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What changed in Ouster, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Ouster, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+329 added−297 removedSource: 10-K (2026-03-02) vs 10-K (2025-03-21)

Top changes in Ouster, Inc.'s 2025 10-K

329 paragraphs added · 297 removed · 237 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

54 edited+17 added−12 removed67 unchanged
Biggest changeWe currently have proprietary intellectual property for both our digital and analog products and solutions, including in our software, real-time 3D vision for autonomous systems, manufacturing processes and calibration methodology. We have also filed patents and trademark applications in order to further secure these rights and strengthen our ability to defend against third parties who may infringe on our rights.
Biggest changeBeing at the forefront of innovation in the lidar market depends in part on our ability to obtain and maintain intellectual property rights relating to our digital and analog products and solutions, including our software, real-time 3D vision for autonomous systems, manufacturing processes, and calibration methodology.
This may include depending on location and eligibility, annual bonuses, paid time-off, 401(k) plan with a Company match (subject to the IRS annual limit), stock-based awards, employee stock purchase plan, health and wellness programs, and other benefits. Our long-term equity compensation is intended to align management interests with those of our stockholders and to encourage the creation of long-term value.
This may include depending on location and eligibility, paid time-off, 401(k) plan with a Company match (subject to the IRS annual limit), stock-based awards, employee stock purchase plan, health and wellness programs, and other benefits. Our long-term equity compensation is intended to align management interests with those of our stockholders and to encourage the creation of long-term value.
As a lidar technology company, we are subject to the Electronic Product Radiation Control Provisions of the Federal Food, Drug, and Cosmetic Act. These requirements are enforced by the U.S. Food and Drug Administration (“FDA”). Electronic product radiation includes laser technology. Regulations governing these products are intended to protect the public from hazardous or unnecessary exposure.
Risk Factors). As a lidar technology company, we are subject to the Electronic Product Radiation Control Provisions of the Federal Food, Drug, and Cosmetic Act. These requirements are enforced by the U.S. Food and Drug Administration (“FDA”). Electronic product radiation includes laser technology. Regulations governing these products are intended to protect the public from hazardous or unnecessary exposure.
We believe that our digital lidar sensors are one of the highest performing, lowest cost solutions available today, which we believe positions us at the center of a global revolution in autonomy. Our four target markets each have unique use cases for our lidar sensors: • Automotive.
We believe that our digital lidar sensors are one of the highest performing, lowest cost solutions available today, which we believe positions us at the center of a global revolution in autonomy. Our four target markets each have unique use cases for our lidar sensors: • Industrial.
High resolution. The patented breakthrough solid-state digital flash architecture produces high-resolution 3D point clouds. Adaptability. The multi-sensor suite is a flexible platform that can be easily adapted to different form-factors and sensor configurations to provide varying ranges, fields of view, and vehicle design freedoms – all with a simple change in optics or housing. Scalability.
High resolution. The patented breakthrough solid-state digital flash architecture produces high-resolution 3D point clouds. Adaptability. The multi-sensor suite is a flexible platform that can be easily adapted to different form-factors and sensor configurations to provide varying ranges, fields of view, and vehicle design freedoms – all with a simple change in optics or housing. 6 Table of C ontents Scalability.
As the Company has developed, we have built a strong supporting team, adding leaders in sales, marketing, operations, engineering, manufacturing, legal, and finance. Our Growth Strategies Our growth strategy is based upon three components: the attractive performance and cost economics of our digital lidar technology, accelerating adoption with our software solutions, and focused commercial execution.
As the Company has developed, we have built a strong and stable supporting team, with long-tenured leaders in sales, marketing, operations, engineering, manufacturing, legal and finance. Our Growth Strategies Our growth strategy is based upon three components: the attractive performance and cost economics of our digital lidar technology, accelerating adoption with our software solutions, and focused commercial execution.
Although we believe our line of products and innovation support position us as a leader in the lidar market, we will continue to face competition from existing, established market competitors with greater resources and new companies developing lidar solutions. Sales And Marketing We maintain a global sales presence across the Americas, Europe, and Asia and Pacific markets.
Although we believe our line of products and innovation support position us as a leader in the lidar market, we will continue to face competition from existing, established market competitors with greater resources and new companies developing lidar solutions. 11 Table of C ontents Sales And Marketing We maintain a global sales presence across the Americas, Europe, and Asia and Pacific markets.
BlueCity provides real-time data analytics and predictions, which can be used to improve traffic and crowd flow efficiency, improve urban planning, advance sustainability, and protect vulnerable road users in a wide range of weather and lighting conditions. Improve flow efficiency .
In addition to traffic signal actuation, BlueCity provides real-time data analytics and predictions, which can be used to improve traffic and crowd flow efficiency, improve urban planning, advance sustainability, and protect vulnerable road users in a wide range of weather and lighting conditions. Improve flow efficiency .
In addition, we are increasingly cross-selling within accounts, accessing new projects and opportunities within accounts where we have a beachhead position and increasing the number of addressable opportunities. 10 Table of C ontents Pursue strategic transactions We have explored and may continue to explore strategic acquisitions, mergers or other transactions as a means to improve our competitive position.
In addition, we are increasingly cross-selling within accounts, accessing new projects and opportunities within accounts where we have a beachhead position and increasing the number of addressable opportunities. Pursue strategic transactions We have explored and may continue to explore strategic acquisitions, mergers or other transactions as a means to improve our competitive position.
We plan to leverage this dynamic to grow our sensor sales by steadily improving our product performance while consistently maintaining a competitive price point. 9 Table of C ontents We believe our software solutions for multiple end markets present a significant growth opportunity. For existing lidar users, software has the potential to decrease development time and improve system performance.
We plan to leverage this dynamic to grow our sensor sales by steadily improving our product performance while consistently maintaining a competitive price point. We believe our software solutions for multiple end markets present a significant growth opportunity. For existing lidar users, software has the potential to decrease development time and improve system performance.
We believe our patented digital approach to lidar and our ongoing development of perception, analytics, mapping, and localization software will better position us in this changing environment. We believe the simplicity of our digital lidar design gives us meaningful cost advantages in manufacturing, supply chain, and production yields. Our main manufacturing partners are Benchmark Electronics, Inc. (“Benchmark”) and Fabrinet.
We believe our patents and ongoing development of perception, analytics, mapping, and localization software will better position us in this evolutionary environment. We believe the simplicity of our digital lidar design gives us meaningful cost advantages in manufacturing, supply chain, and production yields. Our main manufacturing partners are Benchmark Electronics, Inc. (“Benchmark”) and Fabrinet.
The Sense acquisition and the Velodyne Merger have enabled us to acquire additional intellectual property, which we believe will continue to distinguish us in the lidar space. 8 Table of C ontents High performance at an affordable price As we introduce future generations of our proprietary SoC, we expect to be able to offer improved resolution, range, precision, and reliability, and unlock new data types.
The Sense acquisition and the Velodyne Merger have enabled us to acquire additional intellectual property, which we believe will continue to distinguish us in the lidar space. High performance at a competitive price As we introduce future generations of our proprietary SoC, we expect to be able to offer improved resolution, range, precision, and reliability, and unlock new data types.
We are subject to the requirements of the federal Occupational Safety and Health Administration, as amended, (“OSHA”), and comparable international, state and local laws that protect and regulate employee health and safety. We are subject to climate-related, sustainability and environmental laws, rules and regulations that are evolving and changing.
We are subject to the requirements of the federal Occupational Safety and Health Administration, as amended, (“OSHA”), and comparable international, state and local laws that protect and regulate employee health and safety. We are subject to climate-related, sustainability and environmental laws, rules and regulations that are evolving and changing. This is not an exhaustive list of laws, rules, and regulations.
We plan to grow our existing network and establish new distribution partnerships in regions where we do not currently have partnerships. By leveraging these relationships, we believe we will be able to reach more customers faster and rapidly grow our sales.
We believe these distributors enable us to reach more end customers in an operationally efficient manner. We plan to grow our existing network and establish new distribution partnerships in regions where we do not currently have partnerships. By leveraging these relationships, we believe we will be able to reach more customers faster and rapidly grow our sales.
Digital solid-state technology positioned to capture high volume OEM opportunities We expect that our prospective customers will select lidar suppliers primarily based on the anticipated ability to meet performance, reliability, design, and cost requirements. We believe that the solid-state digital lidar technology in our DF sensors will meet these requirements and lead to production wins and growth in this segment.
Digital solid-state technology positioned to capture high volume OEM opportunities We expect that our prospective customers will select lidar suppliers primarily based on the anticipated ability to meet performance, reliability, design, and cost requirements.
The Company is committed to the principles of equal employment and non-harassment. We are committed to complying with all federal, state, and local laws providing equal employment opportunities, and all other employment laws and regulations. Employee engagement.
We are committed to complying with all federal, state, and local laws providing equal employment opportunities, and all other employment laws and regulations. Employee engagement.
We envision a future where our digital technology enables lidar to become universal, empowering 3D perception capabilities within robots, cars, trucks, and drones, as well as factories, warehouses, roads, sidewalks, public spaces, retail stores, stadiums, docks, and airport terminals.
We envision a future where our technology that combines sensing, compute, applications and artificial intelligence will become universal for empowering 3D perception capabilities within robots, cars, trucks, and drones, as well as factories, warehouses, roads, sidewalks, public spaces, retail stores, stadiums, docks, and airport terminals.
Our customers in the robotics market are installing lidar sensors for autonomous navigation, collision avoidance, and mapping in order to provide services such as last-mile delivery, street sweeping, and asset inspection. We believe our robotics customers value the high resolution, precision, wide vertical field-of-view, and high reliability of our lidar sensors.
Our customers in the robotics market are installing lidar sensors for autonomous navigation, collision avoidance, and mapping in order to provide services such as last-mile delivery, street sweeping, and asset inspection.
We also engaged a certain number of consultants and independent contractors to supplement our permanent workforce. None of our employees are currently represented by a labor union or covered by collective bargaining agreements. We believe we have strong and positive relations with our employees. Inclusion and Belonging.
None of our employees are currently represented by a labor union or covered by collective bargaining agreements. We believe we have strong and positive relations with our employees. Inclusion and Belonging.
To attract, motivate and retain a highly-skilled workforce throughout our organization, we are focused on facilitating a safe and inclusive work environment that leverages the capabilities of our employees and encourages diversity of thought. In furtherance of these objectives, we provide Inclusion and Belonging training for our employees to promote a healthy and inclusive organizational culture.
To attract, motivate and retain a highly-skilled workforce throughout our organization, we are focused on facilitating a safe and inclusive work environment that leverages the capabilities of our employees and encourages diversity of thought.
Gemini does not output any personally identifiable information, allowing customers to deploy advanced monitoring systems in public or sensitive areas without privacy concerns. BlueCity BlueCity is a Gemini-powered solution for traffic operations, planning, and safety.
The simplicity of the Gemini platform, along with its intuitive user interface, enables customers to install, configure, and maintain the system with ease. Privacy-preserving . Gemini does not output any personally identifiable information, allowing customers to deploy advanced monitoring systems in public or sensitive areas without privacy concerns. BlueCity BlueCity is a Gemini-powered solution for traffic operations, planning, and safety.
We continue to work to improve the performance and expand the capabilities of these platforms through our artificial intelligence perception software and application-specific integrations, analytics, and dashboards. 7 Table of C ontents Our Customers We target four markets globally: automotive, industrial, robotics, and smart infrastructure.
Our software solutions include BlueCity for intelligent transportation systems, and Ouster Gemini for security, logistics automation, and crowd monitoring. We continue to work to improve the performance and expand the capabilities of these platforms through our artificial intelligence perception software and application-specific integrations, analytics, and dashboards. Our Customers We target four markets globally: automotive, industrial, robotics, and smart infrastructure.
Export Administration Regulations, U.S. Customs regulations and various economic and trade sanctions regulations administered by the U.S. Treasury Department’s Office of Foreign Assets Controls. U.S. export control laws and regulations and economic sanctions prohibit the shipment of certain products and services to countries, governments, and persons targeted by U.S. sanctions.
Export Administration Regulations, U.S. Customs regulations and various economic and trade sanctions regulations administered by the U.S. Treasury Department’s Office of Foreign Assets Controls.
Commercialize digital lidar for emerging high volume OEM opportunities We believe that our solid-state DF sensor will meet industry requirements for performance, cost, and reliability in high volume OEM applications. As development progresses, we will strive to build and maintain relationships with global OEMs and Tier 1s to further strengthen demand.
Commercialize digital lidar for emerging high volume OEM opportunities We believe that our solid-state DF sensor will meet industry requirements for performance, cost, and reliability in high volume OEM applications.
We work with companies across the entire automotive ecosystem, from technology providers to direct automotive parts suppliers and original equipment manufacturers (“OEMs”), to design and manufacture lidar sensors for these advanced vehicle systems. • Industrial. Our industrial customers use our lidar sensors to increase safety and automate operations across the global supply chain.
We work with companies across the entire automotive ecosystem, from technology providers to direct automotive parts suppliers and original equipment manufacturers (“OEMs”), to design and manufacture lidar sensors for these advanced vehicle systems. We believe these markets present a significant growth opportunity for us.
The high resolution and improved range of our digital lidar sensors combined with a state of the art deep neural network based perception algorithms enhance the detection, classification, and tracking accuracy of the perception software. Uninterrupted tracking . Gemini enables seamless tracking of objects across an entire area.
Gemini perception software is specifically optimized to take advantage of the rich and robust data provided by Ouster’s digital lidar sensors. The high resolution and improved range of our digital lidar sensors combined with a state of the art deep neural network based perception algorithms enhance the detection, classification, and tracking accuracy of the perception software. Uninterrupted tracking .
For example, in February 2023, we completed our merger of equals with Velodyne which helped us to strengthen our financial position, technology portfolio and software offering.
For example, in February 2023, we completed our merger of equals with Velodyne which helped us to strengthen our financial position, technology portfolio and software offering, and in February 2026, we completed our acquisition of Stereolabs, which is intended to help us broaden our Physical AI offerings by adding vision-based perceptions systems to our portfolio.
By building a commercial organization with highly-skilled employees and efficient processes and systems, we believe we can improve our customer acquisition, accelerate existing customer growth, increase sales through distribution networks, and build valuable strategic partnerships. Key elements of our growth strategy include: Execute on our product roadmap We continue to place a priority on innovation and product development.
By building a commercial organization with highly-skilled employees and efficient processes and systems, we believe we can improve our customer acquisition, accelerate existing customer growth, increase sales through distribution networks, and build valuable strategic partnerships. With the acquisition of Stereolabs, we are expanding our product portfolio to featuring new camera vision solutions and AI compute.
From time to time, we sponsor universities and other non-profit organizations to increase awareness of our technology and showcase its capabilities. 11 Table of C ontents Research and Development We have invested significant resources into research and development of our lidar-based technologies.
We also sponsor universities and other non-profit organizations to increase awareness of our technology and showcase its capabilities. Research and Development We have invested significant resources into research and development of our lidar-based technologies. We believe our ability to maintain a leadership position depends in part on our ongoing research and development activities.
Our team consists of engineers, technicians, scientists, operators and professionals with experience from a wide variety of the world’s leading sensing, engineering, consumer electronics, and automotive organizations.
The research and development team also partners with our operations and supply chain teams to develop scalable and reliable manufacturing processes and aid in supply chain planning and diversification. Our team consists of engineers, technicians, scientists, operators and professionals with experience from a wide variety of the world’s leading sensing, engineering, consumer electronics, and automotive organizations.
Our Competitive Strengths We believe the following strengths will allow us to maintain and extend our position as a leading provider in high-resolution lidar solutions. Patented digital lidar technology Since we invented and patented our digital lidar technology in 2015, we have launched a suite of products built on a shared architecture.
We believe that our automotive customers value the high resolution, high reliability, and cost of our lidar technology. Our Competitive Strengths We believe the following strengths will allow us to maintain and extend our position as a leading provider in high-resolution lidar solutions.
OS Product line Introduced in 2018, the OS product line is available in four different models to meet the needs of our end customers.
This acquisition provides Ouster the ability to deliver foundational end-to-end sensing and perception platform for Physical AI. OS Product line Introduced in 2018, the OS product line is available in four different models to meet the needs of our end customers.
We believe our ability to maintain a leadership position depends in part on our ongoing research and development activities. Our research and development activities are primarily based in San Francisco, California; Ottawa, Canada; and Edinburgh, Scotland. Our research and development team is responsible for the design, development, manufacturing, and testing of our products.
Our research and development activities are primarily based in San Francisco, California; Ottawa, Canada; and Edinburgh, Scotland. Our research and development team is responsible for the design, development, manufacturing, and testing of our products. We focus our efforts on the development of digital lidar technology, developer tooling, software solutions, and innovative manufacturing technologies.
Users can easily mesh multiple lidar sensors together within the Gemini software interface, allowing a seamless 3D view of object movement throughout the space. Easy setup and administration . The simplicity of the Gemini platform, along with its intuitive user interface, enables customers to install, configure, and maintain the system with ease. Privacy-preserving .
Gemini enables seamless tracking of objects across an entire area. Users can easily mesh multiple lidar sensors together within the Gemini software interface, allowing a seamless 3D view of object movement throughout the space. Easy setup and administration .
Similarly, we are also subject to sourcing regulations such as the requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the EU Conflict Minerals Regulation 2017/821, that require us to carefully monitor our supply chain.
Adherence to these requirements could adversely affect our business and financial results, including ability to sell or ship our inventory of products or develop replacement products not subject to export control regulations, effectively excluding us from certain countries or regions. 12 Table of C ontents Similarly, we are also subject to sourcing regulations such as the requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the EU Conflict Minerals Regulation 2017/821, that require us to carefully monitor our supply chain.
In October of 2021, Ouster acquired Sense Photonics, Inc. (“Sense”) a developer of solid-state flash lidar based on VCSEL and SPAD technology. This acquisition has supported the development of our DF sensor which leverages technology and engineering expertise from both companies. In February 2023, Ouster completed the merger (the “Velodyne Merger”) with Velodyne Lidar, Inc.
This acquisition has supported the development of our DF sensor which leverages technology and engineering expertise from both companies. In February 2023, Ouster completed the merger (the “Velodyne Merger”) with Velodyne Lidar, Inc. (“Velodyne”) pursuant to the terms of the Agreement and Plan of Merger, dated as of November 4, 2022.
Our proprietary SoC replaces hundreds to thousands of discrete components with a single, tightly-integrated, custom SPAD receiver array, and our high-efficiency VCSEL array integrates every laser into a single die. Moreover, our patented micro-optical system increases digital lidar performance by the equivalent of an orders-of-magnitude increase in detector efficiency.
Patented digital lidar technology Since we invented and patented our digital lidar technology in 2015, we have launched a suite of products built on a shared architecture. Our proprietary SoC replaces hundreds to thousands of discrete components with a single, tightly-integrated, custom SPAD receiver array, and our high-efficiency VCSEL array integrates every laser into a single die.
Our smart infrastructure customers are in both the public and private sectors. Cities are prioritizing safety and efficiency through the use of lidar technology on roads and sidewalks in public spaces. We believe our products can enhance public welfare through security and smart city applications.
Cities are prioritizing safety and efficiency through the use of lidar technology on roads and sidewalks in public spaces. We believe our products can enhance public welfare through security and smart city applications. Security companies are also looking to improve intrusion detection and tracking by augmenting existing closed-circuit television (CCTV) systems with the spatial tracking capabilities of lidar. • Robotics.
We believe that this architecture will allow us to continue to increase sensor performance while reducing its cost for many years to come.
Moreover, our patented micro-optical system increases digital lidar performance by the equivalent of an orders-of-magnitude increase in detector efficiency. We believe that this architecture will allow us to continue to increase sensor performance while reducing its cost for many years to come.
Our mission to make the physical world safer and more efficient is aligned with our focus on sustainability now and into the future.
Ouster's mission is to make the physical world safer and more efficient.
Product Roadmap And Development We continue to invest in growing our digital lidar product portfolio and increasing the capabilities of our software solutions.
The embedded AI compute hardware facilitates native, real-time sensor fusion at the edge. 7 Table of C ontents Product Roadmap And Development We continue to invest in growing our digital lidar, camera, and compute product portfolio and increasing the capabilities of our sensing and perception platform and our software solutions.
The automotive industry is shifting towards advanced/enhanced safety and autonomy features, in part powered by lidar. We believe we are uniquely positioned to support this transformation.
Our robotics customers are pioneering an automated future that can affect many aspects of our daily lives as they take on tasks that are redundant, cumbersome, expensive or dangerous for humans. • Automotive. The automotive industry is shifting towards advanced/enhanced safety and autonomy features, in part powered by lidar. We believe we are uniquely positioned to support this transformation.
We protect our proprietary rights through agreements with our commercial partners, supply chain vendors, employees, and consultants, and by closely monitoring the developments and products in the industry; and in addition to seeking patent protection covering inventions originating from us, we continually evaluate opportunities to acquire or in-license patents to the extent we believe such patents are useful or relevant to our business.
In addition to seeking intellectual property protection originating from us, we continually evaluate opportunities to acquire or in-license intellectual property (inclusive of patents) to the extent we believe such intellectual property are useful or relevant to our business.
Expand our distribution network While the majority of our sales are direct to customers, we also sell our sensors through a domestic and international distribution network, which has expanded as a result of the Velodyne Merger. We believe these distributors enable us to reach more end customers in an operationally efficient manner.
As development progresses, we will strive to build and maintain relationships with global OEMs and Tier 1s to further strengthen demand. 10 Table of C ontents Expand our distribution network While the majority of our sales are direct to customers, we also sell our sensors through a domestic and international distribution network, which has expanded as a result of the Velodyne Merger.
These scanning lidar products include the VLP-16, VLP-16 Lite, VLP-16 Hi-Res, VLP-32, and VLS-128, and are in the final stages of their product lifecycle.
These scanning lidar products include the VLP-16, VLP-16 Lite, VLP-16 Hi-Res, VLP-32, and VLS-128, and are in the final stages of their product lifecycle. We stopped manufacturing these products in 2025. Ouster Gemini Ouster Gemini is a perception platform designed for smart infrastructure deployments like security, yard management, and crowd analytics, and is optimized exclusively for Ouster’s digital lidar sensors.
Compliance with these laws, rules and regulations may require us to incur significant costs to comply, including obtaining permits, licenses, inspections of our facilities and products, and implementation of additional internal controls and additional oversight obligations. 12 Table of C ontents Human Capital As of December 31, 2024, we employed 192 people on a full-time basis in the United States and 100 people on a full-time basis internationally, either directly through our international subsidiaries or through a professional employer organization.
Compliance with these laws, rules and regulations may require us to incur significant costs to comply, including obtaining permits, licenses, inspections of our facilities and products, and implementation of additional internal controls and additional oversight obligations.
This approach has multiple advantages compared to other similar solutions and can be used to replace or enhance existing camera, radar, or RF beacon-based systems: Detection accuracy . Gemini perception software is specifically optimized to take advantage of the rich and robust data provided by Ouster’s digital lidar sensors.
Gemini enables our customers to detect, classify, and track objects through a covered area which can be expanded by meshing lidar sensors together to form a single, cohesive 3D view. This approach has multiple advantages compared to other similar solutions and can be used to replace or enhance existing camera, radar, or RF beacon-based systems: Detection accuracy .
Highly reliable and rugged technology In addition to high performance, comparatively low cost, and high customization flexibility, our sensors are designed to be highly reliable.
We believe that the solid-state digital lidar technology in our DF sensors will meet these requirements and lead to production wins and growth in this segment. 9 Table of C ontents Highly reliable and rugged technology In addition to high performance, comparatively low cost, and high customization flexibility, our sensors are designed to be highly reliable.
(“Velodyne”) pursuant to the terms of the Agreement and Plan of Merger, dated as of November 4, 2022. As a result, we currently offer the OS and Velodyne scanning sensors and are developing the DF solid-state flash sensors.
As a result, we currently offer the OS and Velodyne scanning sensors and are developing the DF solid-state flash sensors. On February 4, 2026, Ouster acquired Stereolabs SAS (“Stereolabs”), a developer, manufacturer and seller of AI camera vision and perception solutions.
For the year ended December 31, 2024, one customer accounted for more than 10% of our revenue from product sales. Automotive Our customers in the automotive industry fall into two categories: customers developing various forms of self-driving technology for driverless mobility and freight applications, and customers developing consumer ADAS.
We believe our robotics customers value the high resolution, precision, wide vertical field-of-view, and high reliability of our lidar sensors. 8 Table of C ontents Automotive Our customers in the automotive industry fall into two categories: customers developing various forms of self-driving technology for driverless mobility and freight applications, and customers developing consumer ADAS.
Likewise, smart city initiatives powered by lidar can better manage traffic, reduce commute times, and further reduce emissions. 4 Table of C ontents Intellectual Property We believe our success, competitive advantages, and growth prospects depend in part upon our ability to develop and protect our core technology and intellectual property.
As a leader in sensing and perception we bring Physical AI to life, with a foundational end-to-end sensing and perception platform and delivering intelligent digital lidar and camera solutions that improve quality of life in the physical world. 4 Table of C ontents Intellectual Property We believe our success, competitive advantages, and growth prospects depend in part upon our ability to develop and protect our core technology and intellectual property (“IP”).
The Ouster Gemini platform provides people and object detection, classification, and tracking for actionable, intuitive, and customizable insights while preserving personally identifiable information. Gemini enables our customers to detect, classify, and track objects through a covered area which can be expanded by meshing lidar sensors together to form a single, cohesive 3D view.
The Gemini platform consists of OS series lidar sensors, edge processor hardware, perception software, and cloud analytics. The Ouster Gemini platform provides people and object detection, classification, and tracking for actionable, intuitive, and customizable insights while preserving personally identifiable information.
Lidar also performs better than cameras in low light conditions and produces fewer errors. Compared to radar, lidar provides better resolution, perceiving objects’ shapes for superior object detection and classification. Lidar systems are designed to detect pedestrians equally well during daytime and nighttime conditions because the systems provide self-illumination by means of laser beams.
Lidar systems are designed to detect pedestrians equally well during daytime and nighttime conditions because the systems provide self-illumination by means of laser beams. In October of 2021, Ouster acquired Sense Photonics, Inc. (“Sense”) a developer of solid-state flash lidar based on VCSEL and SPAD technology.
This includes material handling vehicles at ports and warehouses, off-highway vehicles in mines and on farms, and manufacturing equipment in factories. • Robotics. Our robotics customers are pioneering an automated future that can affect many aspects of our daily lives as they take on tasks that are redundant, cumbersome, expensive or dangerous for humans. • Smart infrastructure.
Our industrial customers use our lidar sensors to increase safety and automate operations across the global supply chain. This includes material handling vehicles at ports and warehouses, off-highway vehicles in mines and on farms, and manufacturing equipment in factories. • Smart infrastructure. Our smart infrastructure customers are in both the public and private sectors.
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Item 1. Business. Overview Ouster, Inc. is building the eyes of autonomy. We are a leading global provider of lidar sensors and solutions for the automotive, industrial, robotics, and smart infrastructure industries. Ouster’s products include high-resolution scanning and solid-state digital lidar sensors, analog lidar sensors, and software solutions.
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Item 1. Business. Overview Ouster, Inc. is a leader in sensing and perception for Physical Artificial Intelligence (Physical AI). Ouster enables 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.
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Security companies are also looking to improve intrusion detection and tracking by augmenting existing closed-circuit television (CCTV) systems with the spatial tracking capabilities of lidar. We believe these markets present a significant growth opportunity for us.
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As a pioneer in Physical AI, 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.
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We believe that our lidar technology is a key enabler of sustainable solutions, empowering our customers to achieve greater levels of automation, which have been shown to have the potential to significantly reduce global carbon dioxide emissions and help curb the effects of climate change.
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The Company owns and controls various intellectual property rights, including patents, designs, copyrights, trademarks, trade names, trade secrets and other forms of intellectual property rights in the U.S. and various foreign countries.
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Since our inception, we have heavily invested in our patent portfolio by pursuing comprehensive coverage of invention families, use cases, and international coverage.
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The Company regularly files applications to protect innovations arising from its research, development, design and marketing, and has accumulated a large portfolio of issued and registered intellectual property rights around the world. The Company licenses certain patents and receives annual royalties.
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Being at the forefront of innovation in the lidar market depends in part on our ability to obtain and maintain patents and other proprietary rights relating to our key technology, and our ability to successfully enforce these rights against third parties.
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We do not consider any single patent, trademark, or intellectual property right or a license for intellectual property right as solely or materially responsible for protecting the Company’s product offerings or business. We protect our proprietary rights through agreements with our commercial partners, supply chain vendors, employees, and consultants, and by closely monitoring the developments and products in the industry.
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We also rely on trade secrets, design and manufacturing know-how, and continuing technological innovations to maintain and improve our competitive position. As a result, we have built a portfolio of intellectual property, including issued patents and registered trademarks, copyrights, confidential technical information, and expertise in the development of lidar technology and software.
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We believe these technology breakthroughs are central to our competitive advantage and dramatically improve sensor performance. Our Product Portfolio Ouster offers a unified platform of high-performance digital lidar, cameras, AI compute, sensor fusion and perception software, and cutting-edge AI models.
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We believe these technology breakthroughs are central to our competitive advantage and dramatically improve sensor performance. Our Product Portfolio Using an array of eye-safe lasers, our lidar solutions measure distances in the environment at the speed of light. Unlike camera-based solutions, lidar solutions allow machines to see in 3D by providing precise distance measurements of surrounding objects.
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Using an array of eye-safe lasers, our lidar solutions provide exceptional depth accuracy and perform exceedingly well in dark and obscure conditions. Cameras complement this by providing high resolution context, color, and texture, providing further data to interpret complex environments. Compared to radar, lidar and cameras provide better resolution, perceiving objects’ shapes for superior object detection and classification.
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We plan to stop manufacturing these products in 2025. 6 Table of C ontents Ouster Gemini Ouster Gemini is a perception platform designed for smart infrastructure deployments like security and crowd analytics, and is optimized exclusively for Ouster’s digital lidar sensors. The Gemini platform consists of OS series lidar sensors, edge processor hardware, perception software, and cloud analytics.
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The acquisition expanded the Company's product portfolio, and is expected to further strengthen its software capabilities and accelerate customer development. With this acquisition, Ouster now offers Physical AI's first unified sensing and perception platform, combining high-performance digital lidar, cameras, AI compute, sensor fusion and perception software, and cutting-edge AI models.
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Our software solutions include BlueCity for intelligent transportation systems, and Ouster Gemini for security, logistics automation, and crowd monitoring.
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ZED Cameras and Sensing and Perception Platform With the acquisition of Stereolabs, Ouster now offers ZED cameras and AI Compute. ZED is a high-performance camera that provides 2D and 3D color data with ultra-low latency. The ZED cameras leverage Stereolabs’ Neural Depth engine that delivers up to a 10x sensing price-to-performance advantage over traditional cameras.
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We believe that our automotive customers value the high resolution, high reliability, and cost of our lidar technology.
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These products have been ruggedized for harsh industrial conditions with a compact form factor that simplifies robotics integration.
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We focus our efforts on the development of digital lidar technology, developer tooling, software solutions, and innovative manufacturing technologies. The research and development team also partners with our operations and supply chain teams to develop scalable and reliable manufacturing processes and aid in supply chain planning and diversification.
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For the year ended December 31, 2025, two customers accounted for more than 10% of our revenue.
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Government Regulation While the U.S. has historically provided a positive legal landscape that allows safe testing and development of autonomous features, with nuances that vary from state to state, we are subject to the non-exhaustive list of regulations set forth below.
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Ouster is positioned to secure a greater share of the sensing and perception market, including new high-growth use cases such as humanoid robotics, industrial automation, and visual inspection. Key elements of our growth strategy include: Execute on our product roadmap We continue to place a priority on innovation and product development.
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Government Regulation Our worldwide business activities are subject to the various laws, rules, and regulations of the United States as well as of foreign governments.
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Compliance with laws, rules, and regulations has not had a material effect upon our competitive position but changes to laws, rules, and regulations, and enforcement of such, including but not limited to those pertaining to export controls, foreign exchange controls and cash repatriation restrictions, taxes, tariffs, IP ownership and infringement, cybersecurity, data privacy requirements, AI use and ethics, competition and antitrust, business acquisition, advertising, anti-corruption, climate change, environmental, health and safety requirements, employment, and product regulations, could impact our competitive position or otherwise have adverse impact on our business in subsequent periods (see Part I, Item 1A.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf our common stock are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of “covered securities” under Section 18(b)(1) of the Securities Act, we may, at our option, not permit holders of warrants who seek to exercise their warrants to do so for cash and, instead, require them to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act; in the event we so elect, we will not be required to file or maintain in effect a registration statement or register or qualify the shares underlying the warrants under applicable state securities laws, and in the event we do not so elect, we will use our best efforts to register or qualify the shares underlying the warrants under applicable state securities laws to the extent an exemption is not available.
Biggest changeIn no event will warrants be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption from registration or qualification is available. 36 Table of C ontents If our common stock are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of “covered securities” under Section 18(b)(1) of the Securities Act, we may, at our option, not permit holders of warrants who seek to exercise their warrants to do so for cash and, instead, require them to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act; in the event we so elect, we will not be required to file or maintain in effect a registration statement or register or qualify the shares underlying the warrants under applicable state securities laws, and in the event we do not so elect, we will use our best efforts to register or qualify the shares underlying the warrants under applicable state securities laws to the extent an exemption is not available.
Additional local, state, federal and international laws and rules with respect to sustainability and environmental matters which have been passed or proposed may be enacted in the future and the extent and scope of their requirements and impact on our business are unknown.
Additional local, state, federal and international laws and rules with respect to sustainability and environmental matters which have been passed or proposed and may be enacted in the future and the extent and scope of their requirements and impact on our business are unknown.
In addition, there can be no assurance that we will be able to attain any announced goals related to our sustainability program, as statements regarding our sustainability goals reflect our current plans and aspirations and are not guarantees that we will be able to achieve them within the timelines we announce or at all.
In addition, there can be no assurance that we will be able to attain any announced goals related to our sustainability program, as statements regarding any sustainability goals reflect our current plans and aspirations and are not guarantees that we will be able to achieve them within the timelines we announce or at all.
Such claims may also divert management resources and attention away from other business efforts and force us to acquire intellectual property rights and licenses, which may involve substantial royalty or other payments that may not be acceptable to us.
Such claims may also divert management resources and attention away from other business efforts and force us to acquire intellectual property rights and licenses, which may involve substantial royalty or other payments that may not be acceptable to us.
Further, a party making such a claim against us, if successful, could secure a judgment that requires us to pay substantial damages or such a party could obtain an injunction.
Further, a party making such a claim against us, if successful, could secure a judgment that requires us to pay substantial damages or such a party could obtain an injunction.
Even if we obtain favorable outcomes in any such litigation, we may not be able to obtain adequate remedies, or may have incurred costs that threaten our financial stability.
Even if we obtain favorable outcomes in any such litigation, we may not be able to obtain adequate remedies, or may have incurred costs that threaten our financial stability.
We may require additional capital in order to execute on our business plan, and we may require additional capital to fund our R&D efforts and to respond to technological advancements, competitive dynamics or technologies, customer demands, business opportunities, challenges, acquisitions or unforeseen circumstances and we may determine to utilize our “at-the-market” offering program or engage in equity or debt financings or enter into credit facilities for other reasons.
We may require additional capital in order to execute on our business plan, and we may require additional capital to fund our R&D efforts and to respond to technological advancements, competitive dynamics or technologies, customer demands, business opportunities, challenges, acquisitions or unforeseen circumstances and we may determine to utilize an “at-the-market” offering program or engage in other equity or debt financings or enter into credit facilities for other reasons.
Although our ability to amend the terms of the public warrants with the consent of at least 50% of the then outstanding class of public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, convert the warrants into cash or shares, shorten the exercise period or decrease the number of shares of common stock purchasable upon exercise of a warrant.
Although our ability to amend the terms of the public warrants with the consent of at least 50% of the then outstanding public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, convert the warrants into cash or shares, shorten the exercise period or decrease the number of shares of common stock purchasable upon exercise of a warrant.
Acquisitions involve many and diverse risks and uncertainties, including risks associated with conduction due diligence, problems integrating the purchased operations, assets, technologies or products, unanticipated costs, liabilities, and economic, political, legal and regulatory challenges due to our inexperience operating in new regions or countries, inability to achieve anticipated synergies, overpaying for acquisitions, invalid sales assumptions underlying potential acquisitions, issues maintaining uniform standards, procedures, controls and policies, diversion of management attention, adverse effects on existing business relationships or acquired company business relationships, risks associated with entering new markets, potential loss of key employees of acquired businesses, increased legal, accounting and compliance costs, and failure to successfully integrate acquired companies, or retain key personnel from the acquired company.
Acquisitions involve many and diverse risks and uncertainties, including risks associated with conducting due diligence, problems integrating the purchased operations, assets, technologies or products, unanticipated costs, liabilities, and economic, political, legal and regulatory challenges due to our inexperience operating in new regions or countries, inability to achieve anticipated synergies, overpaying for acquisitions, invalid sales assumptions underlying potential acquisitions, issues maintaining uniform standards, procedures, controls and policies, diversion of management attention, adverse effects on existing business relationships or acquired company business relationships, risks associated with entering new markets, potential loss of key employees of acquired businesses, increased legal, accounting and compliance costs, and failure to successfully integrate acquired companies, or retain key personnel from the acquired company.
We identified material weaknesses in our internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
We previously identified material weaknesses in our internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
If any action, the subject matter of which is within the scope the forum provisions of the warrant agreements, is filed in a court other than a court of the State of New York or the United States District Court for the Southern District of New York (a “foreign action”) in the name of any holder of our warrants, such holder shall be deemed to have consented to: (x) the personal jurisdiction of the state and federal courts located in the State of New York in connection with any action brought in any such court to enforce the forum provisions (an “enforcement action”), and (y) having service of process made upon such warrant holder in any such enforcement action by service upon such warrant holder’s counsel in the foreign action as agent for such warrant holder.
If any action, the subject matter of which is within the scope the forum provisions of the warrant agreement, is filed in a court other than a court of the State of New York or the United States District Court for the Southern District of New York (a “foreign action”) in the name of any holder of our warrants, such holder shall be deemed to have consented to: (x) the personal jurisdiction of the state and federal courts located in the State of New York in connection with any action brought in any such court to enforce the forum provisions (an “enforcement action”), and (y) having service of process made upon such warrant holder in any such enforcement action by service upon such warrant holder’s counsel in the foreign action as agent for such warrant holder.
The price of our common stock, as well as our warrants, may fluctuate due to a variety of factors, including: • changes in the industries in which we and our customers operate; • developments involving our competitors; • changes in laws and regulations affecting our business; • variations in our operating performance and the performance of our competitors in general; • actual or anticipated fluctuations in our quarterly or annual operating results; 35 Table of C ontents • publication of research reports by securities analysts about us or our competitors or our industry; • the public’s reaction to our press releases, our other public announcements and our filings with the SEC; • actions by stockholders, including the sale by significant stockholders of any of their shares of our common stock; • additions and departures of key personnel; • commencement of, or involvement in, litigation involving our Company; • changes in our capital structure, such as future issuances of securities or the incurrence of additional debt; • the volume of shares of our common stock available for public sale; and • general economic, political and social conditions, such as the effects of public health crises, recessions, interest rates, local and national elections, tariffs, fuel prices, international currency fluctuations, corruption, political instability and acts of war or terrorism.
The price of our common stock, as well as our warrants, may fluctuate due to a variety of factors, including: • changes in the industries in which we and our customers operate; • developments involving our competitors; • changes in laws and regulations affecting our business; • variations in our operating performance and the performance of our competitors in general; • actual or anticipated fluctuations in our quarterly or annual operating results; • publication of research reports by securities analysts about us or our competitors or our industry; • the public’s reaction to our press releases, our other public announcements and our filings with the SEC; • actions by stockholders, including the sale by significant stockholders of any of their shares of our common stock; • additions and departures of key personnel; • commencement of, or involvement in, litigation involving our Company; • changes in our capital structure, such as future issuances of securities or the incurrence of additional debt; • the volume of shares of our common stock available for public sale; and • general economic, political and social conditions, such as the effects of public health crises, recessions, interest rates, local and national elections, tariffs, fuel prices, international currency fluctuations, corruption, political instability and acts of war or terrorism.
International operations are subject to a number of other risks, including: • import and export laws and the impact of tariffs; • exchange rate fluctuations; • political and economic instability, war, international terrorism and anti-American sentiment, particularly in emerging markets and the geographic regions affected by the Russia-Ukraine and Israel-Hamas wars; 21 Table of C ontents • uncertainty regarding the trade relationships among the United States, Canada, China, Mexico and Taiwan, as well as other countries, and related impacts to our supply chain; • potential for violations of anti-corruption laws and regulations, such as those related to bribery and fraud; • preference for locally branded products, and laws and business practices favoring local competition; • increased difficulty in managing inventory; • increased risk in collecting trade receivables; • delayed revenue recognition; • less effective protection and/or lack of enforceability of intellectual property; • stringent regulation of the autonomous or other systems or products using our products and stringent consumer protection and product compliance regulations, including but not limited to General Data Protection Regulation in the European Union, European competition law, the Restriction of Hazardous Substances Directive, the Waste Electrical and Electronic Equipment Directive and the European Ecodesign Directive that are costly to comply with and may vary from country to country; • difficulties and costs of staffing and managing foreign operations; • natural disasters and severe weather events including earthquakes, wildfires, hurricanes, tsunamis, floods, rising sea levels, as well as other impacts of climate change; • withdrawals from, or renegotiation of existing trade agreements by the United States (or other jurisdictions) potentially affecting countries in which we do business; • changes in local tax and customs duty laws or changes in the enforcement, application or interpretation of such laws; and • U.S. government’s restrictions on certain technology transfer to certain countries of concern.
International operations are subject to a number of other risks, including: • import and export laws and the impact of tariffs; • exchange rate fluctuations; • political and economic instability, war, international terrorism and anti-American sentiment, particularly in emerging markets and the geographic regions affected by the Russia-Ukraine and Israel-Hamas wars; • uncertainty regarding the trade relationships among the United States, Canada, Thailand, China and Taiwan, as well as other countries, and related impacts to our supply chain; • potential for violations of anti-corruption laws and regulations, such as those related to bribery and fraud; • preference for locally branded products, and laws and business practices favoring local competition; • increased difficulty in managing inventory; • increased risk in collecting trade receivables; • delayed revenue recognition; • less effective protection and/or lack of enforceability of intellectual property; • stringent regulation of the autonomous or other systems or products using our products and stringent consumer protection and product compliance regulations, including but not limited to General Data Protection Regulation in the European Union, European competition law, the Restriction of Hazardous Substances Directive, the Waste Electrical and Electronic Equipment Directive and the Ecodesign for Sustainable Products Regulation that are costly to comply with and may vary from country to country; • difficulties and costs of staffing and managing foreign operations; • natural disasters and severe weather events including earthquakes, wildfires, hurricanes, tsunamis, floods, rising sea levels, as well as other impacts of climate change; • withdrawals from, or renegotiation of existing trade agreements by the United States (or other jurisdictions) potentially affecting countries in which we do business; • changes in local tax and customs duty laws or changes in the enforcement, application or interpretation of such laws; and • U.S. government’s restrictions on certain technology transfer to certain countries of concern.
The warrant agreements provide that in the following circumstances holders of warrants who seek to exercise their warrants will not be permitted to do for cash and will, instead, be required to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act: (i) if the common stock issuable upon exercise of the warrants are not registered under the Securities Act in accordance with the terms of the warrant agreement; (ii) if we have so elected and the common stock are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of “covered securities” under Section 18(b)(1) of the Securities Act; and (iii) if we have so elected and we call the public warrants for redemption.
The warrant agreement provides that in the following circumstances holders of warrants who seek to exercise their warrants will not be permitted to do for cash and will, instead, be required to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act: (i) if the common stock issuable upon exercise of the warrants are not registered under the Securities Act in accordance with the terms of the warrant agreement; (ii) if we have so elected and the common stock are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of “covered securities” under Section 18(b)(1) of the Securities Act; and (iii) if we have so elected and we call the public warrants for redemption.
We continue to maintain a portion of our manufacturing at this facility, including any production of Buy America and Buy American-compliant sensors; however, in 2019, we began moving a portion of our manufacturing operations to a manufacturing facility in Thailand in connection with our relationship with Benchmark, which for the year ended December 31, 2024, accounted for the majority of our OS sensor manufacturing output.
