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Lidar maker

Ouster

reported sales that fell short of Wall Street estimates, but the company just wrapped up its merger with Velodyne, making the past less relevant than what is coming in 2023 and beyond.

Ouster

(ticker: OUST) reported sales of $11 million for the fourth quarter. Wall Street was looking for about $15 million in sales. Earnings before interest, taxes, depreciation, and amortization, or Ebitda, came in at negative $23 million. Wall Street was looking for an Ebitda loss of about $21 million.

The company shipped 2,950 lidar sensors in the fourth quarter, up 23% year over year.

Lidar is essentially laser-based radar. It can be a set of eyes for cars that make driving safer and can enable autonomous driving applications. Lidar, however, has many more applications than cars. Outster targets industrial, robotics, and other markets as well.

Ouster shares were down 7% in after hours trading. The stock rose 3.9% in regular trading while the

S&P 500
and

Nasdaq Composite
rose 0.3% and 1%, respectively.

Sales were a disappointment. Forward guidance for the first quarter is also below Street estimates, but there is a caveat.

Ouster expects first quarter 2023 sales should be in the range of $15 million to $17 million. Wall Street was looking for $20 million. But Ouster just closed its merger with Velodyne on Feb. 1. Wall Street estimates can be a little uncertain around mergers.

Based on Velodyne’s results last year, it looks as if total sales will be up about 8% year over year in the first quarter. Investors might want to see more growth than that, but it will take a few quarters to see how the combined company preforms.

Following the merger, Ouster is targeting $75 million in cost savings in 2023. The company used roughly $115 million in cash in 2022. Investors should expect, with growing sales, and lower costs, cash use to reduce in 2023. The combined company ended the year with about $315 million on the books.

Through Thursday trading, shares are down about 77% over the past 12 months. Rising interest rates and slower than expected sales growth for the industry sapped some investor enthusiasm for the lidar sector.

Write to Al Root at allen.root@dowjones.com