Ambarella, Inc. (NASDAQ: AMBA), an edge AI semiconductor company,
today announced financial results for its third quarter of fiscal
year 2024 ended October 31, 2023.
- Revenue for the third quarter of
fiscal 2024 was $50.6 million, down 39% from $83.1 million in the
same period in fiscal 2023. For the nine months ended October 31,
2023, revenue was $174.9 million, down 31% from $254.3 million for
the nine months ended October 31, 2022.
- Gross margin under U.S. generally
accepted accounting principles (GAAP) for the third quarter of
fiscal 2024 was 59.3%, compared with 62.2% for the same period in
fiscal 2023. For the nine months ended October 31, 2023, GAAP gross
margin was 60.6%, compared with 62.6% for the nine months ended
October 31, 2022.
- GAAP net loss for the third quarter
of fiscal 2024 was $41.7 million, or loss per diluted ordinary
share of $1.04, compared with GAAP net loss of $19.8 million, or
loss per diluted ordinary share of $0.51, for the same period in
fiscal 2023. GAAP net loss for the nine months ended October 31,
2023 was $108.8 million, or loss per diluted ordinary share of
$2.74. This compares with GAAP net loss of $54.3 million, or loss
per diluted ordinary share of $1.42, for the nine months ended
October 31, 2022.
Financial results on a non-GAAP basis for the third quarter of
fiscal 2024 are as follows:
- Gross margin on a non-GAAP basis
for the third quarter of fiscal 2024 was 62.6%, compared with 63.5%
for the same period in fiscal 2023. For the nine months ended
October 31, 2023, non-GAAP gross margin was 63.5%, compared with
64.0% for the nine months ended October 31, 2022.
- Non-GAAP net loss for the third
quarter of fiscal 2024 was $11.2 million, or loss per diluted
ordinary share of $0.28. This compares with non-GAAP net income of
$9.5 million, or earnings per diluted ordinary share of $0.24, for
the same period in fiscal 2023. Non-GAAP net loss for the nine
months ended October 31, 2023 was $23.2 million, or loss per
diluted ordinary share of $0.59. This compares with non-GAAP net
income of $34.1 million, or earnings per diluted ordinary share of
$0.88, for the nine months ended October 31, 2022.
Based on information available as of today, Ambarella is
offering the following guidance for the fourth quarter of fiscal
year 2024, ending January 31, 2024:
- Revenue is expected to be between $50.0 million and $53.0
million.
- Gross margin on a non-GAAP basis is expected to be between
62.0% and 63.0%.
- Operating expenses on a non-GAAP basis are expected to be
between $45.0 million and $48.0 million.
Ambarella reports gross margin, net income (loss) and earnings
(losses) per share in accordance with GAAP and, additionally, on a
non-GAAP basis. Non-GAAP financial information excludes the impact
of stock-based compensation, acquisition-related costs and
restructuring expense adjusted for the associated tax impact, which
includes the effect of any benefits or shortfalls recognized.
Non-GAAP financial information also excludes the impact of the
release of a valuation allowance on certain deferred tax assets. A
reconciliation of the GAAP to non-GAAP gross margin, net income
(loss) and earnings (losses) per share for the periods presented,
as well as a description of the items excluded from the non-GAAP
calculations, is included in the financial statements portion of
this press release.
Total cash, cash equivalents and marketable debt securities on
hand at the end of the third quarter of fiscal 2024 was $222.3
million, compared with $216.5 million at the end of the prior
quarter and $199.0 million at the end of the third quarter of
fiscal 2023.
“Our customers appear to be making progress with their inventory
reduction efforts and we expect to return to revenue growth in
Fiscal 2025,” said Fermi Wang, President and CEO. “We remain
determined and focused on our strategic R&D priorities for the
introduction of a portfolio of SoCs and software targeting more
sophisticated AI inference workloads. Our 5nm SoCs are progressing
well; CV5 the flagship of our CV2 family is forecasted to generate
meaningful revenue in Fiscal 2025, we have received first silicon
of CV3-AD685, the flagship of our CV3 platform, and we plan to
demonstrate this to customers in December.”
Quarterly Conference Call
Ambarella plans to hold a conference call at 4:30 p.m. Eastern
Time / 1:30 p.m. Pacific Time today with Fermi Wang, President and
Chief Executive Officer, and Brian White, Chief Financial Officer,
to discuss the third quarter of fiscal year 2024 results. A live
and archived webcast of the call will be available on Ambarella’s
website at http://www.ambarella.com/ for up to 30 days after the
call.
About Ambarella
Ambarella’s products are used in a wide variety of human vision
and edge AI applications, including video security, advanced driver
assistance systems (ADAS), electronic mirror, drive recorder,
driver/cabin monitoring, autonomous driving and robotics
applications. Ambarella’s low-power systems-on-chip (SoCs) offer
high-resolution video compression, advanced image and radar
processing, and powerful deep neural network processing to enable
intelligent perception, fusion and planning. For more information,
please visit www.ambarella.com.
"Safe harbor" statement under the Private Securities
Litigation Reform Act of 1995
This press release contains forward-looking statements that are
not historical facts and often can be identified by terms such as
“outlook,” “projected,” “intends,” “will,” “estimates,”
“anticipates,” “expects,” “believes,” “could,” “should,” or similar
expressions, including the guidance for the fourth quarter of
fiscal year 2024 ending January 31, 2024, and the comments of our
CEO relating to our customers’ efforts to reduce inventory, our
anticipated future return to revenue growth in fiscal year 2025,
our progress with commercializing our CV5 and CV3-AD685 SoCs, and
our projected revenue growth in the automotive market, including
our ability to achieve revenue levels associated with our projected
six-year automotive funnel. The achievement or success of the
matters covered by such forward-looking statements involves risks,
uncertainties and assumptions. Our actual results could differ
materially from those predicted or implied and reported results
should not be considered as an indication of our future
performance.
The risks and uncertainties referred to above include, but are
not limited to, global economic and political conditions, including
possible trade tariffs and restrictions; revenue being generated
from new customers or design wins, neither of which is assured; the
commercial success of our customers’ products; our customers’
ability to manage their inventory requirements; our growth
strategy; our ability to anticipate future market demands and
future needs of our customers, particularly for AI computer vision
applications; our ability to introduce, and to generate revenue
from, new and enhanced solutions; our ability to develop, and to
generate revenue from, new advanced technologies, such as computer
vision and AI functionality; our ability to retain and expand
customer relationships and to achieve design wins; the expansion of
our current markets and our ability to successfully enter new
markets, such as the OEM automotive and robotics markets;
anticipated trends and challenges, including competition, in the
markets in which we operate; risks associated with global health
conditions and associated risk mitigation measures; our ability to
effectively manage growth; our ability to retain key employees; and
the potential for intellectual property disputes or other
litigation.
Further information on these and other factors that could affect
our financial results is included in the company’s Quarterly Report
on Form 10-Q for the second quarter of fiscal 2024, which is on
file with the Securities and Exchange Commission. Additional
information will also be set forth in the company’s quarterly
reports on Form 10-Q, annual reports on Form 10-K and other filings
the company makes with the Securities and Exchange Commission from
time to time, copies of which may be obtained by visiting the
Investor Relations portion of our web site at www.ambarella.com or
the SEC's web site at www.sec.gov. Undue reliance should not be
placed on the forward-looking statements in this release, which are
based on information available to us on the date hereof. The
results we report in our Quarterly Report on Form 10-Q for the
third fiscal quarter ended October 31, 2023 could differ from the
preliminary results announced in this press release.
Ambarella assumes no obligation and does not intend to update
the forward-looking statements made in this press release, except
as required by law.
Non-GAAP Financial Measures
The company has provided in this release non-GAAP financial
information, including non-GAAP gross margin, net income (loss),
and earnings (losses) per share, as a supplement to the condensed
consolidated financial statements, which are prepared in accordance
with generally accepted accounting principles ("GAAP"). Non-GAAP
financial information excludes the impact of stock-based
compensation, acquisition-related costs and restructuring expense
adjusted for the associated tax impact, which includes the effect
of any benefits or shortfalls recognized. Non-GAAP financial
information also excludes the impact of the release of a valuation
allowance on certain deferred tax assets. Management uses these
non-GAAP financial measures internally in analyzing the company’s
financial results to assess operational performance and when
planning, forecasting and analyzing future periods. Further, the
company believes these non-GAAP financial measures are useful to
investors because they allow for greater transparency with respect
to key financial metrics that the company uses in making operating
decisions and because the company believes that investors and
analysts use them to help assess the health of its business and for
comparison to other companies. The company’s definitions of its
non-GAAP financial measures may differ from the definitions used by
other companies and, therefore, comparability may be limited, and
other companies may not publish these non-GAAP financial measures.
