or theories at the arbitration that the Claimant did not pursue in his or her appeal, except in response to new evidence, facts, arguments, or theories presented on behalf of the other parties to the arbitration. However, an arbitrator may permit a Claimant to present additional evidence or theories if the Arbitrator determines that the Claimant was precluded from presenting them during the claim and appeal procedures due to procedural errors of the Plan
Appendix B-4 Administrator or its delegates. Each Claimant may only submit individual claims to the Arbitrator, and the Arbitrator may only review individual, not class, claims. Administrative Record The Plan Administrator shall submit to the Arbitrator a certified copy of the record on which the appeals official’s decision was made. Experts, Depositions, and Discovery Except as otherwise permitted by the Arbitrator on a showing of substantial need, either party may: (1) designate one expert witness; (2) take the deposition of one individual and the other party’s expert witness; (3) propound requests for production of documents; and (4) subpoena witnesses and documents relating to the discovery permitted in this paragraph. Pre-Hearing Procedures At least 30 days before the arbitration hearing, the parties must exchange lists of witnesses, including any expert witnesses, and copies of all exhibits intended to be used at the hearing. The Arbitrator shall have jurisdiction to hear and rule on pre-hearing disputes and is authorized to hold pre-hearing conferences by telephone or in person, as the Arbitrator deems necessary. Transcripts Either party may arrange for a court reporter to provide a stenographic record of the proceedings at the party’s own cost. Post-Hearing Procedures Either party, on request at the close of the hearing, may be given leave to file a post-hearing brief within the time limits established by the Arbitrator. Costs and Attorneys’ Fees Each party shall bear its own costs and attorneys’ fees in connection with the arbitration, provided that the Company shall bear the costs of the Arbitrator and administrative fees. Arbitration Award The Arbitrator shall render an award and opinion in the form typically rendered in labor arbitrations. Within 20 days after issuance of the Arbitrator’s award and opinion, either party may file with the Arbitrator a motion to reconsider, which shall be accompanied by a supporting brief. If such a motion is filed, the other party shall have 20 days from the date of the motion to respond, after which the Arbitrator shall reconsider the issues raised by the motion and either promptly confirm or promptly change his or her decision. The decision shall then be final and conclusive on the parties. Arbitrator fees and other costs of a motion for reconsideration shall be borne by the losing party, unless the Arbitrator orders otherwise. Either party may bring an action in any court of appropriate jurisdiction to enforce an arbitration award. A party opposing enforcement of an arbitration award may not do so in an enforcement proceeding, but must bring a separate action in a court of competent jurisdiction to set aside the award. In any such action, the standard of review shall be the same as that applied by an appellate court reviewing the decision of a trial court in a nonjury trial.
Appendix B-5 Severability The invalidity or unenforceability of any part of these arbitration procedures shall not affect the validity of the rest of the procedures.
Appendix C-1 APPENDIX C ADDITIONAL INFORMATION RIGHTS UNDER ERISA As a participant in the Plan, you are entitled to certain rights and protections under ERISA. ERISA provides that all Plan participants will be entitled to: Receive Information About Your Plan and Benefits 1. Examine, without charge, at the Company’s headquarters, all documents governing the Plan, if any, and a copy of the latest annual report (Form 5500 Series) filed by the Plan with U.S. Department of Labor and available at the Public Disclosure Room of the Employee Benefits Security Administration. 2. Obtain, upon written request to the Plan Administrator, copies of documents governing the operation of the Plan, including copies of the latest annual report (Form 5500 Series) and updated summary plan description. The Plan Administrator may make a reasonable charge for the copies. 3. Receive a summary of the Plan’s annual financial report, if any. The Plan Administrator is required by law to furnish each participant with a copy of this summary annual report. Prudent Actions by Plan Fiduciaries In addition to creating rights for Plan participants, ERISA imposes duties upon the people who are responsible for the operation of the employee benefit plan. The people who operate your Plan, called “fiduciaries” of the Plan, have a duty to do so prudently and in the interest of you and other Plan participants and beneficiaries. No one, including the Company, or any other person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a welfare benefit or exercising your right under ERISA. Enforce Your Rights If your claim for a welfare benefit is denied or ignored, in whole or in part, you have a right to know why this was done, to obtain copies of documents relating to the decision without charge, and to appeal any denial, all within certain time schedules. Under ERISA, there are steps you can take to enforce the above rights. For instance, if you request a copy of plan documents or the latest annual report from the Plan and do not receive them within 30 days, you may file suit in a Federal court. In such a case, the court may require the Plan Administrator to provide the materials and pay you up to $110 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the Plan Administrator. If you have a claim for benefits, which is denied or ignored, in whole or in part, you may file suit in a state or Federal court. If it should happen that Plan fiduciaries misuse the Plan’s money, or if you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a federal court. The court will decide who should pay court costs and legal fees. If you are successful, the court may order the person you have sued to pay these costs and fees. If you lose, the court may order you to pay these costs and fees, for example, if it finds your claim is frivolous. Assistance with Your Questions If you have any questions about your Plan, you should contact the Plan Administrator. If you should have any questions about this statement or about your rights under ERISA, or if you need assistance in obtaining documents from the Plan Administrator, you should contact the nearest office of the Employee
Appendix C-2 Benefits Security Administration, U.S. Department of Labor, listed in your telephone directory or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue N. W., Washington, D. C. 20210. You may also obtain certain publications about your rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration. ADMINISTRATIVE INFORMATION Name of Plan: Ouster, Inc. Executive Change in Control and Severance Plan Plan Sponsor: Ouster, Inc. 350 Treat Avenue San Francisco, CA 94110 Tel: (415) 949-0108 Plan Administrator: Compensation Committee of the Board of Directors of Ouster, Inc. 350 Treat Avenue San Francisco, CA 94110 Tel: (415) 949-0108 Type of Administration: Self-Administered Type of Plan: Severance Pay Employee Welfare Benefit Plan Employer Identification Number: 86-2528989 Direct Questions Regarding the Plan to: Ouster People Team 350 Treat Avenue San Francisco, CA 94110 Tel: (415) 949-0108 Agent for Service of Legal Process: Ouster, Inc. 350 Treat Avenue San Francisco, CA 94110 Tel: (415) 949-0108 Service of Legal Process may also be made upon the Plan Administrator. Plan Year End: December 31 Plan Number: [502] Funding: The Plan is unfunded. Plan benefits are paid as needed from the general assets of the Company.
Exhibit 10.2 OUSTER, INC. EXECUTIVE CHANGE IN CONTROL AND SEVERANCE PLAN PARTICIPATION AGREEMENT Dear [_______]: We are pleased to inform you that the Compensation Committee of the Board of Directors of Ouster, Inc., a Delaware corporation (the “Company”), has determined that, effective as of [ ˜ ] (the “Participation Date”), you are eligible to participate in the Company’s Executive Change in Control and Severance Plan (the “Plan”) as a Tier [1 OR 2] Participant thereunder, subject to your execution and delivery of this Participation Agreement to the Company and subject to the terms and conditions of the Plan and this Participation Agreement. Capitalized terms used and not defined herein shall have the meanings given to such terms in the Plan. The terms of the Plan are set forth in the copy of the Plan that is attached as Annex A to this Participation Agreement, and those terms are incorporated in and made a part of this Participation Agreement. As described in more detail in the Plan, the Plan entitles you to certain severance payments and benefits in the event that your employment with the Company or any Subsidiary terminates under certain circumstances. This Participation Agreement and the Plan constitute the entire agreement between you and the Company with respect to the subject matter hereof and, as of the Participation Date, shall supersede in all respects any and all prior agreements between you and the Company and any Subsidiary concerning such subject matter, including any and all offer letters, employment agreements and change in control and severance agreements. As of the Participation Date, the change in control and severance provisions of any such offer letters and other agreements between you and the Company or any Subsidiary shall terminate and be of no further force or effect. By signing below, you agree to the terms and conditions set forth herein and the Plan and acknowledge: (a) your participation in the Plan is as of the Participation Date; (b) that you have received and read a copy of the Plan; (c) that you agree that any severance payments and benefits provided for in the Plan are subject to all of the terms and conditions of the Plan and you agree to such terms and conditions; and (d) that the Company may amend or terminate the Plan at any time subject to the limitations set forth in the Plan. [Signature Page Follows]
Exhibit 10.2 COMPANY: OUSTER, INC., a Delaware corporation By: ________________________________________ Name: [__________] Title: [_________] AGREED TO AND ACCEPTED __________________________________ Name: [_________]
Exhibit 10.2 Annex A to Participation Agreement Executive Severance Control Plan [See Attached]
Exhibit 31.1
CERTIFICATION
I, Angus Pacala, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Ouster, Inc.; | ||||
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | ||||
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | ||||
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: | ||||
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |||||||
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |||||||
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |||||||
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and | |||||||
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): | ||||
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |||||||
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. | |||||||
Date: November 3, 2026 | By: | /s/ Angus Pacala | |||||||||
| Angus Pacala | |||||||||||
Co-Founder and Chief Executive Officer (principal executive officer) | |||||||||||
Exhibit 31.2
CERTIFICATION
I, Kenneth Gianella, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Ouster, Inc.; | ||||
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | ||||
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | ||||
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: | ||||
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |||||||
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |||||||
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |||||||
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and | |||||||
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): | ||||
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |||||||
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. | |||||||
Date: November 3, 2026 | By: | /s/ Kenneth P. Gianella | |||||||||
| Kenneth P. Gianella | |||||||||||
Chief Financial Officer (principal financial officer) | |||||||||||
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of Ouster, Inc. (the “Company”) for the period ended September 30, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |||||||
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. | |||||||
Date: November 3, 2026 | By: | /s/ Angus Pacala | |||||||||
| Angus Pacala | |||||||||||
Co-Founder and Chief Executive Officer (principal executive officer) | |||||||||||
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of Ouster, Inc. (the “Company”) for the period ended September 30, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |||||||
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. | |||||||
Date: November 3, 2026 | By: | /s/ Kenneth P. Gianella | |||||||||
| Kenneth P. Gianella | |||||||||||
Chief Financial Officer (principal financial officer) | |||||||||||