What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-02 compared with 2025-03-21 · 113 added, 85 removed, 305 unchanged (39% of the section changed)

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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.

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Ouster was founded in 2015 with the invention of our high-performance digital lidar.

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Our digital lidar sensors leverage a simplified architecture based on two semiconductor chips and are backed by a suite of patent-protected technology.

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We also provide perception software platforms for smart infrastructure deployments.

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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 plan to discontinue manufacturing them in 2025.

These product offerings are in the final stages of their product life cycle, and we ceased manufacturing them in 2025.

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Amazon Warrant

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We assumed the Amazon Warrant as part of the Velodyne Merger.

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.

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

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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.

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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.

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 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.

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.

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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.

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.

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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 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.

However, notwithstanding any short-term price surcharges on our components, we expect that our volume-driven product costs will decrease over time.

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.

These costs could also impact customer demand as described above under “Customers’ Sales Volumes.”

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, we are well-positioned to scale more effectively than our competitors and can leverage this scale to deliver positive gross margins.

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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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 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.

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.

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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.

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Supply Chain Continuity.

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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 scheduled product deliveries and may subsequently lead to the loss of sales.

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 solution.

We estimate a multi-billion dollar total addressable market (“TAM”) for our solutions in the future.

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.

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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 and international taxes or tariffs related to such technologies.

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.

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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 and tariffs, legal obligations, export/import regulations and additional operational costs.

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.

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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

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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.

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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

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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

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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

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We expect sales and marketing expenses as a percentage of revenue to decrease over time as our business grows.

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General and Administrative Expenses

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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.

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.

Interest Income, Interest Expense, and Other Income (Expense), Net

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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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Our income tax provision consists of federal, state and foreign current and deferred income taxes.

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We continue to maintain a full valuation allowance against our U.S.

Federal and state deferred tax assets, excluding specific balances due to the Velodyne Merger.

The income tax provision for the years ended December 31, 2024 and 2023, respectively, was not material to the Company’s consolidated financial statements.

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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:

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Year Ended December 31,

(dollars in thousands)

Revenue $ 111,101 $ 83,279

(in thousands)

Product revenue $ 146,578 $ 111,101

Royalties 22,806 —

Total revenue 169,384 111,101

Cost of revenue (1)

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General and administrative 64,641 58,701

Goodwill impairment charges — 166,675

Total operating expenses 157,435 144,637

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Loss before income taxes (63,312) (96,508)

Provision for income tax expense

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:

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(% of total revenue)

Revenue 100 % 100 %

Product revenue 87 % 100 %

Royalties 13 —

Total revenue 100 100

Cost of revenue (1)

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General and administrative 38 53

Goodwill impairment charges — 200

Total operating expenses 94 130

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Loss before income taxes (37) (87)

Provision for income tax expense

Provision for (benefit from) income taxes (2) —

Net loss (36) % (87) %

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(1) Includes stock-based compensation expense as follows:

Year Ended December 31,

(dollars in thousands)

(in thousands)

Cost of revenue $ 5,455 $ 4,608

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2025 - 2024 Change

2024 2023 $ %

(dollars in thousands)

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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 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 REV7 sensors as customers increased their purchase levels compared to the prior year period.

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, Asia and Pacific, and Europe, Middle East and Africa as compared to the comparable period in the prior year.

The revenue increases in those geographic regions were primarily attributable to higher sales of the REV7 sensor.

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

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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 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.

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.

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.

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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

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General and administrative 64,641 58,701 5,940 10

Goodwill impairment charges

— 166,675 (166,675) 100 %

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 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.

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.

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 attributable to the reduction in compensation expenses and other costs from the restructuring and cost reduction initiatives after the closing of the Velodyne Merger.

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 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.

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.

Goodwill Impairment Charges

There was no addition to goodwill for the year ended December 31, 2024, and as such, our remaining goodwill balance was nil.

Goodwill impairment charges were $166.7 million for the year ended December 31, 2023, primarily driven by the decrease in our market capitalization during the period.

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

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Interest expense — (1,823) 1,823 (100)

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.

The year-over-year decrease in interest expense was due to entering into the UBS Agreement in October 2023, which had a lower interest rate than our prior debt arrangement and a reduction in the outstanding debt balance which was paid off in full on August 12, 2024.

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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Loss before income taxes $ (63,312) $ (96,508) $ 33,196 (34) %

Provision for income tax expense (benefit) 537 523 14 3

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.

Our tax expense changed during the year ended December 31, 2024, compared to the prior year, primarily due to income tax expense from profitable foreign jurisdictions.

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.

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and Oppenheimer & Co.

(the “ATM Agreement”), which expires three years from the May 2, 2022 Form S-3 filing date, pursuant to which we may 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.

Subject to the terms and conditions of the ATM Agreement, we may sell the shares in amounts and at times to be determined by us but we are under no obligation to sell any of the shares.

Actual sales, if any, will depend on a variety of factors to be determined by us from time to time, including, among other things, market conditions, the trading price of our common stock, capital needs and determinations by us of the appropriate sources of funding.

During the year ended December 31, 2024, we sold 6,045,428 shares of common stock for net proceeds of $57.8 million under the ATM Agreement, and during the year ended December 31, 2023, we sold 2,878,875 shares of common stock for net proceeds of $14.6 million.

The remaining availability under the ATM Agreement as of December 31, 2024 is approximately $58.6 million.

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.

(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.

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

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For the Years ended December 31,

(dollars in thousands)

(in thousands)

Net cash provided by (used in):

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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 $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.

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 $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 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.

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, 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.

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, 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, 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, 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.

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

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A change in our estimates could have a significant impact on the value of our inventory and our results of operations.

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.

Table of C ontents

Revenue Recognition

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The amount of revenue recognized reflects the consideration that the Company expects to be entitled to receive in exchange for these products or services.

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.

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.

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.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis