Ouster Q1 2025 slides: revenue jumps 26%, gross margins expand to 41%

Ouster Inc (NASDAQ:OUST) reported strong first-quarter 2025 results on May 8, marking its ninth consecutive quarter of meeting or exceeding guidance. The lidar technology company posted significant year-over-year improvements in revenue and gross margins while maintaining its strategic focus on software expansion and path to profitability.

Quarterly Performance Highlights

Ouster delivered $33 million in revenue for Q1 2025, representing a 26% increase compared to the same period in 2024. The company shipped over 4,700 sensors during the quarter, up 6% year-over-year, while significantly improving profitability metrics.

"We had a solid start to the year, delivering our 9th consecutive quarter of meeting or exceeding guidance," said CEO and Co-founder Angus Pacala in the earnings presentation. "We won multi-million dollar deals across all four of our verticals and our installed base of connected software solutions is growing."

Gross margin improvements were particularly notable, with GAAP gross margin reaching 41%, up from 29% in Q1 2024. On a non-GAAP basis, gross margin expanded to 46%, compared to 36% in the year-ago quarter. The company maintained a strong balance sheet with $171 million in cash and equivalents and no debt.

The Q1 results continue Ouster’s growth trajectory, building on the company’s performance in the previous quarter. In Q4 2024, Ouster reported $30 million in revenue with a 44% gross margin, shipping approximately 4,800 sensors.

Strategic Initiatives

Ouster outlined three key strategic priorities for 2025: scaling its software-attached business, transforming its product portfolio, and executing toward profitability.

The company is particularly focused on expanding its software-attached business, targeting a $19 billion total addressable market by 2030 across intelligent transportation systems, perimeter security, logistics, and crowd analytics.

"We are going to have the biggest expansion in our addressable market in the company’s history," Pacala had noted during the previous quarter’s earnings call, emphasizing the company’s strategic focus on expanding its software-attached business internationally.

Product portfolio transformation represents another key initiative, with Ouster developing next-generation custom silicon for its hardware products, enhanced firmware capabilities, and expanded software functionality in its Ouster Gemini and BlueCity platforms. The company aims to more than double its current addressable market through these innovations.

Path to Profitability

Ouster’s third strategic priority focuses on achieving profitability while maintaining growth. The company aims to achieve 30-50% annual revenue growth by supporting customers moving into commercial production and growing its sales pipeline in high-volume end markets.

The company plans to maintain gross margins in the 35-40% range by driving value through higher-performance products, leveraging its low-cost contract manufacturing model, and increasing contribution from software-attached sales. Simultaneously, Ouster is committed to keeping operating expenses at or below Q3 2023 levels by expanding the use of lower-cost locations and optimizing underutilized fixed assets.

Forward-Looking Statements

For the second quarter of 2025, Ouster provided revenue guidance of $32-35 million, suggesting continued year-over-year growth but potentially flat to modest sequential growth compared to Q1.

This guidance aligns with the company’s broader strategy of achieving 30-50% annual revenue growth while maintaining gross margins in the 35-40% range. Ouster continues to position itself as a "Physical AI" company, bringing together digital lidar technology, AI software solutions, and autonomy across industries.

Market Reaction

Following the earnings presentation, Ouster’s stock rose 9.94% in aftermarket trading to $9.51, building on a 4.6% gain during the regular trading session. The stock has traded between $5.84 and $16.88 over the past 52 weeks.

Investors appear to be responding positively to the company’s continued revenue growth, margin expansion, and strategic focus on software-attached business and profitability. With a strong cash position and zero debt, Ouster remains well-positioned to execute its growth strategy in the competitive lidar market.

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