We continue to maintain a portion of our manufacturing at this facility, including any production of Buy America and Buy American-compliant sensors; however, in 2019, we began moving a portion of our manufacturing operations to a manufacturing facility in Thailand in connection with our relationship with Benchmark, which for the year ended December 31, 2025, accounted for the majority of our OS sensor manufacturing output.
These inherent operational risks are all the more important that the development cycles of our products with new customers vary widely depending on the application, market, customer and the complexity of the product. In our four target markets, development cycles can be six months to seven or more years.
These inherent operational risks are all the more important since the development cycles of our products with new customers vary widely depending on the application, market, customer and the complexity of the product. In our four target markets, development cycles can be six months to seven or more years.
Notwithstanding the foregoing, these provisions of the warrant agreements will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal district courts of the United States of America are the sole and exclusive forum.
Notwithstanding the foregoing, these provisions of the warrant agreement will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal district courts of the United States of America are the sole and exclusive forum.
Our warrant agreements for our publicly traded warrants provide that, subject to applicable law, (i) any action, proceeding or claim against us arising out of or relating in any way to the warrant agreements, including under the Securities Act, will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and (ii) that we irrevocably submit to such jurisdiction, which jurisdiction shall be the exclusive forum for any such action, proceeding or claim.
The warrant agreement for our publicly traded warrants provides that, subject to applicable law, (i) any action, proceeding or claim against us arising out of or relating in any way to the warrant agreements, including under the Securities Act, will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and (ii) that we irrevocably submit to such jurisdiction, which jurisdiction shall be the exclusive forum for any such action, proceeding or claim.
Our forecasts of market growth may not be accurate. Market opportunity estimates and growth forecasts included in this Annual Report on Form 10-K and in our other public disclosures are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate.
Our forecasts of market growth and estimates of total addressable market may not be accurate. Market opportunity estimates and growth forecasts included in this Annual Report on Form 10-K and in our other public disclosures are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate.
Our ability to accurately forecast demand for our products could be affected by many factors, including the rapidly changing nature of our current target markets, the uncertainty surrounding the market acceptance and commercialization of lidar technology, the emergence of new markets, an increase or decrease in customer demand for our products or for products and services of our competitors, product introductions by 22 Table of C ontents competitors, market or supply chain disruptions due to public health crises, and any associated work stoppages or interruptions, unanticipated changes in general market conditions and the weakening of economic conditions or consumer confidence in future economic conditions.
Our ability to accurately forecast demand for our products could be affected by many factors, including the rapidly changing nature of our current target markets, the uncertainty surrounding the market acceptance and commercialization of lidar technology, the emergence of new markets, an increase or decrease in customer demand for our products or for products and services of our competitors, product introductions by competitors, market or supply chain disruptions due to public health crises, and any associated work stoppages or interruptions, unanticipated changes in general market conditions and the weakening of economic conditions or consumer confidence in future economic conditions.
Alternatively, if a court were to find this provision in 37 Table of C ontents our warrant agreements inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and board of directors.
Alternatively, if a court were to find this provision in our warrant agreements inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and board of directors.
An adverse judgment could result in monetary damages, which could have a negative impact on our liquidity and financial condition. For a description of our legal proceedings, see Note 9. Commitments and Contingencies included in the notes to our audited financial statements included elsewhere in the Annual Report on Form 10-K.
An adverse judgment could result in monetary damages, which could have a negative impact on our liquidity and financial condition. For a description of our legal proceedings, see Note 8. Commitments and Contingencies included in the notes to our audited consolidated financial statements included elsewhere in the Annual Report on Form 10-K.
Among other things, the Certification of Incorporation and Bylaws include provisions regarding: • providing for a classified board of directors with staggered, three-year terms; • the ability of our board of directors to issue shares of preferred stock, including “blank check” preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; • the Certificate of Incorporation prohibits cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; • the limitation of the liability of, and the indemnification of, our directors and officers; • the ability of our board of directors to amend the Bylaws, which may allow our board of directors to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the Bylaws to facilitate an unsolicited takeover attempt; and • advance notice procedures with which stockholders must comply to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in our board of directors and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us.
Among other things, the Certification of Incorporation and Bylaws include provisions regarding: • providing for a classified board of directors with staggered, three-year terms; • the ability of our board of directors to issue shares of preferred stock, including “blank check” preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; • the Certificate of Incorporation prohibits cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; • the limitation of the liability of, and the indemnification of, our directors and officers; • the ability of our board of directors to amend the Bylaws, which may allow our board of directors to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the Bylaws to facilitate an unsolicited takeover attempt; and • advance notice procedures with which stockholders must comply to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in our board of directors and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us. 38 Table of C ontents These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our board of directors or management.
Although we are evaluating and, where we believe appropriate, incorporating the use of AI tools into our operations, such as the use of generative AI tools to assist in the development of code, our use of such tools may subject us to significant competitive, legal, regulatory and other risks, and there can be no assurance that our use of AI tools will enhance our 30 Table of C ontents business operations or result in a benefit to us.
Although we are evaluating and, where we believe appropriate, incorporating the use of AI tools into our operations, such as the use of generative AI tools to assist in the development of code, our use of such tools may subject us to significant competitive, legal, regulatory and other risks, and there can be no assurance that our use of AI tools will enhance our business operations or result in a benefit to us.
New and changing laws, regulations, executive orders and enforcement priorities can also create uncertainty about how such laws and regulations will be interpreted and applied, which may decrease customer spending, increase our costs or otherwise adversely impact our business and results of operations. We are subject to governmental export and import controls and economic sanctions laws and regulations.
New and changing laws, regulations, executive orders and enforcement priorities can also create uncertainty about how such laws and regulations will be interpreted and applied, which may decrease customer spending, increase our costs or otherwise adversely impact our business and results of operations. 27 Table of C ontents We are subject to governmental export and import controls and economic sanctions laws and regulations.
The forecasts and estimates relating to the expected size and growth of the markets for lidar-based technology may prove to be inaccurate. Even if these markets experience the forecasted growth, we may not grow our business at similar rates, or at all.
The forecasts and estimates relating to the expected size and growth of the markets for lidar-based technology and sensing and perception solutions may prove to be inaccurate. Even if these markets experience the forecasted growth, we may not grow our business at similar rates, or at all.
Our warrant agreements designate the courts of the State of New York or the United States District Court for the Southern District of New York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of our warrants, which could limit the ability of warrant holders to obtain a favorable judicial forum for disputes with us.
Our warrant agreement designates the courts of the State of New York or the United States District Court for the Southern District of New York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of our warrants, which could limit the ability of warrant holders to obtain a favorable judicial forum for disputes with us.
It would be time consuming, and could be costly and impracticable, to begin to use 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.
It would be time consuming, and could be costly and impracticable, to begin to use new manufacturers, components or designs, and such changes could cause significant interruptions in supply and could have an 24 Table of C ontents adverse effect on our ability to meet our scheduled product deliveries and may subsequently lead to the loss of sales.
Our success depends on our ability to enhance and broaden our product offerings in response to changing customer demands, competitive pressures and advances in technologies. Failure to successfully identify, complete, manage and integrate acquisitions could materially and adversely affect our business, financial condition and results of operations and 26 Table of C ontents could cause our stock price to decline.
Our success depends on our ability to enhance and broaden our product offerings in response to changing customer demands, competitive pressures and advances in technologies. Failure to successfully identify, complete, manage and integrate acquisitions could materially and adversely affect our business, financial condition and results of operations and could cause our stock price to decline.
Any of these results could adversely affect our brand and operating results. Any intellectual property and related contractual litigation, if it is initiated in the future by us or a third-party, would result in substantial costs and diversion of management resources, either of which could adversely affect our business, operating results and financial condition.
Any of these results could adversely affect our brand and operating results. 33 Table of C ontents Any intellectual property and related contractual litigation, if it is initiated in the future by us or a third-party, would result in substantial costs and diversion of management resources, either of which could adversely affect our business, operating results and financial condition.
For the class of publicly traded warrants traded under the symbol “OUSTZ”, we may redeem such warrants at a price of $0.10 per warrant, provided that the closing price of our common stock equals or exceeds $180.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date on which we give proper notice of such redemption to the warrant holders and provided certain other conditions are met.
We may redeem such warrants at a price of $0.10 per warrant, provided that the closing price of our common stock equals or exceeds $180.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date on which we give proper notice of such redemption to the warrant holders and provided certain other conditions are met.
If we fail in defending such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel. A loss of key personnel or their work product could hamper or prevent our ability to commercialize our products, which could severely harm our business.
If we fail in defending such claims, in addition to paying monetary damages, we may lose valuable 34 Table of C ontents intellectual property rights or personnel. A loss of key personnel or their work product could hamper or prevent our ability to commercialize our products, which could severely harm our business.
In addition, California has from time to time experienced shortages of water, natural gas, and electric power. Future shortages and conservation measures could impact our operations and result in increased expenses. In addition, we rely on information technology systems to communicate among our workforce and with third parties.
In addition, California has from time to time experienced shortages of water, natural gas, and electric power. Future shortages and conservation measures could impact our operations and result in increased expenses. In addition, we rely on information technology systems to 39 Table of C ontents communicate among our workforce and with third parties.
These development cycles require us to invest significant resources prior to realizing any revenue from the commercialization. Our revenue growth may be impaired if the system, product or vehicle model that includes our digital lidar sensors is unsuccessful, including for reasons unrelated to our technology or software.
These development cycles require us to invest significant resources prior to realizing any revenue from the commercialization. Our revenue growth may be impaired if the system, product or vehicle model that includes our products is unsuccessful, including for reasons unrelated to our technology or software.
Similarly, we source components from countries that may be impacted by tariffs under the current U.S. government, including Canada, China, and Mexico. If the cost of products sourced from these or certain other countries increase significantly due to tariffs or trade restrictions, we may not be able to change suppliers or otherwise avoid or mitigate such costs.
Similarly, we source components from countries that have been impacted by tariffs under the current U.S. government, including Thailand, Canada, China and Taiwan. If the cost of products sourced from these or certain other countries increase significantly due to tariffs or trade restrictions, we may not be able to change suppliers or otherwise avoid or mitigate such costs.
To the extent compliance with, or the effect of, these regulations and requirements on vendors and suppliers result in their inability to deliver their products to us on time or at all, this could materially adversely impact our business, results of operations and financial condition.
To the extent compliance with, or the effect of, these regulations and requirements on vendors and suppliers result in their inability to deliver their products to us on time or at all, this could materially adversely impact our business, results of operations 29 Table of C ontents and financial condition.
Long development cycles and product cancellations or postponements may adversely affect our business, results of operations and financial condition. If we do not adequately manage our inventory, we could lose sales or incur higher inventory-related expenses, which could negatively affect our operating results.
Long development cycles and product cancellations or postponements may adversely affect our business, results of operations and financial condition. 22 Table of C ontents If we do not adequately manage our inventory, we could lose sales or incur higher inventory-related expenses, which could negatively affect our operating results.
These measures to reduce credit risk may not be sufficient and our accounts receivable could be impaired or our revenues adversely impacted. We are exposed to credit risk on our trade accounts receivable, supplier non-trade receivables and prepayments related to long-term supply agreements, and this risk is heightened during periods when economic conditions worsen.
These measures to reduce credit risk may not be sufficient and our accounts receivable could be impaired or our revenues adversely impacted. 23 Table of C ontents We are exposed to credit risk on our trade accounts receivable, supplier non-trade receivables and prepayments related to long-term supply agreements, and this risk is heightened during periods when economic conditions worsen.
We may not be able to implement improvements in an efficient or timely manner and may discover deficiencies in existing controls, programs, systems and procedures, which could have an adverse effect on our business, reputation and financial results. Additionally, rapid growth 20 Table of C ontents in our business may place a strain on our human and capital resources.
We may not be able to implement improvements in an efficient or timely manner and may discover deficiencies in existing controls, programs, systems and procedures, which could have an adverse effect on our business, reputation and financial results. Additionally, rapid growth in our business may place a strain on our human and capital resources.
Accordingly, we may amend the terms of either class of public warrants in a manner adverse to a holder of such class of public warrants if holders of at least 50% of the then outstanding public warrants in such class approve of such amendment.
Accordingly, we may amend the terms of our public warrants in a manner adverse to a holder of public warrants if holders of at least 50% of the then outstanding public warrants approve of such amendment.
It also may have interests that differ from other stockholders and may vote or otherwise act in ways with which we or other stockholders disagree or that may be adverse to the interests of our stockholders. The price of our common stock and warrants may be volatile.
It also may have interests that differ from other stockholders and may vote or otherwise act in ways with which we or other stockholders disagree or that may be adverse to the interests of our stockholders. 35 Table of C ontents The price of our common stock and warrants may be volatile.
Any debt 19 Table of C ontents financing obtained by us in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions.
Any debt financing obtained by us in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions.
If we do not successfully implement, maintain or expand these programs and processes as planned, our operations may be disrupted, our ability to accurately and timely report our financial results could be impaired, and deficiencies may arise in our internal control over financial reporting, which may impact our ability to certify our financial results.
If we do not successfully implement, maintain or expand these programs and processes as planned, our operations may be disrupted, our ability to 40 Table of C ontents accurately and timely report our financial results could be impaired, and deficiencies may arise in our internal control over financial reporting, which may impact our ability to certify our financial results.
Our portfolio of currently-issued patents and registered trademarks, and any patents that may be issued, any copyrights and trademarks that may be registered in the future, may not provide sufficiently broad protections to us, or may not prove to be enforceable in actions against alleged infringers.
Our portfolio of currently-issued patents and registered trademarks, and any patents that may be issued, any copyrights and trademarks that may be registered in the future, may not provide sufficiently 32 Table of C ontents broad protections to us, or may not prove to be enforceable in actions against alleged infringers.
Even though we take precautions to prevent our productions and solutions from being provided to entities subject to these restrictions, our products could find their way to such prohibited 27 Table of C ontents entities. Any such provision could have negative consequences, including government investigations, penalties, or reputational harm.
Even though we take precautions to prevent our productions and solutions from being provided to entities subject to these restrictions, our products could find their way to such prohibited entities. Any such provision could have negative consequences, including government investigations, penalties, or reputational harm.
We have experienced net losses in each year since our inception. In the years ended December 31, 2024 and 2023, we incurred net losses of $97.0 million and $374.1 million, respectively. We expect to continue to incur losses for the foreseeable future as we expand our product offering and continue to scale our commercial operations and research and development program.
We have experienced net losses in each year since our inception. In the years ended December 31, 2025 and 2024, we incurred net losses of $60.4 million and $97.0 million, respectively. We expect to continue to incur losses for the foreseeable future as we expand our product offering and continue to scale our commercial operations and research and development program.
An adverse determination also could invalidate our intellectual property rights and adversely affect our ability to offer our products to our customers 32 Table of C ontents and may require that we procure or develop substitute products that do not infringe, which could require significant effort and expense.
An adverse determination also could invalidate our intellectual property rights and adversely affect our ability to offer our products to our customers and may require that we procure or develop substitute products that do not infringe, which could require significant effort and expense.
Any person or entity purchasing or otherwise acquiring any interest in any of our warrants shall be deemed to have notice of and to have consented to the forum provisions in our warrant agreement.
Any person or entity purchasing or otherwise acquiring any interest in any of 37 Table of C ontents our warrants shall be deemed to have notice of and to have consented to the forum provisions in our warrant agreement.
As we increase our international cross-border business and expand our operations abroad, we may continue to engage with business partners and third-party intermediaries to market our services and to obtain necessary permits, licenses and other regulatory approvals.
As we increase our international cross-border business and expand our operations abroad, we may continue to engage with business partners and third-party intermediaries to market our services and to obtain necessary permits, licenses and other 30 Table of C ontents regulatory approvals.
In certain non-US jurisdictions, despite the PEO relationship, there is a risk that the employee may nonetheless be deemed our direct employee and that the Company may be deemed to have a permanent operation in a non-US jurisdiction.
In certain non-US jurisdictions, despite the PEO relationship, there is a risk that the employee may nonetheless be deemed our direct employee and that the Company may be deemed to have a permanent operation in a 26 Table of C ontents non-US jurisdiction.
If we are not effective in addressing ESG matters affecting our industry, such as greenhouse gas emissions and climate-related risks, renewable energy, water stewardship, waste management, diversity and inclusion, responsible sourcing and supply chain, human rights, and social responsibility, among other issues, or setting and meeting relevant 29 Table of C ontents sustainability commitments, goals, or targets, our reputation may suffer.
If we are not effective in addressing ESG matters affecting our industry, such as greenhouse gas emissions and climate-related risks, renewable energy, water stewardship, waste management, responsible artificial intelligence, human capital matters, responsible sourcing and supply chain, human rights, and social responsibility, among other issues, or setting and meeting relevant sustainability commitments, goals, or targets, our reputation may suffer.
The warrant agreements provide that the terms of each class of warrants may be amended without the consent of any holder for certain limited administrative provisions, and that the approval by the holders of at least 50% of the then-outstanding public warrants in such class is required to make any change that adversely affects the interests of the registered holders of publicly traded warrants.
The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder for certain limited administrative provisions, and that the approval by the holders of at least 50% of the then-outstanding public warrants is required to make any change that adversely affects the interests of the registered holders of publicly traded warrants.
It is possible that we will not generate taxable income in time to use our net operating loss carryforwards and certain tax credits before their expiration (if we generate taxable income at all).
Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited. It is possible that we will not generate taxable income in time to use our net operating loss carryforwards and certain tax credits before their expiration (if we generate taxable income at all).
As of December 31, 2024, we had an accumulated deficit of $913.1 million. Even if we are able to increase the sales of our products, there can be no assurance that we will be profitable.
As of December 31, 2025, we had an accumulated deficit of $973.4 million. Even if we are able to increase the sales of our products, there can be no assurance that we will be profitable.
Our failure to implement and maintain effective internal control over financial reporting could result in errors in our consolidated financial statements that could result in a restatement of our financial statements and could cause us to fail to meet our reporting obligations, any of which could diminish investor confidence in us and cause a decline in the price of our common stock.
While we have remediated our prior material weaknesses, our failure to implement and maintain effective internal control over financial reporting in the future could result in errors in our consolidated financial statements that could result in a restatement of our financial statements and could cause us to fail to meet our reporting obligations, any of which could diminish investor confidence in us and cause a decline in the price of our common stock.
If lidar technology generally does not achieve commercial success or if the market adoption is slower than expected, our business, results of operation and financial condition will be materially and adversely affected. We may experience difficulties in managing our growth and expanding our operations. We are experiencing significant growth in the scope and nature of our operations.
If lidar technology generally does not achieve commercial success or if the market adoption is slower than expected, our business, results of operation and financial condition will be materially and adversely affected. 20 Table of C ontents We may experience difficulties in managing our growth and expanding our operations.
Additionally, ineffective internal control could expose us to an increased risk of financial reporting fraud and the misappropriation of assets and subject us to potential delisting from the stock exchange on which we list or to other regulatory investigations and civil or criminal sanctions. We did not design and maintain an effective control environment commensurate with our financial reporting requirements.
Additionally, ineffective internal control could expose us to an increased risk of financial reporting fraud and the misappropriation of assets and subject us to potential delisting from the stock exchange on which we list or to other regulatory investigations and civil or criminal sanctions.
We are committed to continuous improvement and will continue to diligently review our internal control over financial reporting. 34 Table of C ontents As a public company, we are required pursuant to Section 404(a) of the Sarbanes-Oxley Act of 2022 (the “Sarbanes Oxley Act”) to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting for each annual report on Form 10-K filed with the SEC.
As a public company, we are required pursuant to Section 404(a) of the Sarbanes-Oxley Act of 2022 (the “Sarbanes Oxley Act”) to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting for each annual report on Form 10-K filed with the SEC.
Our future success will depend, in part, upon our ability to manage the expanded business following these acquisitions, including challenges related to the management and monitoring of new operations and associated increased costs and complexity associated with such acquisitions. For example, in February 2023, we completed the Velodyne Merger and, in October 2021, we completed the acquisition of Sense.
Our future success will depend, in part, upon our ability to manage the expanded business following these acquisitions, including challenges related to the management and monitoring of new operations and associated increased costs and complexity associated with such acquisitions. For example, in February 2026, we completed the acquisition of Stereolabs, a company with operations outside of the United States.
Failure to comply with these requirements could result in enforcement action by the FDA, which could require us to cease distribution of our products, recall or remediate products already distributed to customers, or subject us to FDA enforcement. We are exposed to risks related to the use of AI tools by us and others.
Failure to comply with these requirements could result in enforcement action by the FDA, which could require us to cease distribution of our products, recall or remediate products already distributed to customers, or subject us to FDA enforcement.
In addition, as climate change issues become more prevalent, foreign, federal, state and local governments and our customers have increased their focus on environmental sustainability, which has resulted in, and may result in new, regulations and customer requirements, which could materially adversely impact our business, results of operations and financial condition.
In addition, foreign, federal, state and local governments and our customers have had an evolving focus on environmental sustainability, which has resulted in, and may result in new, regulations and customer requirements, which could materially adversely impact our business, results of operations and financial condition.
For example, the State of California has enacted a number of laws that require reporting on carbon neutrality claims and use of carbon removal credits and direct and indirect greenhouse gas emissions and climate-related financial risks. The SEC also adopted and then stayed rules that would require companies to provide certain climate-related disclosures.
For example, the State of California has enacted a number of laws that require reporting on carbon neutrality claims and use of carbon removal credits and direct and indirect greenhouse gas emissions and climate-related financial risks.
If we are unable to adequately reduce and control the costs of such key components, we will be unable to realize manufacturing costs targets, which could reduce the market adoption of our products, damage our reputation with current or prospective customers, and materially and adversely impact our brand, business, prospects, financial condition and operating results. 25 Table of C ontents Adverse conditions in the industries we target or the global economy more generally could have adverse effects on our results of operations.
If we are unable to adequately reduce and control the costs of such key components, we will be unable to realize manufacturing costs targets, which could reduce the market adoption of our products, damage our reputation with current or prospective customers, and materially and adversely impact our brand, business, prospects, financial condition and operating results.
Our sales and operations in international markets expose us to operational, financial and regulatory risks. International sales comprise a significant amount of our overall revenue and while growing our international sales is an important part of our growth strategy, these efforts may not be successful.
International sales comprise a significant amount of our overall revenue and while growing our international sales is an important part of our growth strategy, these efforts may not be successful.
Our publicly traded warrants were issued in registered forms under warrant agreements between Continental Stock Transfer & Trust Company, as warrant agent, and us (or formerly, Velodyne).
Our publicly traded warrants were issued in registered form under the warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us.
Additionally, manufacturing outside the United States is subject to several inherent risks, including: • foreign currency fluctuations; • local economic conditions; • political instability; • import or export requirements; • foreign government regulatory requirements; • reduced protection for intellectual property rights in some countries; • tariffs and other trade barriers and restrictions; and • potentially adverse tax consequences.
Additionally, manufacturing outside the United States is subject to several inherent risks, including: • foreign currency fluctuations; • local economic conditions; • political instability; • import or export requirements; • foreign government regulatory requirements; • reduced protection for intellectual property rights in some countries; • tariffs and other trade barriers and restrictions; and • potentially adverse tax consequences. 25 Table of C ontents We do not currently have long-term, committed supply contracts with many of our suppliers.
Moreover, any integration of artificial intelligence in our or any third-party’s operations, products or services is expected to pose new or unknown cybersecurity risks and challenges. We and certain of our third-party providers regularly experience actual and attempted cyberattacks and other incidents.
Moreover, any integration of artificial intelligence in our or any third-party’s operations, products or services is expected to pose new or unknown cybersecurity risks and challenges. We and certain of our third-party providers have experienced actual and attempted cyberattacks and other security incidents. For example, we have experienced phishing attacks and incidents involving unauthorized access to Confidential Information.
In the event of a component shortage, supply interruption or material pricing change from suppliers of these components, we may not be able to develop alternate sources in a timely manner or at all in the case of sole or limited sources. 24 Table of C ontents Developing alternate sources of supply for these components may be time-consuming, difficult, and costly and we may not be able to source these components on terms that are acceptable to us, or at all, which may undermine our ability to meet our requirements or to fill customer orders in a timely manner.
Developing alternate sources of supply for these components may be time-consuming, difficult, and costly and we may not be able to source these components on terms that are acceptable to us, or at all, which may undermine our ability to meet our requirements or to fill customer orders in a timely manner.
We are also required to disclose material changes made in our internal control over financial reporting on a quarterly basis. Failure to comply with the Sarbanes-Oxley Act could potentially subject us to sanctions or investigations by the SEC, the stock exchange on which our securities are listed or other regulatory authorities, which would require additional financial and management resources.
Failure to comply with the Sarbanes-Oxley Act could potentially subject us to sanctions or investigations by the SEC, the stock exchange on which our securities are listed or other regulatory authorities, which would require additional financial and management resources.
(“Amazon”), holds a warrant (“Amazon Warrant”) to acquire, following customary antidilution adjustments, up to an aggregate of 3,267,890 (2,160,304 of which are currently vested) shares of our common stock at an exercise price of $50.64 per share, representing 6.1% of our outstanding common stock as of March 17, 2025. We assumed the Amazon Warrant as part of the Velodyne Merger.
(“Amazon”), holds a warrant (“Amazon Warrant”) to acquire, following customary antidilution adjustments, up to an aggregate of 3,271,970 (2,728,985 of which are currently vested) shares of our common stock at an exercise price of $50.57 per share, representing 5.2% of our outstanding common stock as of February 25, 2026. We assumed the Amazon Warrant as part of the Velodyne Merger.
Even if we are successful in defending against any such claims, litigation could result in substantial costs and demand on management resources. 33 Table of C ontents Risks Related to Being a Public Company and our Capital Structure We have identified material weaknesses in our internal control over financial reporting and may identify additional material weaknesses in the future or otherwise fail to maintain effective internal control over financial reporting, which may result in material misstatements of our consolidated financial statements, cause us to fail to meet our periodic reporting obligations, or cause our access to the capital markets to be impaired.
Risks Related to Being a Public Company and our Capital Structure We have previously identified material weaknesses in our internal control over financial reporting and may identify additional material weaknesses in the future or otherwise fail to maintain effective internal control over financial reporting in the future, which may result in material misstatements of our consolidated financial statements, cause us to fail to meet our periodic reporting obligations, or cause our access to the capital markets to be impaired.
If we raise additional funds through the issuance of equity or convertible debt, including through our “at-the-market” offering program, or other equity-linked securities or if we issue equity or equity-linked securities to current or potential customers to further business relationships, our existing stockholders could experience significant dilution.
Any inability to access or delay in accessing these funds could adversely affect our business and financial position. 19 Table of C ontents If we raise additional funds through the issuance of equity or convertible debt, including through an “at-the-market” offering program, or other equity-linked securities or if we issue equity or equity-linked securities to current or potential customers to further business relationships, our existing stockholders could experience significant dilution.
Our ability to manage our operations and future growth will require us to continue to improve our operational, financial and management controls, compliance programs and reporting systems. We are currently in the process of strengthening our compliance programs, including our compliance programs related to product certifications, quality management systems certifications, environmental certifications, export controls, privacy and cybersecurity and anti-corruption.
We are currently in the process of strengthening our compliance programs, including our compliance programs related to product certifications, quality management systems certifications, environmental certifications, export controls, privacy and cybersecurity and anti-corruption.
We also cannot guarantee that our cybersecurity risk management program and processes, including our policies, controls, or procedures will be fully implemented, complied with, or adequate to detect, prevent or mitigate cyber incidents. Further, the implementation, maintenance, segregation and improvement of these programs and processes require significant management time, support and cost.
We cannot guarantee that our cybersecurity risk management program and processes, including our policies, controls, or procedures will be fully implemented, complied with, or adequate to detect, prevent or mitigate cyber incidents.
We do not currently have long-term, committed supply contracts with many of our suppliers. Loss of one or more of these suppliers or our inability to identify and establish relationships with new suppliers could harm our business and impede our growth.
Loss of one or more of these suppliers or our inability to identify and establish relationships with new suppliers could harm our business and impede our growth.
These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our board of directors or management. 38 Table of C ontents The provisions of our Certificate of Incorporation requiring exclusive forum in the Court of Chancery of the State of Delaware and the federal district courts of the United States for certain types of lawsuits may have the effect of discouraging lawsuits against our directors and officers.
The provisions of our Certificate of Incorporation requiring exclusive forum in the Court of Chancery of the State of Delaware and the federal district courts of the United States for certain types of lawsuits may have the effect of discouraging lawsuits against our directors and officers.
Although none of these actual or attempted cyber-attacks has had a material adverse impact on our operations or financial condition to date, we cannot guarantee that any such incidents will not have such an impact in the future.
While no attacks or incidents have had a material adverse impact on our operations or financial condition to date, we cannot guarantee that material incidents will not occur in the future.
Competitors and other unauthorized parties may attempt to copy or reverse engineer our lidar technology and other aspects of our solutions that we consider proprietary.
We believe that our patents are foundational in the area of lidar products, and intend to enforce our intellectual property rights. Competitors and other unauthorized parties may attempt to copy or reverse engineer our lidar technology and other aspects of our solutions that we consider proprietary.
To the extent 39 Table of C ontents that any such disruptions result in delays or cancellations of orders or impede our suppliers’ ability to timely deliver product components, our business, operating results and financial condition would be adversely affected.
Any disruption to our communications, whether caused by a natural disaster or by man-made problems, such as power disruptions, could adversely affect our business. To the extent that any such disruptions result in delays or cancellations of orders or impede our suppliers’ ability to timely deliver product components, our business, operating results and financial condition would be adversely affected.
We have filed for patents and trademarks in the United States and in certain international jurisdictions, but such protections may not be available, and we may not have applied for protections in all countries in which we operate or sell our products. 31 Table of C ontents Though we may have obtained intellectual property and related proprietary rights in various jurisdictions, it may prove difficult to enforce our intellectual property rights in practice.
We have filed for patents and trademarks in the United States and in certain international jurisdictions, but such protections may not be available, and we may not have applied for protections in all countries in which we operate or sell our products.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Board is also apprised by the executive team and Senior Director of Information Security and Compliance of more significant or serious cybersecurity incidents.
Biggest changeThe Board is also apprised by the executive team and Senior Director of Information Security and Compliance of more significant or serious cybersecurity incidents. 41 Table of C ontents Our Senior Director of Information Security and Compliance under the direction of our executive team, and is primarily responsible for assessing and managing our material risks from cybersecurity threats.
Key elements of our cybersecurity program include, but are not limited to, (i) raising security awareness of our employees and product development teams, and (ii) implementing and maintaining security operations that are designed to protect identities, networks, systems, and data and provide for detection, response, and recovery, including a cyber incident response plan.
Key elements of our cybersecurity program include, but are not limited to, (i) raising security awareness of our employees and product development teams, and (ii) implementing and maintaining security controls and operations that are designed to protect identities, networks, systems, and data and provide for detection, response, and recovery, including a cyber incident response plan.
He holds a M.S. in Computer Science and has attained various certifications, including an Advanced Computer Certificate from Stanford University.
He holds a M.S. in Computer Science and has attained various certifications, including an Advanced Computer Security Certificate from Stanford University.
Our executive team takes steps to stay informed about and monitor efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from the Senior Director of Information Security and Compliance and other internal security personnel; threat intelligence and other information 41 Table of C ontents obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in our IT environment.
Our Senior Director of Information Security and Compliance assists the executive team by taking steps to stay informed about and monitor the Company’s efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in our IT environment.
The Company has adopted a third-party management policy to formalize the baseline of security controls that it expects its partners and other third-party companies (including service providers) to meet, in accordance with their criticality to our operations and respective risk profile, when directly interacting with the Company’s data.
The Company has adopted a third-party management policy to formalize the baseline of security controls that it expects its partners and other third-party companies (including service providers) to meet, in accordance with their criticality to our operations and respective risk profile based on their level of access to our systems and/or data.
The Company’s executive team also monitors the activities of the BRT and where appropriate participates in and supports the BRT in the evaluation and remediation of actual or perceived cyber incidents in accordance with the Company’s incident response plan.
The Company’s executive team also monitors the activities of the Breach Response Team (“BRT”) and where appropriate participates in and supports the BRT in the evaluation and remediation of cyber and other security incidents in accordance with the Company’s incident response plan.
We engage external parties to enhance our cybersecurity program and to operate a variety of operational functions. We engage consultants, advisors and vendors who are recognized for their cybersecurity expertise or products to supplement, augment and/or test specific elements of our security program.
We engage external parties to enhance our cybersecurity program and to operate a variety of operational functions. We engage consultants, advisors and vendors who are recognized for their cybersecurity expertise or products to supplement, augment and/or test elements of our security program. We also engage third-party specialists to conduct security assessments and independent audits of the Company’s systems and networks.
Item 1C. Cybersecurity We have developed and implemented a cybersecurity program that seeks to ensure the confidentiality, integrity, and availability of the Company’s information assets, including its critical systems. The Company’s cybersecurity program is based on an ISO 27001 compliant Information Security Management System (ISMS).
Item 1C. Cybersecurity We have developed and implemented a cybersecurity program that seeks to ensure the confidentiality, integrity, and availability of the Company’s information assets, including its critical systems. We use the ISO 27001 Information Security Management System (ISMS) standard as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business.
To mitigate risks that may arise from the Company’s interactions with service providers, suppliers, and vendors, we strive to ensure that our systems/services are integrated with trustworthy vendors. Although to date we have not experienced a material cybersecurity incident resulting in an interruption of our operations, the scope or impact of any future incident cannot be predicted with complete certainty.
To mitigate risks that may arise from the Company’s interactions with service providers, suppliers, and vendors, we strive to ensure that our systems/services are integrated with trustworthy vendors.
Removed
We use ISO 27001 as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business.
Added
Although to date we have not identified risks from cybersecurity threats or experienced any cybersecurity incidents that have materially affected or are reasonably likely to materially affect our operations, business strategy or financial condition, the scope or impact of any future incident cannot be predicted with certainty.
Removed
We also engage third-party specialists to conduct security assessments and independent audits of the security of the Company’s systems and networks. The results of these assessments may be used to help us improve our cybersecurity program.
Removed
The Company has a Breach Response Team (“BRT”) led by our Senior Director of Information Security and Compliance under the direction of our executive team, and is responsible for assessing and managing our material risks from cybersecurity threats.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed2 unchanged
Biggest changeProperties Our corporate headquarters are located in San Francisco, California where we lease properties as follows: (i) 26,125 square feet of office space pursuant to a lease that is scheduled to expire in August 2027, and (ii) 20,032 square feet of office space in a building adjacent to our corporate headquarters, which term is scheduled to expire in August 2027.
Biggest changeItem 2. Properties Our corporate headquarters are located in San Francisco, California where we lease 26,125 square feet of office space pursuant to a lease that is scheduled to expire in August 2034. In December 2025, we acquired 20,032 square feet of office space in a building adjacent to our corporate headquarters which was previously held under lease.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. 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 9. Commitments and Contingencies included in the notes to our audited financial statements included elsewhere in the Annual Report on Form 10-K for a discussion of our material legal proceedings.
Biggest changeItem 3. 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 8. Commitments and Contingencies included in the notes to our audited financial statements included elsewhere in the Annual Report on Form 10-K for a discussion of our material legal proceedings.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeItem 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock and warrants expiring in 2026 are listed for trading on the NASDAQ under the symbols “OUST” and “OUSTZ”, respectively, and our warrants expiring in 2025 are listed for trading on the NASDAQ under the symbol “OUSTW”.
Biggest changeItem 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock and warrants expiring in 2026 are listed for trading on the NASDAQ under the symbols “OUST” and “OUSTZ”, respectively. Holders As of February 25, 2026, there were 240 registered holders of record of our common stock.
Holders As of March 17, 2025, there were 225 registered holders of record of our common stock. The actual number of stockholders of our common stock is greater than this number of record holders and includes stockholders who are beneficial owners but whose shares of common stock are held in street name by banks, brokers and other nominees.
The actual number of stockholders of our common stock is greater than this number of record holders and includes stockholders who are beneficial owners but whose shares of common stock are held in street name by banks, brokers and other nominees.
Removed
Recent Sales of Unregistered Securities; Purchases of Equity Securities by the Issuer or Affiliated Purchaser Other than as described in the Company’s Quarterly Reports on Form 10-Q for the quarterly periods ended June 30, 2024 and March 31, 2024, the Company did not sell any securities that were not registered under the Securities Act during the year ended December 31, 2024.
Added
Recent Sales of Unregistered Securities; Purchases of Equity Securities by the Issuer or Affiliated Purchaser In October 2025, certain shareholders of a subsidiary of Velodyne (the "BlueCity Holders") exercised their right to exchange an aggregate of 502,776 shares in such subsidiary into 41,248 shares of our common stock, respectively.
Added
The BlueCity Holders acquired the shares in the Velodyne subsidiary as consideration for Velodyne’s acquisition of BlueCity Technology, Inc. in October 2022, and the shares were exchangeable into Velodyne shares generally on a one-for-one basis, which ratio was adjusted to reflect the exchange ratio from the Velodyne Merger and our reverse stock split.
Added
The shares of our common stock were issued without registration under the Securities Act in reliance on Section 4(a)(2) and/or Regulation S of the Securities Act and the rules and regulations promulgated thereunder. On November 9, 2025, we agreed to issue shares of common stock as partial consideration for the acquisition of Stereolabs SAS (“Stereolabs”).
Added
Upon the closing of the Stereolabs transaction on February 4, 2026, we issued 1,847,677 shares, inclusive of 660,005 shares which will be released over a four-year period.
Added
We 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.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

70 edited+31 added−13 removed47 unchanged
Biggest changeThe income tax provision for the years ended December 31, 2024 and 2023, respectively, was not material to the Company’s consolidated financial statements. 48 Table of C ontents Results of Operations: The following table summarizes key components of our results of operations for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 (dollars in thousands) Revenue $ 111,101 $ 83,279 Cost of revenue (1) 70,641 74,965 Gross profit 40,460 8,314 Operating expenses (1) : Research and development 58,084 91,210 Sales and marketing 27,852 41,639 General and administrative 58,701 81,982 Goodwill impairment charges — 166,675 Total operating expenses 144,637 381,506 Loss from operations (104,177) (373,192) Other income (expense): Interest income 8,846 9,038 Interest expense (1,823) (9,303) Other income (expense), net 646 (130) Total other income (expense), net 7,669 (395) Loss before income taxes (96,508) (373,587) Provision for income tax expense 537 523 Net loss $ (97,045) $ (374,110) The following table sets forth the components of our consolidated statements of operations and comprehensive loss data as a percentage of revenue for the periods presented: Year Ended December 31, 2024 2023 (% of total revenue) Revenue 100 % 100 % Cost of revenue (1) 64 90 Gross profit 36 10 Operating expenses (1) : Research and development 52 110 Sales and marketing 25 50 General and administrative 53 98 Goodwill impairment charges — 200 Total operating expenses 130 458 Loss from operations (94) (448) Other income (expense): Interest income 8 11 Interest expense (2) (11) Other income (expense), net 1 — Total other income (expense), net — — Loss before income taxes (94) (448) Provision for income tax expense — 1 Net loss (94) % (449) % 49 Table of C ontents (1) Includes stock-based compensation expense as follows: Year Ended December 31, 2024 2023 (dollars in thousands) Cost of revenue $ 4,608 $ 2,854 Research and development 18,260 24,551 Sales and marketing 5,347 9,966 General and administrative 12,244 20,354 Total stock-based compensation $ 40,459 $ 57,725 Comparison of the years ended December 31, 2024 and 2023 Revenue Year Ended December 31, 2024 - 2023 Change 2024 2023 $ % (dollars in thousands) Revenue by geographic location: Americas $ 58,429 $ 45,744 $ 12,685 28 % Asia and Pacific 20,158 12,929 7,230 56 Europe, Middle East and Africa 32,513 24,606 7,907 32 Total $ 111,101 $ 83,279 $ 27,822 33 % Revenue Revenue increased by $27.8 million , or 33% , to $111.1 million for the year ended December 31, 2024 from $83.3 million for the prior year.
Biggest changeResults of Operations: The following table summarizes key components of our results of operations for the years ended December 31, 2025 and 2024: Year Ended December 31, 2025 2024 (in thousands) Revenue Product revenue $ 146,578 $ 111,101 Royalties 22,806 — Total revenue 169,384 111,101 Cost of revenue (1) 85,948 70,641 Gross profit 83,436 40,460 Operating expenses (1) : Research and development 65,170 58,084 Sales and marketing 27,624 27,852 General and administrative 64,641 58,701 Total operating expenses 157,435 144,637 Loss from operations (73,999) (104,177) Other income (expense): Interest income 9,485 8,846 Interest expense — (1,823) Other income (expense), net 1,202 646 Total other income (expense), net 10,687 7,669 Loss before income taxes (63,312) (96,508) Provision for (benefit from) income taxes (2,935) 537 Net loss $ (60,377) $ (97,045) 49 Table of C ontents The following table sets forth the components of our consolidated statements of operations and comprehensive loss data as a percentage of revenue for the periods presented: Year Ended December 31, 2025 2024 (% of total revenue) Revenue: Product revenue 87 % 100 % Royalties 13 — Total revenue 100 100 Cost of revenue (1) 51 64 Gross profit 49 36 Operating expenses (1) : Research and development 38 52 Sales and marketing 16 25 General and administrative 38 53 Total operating expenses 94 130 Loss from operations (45) (94) Other income (expense): Interest income 6 8 Interest expense — (2) Other income (expense), net 1 1 Total other income (expense), net 7 7 Loss before income taxes (37) (87) Provision for (benefit from) income taxes (2) — Net loss (36) % (87) % (1) Includes stock-based compensation expense as follows: Year Ended December 31, 2025 2024 (in thousands) Cost of revenue $ 5,455 $ 4,608 Research and development 19,020 18,260 Sales and marketing 4,978 5,347 General and administrative 11,371 12,244 Total stock-based compensation $ 40,824 $ 40,459 Comparison of the years ended December 31, 2025 and 2024 Revenue Year Ended December 31, 2025 - 2024 Change 2025 2024 % (dollars in thousands) Revenue by geographic location: Americas $ 92,103 $ 58,430 $ 33,673 58 % Asia and Pacific 54,187 20,158 34,029 169 Europe, Middle East and Africa 23,094 32,513 (9,419) (29) Total $ 169,384 $ 111,101 $ 58,283 52 % 50 Table of C ontents Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 Revenue Revenue increased by $58.3 million , or 52% , to $169.4 million for the year ended December 31, 2025 from $111.1 million for the prior year.
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, or China that are used in our products.
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, China or Taiwan that are used in our products.
Financing Activities During the year ended December 31, 2024, cash provided by financing activities was $15.4 million, consisting primarily of $57.8 million of proceeds from the issuance of common stock under the ATM Agreement, partially offset by the repayment of indebtedness of $44.0 million under the UBS Agreement.
During the year ended December 31, 2024, cash provided by financing activities was $15.4 million, consisting primarily of $57.8 million of proceeds from the issuance of common stock under the Former ATM Agreement, partially offset by the repayment of indebtedness of $44.0 million under the UBS Agreement.
Certain contractual obligations are reflected on the consolidated balance sheet as of December 31, 2024, 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.
Certain contractual obligations are reflected on the consolidated balance sheet as of December 31, 2025, 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.
On August 12, 2024, we repaid the $44.0 million principal amount outstanding under the UBS Agreement, along with accrued interest, and terminated all commitments and obligations thereunder. We funded the repayment of the outstanding revolving loans under the UBS Agreement with cash on hand. For additional information regarding the terms of the UBS Agreement, see Note 6.
On August 12, 2024, we repaid the $44.0 million principal amount outstanding under the UBS Agreement, along with accrued interest, and terminated all commitments and obligations thereunder. We funded the repayment of the outstanding revolving loans under the UBS Agreement with cash on hand. For additional information regarding the terms of the UBS Agreement, see Note 5.
Liquidity and Capital Resources Our principal sources of liquidity are our cash and cash equivalents and short-term investments, cash generated from sales of our products, and sales of common stock under our at-the market equity offering program. Our primary requirements for liquidity and capital are to finance working capital, inventory management, capital expenditures, and general corporate purposes.
Liquidity and Capital Resources Our principal sources of liquidity are our cash and cash equivalents and short-term investments, cash generated from sales of our products, and sales of common stock under our at-the market equity offering programs. Our primary requirements for liquidity and capital are to finance working capital, inventory management, capital expenditures, and general corporate purposes.
For information regarding our other contractual obligations, refer to Note 8. Leases and Note 9. Commitments and Contingencies to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
For information regarding our other contractual obligations, refer to Note 7. Leases and Note 8. Commitments and Contingencies to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
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.
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 and state deferred tax assets.
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 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.
Other income (expense), net consists primarily of 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 and the change in fair value of the private placement warrant liability. Income Taxes Our income tax provision consists of federal, state and foreign current and deferred income taxes.
Other income (expense), net consists primarily of 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 and the change in fair value of the private placement warrant liability. 48 Table of C ontents Income Taxes Our income tax provision consists of federal, state and foreign current and deferred income taxes.
We anticipate increasing demand for our digital lidar solution. 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.
We anticipate increasing demand for our digital lidar solutions within a multi-billion dollar total addressable market (“TAM”). We define our TAM as applications in the automotive, industrial, robotics, and smart infrastructure end markets where we actively engage and maintain customer relationships.
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. 45 Table of C ontents Supply Chain Continuity.
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. Supply Chain Continuity.
Within our OS sensor models, we offer numerous customization options, all enabled by embedded software. For each of our models in the OS product line, we offer resolution options of 128 lines vertically (“channels”), 64 channels, or 32 channels, as well as many beam spacing options. In 2022, we launched our REV7 OS series scanning sensors powered by L3 chip.
For each of our models in the OS product line, we offer resolution options of 128 lines vertically (“channels”), 64 channels, or 32 channels, as well as many beam spacing options. In 2022, we launched our REV7 OS series scanning sensors powered by L3 chip.
However, we believe that because of the simplicity of our digital lidar technology, we are well-positioned to scale more effectively than our competitors and can leverage this scale to deliver positive gross margins. Continued Investment and Innovation. We believe that we are a leading lidar provider.
However, we believe that because of the simplicity of our digital lidar technology and the value proposition of our lidar solutions, we are well-positioned to scale more effectively than our competitors and to continue to deliver positive gross margins. Continued Investment and Innovation. We believe that we are a leading lidar provider.
These costs could also impact customer demand 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.
These costs could impact customer demand and adoption as described above under “Customers’ Sales Volumes.” 45 Table of C ontents Competition. Lidar is an emerging technology, and there are many competitors for this growing market. Absent the introduction of new technology, we expect this competition to continue to push our ASPs lower in the coming years.
The Amazon Warrant is subject to vesting; 50% of the unvested Amazon Warrant as of the date of the Velodyne Merger vested as a result of the Velodyne Merger and the remainder will vest over time based on payments by Amazon or its affiliates to us in connection with Amazon’s purchase of goods and services from us. 44 Table of C ontents Factors Affecting Our Performance Commercialization of Lidar Applications.
The Amazon Warrant is subject to vesting; 50% of the unvested Amazon Warrant as of the date of the Velodyne Merger vested as a result of the Velodyne Merger and the remainder will vest over time based on payments by Amazon or its affiliates to us in connection with Amazon’s purchase of goods and services from us.
Our digital lidar sensors leverage a simplified architecture based on two semiconductor chips and are backed by a suite of patent-protected technology. 43 Table of C ontents We also provide perception software platforms for smart infrastructure deployments. Our software enables real-time people and object detection, classification, and tracking for actionable, intuitive, and customizable insights while preserving personally identifiable information.
Our software enables real-time people and object detection, classification, and tracking for actionable, intuitive, and customizable insights while preserving personally identifiable information. Our digital lidar sensors leverage a simplified architecture based on two semiconductor chips and are backed by a suite of patent-protected technology.
These product offerings are in the final stages of their product life cycle and we plan to discontinue manufacturing them in 2025. Amazon Warrant Amazon.com NV Investment Holdings LLC, a wholly-owned subsidiary of Amazon.com, Inc. (“Amazon”), holds a warrant (“Amazon Warrant”) to acquire shares of our common stock. We assumed the Amazon Warrant as part of the Velodyne Merger.
These product offerings are in the final stages of their product life cycle, and we ceased manufacturing them in 2025. 44 Table of C ontents Amazon Warrant Amazon.com NV Investment Holdings LLC, a wholly-owned subsidiary of Amazon.com, Inc. (“Amazon”), holds a warrant (“Amazon Warrant”) to acquire shares of our common stock.
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.
It is critical to our future success that our customers reach commercial production and select our products, and that we avoid unexpected cancellations of major purchases of our products.
We expect sales and marketing expenses as a percentage of revenue to decrease over time as our business grows. 47 Table of C ontents 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, fees related to legal fees, patent prosecution, accounting, finance and professional services, as well as insurance and bank fees.
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, fees related to legal fees, patent prosecution, accounting, finance and professional services, as well as insurance and bank fees.
The changes in our operating assets and liabilities of $11.5 million was primarily due to a decrease in accounts receivable of $1.7 million, decrease in inventory of $4.7 million, an increase in prepaid expenses and other assets of $21.3 million, an increase in accounts payable of $2.5 million, an increase in contract liabilities of $19.0 million, a decrease in operating lease liability of $6.3 million, and a decrease in accrued and other liabilities of $28.1 million.
The changes in our operating assets and liabilities of $32.1 million were primarily due to an increase in accounts receivable of $8.0 million, an increase in inventory of $6.8 million, an increase in prepaid expenses and other assets of $3.6 million, an increase in accounts payable of $13.2 million, a decrease in contract liabilities of $14.3 million, a decrease in operating lease liability of $6.7 million, and a decrease in accrued and other liabilities of $5.9 million.
We are headquartered in San Francisco, California. 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 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 expect these needs to continue as we develop and grow our business. As of December 31, 2024 we had an accumulated deficit of $913.1 million and cash, cash equivalents, restricted cash and short-term investments of approximately $174.6 million.
We expect these needs to continue as we develop and grow our business. As of December 31, 2025 we had an accumulated deficit of $973.4 million and cash, cash equivalents, restricted cash and short-term investments of approximately $211.2 million.
We assess the fair value of assets acquired, including intangible assets, and liabilities assumed using a variety of methods. Each asset acquired and liability assumed is measured at fair value from the perspective of a market participant.
We recognize the assets acquired and liabilities assumed in business combinations on the basis of their fair values at the date of acquisition. We assess the fair value of assets acquired, including intangible assets, and liabilities assumed using a variety of methods. Each asset acquired and liability assumed is measured at fair value from the perspective of a market participant.
We believe that our lidar solutions are approaching an inflection point of adoption across our target end market applications, and that we are well-positioned to capitalize on this market adoption. However, as our customers continue research and development projects that rely on lidar technology, it is difficult to estimate the timing of ultimate end market and customer adoption.
Factors Affecting Our Performance Commercialization of Lidar Applications. We believe that our lidar solutions are approaching an inflection point of adoption across our target end market applications and that we are well-positioned to capitalize on this opportunity. However, it is difficult to estimate the timing of ultimate end market and customer adoption.
Interest Income, Interest Expense, 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. Interest expense consists primarily of interest on our debt and the amortization of debt issuance costs and discounts.
These amounts will vary based on our respective balances and market rates. Interest expense consists primarily of interest on our debt and the amortization of debt issuance costs and discounts.
As of December 31, 2024, there were 3,267,890 shares of common stock issuable under the Amazon Warrant.
As of December 31, 2025, there were 3,271,970 shares of common stock issuable under the Amazon Warrant.
The increase in revenue was primarily driven by increased sales of the REV7 sensors as customers increased their purchase levels compared to the prior year period. Geographic Locations Revenue increased across the geographic regions of the Americas, Asia and Pacific, and Europe, Middle East and Africa as compared to the comparable period in the prior year.
Geographic Locations Revenue increased across the geographic regions of the Americas and Asia and Pacific, offset in part by decreased revenue in Europe, the Middle East and Africa as compared to the comparable period in the prior year. The revenue increase in the Americas was primarily attributable to higher sales of the REV7 sensor.
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. However, notwithstanding any short-term price surcharges on our components, we expect that our volume-driven product costs will decrease over time.
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.
Sales and marketing expenses also include amortization expense of intangible assets related to customer relationships associated with the acquisitions and an allocated portion of facility and IT costs that support sales and marketing activities.
Sales and marketing expenses also include amortization expense of intangible assets related to customer relationships 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.
Our cost of revenue also includes depreciation of manufacturing equipment, amortization of intangible assets, an allocated portion of overhead, facility and IT costs, warranty expenses, excess and obsolete inventory and shipping costs.
Our cost of revenue also includes depreciation of manufacturing equipment, amortization of intangible assets, an allocated portion of overhead, facility and IT costs, warranty expenses, excess and obsolete inventory and shipping costs. Revenue from royalties from long-term IP license contracts is recorded without any associated cost of revenue.
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.
These risks and challenges that 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. Employee Retention Credit.
We currently intend to use the net proceeds from the sale of shares pursuant to the ATM Agreement for working capital and general corporate purposes. 52 Table of C ontents Prior Debt Arrangements On October 25, 2023, we entered into the Credit Line Account Application and Agreement for Organizations and Businesses (the “Credit Agreement”) and the Addendum to Credit Line Account Application and Agreement (the “Addendum”; and the Credit Agreement as amended, modified, and/or supplemented by the Addendum, the “UBS Agreement”) by and among the Company, UBS Bank USA (the “Bank”), and UBS Financial Services Inc.
Prior Debt Arrangements On October 25, 2023, we entered into the Credit Line Account Application and Agreement for Organizations and Businesses (the “Credit Agreement”) and the Addendum to Credit Line Account Application and Agreement (the “Addendum”; and the Credit Agreement as amended, modified, and/or supplemented by the Addendum, the “UBS Agreement”) by and among the Company, UBS Bank USA (the “Bank”), and UBS Financial Services Inc.
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 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 the market for lidar solutions matures and more customers reach a commercialization phase, the fluctuations in our operating results may become less pronounced.
During the year ended December 31, 2023, operating activities used $137.9 million in cash.
During the year ended December 31, 2024, operating activities used $33.7 million in cash.
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 Scotland and Canada and consist of the following activities: • Design, prototyping, and testing of proprietary electrical, optical, and mechanical subsystems for our digital lidar 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 integration products; • Custom SoC design for Ouster’s digital lidar products; and • Development of custom manufacturing equipment.
Because revenue from royalties from long-term IP license contracts is recorded without any associated cost of revenue, our gross profit and gross margin are favorably impacted by royalties from long-term IP license contracts, particularly in the year ended December 31, 2025. 47 Table of C ontents 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 Scotland and Canada and consist of the following activities: • Design, prototyping, and testing of proprietary electrical, optical, and mechanical subsystems for our digital lidar 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 integration products; • Custom SoC design for Ouster’s digital lidar products; and • Development of custom manufacturing equipment.
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.
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.
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.
Our financial performance is significantly dependent on our ability to maintain this leading position, which is further dependent on the investments we make in growing our digital lidar product portfolio and increasing the capabilities of our software solutions.
Cash Flow Summary For the Years ended December 31, 2024 2023 (dollars in thousands) Net cash provided by (used in): Operating activities $ (33,694) $ (137,890) Investing activities 14,652 50,601 Financing activities 15,393 15,657 Operating Activities During the year ended December 31, 2024, operating activities used $33.7 million in cash.
Cash Flow Summary For the Years ended December 31, 2025 2024 (in thousands) Net cash provided by (used in): Operating activities $ (39,956) $ (33,694) Investing activities (36,251) 14,652 Financing activities 97,610 15,393 Operating Activities During the year ended December 31, 2025, operating activities used $40.0 million in cash.
Market acceptance of lidar technology and active safety technology depend upon many factors, including cost, performance, safety performance, regulatory requirements and international taxes or tariffs 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.
Market acceptance of lidar technology and active safety technology depend upon many factors, including cost, performance, safety performance, regulatory requirements, international taxes, and 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.
The primary factors affecting our operating cash flows during this period were our net loss of $374.1 million, impacted by our non-cash charges of $257.7 million primarily consisting of inventory write-down of $10.0 million, interest expense and loss on extinguishment of debt of $4.0 million, goodwill impairment charges of $166.7 million, depreciation and amortization of $17.1 million, stock-based compensation of $57.7 million, loss on write-off of construction in-progress and right-of-use asset impairment of $1.7 million, and amortization of right-of-use asset of $4.5 million.
The primary factors affecting our operating cash flows during this period were our net loss of $60.4 million, offset by our non-cash charges of $52.5 million primarily consisting of depreciation and amortization of $7.8 million, stock-based compensation of $40.8 million, amortization of right-of-use asset of $5.1 million and inventory write-down of $0.4 million.
The cash used in changes in our operating assets and liabilities of $21.5 million was primarily due to an increase in inventories of $4.0 million, a decrease in accounts payable of $8.5 million, an increase in accrued and other liabilities of $8.1 million. 53 Table of C ontents Investing Activities During the year ended December 31, 2024, cash provided by investing activities was $14.7 million, consisting primarily of $162.3 million proceeds from sales of short-term investments and purchases of short-term investments of $144.6 million.
The changes in our operating assets and liabilities of $11.5 million was primarily due to an increase in accounts receivable of $1.7 million, decrease in inventory of $4.7 million, a decrease in prepaid expenses and other assets of $21.3 million, an increase in accounts payable of $2.5 million, an increase in contract liabilities of $19.0 million, a decrease in operating lease liability of $6.3 million, and a decrease in accrued and other liabilities of $28.1 million. 54 Table of C ontents Investing Activities During the year ended December 31, 2025, cash used by investing activities was $36.3 million, consisting primarily of purchases of short-term investments of $149.6 million and purchase of property and equipment of $24.9 million, offset in part by $138.3 million proceeds from sales and maturities of short-term investments.
Cost of Revenue and Gross Margin Year Ended December 31, 2024 - 2023 Change 2024 2023 $ % (dollars in thousands) Cost of revenue $ 70,641 $ 74,965 $ (4,324) (6) % Cost of revenue Cost of revenue decreased by $4.3 million, or 6%, to $70.6 million for the year ended December 31, 2024 from $75.0 million for the prior year.
Cost of Revenue and Gross Margin Year Ended December 31, 2025 - 2024 Change 2025 2024 $ % (dollars in thousands) Cost of revenue $ 85,948 $ 70,641 $ 15,307 22 % Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 Cost of revenue Cost of revenue increased by $15.3 million, or 22%, to $85.9 million for the year ended December 31, 2025 from $70.6 million for the prior year.
Overview Ouster was founded in 2015 with the invention of our high-performance digital lidar. To continue to grow our bus iness in the coming years, we expanded and plan to continue invest in growing our digital lidar product portfolio, increasing the capabilities of our software solutions, and opportunistically expanding our sales and marketing efforts.
To continue to grow our bus iness in the coming years, we expanded and plan to continue invest in growing our digital lidar product portfolio, increasing the capabilities of our software solutions, and opportunistically expanding our sales and marketing efforts. We are headquartered in San Francisco, California. We are a leading global provider of lidar sensors and solutions.
The preparation of these consolidated financial statements requires us to make estimates, assumptions and judgments that can significantly impact the amounts we report as assets, liabilities, revenue, costs and expenses and the related disclosures. We base our estimates on historical experience and other assumptions that we believe are reasonable under the circumstances.
Critical Accounting Policies and Estimates We prepare our consolidated financial statements in accordance with U.S. GAAP. The preparation of these consolidated financial statements requires us to make estimates, assumptions and judgments that can significantly impact the amounts we report as assets, liabilities, revenue, costs and expenses and the related disclosures.
As a result of the issuance and sale by us of an additional 6,045,428 shares of common stock in the year ended December 31, 2024 pursuant to the At-Market-Issuance Sales Agreement at prices below the exercise price of the Amazon Warrant, an antidilution adjustment to the terms of the Amazon Warrant occurred, resulting in the increase in the number of shares issuable under the Amazon Warrant by 3,374 shares of common stock and a reduction to the original strike price of the Amazon Warrant to $50.64 per share.
As a result of the issuance and sale by the Company of an additional 4,671,406 shares of common stock in the twelve months ended December 31, 2025 in “at-the-market offerings” at prices below the exercise price of the Amazon Warrant, an antidilution adjustment was made in accordance with the terms of the Amazon Warrant, resulting in the increase in the number of shares issuable under the Amazon Warrant by 4,077 shares of common stock and a reduction to the original strike price of the Amazon Warrant to $50.57 per share.
This discussion contains forward-looking statements based upon current plans, expectations and beliefs involving risks and uncertainties. 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” and in other parts of this Annual Report on Form 10-K.
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” and in other parts of this Annual Report on Form 10-K. 43 Table of C ontents Overview Ouster was founded in 2015 with the invention of our high-performance digital lidar.
Significant judgment is applied when the Company determines the amount and timing of revenue from the intellectual property (“IP”) royalties when Company contracts with customers to license rights to its IP.
Significant judgment is applied when the Company determines the amount and timing of revenue from the IP royalties when Company contracts with customers to license rights to its IP. In the year ended December 31, 2025, we recognized $22.8 million in revenue for royalties from long-term IP license contracts.
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. 46 Table of C ontents Cost of Revenue Cost of revenue consists of the manufacturing cost of our lidar sensors, which primarily consists of sensor 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.
Cost of Revenue Cost of revenue consists of the manufacturing cost of our lidar sensors, which primarily consists of sensor 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.
A change in our estimates could have a significant impact on the value of our inventory and our results of operations. 54 Table of C ontents We believe that the accounting policy discussed below is critical to understanding our historical and future performance as these policies involve a greater degree of judgment and complexity.
We believe that the accounting policy discussed below is critical to understanding our historical and future performance as these policies involve a greater degree of judgment and complexity. 55 Table of C ontents Revenue Recognition Revenue is recognized when a customer obtains control of promised products or services.
We believe our sensors are one of the highest-performing, lowest-cost lidar solutions available today across each of our four target markets: automotive, industrial, robotics, and smart infrastructure.
We believe our sensors are one of the highest-performing, lowest-cost lidar solutions available today across each of our four target markets: automotive, industrial, robotics, and smart infrastructure. Our digital lidar sensors leverage a simplified architecture based on two semiconductor chips and are backed by a suite of patent-protected technology. We also provide perception software platforms for smart infrastructure deployments.
Our actual results could differ significantly from these estimates under different assumptions and conditions. Business Combinations Business combinations are accounted for under the acquisition method. We recognize the assets acquired and liabilities assumed in business combinations on the basis of their fair values at the date of acquisition.
We base our estimates on historical experience and other assumptions that we believe are reasonable under the circumstances. Our actual results could differ significantly from these estimates under different assumptions and conditions. Business Combinations Business combinations are accounted for under the acquisition method.
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.
In 2025, our strategic business objectives included 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.
Our digital lidar sensors leverage a simplified architecture based on two semiconductor chips and are backed by a suite of patent-protected technology. Our hardware product offering currently includes four models of sensors in our OS product line: the hemispheric field of view OSDome, the ultra-wide field of view OS0, the mid-range OS1, and the long-range OS2.
Our hardware product offering currently includes four models of sensors in our OS product line: the hemispheric field of view OSDome, the ultra-wide field of view OS0, the mid-range OS1, and the long-range OS2. Within our OS sensor models, we offer numerous customization options, all enabled by embedded software.
For example, the production cycle in the automotive market tends to be substantially longer than in our other target markets.
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 longer than other target markets.
Other income (expense), net was not material for the years ended December 31, 2024 and December 31, 2023. 51 Table of C ontents Income Taxes Year Ended December 31, 2024 - 2023 Change 2024 2023 $ % (dollars in thousands) Loss before income taxes $ (96,508) $ (373,587) $ 277,079 (74) % Provision for income tax expense (benefit) 537 523 14 3 Effective tax rate (0.56) % (0.14) % Our effective tax rate was (0.56)% for the year ended December 31, 2024 compared to our effective tax rate of (0.14)% for the prior year.
The year-over-year increase in other income (expense), net was due to a R&D tax credit refund of $0.7 million from a foreign jurisdiction. 52 Table of C ontents Income Taxes Year Ended December 31, 2025 - 2024 Change 2025 2024 $ % (dollars in thousands) Loss before income taxes $ (63,312) $ (96,508) $ 33,196 (34) % Provision for (benefit from) income tax (2,935) 537 (3,472) (647) Effective tax rate 4.64 % (0.56) % Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 Our effective tax rate was 4.64% for the year ended December 31, 2025 compared to our effective tax rate of (0.56)% for the prior year.
During the year ended December 31, 2023, cash used in investing activities was $50.6 million, which was attributed primarily to the Velodyne Merger and proceeds and purchases of short-term investments.
During the year ended December 31, 2024, cash provided by investing activities was $14.7 million, consisting primarily of $162.3 million proceeds from sales and maturities of short-term investments offset in part by purchases of short-term investments of $144.6 million.
ATM Agreement On April 29, 2022, we entered into an open market sale agreement with B. Riley Securities, Inc., Cantor Fitzgerald & Co. and Oppenheimer & Co. Inc.
ATM Agreement On April 29, 2022, we entered into an open market sale agreement with B. Riley Securities, Inc., Cantor Fitzgerald & Co. and Oppenheimer & Co. Inc. (the “Former ATM Agreement”), pursuant to which we could offer and sell shares of our common stock with an aggregate offering price of up to $150.0 million under an “at-the-market” offering program.
Revenue Recognition Revenue is recognized when a customer obtains control of promised products or services. The amount of revenue recognized reflects the consideration that the Company expects to be entitled to receive in exchange for these products or services.
The amount of revenue recognized reflects the consideration that the Company expects to be entitled to receive in exchange for these products or services. The Company licenses rights to its IP to certain customers and collects royalties based on customer’s product sales. IP revenue recognition is dependent on the nature and terms of each agreement.
Expanded global reach will require continued investment and may expose us to additional foreign currency risk, international taxes and tariffs, legal obligations, export/import regulations and additional operational costs. These risks and challenges that may impact our ability to meet our projected sales volumes, revenues, and gross margins.
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, export/import regulations and additional operational costs.
During the year ended December 31, 2023, cash provided by financing activities was $15.7 million, consisting primarily of $14.6 million of proceeds from the issuance of common stock under the ATM Agreement and proceeds from employee stock purchase program of $1.2 million. Critical Accounting Policies and Estimates We prepare our consolidated financial statements in accordance with U.S. GAAP.
Financing Activities During the year ended December 31, 2025, cash provided by financing activities was $97.6 million, consisting primarily of $95.6 million of proceeds from the issuance of common stock under the ATM Agreement.
The decrease was primarily attributable to the reduction in compensation expenses and other costs from the restructuring and cost reduction initiatives after the closing of the Velodyne Merger. Sales and Marketing Sales and marketing expenses decreased by $13.8 million, or 33%, to $27.9 million for the year ended December 31, 2024 from $41.6 million in the prior year.
Sales and Marketing Sales and marketing expenses decreased by $0.2 million, or 1%, to $27.6 million for the year ended December 31, 2025 from $27.9 million in the prior year.
Components of Results of Operations Revenue The majority of our revenue comes from the sale of our lidar sensors and accessories both directly to end users and through distributors both domestically and internationally.
The Company qualified for the ERC for the period between March 17, 2020 and September 30, 2021 and the Company received an ERC credit in the amount of $8.0 million during the year ended December 31, 2025. 46 Table of C ontents Components of Results of Operations Revenue The majority of our revenue comes from the sale of our lidar sensors and accessories both directly to end users and through distributors both domestically and internationally.
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. Goodwill Impairment Charges In the year ended December 31, 2023, we recorded goodwill impairment charges of approximately $166.7 million.
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. Interest Income, Interest Expense, and Other Income (Expense), Net Interest income consists primarily of income earned on our cash and cash equivalents and short-term investments.
Gross margin rose to 36% for the year ended December 31, 2024 from 10% in the prior year primarily as a result of the factors described above related to the increased sales of REV7 sensor. 50 Table of C ontents Operating Expenses Year Ended December 31, 2024 - 2023 Change 2024 2023 $ % (dollars in thousands) Operating expenses: Research and development $ 58,084 $ 91,210 $ (33,126) (36) % Sales and marketing 27,852 41,639 (13,787) (33) General and administrative 58,701 81,982 (23,281) (28) Goodwill impairment charges — 166,675 (166,675) 100 % Total operating expenses: $ 144,637 $ 381,506 $ (236,869) (62) % Research and Development Research and development expenses decreased by $33.1 million, or 36%, to $58.1 million for the year ended December 31, 2024 from $91.2 million in the prior year.
Operating Expenses Year Ended December 31, 2025 - 2024 Change 2025 2024 $ % (dollars in thousands) Operating expenses: Research and development $ 65,170 $ 58,084 $ 7,086 12 % Sales and marketing 27,624 27,852 (228) (1) General and administrative 64,641 58,701 5,940 10 Total operating expenses: $ 157,435 $ 144,637 $ 12,798 9 % 51 Table of C ontents Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 Research and Development Research and development expenses increased by $7.1 million, or 12%, to $65.2 million for the year ended December 31, 2025 from $58.1 million in the prior year.
The decrease in cost of revenue was primarily attributable to lower excess and obsolete inventory charges and compensation-related expenses, partially offset by increased shipments over the period.
The increase in cost of revenue was primarily attributable to higher volume of sensor shipments, higher product manufacturing, stock based compensation and tariff related costs, partially offset by lower excess and obsolete inventory charges and a $2.4 million cost reduction associated with the ERC that was received in the year ended December 31, 2025.
The remaining availability under the ATM Agreement as of December 31, 2024 is approximately $58.6 million.
Cumulative net proceeds to us totaled approximately $95.6 million after deducting offering costs, sales commissions and fees. The remaining availability under the ATM Agreement as of December 31, 2025 is approximately $2.5 million.
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. Market Trends and Uncertainties.
Such changes could have an adverse effect on our ability to meet our scheduled product deliveries and may subsequently lead to the loss of sales. In addition, we are continuing to monitor the impact of the recent tariff and trade policy actions taken by the United States and foreign governments on our supply chain.
The decrease was primarily attributable to the reduction in compensation expenses and other costs from the restructuring and cost reduction initiatives after the closing of the Velodyne Merger. General and Administrative General and administrative expenses decreased by $23.3 million, or 28%, to $58.7 million for the year ended December 31, 2024 from $82.0 million in the prior year.
General and Administrative General and administrative expenses increased by $5.9 million, or 10%, to $64.6 million for the year ended December 31, 2025 from $58.7 million in the prior year.
Interest Income, Interest Expense and Other Income (Expense), Net Year Ended December 31, 2024 - 2023 Change 2024 2023 $ % (dollars in thousands) Interest income $ 8,846 $ 9,038 $ (192) (2) % Interest expense (1,823) (9,303) 7,480 (80) Other expense (income), net 646 (130) 776 (597) The year-over-year decrease in interest income was primarily attributable to lower average cash and cash equivalent balances.
Interest Income, Interest Expense and Other Income (Expense), Net Year Ended December 31, 2025 - 2024 Change 2025 2024 $ % (dollars in thousands) Interest income $ 9,485 $ 8,846 $ 639 7 % Interest expense — (1,823) 1,823 (100) Other income (expense), net 1,202 646 556 86 Total $ 10,687 $ 7,669 $ 3,018 39 % Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 The year-over-year increase in interest income was primarily attributable to $1.3 million interest income earned on delayed IRS payments related to ERC claims recognized during the year ended December 31, 2025, offset in part by lower investment interest income earned which resulted from lower cash and short-term investments balances and lower average rate of interest earned on held balances during the year ended December 31, 2025.
Removed
As the market for lidar solutions matures and more customers reach a commercialization phase with solutions that rely on our technology, the fluctuations in our operating results may become less pronounced. In 2025, our strategic business objectives include growing the software-attached business, transforming the product portfolio, and executing towards profitability. Number of Customers in Production.
Added
This discussion contains forward-looking statements based upon current plans, expectations and beliefs involving risks and uncertainties.
Removed
For example, we may be required to seek alternate manufacturers or suppliers for our products.
Added
We assumed the Amazon Warrant as part of the Velodyne Merger.
Removed
These charges were primarily driven by the decrease in our market capitalization during the period. Our goodwill impairment analysis includes a comparison of the aggregate estimated fair value of our reporting unit to our total market capitalization. There was no addition to goodwill as of December 31, 2024, and as such, our remaining goodwill balance was nil.
Added
Our contractual arrangements generally provide that our customers will pay the costs of tariffs. Although we are taking steps to mitigate the impacts of potential tariffs, we do not expect to be able to fully offset or avoid such costs.
Removed
Federal and state deferred tax assets, excluding specific balances due to the Velodyne Merger.
Added
We are continuously considering ways to mitigate the impact of these evolving tariff and trade policy actions and the uncertainties arising from the rapidly changing global trade environment on our supply chain; however, there can be no assurances that our current or future mitigation efforts will be successful. Market Trends and Uncertainties.
Removed
The revenue increases in those geographic regions were primarily attributable to higher sales of the REV7 sensor.
Added
The employee retention credit (“ERC”), as originally enacted through the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) on March 27, 2020, is a refundable credit against certain employment taxes.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAs of December 31, 2024, 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.
Biggest changeAs of December 31, 2025, we had no debt outstanding and therefore are not exposed to interest rate risk with respect to debt. 56 Table of C ontents Foreign Currency Exchange Risk Our results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates.
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. 55 Table of C ontents
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. 57 Table of C ontents
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.
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.
Interest Rate Risk As of December 31, 2024, we had cash, cash equivalents, restricted cash and short-term investments of approximately $174.6 million, of which $24.7 million consisted of institutional money market funds, $56.9 million consisted of commercial paper, and $69.6 million consisted of corporate debt and U.S. government agency securities, all of which carries a degree of interest rate risk.
Interest Rate Risk As of December 31, 2025, we had cash, cash equivalents, restricted cash and short-term investments of approximately $211.2 million, of which $54.5 million consisted of institutional money market funds, $68.3 million consisted of commercial paper, and $72.8 million consisted of corporate debt, all of which carries a degree of interest rate risk.

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