In Conversation: Ouster (OUST US)
Sensing an Opportunity in Sensing
Introduction
The foundational framework for Citrini Research is the hunt for megatrends in markets – these are secular shifts with the potential to transform industries and the parts of society they touch. Meanwhile, we are also traders and, as such, attentive to entries. The best entry points, we believe, are often found at cyclical inflections. Those periods when a rebound from a “crash” or a “bust” is in progress but market sentiment remains depressed present fertile hunting grounds for new themes.
Ouster (OUST US) represents a perfect example, and so we were thrilled to have the opportunity recently to sit down with the company’s Chief Executive Officer and Co-Founder, Angus Pacala, and SVP, Chen Geng.
Our view is that Ouster is positioned squarely in the center of the mega-trend that is robotics and automation, which is why we included it in our basket for our most recent thematic primer, Humanoid Robots.
As the largest Western LiDAR provider, Ouster has carved out a leading position in the competitive LiDAR market. LiDAR stands for Light Detection and Ranging, and it is a remote sensing technology that measures distance by illuminating a target with laser light and then analyzing the reflected pulses. Ouster’s digital technology integrates LiDAR onto CMOS chips for cost and performance benefits with a diversification strategy across automotive, industrial, robotics, and smart infrastructure.
Ouster is targeting significant growth in all four verticals, and sees the market for LiDAR technology as a $70 billion opportunity, with expectations that the adoption of LiDAR outside of automotive will surpass that within the automotive sector.
The company anticipates substantial volume growth as customers transition from prototypes to commercialization. Overall, Ouster is optimistic about the potential for LiDAR to grow for decades, not just years, as it continues to tap into these emerging markets.
While maintaining a lean cost structure, Ouster is targeting 30-50% annual revenue growth and gross margins of 35-40%. The company has met or exceeded its guidance for nine consecutive quarters. Revenue is roughly evenly split among automotive, industrial, robotics, and smart infrastructure with notable clients such as John Deere, Komatsu, Motional, May Mobility, Forterra, and Serve Robotics. Ouster has $171M cash on hand as of 3/31 and burned ~$37M in 2025. Ouster’s consistent revenue growth and healthy gross margins puts them on a path to profitability, with a focus on maintaining healthy gross margins.
Please enjoy the transcript of our discussion with the company below: