# Ouster, Inc. (OUST)

Informational only - not investment advice.

CIK: 0001816581
SIC: 3569 General Industrial Machinery & Equipment, NEC
SIC breadcrumb: [Manufacturing](/division/D/) > [Industrial And Commercial Machinery And Computer Equipment](/major-group/35/) > [SIC 3569 General Industrial Machinery & Equipment, NEC](/industry/3569/)
Latest 10-K filed: 2026-03-02
SEC page: https://www.sec.gov/edgar/browse/?CIK=1816581
Filing source: https://www.sec.gov/Archives/edgar/data/1816581/000162828026013313/oust-20251231.htm

## Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
| --- | ---: | --- | ---: | --- |
| Revenue | 169384000 | USD | 2025 | 2026-03-02 |
| Net income | -60377000 | USD | 2025 | 2026-03-02 |
| Assets | 349516000 | USD | 2025 | 2026-03-02 |

## Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-03-02. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001816581.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

| Metric | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Revenue |  | 11,413,000 | 18,904,000 | 33,578,000 | 41,029,000 | 83,279,000 | 111,101,000 | 169,384,000 |
| Net income |  | -51,661,000 | -106,780,000 | -93,981,000 | -138,560,000 | -374,110,000 | -97,045,000 | -60,377,000 |
| Operating income |  | -48,363,000 | -51,762,000 | -99,710,000 | -145,423,000 | -373,192,000 | -104,177,000 | -73,999,000 |
| Gross profit |  | -6,015,000 | 1,513,000 | 9,086,000 | 10,930,000 | 8,314,000 | 40,460,000 | 83,436,000 |
| Diluted EPS |  | -6.99 | -5.98 | -0.70 | -7.79 | -10.10 | -2.08 | -1.07 |
| Operating cash flow |  | -40,187,000 | -42,117,000 | -71,061,000 | -110,690,000 | -137,890,000 | -33,694,000 | -39,956,000 |
| Capital expenditures |  | 7,494,000 | 3,509,000 | 4,283,000 | 5,422,000 | 3,006,000 | 3,756,000 | 24,893,000 |
| Assets |  |  | 46,414,000 | 307,702,000 | 256,137,000 | 330,743,000 | 276,148,000 | 349,516,000 |
| Liabilities |  |  | 83,096,000 | 47,002,000 | 84,518,000 | 151,071,000 | 95,237,000 | 87,778,000 |
| Stockholders' equity | -50,236,000 | -100,319,000 | -75,907,000 | 260,700,000 | 171,619,000 | 179,672,000 | 180,911,000 | 261,738,000 |
| Cash and cash equivalents |  | 16,848,000 | 11,362,000 | 182,644,000 | 122,932,000 | 50,991,000 | 45,542,000 | 67,413,000 |
| Free cash flow |  | -47,681,000 | -45,626,000 | -75,344,000 | -116,112,000 | -140,896,000 | -37,450,000 | -64,849,000 |

### Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

| Metric | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Net margin |  |  |  |  |  |  | -87.35% | -35.65% |
| Operating margin |  |  |  |  |  |  | -93.77% | -43.69% |
| Return on equity |  |  |  | -36.05% | -80.74% | -208.22% | -53.64% | -23.07% |
| Return on assets |  |  |  | -30.54% | -54.10% | -113.11% | -35.14% | -17.27% |
| Liabilities / equity |  |  |  | 0.18 | 0.49 | 0.84 | 0.53 | 0.34 |
| Current ratio |  |  | 1.01 | 9.38 | 5.51 | 3.22 | 2.80 | 3.93 |

## Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-05. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001816581.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

| Quarter | End date | Revenue | Net income | Diluted EPS | Method |
| --- | --- | ---: | ---: | ---: | --- |
| 2021-Q3 | 2021-09-30 |  |  | -0.08 | reported discrete quarter |
| 2023-Q1 | 2023-03-31 |  |  | -6.03 | reported discrete quarter |
| 2023-Q2 | 2023-03-31 |  | -177,280,000 |  | reported discrete quarter |
| 2023-Q2 | 2023-06-30 | 19,396,000 |  | -3.19 | reported discrete quarter |
| 2023-Q3 | 2023-06-30 |  | -122,733,000 |  | reported discrete quarter |
| 2023-Q3 | 2023-09-30 | 22,209,000 |  | -0.89 | reported discrete quarter |
| 2023-Q4 | 2023-12-31 | 24,444,000 | -38,995,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2024-Q1 | 2024-03-31 | 25,944,000 | -23,849,000 | -0.55 | reported discrete quarter |
| 2024-Q2 | 2024-03-31 |  | -23,849,000 |  | reported discrete quarter |
| 2024-Q2 | 2024-06-30 | 26,990,000 |  | -0.53 | reported discrete quarter |
| 2024-Q3 | 2024-06-30 |  | -23,869,000 |  | reported discrete quarter |
| 2024-Q3 | 2024-09-30 | 28,075,000 |  | -0.54 | reported discrete quarter |
| 2024-Q4 | 2024-12-31 | 30,092,000 | -23,737,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2025-Q1 | 2025-03-31 | 32,632,000 | -22,017,000 | -0.42 | reported discrete quarter |
| 2025-Q2 | 2025-03-31 |  | -22,017,000 |  | reported discrete quarter |
| 2025-Q2 | 2025-06-30 | 35,049,000 |  | -0.38 | reported discrete quarter |
| 2025-Q3 | 2025-06-30 |  | -20,612,000 |  | reported discrete quarter |
| 2025-Q3 | 2025-09-30 | 39,525,000 |  | -0.37 | reported discrete quarter |
| 2025-Q4 | 2025-12-31 | 62,178,000 | 3,985,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2026-Q1 | 2026-03-31 | 48,578,000 | -17,465,000 | -0.28 | reported discrete quarter |

## Macro Cross-References
- [CPIAUCSL](/indicator/CPIAUCSL/): Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
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- [TTLCONS](/indicator/TTLCONS/): Total Construction Spending: Total Construction in the United States
- [RRVRUSQ156N](/indicator/RRVRUSQ156N/): Rental Vacancy Rate in the United States
- [TOTALSL](/indicator/TOTALSL/): Total Consumer Credit Owned and Securitized
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- [DRCCLACBS](/indicator/DRCCLACBS/): Delinquency Rate on Credit Card Loans, All Commercial Banks
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- [DGORDER](/indicator/DGORDER/): Manufacturers' New Orders: Durable Goods
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- [IR](/indicator/IR/): Import Price Index (End Use): All Commodities
- [PPIFIS](/indicator/PPIFIS/): Producer Price Index by Commodity: Final Demand

## Latest quarter (10-Q)

Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1816581/000162828026030722/oust-20260331.htm

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary.
Confidence: high
Filing date: 2026-05-05
Report date: 2026-03-31

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our results of operations and financial condition of Ouster, Inc. (“we,” “us,” “our,” the “Company,” “Ouster”) should be read together with the information set forth in our unaudited condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report, as well as our audited consolidated financial statements and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Ouster’s Annual Report on Form 10-K (the “2025 Annual Report”) filed with the SEC on March 2, 2026. This discussion contains forward-looking statements based upon current plans, expectations and beliefs involving risks and uncertainties, including with respect to the potential future impact of tariffs and other trade measures on the Company’s business and results of operations. Ouster’s actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in the section titled “Risk Factors” in Ouster’s 2025 Annual Report and as may be further updated from time to time in the Company’s other filings with the SEC. The Company assumes no obligation to revise or update any forward-looking statements for any reason, except as required by law.

Overview

Ouster was founded in 2015 with the invention of its high-performance digital lidar and is headquartered in San Francisco, California. We are a leader in sensing and perception for Physical AI across industrial, robotics, automotive, and smart infrastructure. With a unified platform of high-performance digital lidar, cameras, AI compute, sensor fusion and perception software, and AI models, Ouster delivers solutions that improve quality of life by enabling machines to sense, think, act, and learn in the physical world. To grow our business, we have introduced new product lines and made several acquisitions to accelerate growth. We continue to invest in growing our hardware product portfolio, increasing the capabilities of our software solutions, and opportunistically expanding our sales and marketing efforts.

We are a leading global provider of lidar sensors and solutions. We design and manufacture high-resolution digital lidar sensors that offer advanced 3D vision to machinery, vehicles, robots, and fixed infrastructure assets, which allows each to understand and visualize the surrounding world and enable safe operation and autonomy. We believe our sensors are one of the highest-performing, lowest-cost lidar solutions available today.

Our wholly-owned subsidiary, Stereolabs, which we acquired on February 4, 2026, is a pioneer in AI vision and perception solutions that has developed a leading portfolio of industrial-grade ZED-cameras, AI compute powered by NVIDIA’s platform, and in-house AI vision software to power solutions across robotics, industrials, and smart infrastructure. Its high-performance ZED cameras provide best-in-class 2D and 3D color data with ultra-low latency, and its embedded AI compute hardware facilitates native, real-time sensor fusion at the edge. We believe Stereolabs’s perception software, built on proprietary AI models, is the foundation for thousands of developers’ autonomy workflows. The Stereolabs acquisition positions Ouster as the foundational end-to-end sensing and perception platform for Physical AI. We have invested heavily in patents since our inception, pursuing comprehensive coverage of invention families and use cases, with broad international coverage.

We believe that our extensive patent coverage creates material barriers to entry.

Products and Solutions

Ouster's hardware product offerings include a broad portfolio of digital lidar sensors, monocular and stereo cameras, and AI compute. On May 4, 2026, we announced the launch of the Rev8 OS family of digital lidar sensors. Powered by our next-generation L4 and L4 Max Ouster Silicon, the Rev8 family features upgraded OS0, OS1, and OSDome sensors and adds the flagship 256-channel OS1 Max. Rev8 introduces the world’s first native color lidar sensors, provides up to double the range and resolution of the previous generation, and is designed for functional safety, reliability, affordability, and scale. Within our OS sensor models, we offer numerous customization options, all enabled by embedded software.

In addition, our portfolio has expanded to include Stereolabs’s growing product line, which now includes the ZED X, ZED X Mini, and ZED X Nano stereo cameras, the ZED X One monocular camera, and the ZED Box edge compute. We are currently developing our solid-state digital flash (“DF”) sensors, which is a suite of short, mid, and long-range solid-state digital lidar sensors that provide uniform precision imaging without motion blur across an entire field of view.

Ouster provides Physical AI solutions tailored for smart infrastructure applications. Our software solutions, built on proprietary AI models, enable real-time people and object detection, classification, and tracking for actionable, intuitive, and customizable insights while preserving personally identifiable information. Ouster Gemini is our digital lidar powered perception platform designed for security and crowd analytics, logistics, and intelligent transportation systems. Ouster BlueCity is our turnkey real-time traffic management solution for analytics and signal actuation to improve traffic flow, road safety, and urban planning.

28

Table of Contents

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 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. 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 with solutions that rely on our technology, the fluctuations in our operating results may become less pronounced. Our strategic business objectives also include growing the software-attached business, transforming the product portfolio, and executing towards profitability.

Number of Customers in Production. For certain strategic customers and markets, our products must be integrated into a broader platform, which then must be tested and validated to achieve system-level performance and reliability thresholds that enable commercial production and sales. The time necessary to reach commercial production varies from six months to several years, based on the market and application. For example, the production cycle in the automotive market tends to be substantially longer than in our other target markets. It is critical to our future success in each of our target end markets that our customers reach commercial production and select our products in their commercial production applications, and that we avoid unexpected cancellations of major purchases of our products. Because the timelines to reach production vary significantly and the revenue generated by each customer in connection with commercial production is unpredictable, it is difficult for us to reliably predict our financial performance.

Customers’ Sales Volumes. Our customer base is diversified, and we aim to continue to penetrate diverse end markets to increase our sales volumes. Ultimately, widespread adoption of our customers’ products that incorporate our lidar solutions will depend on many factors, including the size of our customers’ end markets, market penetration of our customers’ products that incorporate our digital lidar solutions, our customers’ ability to sell their products, and the financial stability and reputation of our customers.

Average Selling Prices (“ASPs”), Product Costs and Margins. Our product costs and gross margins depend largely on the volumes of sensors shipped, the mix of existing and new products sold and the number and variety of solutions we provide to our customers. We expect that our selling prices will vary by target end market and application due to market-specific supply and demand dynamics. We expect to continue to experience some downward pressure on prices from signing anticipated large multi-year agreements in the near term with multi-year negotiated pricing. We expect that these customer-specific selling price fluctuations combined with our volume-driven product costs may drive fluctuations in revenue and gross margins on a quarterly basis. In addition, we expect that the current uncertainty surrounding U.S. trade relationships may impact our future product costs and margins, particularly to the extent there are significant tariffs or trade restrictions imposed on goods imported from Thailand, Canada, Taiwan or China that are used in our products. Although we are taking steps to mitigate the impacts of potential tariffs, we do not expect to be able to offset or avoid such costs in full. In addition, our contractual arrangements generally provide that our customers will pay the costs of tariffs. These costs could impact customer demand and adoption as described above under “Customers’ Sales Volumes.”

Competition. Lidar is an emerging technology, and there are many competitors for this growing market which has created downward pressure on our ASPs. Absent the introduction of new technology, we expect this pressure to continue to push our ASPs lower in the coming years. However, we believe that because of the simplicity of our digital lidar technology, the increasing capabilities of our software solutions, and efficiencies created by our established manufacturing partnerships and suppliers, including Benchmark and Fabrinet, 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. Our financial performance is significantly dependent on our ability to maintain this leading position, which is further dependent on the investments we make in research and development. We believe it is essential that we continue to identify and respond to rapidly evolving customer requirements, including successfully progressing our digital lidar roadmap and developing technologies that will enhance the operating performance of our products. We announced our Rev8 family of products. Our “Chronos” chip has been fabricated by our foundry partner and is now undergoing in-house testing. If we fail to continue our innovation, our market position and revenue may be adversely affected, and our investments in that area will not be recovered.

29

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Supply Chain Continuity. Some of the key components in the products we have designed or are currently designing come from limited or single source suppliers. If these third parties experience financial, operational, manufacturing capacity or other difficulties, or experience shortages in required components, or if they are otherwise unable or unwilling to continue to manufacture these components in required volumes or at all, our supply may be disrupted or be on less favorable terms. For example, we may be required to seek alternate manufacturers or suppliers for our products. It would be time-consuming, and could be costly and impracticable, to begin to use and qualify new manufacturers, components or designs, and such changes could cause significant interruptions in supply and could have an adverse effect on our ability to meet our schedu

[Excerpt truncated for page length; source filing is linked above.]

## Latest 10-K MD&A

Extracted from Item 7 to the first post-MD&A boundary after HTML sanitization.
Confidence: high

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our results of operations and financial condition should be read together with our audited consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. 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.

43

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Overview

Ouster was founded in 2015 with the invention of our high-performance digital lidar. To continue to grow our business 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. We design and manufacture high-resolution digital lidar sensors that offer advanced 3D vision to machinery, vehicles, robots, and fixed infrastructure assets, which allows each to understand and visualize the surrounding world and enable safe operation and autonomy. We believe our sensors are one of the highest-performing, lowest-cost lidar solutions available today 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 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.

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 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. REV7 features the all-new OSDome sensor, as well as upgraded OS0, OS1, and OS2 sensors that deliver double the range, enhanced object detection, increased precision and accuracy, and greater reliability compared to our prior generation sensors. We are currently developing our solid-state digital flash (“DF”) sensors, which is a suite of short, mid, and long-range solid-state digital lidar sensors that provide uniform precision imaging without motion blur across an entire field of view.

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. 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. BlueCity is a Gemini-powered solution for traffic operations, planning, and safety. 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.

We have invested heavily in patents since our inception, pursuing comprehensive coverage of invention families and use cases, with broad international coverage. We believe that our extensive patent coverage creates material barriers to entry for anyone aiming to compete in the digital lidar space.

We believe the simplicity of our digital lidar design gives us a meaningful advantage in costs related to manufacturing, supply chain, and production yields. Our main manufacturing partners are Benchmark and Fabrinet, which manufacture the majority of our products at their facilities in Thailand. We expect this will allow us to continue to reduce our product costs and rapidly scale production to meet our anticipated product demand. Based on cost quotes for our products in mass production, we anticipate our manufacturing costs per unit will decrease further as production volumes increase.

Merger with Velodyne Lidar, Inc.

On November 4, 2022, we entered into an Agreement and Plan of Merger (the “Velodyne Merger Agreement”) with Velodyne Lidar, Inc., a Delaware corporation (“Velodyne”), Oban Merger Sub, Inc., a Delaware corporation and one of our direct, wholly owned subsidiaries (“Velodyne Merger Sub I”) and Oban Merger Sub II LLC, a Delaware limited liability company and one of our direct, wholly owned subsidiaries (“Velodyne Merger Sub II”). On February 10, 2023, we completed our merger of equals with Velodyne pursuant to the terms of the Velodyne Merger Agreement with Velodyne, Merger Sub I and Merger Sub II (the “Velodyne Merger”).

The product offerings we acquired through the Velodyne Merger include the VLP-16, VLP-16 Lite, VLP-16 Hi-Res, VLP-32 and VLS-128. These product offerings are in the final stages of their product life cycle, and we ceased manufacturing them in 2025.

44

Table of Contents

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. 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. As of December 31, 2025, there were 3,271,970 shares of common stock issuable under the Amazon Warrant.

The exercise price and the warrant shares issuable upon exercise of the Amazon Warrant are subject to further antidilution adjustments, including in the event we make certain sales of common stock (or securities exercisable or convertible into or exchangeable for shares of our common stock) at a price less than the exercise price of the Amazon Warrant. 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.

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. 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. 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. 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. 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. Because the timelines to reach production vary significantly and the revenue generated by each customer in connection with commercial production is unpredictable, it is difficult for us to reliably predict our financial performance.

Customers’ Sales Volumes. Our customer base is diversified and we aim to continue to penetrate into diverse end markets to increase our sales volumes. Ultimately, widespread adoption of our customers’ products that incorporate our lidar solutions will depend on many factors, including the size of our customers’ end markets, market penetration of our customers’ products that incorporate our digital lidar solutions, our customers’ ability to sell their products, and the financial stability and reputation of our customers.

Average Selling Prices (“ASPs”), Product Costs and Margins. Our product costs and gross margins depend largely on the volumes of sensors shipped, the mix of existing and new products sold, and the number and variety of solutions we provide to our customers. We expect that our selling prices will vary by target end market and application due to market-specific supply and demand dynamics. We expect to continue to experience some downward pressure on prices from signing anticipated large multi-year agreements in the near term. We expect that these customer-specific selling price fluctuations, combined with our volume-driven product costs, may drive fluctuations in revenue and gross margins on a quarterly basis. In addition, we expect that the current uncertainty surrounding U.S. trade relationships may impact our future product costs and margins, particularly to the extent there are significant tariffs or trade restrictions imposed on goods imported from Thailand, Canada, China or Taiwan that are used in our products. 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. These costs could impact customer demand and adoption as described above under “Customers’ Sales Volumes.”

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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. 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. 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. We believe it is essential that we continue to identify and respond to rapidly evolving customer requirements, including successfully progressing our digital lidar roadmap and developing technologies that will enhance the operating performance of our products. Our “L4” sensor prototypes are generating rich point clouds and have moved into validation testing. 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. Some of the key components in the products we have designed or are currently designing come from limited or single source suppliers. If these third parties experience financial, operational, manufacturing capacity or other difficulties, or experience shortages in required components, or if they are otherwise unable or unwilling to continue to manufacture these components in required volumes or at all, our supply may be disrupted or be on less favorable terms. 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. 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. 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. Each of our target markets is potentially a significant global opportunity, and these markets have historically been underserved by limited or inferior technology or not served at all. We believe we are well-positioned in our market as a leading provider of high-resolution lidar sensors.

We may not be able to take advantage of demand if we are unable to anticipate regulatory changes and adapt quickly enough to meet such new regulatory standards or requirements applicable to us or to our customers’ products in which our lidar sensors are used. Market acceptance of lidar technology and active safety technology depend upon many factors, including cost, performance, 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. We view international expansion as an important element of our strategy to increase revenue and achieve profitability. We continue to position ourselves in geographic markets that we expect to serve as important sources of future growth. We have an existing presence in three regions: Americas; Asia and Pacific; and Europe, Middle East and Africa. We intend to expand our presence in these regions over time including through distribution partnerships. Expanded global reach will require continued investment and may expose us to additional foreign currency risk, international taxes, tariff and trade policy actions of foreign governments, legal obligations, 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. 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. 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. 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.

