Ouster, a developer of LiDAR sensors, announced its Q3 2022 results today. The company reported USD 11.2 million in revenue during the quarter (up 44% YoY), driven by the industrial and robotics segments. Its net loss for the quarter stood at USD 36 million (USD 0.20 loss per share), up from a net loss of USD 12.7 million (USD 0.08 loss per share) in Q3 2021 due to higher R&D, and sales and marketing expenses, and a reduction in other income.

Ouster shipped 2,136 sensors in Q3 2022 (up 31% YoY) and increased the number of strategic customer agreements to 84 by the end of September (from 80 in Q2 2022). The company also launched its newest LiDAR sensor “REV7” in October with enhanced object detection, increased precision and accuracy, and double the range.

The company continued to expand its presence in the automotive segment as it received orders for trucks and buses from customers in the segment.

The company reiterated that its full-year 2022 revenue would range between USD 40 million and USD 55 million (an implied increase of 19%–64% YoY) and is targeting a gross margin of 25%–30%.

Ouster also announced the signing of a definitive agreement for an all-stock merger with incumbent LiDAR maker Velodyne Lidar to accelerate LiDAR adoption and strengthen the combined entity's financial position. The deal is subject to regulatory and shareholder approvals and other customary closing conditions and is expected to close in 1H 2023. The companies will operate independently till then and will own 50-50% of the combined entity once merged.

In addition, the combined entity will also result in operational synergies, complementary customer and partner networks, a sizable intellectual property portfolio, and a strengthened leadership team.

Analyst QuickTake: Today’s news on the upcoming merger adds to recent consolidations in the LiDAR space. Earlier in October, Velodyne acquired peer LiDAR maker Bluecity.ai to complement LiDAR development for smart city applications and Ouster acquired Sense Photonics in October last year to complement product development. Meanwhile, self-driving tech company Aurora Innovation, which develops its own LiDAR, also acquired two LiDAR startups– Blackmore (May 2019) and OURS Technology (February 2021) to expedite its LiDAR development process.