Many commercial Lidar systems have GPS, PPS, and serial interfaces. What's the application and how's it being used?
Generally speaking, PPS input from a GPS has exceptional accuracy and very low jitter characteristics. So a microcontroller, for example, can use a timer peripheral to measure it's perceived duration of the time between pulses, and use that to calibrate it's measure of time.
For example if the pulse-to-pulse timing of a GPS PPS signal is measured by the microcontroller to be 999 milliseconds, then it can assume it's perception of time is (1000/999) times what it measures and adjust accordingly. By re-calibrating itself occasionally, this can account for drift / variation in cumulative timing errors attributable to, say, temperature, humidity, manufacturing tolerance, and so forth.
Light travels pretty fast, so small errors in timing reflections add up to big errors in distance calculations.
Read the interface box manual to get a fuller description of the use of PPS and NMEA $GPRMC. Be aware you need both the PPS and NMEA sentence to work.
Once setup it allow you to understand the polar co-ordinates/time of Laser pulses.
The Velodyne Interface box manual is here.
GPS makes LiDar more accurate through time synchronization of its clock with that of LiDar. GPS is a stratum0 clock which means it is pretty accurate, so the LiDar can be synced with it.