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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. We recognize revenue from product sales when the performance obligation of transferring control of the product to the customer has been met, generally when the product is shipped. We also recognize revenue by performing services related to product development, validation, licenses, maintenance under our extended warranty contracts, and shipping. We do not expect these services to be material components of revenue, cost of revenue or gross margin in the near future. Performance obligations related to services are generally recognized over time, based on cost-to-cost input basis or straight-line over time. Amounts billed to customers related to shipping and handling are classified as revenue, and we have elected to recognize the cost of shipping activities that occur after control has transferred to the customer as a fulfillment cost rather than a separate performance obligation. All related costs are accrued and recognized within cost of revenue when the related revenue is recognized.

Most of our customers are innovators and early technology adopters incorporating our products into their solutions. Currently, our product revenue consists of both customers ordering small volumes of our products that are in an evaluation phase and customers that order larger volumes of our products and have more predictable long-term production schedules. However, we believe we are still at the very beginning of the lidar adoption curve, and some customers are still learning their growth and demand rates which can impact the timing of purchase orders quarter to quarter. As we grow our business, we expect to continue to improve our own understanding of our customers’ needs and timelines, and expect the timing of orders will have a less notable impact on our quarterly results.

Royalties from Long-Term IP License Contracts

We license rights to our intellectual property (“IP”) to certain customers and collect royalties based on those customers’ product sales. The recognition of such revenue from royalties for long-term IP contracts is dependent on the nature and terms of each agreement. We recognize license revenue upon the later of (a) delivery of the IP or (b) commencement of the license term if there are no substantive future obligations to perform under the arrangement. Revenue for licenses to future technology developed on a when-and-if -available basis is recognized straight-line over the license period as long as customers continue to have access to the future technology. Royalties from the license of IP are recognized at the later of the period the sales occur or the satisfaction of the performance obligation to which some or all of the royalties have been allocated. 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. However, we do not consider this revenue to be reflective of the core operations of our business. Further, we expect the revenue we recognize for such royalties in the future will vary considerably from period to period, and expect that the amounts recognized in the year ended December 31, 2025 will likely exceed amounts recognized in future annual periods.

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. 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.

Gross Profit and Gross Margin

Our gross profit equals total revenues less our total cost of revenues, and our gross margin is our gross profit expressed as a percentage of total revenue. Our gross margin is subject to quarterly fluctuations in product mix, price and volume. 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.

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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.

R&D expenses consist of personnel-related expenses, including salaries, benefits, and stock-based compensation, for all personnel directly involved in R&D activities, third-party engineering and contractor costs, prototype expenses, amortization of intangible assets, and an allocated portion of overhead, facility and information technology (“IT”) costs that support R&D activities.

R&D costs are expensed as they are incurred. Our investment in R&D will continue to grow as we invest in new lidar technology and related software. Our absolute amount of R&D expenses is expected to grow over time; however, we expect R&D as a percentage of revenue to decrease as our business grows.

Sales and Marketing Expenses

Our business development, customer support and marketing teams are located in offices worldwide. Selling and marketing expenses consist of personnel-related expenses, including salaries, benefits, and stock-based compensation, for all personnel directly involved in business development, customer support, and marketing activities, and marketing expenses including trade shows, advertising, and demonstration equipment. Sales and marketing expenses also include amortization expense of intangible assets related to customer relationships associated with the acquisitions and an allocated portion of facility and IT costs that support sales and marketing activities. We expect sales and marketing expenses as a percentage of revenue to decrease over time as our business grows.

General and Administrative Expenses

General and administrative expenses consist of personnel-related expenses, including salaries, benefits, and stock-based compensation, of our executives and members of the board of directors, finance, human resources, an allocated portion of facility and IT costs that support general and administrative activities, as well as amortization of intangible assets, fees related to legal fees, patent prosecution, accounting, finance and professional services, as well as insurance and bank fees. We have experienced and may in the near-term experience additional increases in general and administrative expenses related to legal, accounting, finance and professional services costs associated with litigation activities, hiring more personnel and consultants to support our international activities and compliance with the applicable provisions of the Sarbanes-Oxley Act and other SEC rules and regulations as a result of being a public company. Our absolute amount of general and administrative expenses will grow over time; however, we expect general and administrative expenses as a percentage of revenue to decrease as our business grows.

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. 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.

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Income Taxes

Our income tax provision consists of federal, state and foreign current and deferred income taxes. Our income tax provision for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items arising in the quarter. Our effective tax rate differs from the U.S. statutory tax rate primarily due to valuation allowances on deferred tax assets as it is more likely than not that some, or all, of our deferred tax assets will not be realized. We continue to maintain a full valuation allowance against our U.S. Federal and state deferred tax assets. The income tax provision (benefit) for the years ended December 31, 2025, and 2024, respectively, was not material to the Company’s consolidated financial statements. For the year ended December 31, 2025, the Company recorded an income tax benefit of $2.9 million primarily related to the resolution of the Company’s IRS examination of its 2017 and 2018 tax years offset in part by income taxes for its foreign operations.

Results 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)

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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 

%

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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. The increase in revenue was primarily driven by increased sales of the sensors as customers increased their purchase levels compared to the prior year period and the recognition of $22.8 million of revenue on royalties from long-term IP license contracts. During the fourth quarter of fiscal 2025, the Company recognized $16.1 million associated with royalties that were previously deferred pending the resolution of significant uncertainty associated with resolving the Company’s performance obligation under the license contract. The cumulative royalty revenue (included above) is associated with a multi-year IP license contract entered into in a prior year which granted a customer a right-to-use our functional intellectual property for the duration of the stated license term. As of December 31, 2025 those uncertainties have been resolved, which resulted in recognition of such amounts.

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. The revenue increase in Asia and Pacific was primarily attributable to the recognition of $22.8 million of revenue on royalties from long-term IP license contracts.

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. 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.

Gross margin rose to 49% for the year ended December 31, 2025 from 36% in the prior year primarily as a result of the recognition of revenue on royalties from long-term IP license contracts for which there is no associated cost of revenue as well as the factors described above related to the increased sales of REV7 sensor.

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 

%

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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 increase is primarily attributable to the Company’s continuing investment in the research and development of new product offerings and higher annual incentive compensation costs for employees engaged in the research and product development function, offset in part by $3.3 million in ERC benefits recognized as a reduction to research and development expense in the year ended December 31, 2025.

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. The decrease was primarily due to the $1.1 million in ERC benefits recognized as a reduction to sales and marketing expense in the year ended December 31, 2025, offset in part by an increase in sales and marketing compensation and personnel related expenses.

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. The increase was primarily attributable to higher legal and professional fees to support an acquisition transaction and other corporate initiatives, partially offset by $1.2 million in ERC benefits recognized as a reduction in general and administrative expense in the year ended December 31, 2025.

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.

The year-over-year decrease in interest expense was due to the full pay off of our debt facility in August 2024.

Other income (expense), net was not material for the years ended December 31, 2025 and December 31, 2024. 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.

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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.

For the year ended December 31, 2025, the Company recorded an income tax benefit of $2.9 million primarily related to the resolution of the Company’s IRS examination of its 2017 and 2018 tax years offset in part by income taxes for its foreign operations.

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. 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. Management believes that our existing sources of liquidity will be adequate to fund our operations for at least twelve months from the date of this Annual Report on Form 10-K. However, we may need to raise additional capital in the future to support our operations.

We manage our cash and cash equivalents with financial institutions that we believe have high credit quality and, at times, such amounts exceed federally insured limits. The failure of any bank with which we maintain a commercial relationship could cause us to lose our deposits in excess of the federally insured or protected amounts. We have experienced recurring losses from operations, and negative cash flows from operations, and we expect to continue operating at a loss and to have negative cash flows from operations for the foreseeable future. Because we are in the growth stage of our business and operate in an emerging field of technology, we expect to continue to invest in research and development and opportunistically expand our sales and marketing teams worldwide. We may require additional capital to respond to technological advancements, competitive dynamics or technologies, customer demands, business opportunities, challenges, acquisitions, or unforeseen circumstances and in either the short-term or long-term may determine to engage in equity or debt financings. If we are unable to obtain adequate financing or financing on terms satisfactory to us, when we require it, our ability to continue to grow or support our business and to respond to business challenges could be significantly limited. In particular, current macroeconomic conditions, including elevated inflation rates and high interest rates, have resulted in, and may continue to result in, significant disruption of global financial markets, reducing our ability to access capital. If we are unable to raise additional funds when or on the terms desired, our business, financial condition and results of operations could be adversely affected.

ATM Agreement

On 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.

We terminated the Former ATM Agreement in April 2025 in anticipation of the scheduled expiration of our registration statement on Form S-3 (File No. 333-264600). We filed a new registration statement on Form S-3 on May 2, 2025 (File No. 333-286936), which was subsequently declared effective by the SEC.

On May 12, 2025, we entered into an At Market Issuance Sales Agreement (the “ATM Agreement”) with Oppenheimer & Co. Inc., pursuant to which the Company may offer and sell, from time to time, through or to the agent, acting as agent or principal, having an aggregate offering price of up to $100.0 million.

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During the year ended December 31, 2025, we sold 4,671,406 shares at a weighted-average sales price of $20.88 per share, resulting in cumulative gross proceeds to us totaling approximately $97.5 million before deducting offering costs, sales commissions and fees. 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.

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. The UBS Agreement provided us with a revolving credit line of up to $45.0 million, subject to certain terms and conditions. We initially borrowed $44.0 million, and all of the proceeds were used to refinance and terminate our prior term loan facility.

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. Debt to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

Material Cash Requirements

We are a party to many contractual obligations involving commitments to make payments to third parties. These obligations impact our short-term and long-term liquidity and capital resource needs. Certain contractual obligations are reflected on the 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. 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.

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. 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 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.

During the year ended December 31, 2024, operating activities used $33.7 million in cash. The primary factors affecting our operating cash flows during this period were our net loss of $97.0 million, offset by our non-cash charges of $51.9 million primarily consisting of depreciation and amortization of $9.8 million, stock-based compensation of $40.5 million, amortization of right-of-use asset of $4.9 million and inventory write-down of $2.1 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.

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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. During the year ended December 31, 2025, cash used for the purchase of property and equipment was primarily related to a purchase of real property for $18.2 million.

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.

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.

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.

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. 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. 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. The method used to estimate the fair values of intangible assets incorporates significant estimates and assumptions regarding the estimates a market participant would make in order to evaluate an asset, including a market participant’s use of the asset, future cash inflows and outflows, probabilities of success, asset lives, and the appropriate discount rates. Any excess purchase price over the fair value of the net tangible and intangible assets acquired is allocated to goodwill. Transaction costs and restructuring costs associated with a business combination are expensed as incurred.

During the measurement period, which extends no later than one year from the acquisition date, we may record certain adjustments to the carrying value of the assets acquired and liabilities assumed with the corresponding offset to goodwill. After the measurement period, all adjustments are recorded in the consolidated statements of operations within other income (expense), net.

Inventory Valuation

Inventories are stated at the lower of cost or estimated net realizable value. Costs are computed under the standard cost method, which approximates actual costs determined on a first in, first out basis. We record write-downs of inventories which are obsolete or in excess of anticipated demand. Significant judgment is used in establishing our forecasts of future demand and obsolete material exposures. We consider marketability and product life cycle stage, product development plans, demand forecasts, and assumptions about future demand and market conditions in establishing our estimates. If the actual component usage and product demand are significantly lower than forecast, which may be caused by factors within and outside of our control, or if there were a higher incidence of inventory obsolescence because of rapidly changing technology and our customer requirements, we may be required to increase our inventory write-downs. A change in our estimates could have a significant impact on the value of our inventory and our results of operations.

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.

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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 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. The Company recognizes license revenue upon the later of (a) delivery of the IP or (b) commencement of the license term if there are no substantive future obligations to perform under the arrangement. Revenue for licenses to future technology developed on a when-and-if -available basis is recognized straight-line over the license period as long as customers continue to have access to the future technology. Royalties from the license of IP are recognized at the later of the period the sales occur or the satisfaction of the performance obligation to which some or all of the royalties have been allocated.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.

Refer to Note 2 - Summary of Significant Accounting Policies to our consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data” for additional information regarding our revenue recognition policies.