0001628280-26-030722
SEC filingOuster's Q1 2026 revenue surged 49% YoY to $48.6M driven by higher sensor volumes, with gross margin expanding 200 bps to 43% despite lower ASPs and Stereolabs integration costs.
Ouster, Inc. reported total revenue of $48.6 million for the first quarter of 2026, a 49% increase compared to $32.6 million in the prior year period. This growth was primarily driven by a significant increase in sensor volumes as customers raised their purchase levels. Product revenue constituted 99% of total revenue, with royalties contributing the remaining 1%, a notable shift from the 5% royalty contribution in Q1 2025. The company recorded a net loss of $17.5 million, an improvement from the $22.0 million net loss in the prior year, driven by higher gross profit and a lower operating loss.
Gross profit rose 55% to $20.8 million, with gross margin expanding 200 basis points to 43% from 41% a year ago. The margin improvement was attributed to higher sensor volumes, which helped offset the dilutive effects of lower average selling prices (ASPs) and the inclusion of production costs from the recently acquired Stereolabs subsidiary. Cost of revenue increased 45% to $27.7 million, reflecting higher product manufacturing costs, tariffs, and higher amortization of acquired intangible assets.
Total operating expenses increased 7% to $40.1 million. Research and development expenses grew 7% to $16.1 million, sales and marketing rose 22% to $7.8 million, and general and administrative expenses were relatively flat at $16.1 million. The increases were primarily attributable to the inclusion of Stereolabs' operations and higher amortization of acquisition-related intangible assets, partially offset by lower litigation and settlement costs in G&A. Loss from operations narrowed to $19.2 million from $23.8 million.
Geographic revenue performance showed significant divergence. The Americas segment was the standout performer, with revenue surging 111% year-over-year to $32.8 million, driven by increased sensor volumes. The Europe, Middle East, and Africa (EMEA) region also demonstrated strong momentum, growing 68% to $7.8 million. In contrast, the Asia and Pacific region experienced a 36% decline to $8.0 million, representing a notable headwind and shift in geographic mix. Management noted that customer adoption timelines remain unpredictable, and quarterly fluctuations are expected as the market matures.
Management's outlook emphasizes continued investment in innovation and commercialization. The company announced the launch of its next-generation Rev8 OS family of digital lidar sensors on May 4, 2026, featuring the world's first native color lidar and significant improvements in range and resolution. The integration of Stereolabs, acquired in February 2026, positions Ouster as an end-to-end sensing and perception platform for Physical AI. The company expects its results of operations, including revenue and gross margins, to improve over time but remain subject to quarterly fluctuations. Ouster anticipates continued downward pressure on ASPs from competitive dynamics and large multi-year agreements but believes its technology and manufacturing scale will support positive gross margins. The company is actively monitoring the impact of U.S. trade policy and tariffs on its supply chain and product costs, noting that while mitigation steps are being taken, full cost offset is not expected. Management believes existing liquidity of $174.9 million in cash and short-term investments is sufficient to fund operations for at least the next twelve months.
As of March 31, 2026, Ouster's liquidity position included $78.7M in cash and cash equivalents, $94.4M in short-term investments, and $1.7M in restricted cash, totaling $174.9M. This compares to $69.9M in total cash, equivalents, and restricted cash at December 31, 2025. The company maintains a full valuation allowance against its net deferred tax assets. Inventory increased to $29.9M from $23.6M at year-end 2025, driven partly by $2.2M in inventory acquired from Stereolabs. Goodwill of $38.5M and acquired intangible assets of $23.4M were recorded from the Stereolabs acquisition, with the purchase price allocation still subject to measurement-period adjustments. Contract liabilities rose to $27.1M from $23.8M, including $2.3M acquired from Stereolabs and $12.5M remaining deferred on a multi-year product contract entered in 2023. Accrued liabilities increased to $38.2M from $26.2M, largely due to $6.3M in indemnified tax liabilities assumed in the acquisition, offset by a $1.9M indemnification asset.
Non-cancelable purchase commitments totaled $39.3M as of March 31, 2026, comprising $13.0M to third-party contract manufacturers and $26.3M to other vendors. The company also had outstanding letters of credit of $0.3M, collateralized by restricted cash. Operating lease liabilities totaled $17.4M ($4.6M current, $12.8M non-current). The Amazon Warrant, assumed in the Velodyne merger, had 3,277,155 shares issuable at $50.49 per share as of March 31, 2026, with 2,871,875 shares vested. Vesting is tied to up to $100.0M in payments from Amazon for goods and services.
Capital expenditures were $2.6M for the three months ended March 31, 2026, representing 5.3% of total revenue. No shares were sold under the $100.0M at-the-market equity offering program during the quarter; $2.5M in availability remained. The company issued 1,847,677 shares of common stock as partial consideration for the Stereolabs acquisition, valued at $22.8M. No dividends were declared or paid. Stock-based compensation expense was $7.5M, with $36.2M in unrecognized RSU expense and $12.2M in unrecognized expense tied to Stereolabs retention shares.
The company operates as a single reportable segment. Geographic revenue mix for Q1 2026: Americas $32.8M (67.5%), Asia-Pacific $8.0M (16.4%), EMEA $7.8M (16.1%). The United States accounted for 66% of total revenue, and Austria for 11%. Customer concentration was significant, with Customer E representing 31% of revenue and Customer H representing 11%. Accounts receivable concentration showed Customer A at 25% and Customer E at 30% of total receivables.
For the three months ended March 31, 2026, Ouster, Inc. reported a net loss of $17.5 million, while net cash used in operating activities was $7.3 million. The difference is primarily driven by non-cash charges including $7.5 million in stock-based compensation and $2.7 million in depreciation and amortization. However, operating cash flow deteriorated year-over-year from a use of $4.9 million to $7.3 million, a 49% increase in cash burn. This was largely due to significant working capital swings: a $3.5 million use of cash for accounts payable versus a $4.1 million source in the prior year, and a $3.7 million build in inventory compared to a $1.1 million reduction in Q1 2025. These outflows were partially offset by a $6.5 million reduction in accounts receivable.
Investing activities provided $17.1 million in cash, heavily supported by $57.9 million in proceeds from sales and maturities of short-term investments, which more than offset $10.8 million in purchases. A major cash outflow was the $27.5 million acquisition of Stereolabs, net of cash acquired. Capital expenditures increased sharply to $2.6 million from $0.6 million in the prior year, indicating higher investment in property and equipment. The company did not pay dividends or repurchase shares. Financing activities provided a modest $0.7 million from stock option exercises and employee tax obligation funding for vested RSUs. Overall, cash, cash equivalents, and restricted cash increased by $10.5 million to $80.5 million, bolstered by the net liquidation of the investment portfolio to fund the acquisition.