Non-GAAP results are presented for supplemental informational
purposes only for understanding the company’s operating results.
The non-GAAP information should not be considered a substitute for
financial information presented in accordance with GAAP, and may be
different from non-GAAP measures used by other companies.
With respect to its financial results for the third quarter of
fiscal year 2024, the company has provided below reconciliations of
its non-GAAP financial measures to its most directly comparable
GAAP financial measures. With respect to the company’s expectations
for the fourth quarter of fiscal year 2024, a reconciliation of the
company’s guidance for non-GAAP gross margin and non-GAAP operating
expenses to the closest corresponding GAAP measure is not available
without unreasonable efforts due to the high variability and
low visibility with respect to the charges excluded from these
non-GAAP measures. We expect the variability of the above charges
to have a significant, and potentially unpredictable, impact on our
future GAAP financial results.
AMBARELLA,
INC. |
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS |
(in
thousands, except share and per share data) |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended October 31, |
|
Nine Months Ended October 31, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
Revenue |
|
$ |
50,595 |
|
|
$ |
83,096 |
|
|
$ |
174,858 |
|
|
$ |
254,285 |
|
|
|
|
|
|
|
|
|
|
Cost of
revenue |
|
|
20,612 |
|
|
|
31,418 |
|
|
|
68,894 |
|
|
|
94,996 |
|
Gross profit |
|
|
29,983 |
|
|
|
51,678 |
|
|
|
105,964 |
|
|
|
159,289 |
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
Research and development |
|
|
53,702 |
|
|
|
52,864 |
|
|
|
163,060 |
|
|
|
151,892 |
|
Selling, general and administrative |
|
|
18,246 |
|
|
|
18,944 |
|
|
|
55,750 |
|
|
|
58,213 |
|
|
|
|
|
|
|
|
|
|
Total
operating expenses |
|
|
71,948 |
|
|
|
71,808 |
|
|
|
218,810 |
|
|
|
210,105 |
|
|
|
|
|
|
|
|
|
|
Loss from
operations |
|
|
(41,965 |
) |
|
|
(20,130 |
) |
|
|
(112,846 |
) |
|
|
(50,816 |
) |
|
|
|
|
|
|
|
|
|
Other
income, net |
|
|
1,900 |
|
|
|
1,433 |
|
|
|
3,923 |
|
|
|
1,493 |
|
|
|
|
|
|
|
|
|
|
Loss
before income taxes |
|
|
(40,065 |
) |
|
|
(18,697 |
) |
|
|
(108,923 |
) |
|
|
(49,323 |
) |
|
|
|
|
|
|
|
|
|
Provision
(benefit) for income taxes |
|
|
1,645 |
|
|
|
1,112 |
|
|
|
(113 |
) |
|
|
4,958 |
|
|
|
|
|
|
|
|
|
|
Net
loss |
|
$ |
(41,710 |
) |
|
$ |
(19,809 |
) |
|
$ |
(108,810 |
) |
|
$ |
(54,281 |
) |
|
|
|
|
|
|
|
|
|
Net loss per share attributable to ordinary shareholders: |
|
|
|
|
|
|
|
Basic |
|
$ |
(1.04 |
) |
|
$ |
(0.51 |
) |
|
$ |
(2.74 |
) |
|
$ |
(1.42 |
) |
Diluted |
|
$ |
(1.04 |
) |
|
$ |
(0.51 |
) |
|
$ |
(2.74 |
) |
|
$ |
(1.42 |
) |
Weighted-average shares used to compute net loss per share |
|
|
|
|
|
|
|
attributable to ordinary shareholders: |
|
|
|
|
|
|
|
|
Basic |
|
|
40,053,251 |
|
|
|
38,582,584 |
|
|
|
39,710,248 |
|
|
|
38,185,421 |
|
Diluted |
|
|
40,053,251 |
|
|
|
38,582,584 |
|
|
|
39,710,248 |
|
|
|
38,185,421 |
|
|
|
|
|
|
|
|
|
|
The following tables present details of stock-based
compensation, acquisition-related costs and restructuring expense
included in each functional line item in the condensed consolidated
statements of operations above:
|
|
|
|
|
|
|
|
|
|
Three Months Ended October 31, |
|
Nine Months Ended October 31, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
(unaudited,
in thousands) |
|
Stock-based
compensation: |
|
|
|
|
|
|
|
|
Cost of revenue |
$ |
868 |
|
$ |
360 |
|
$ |
2,694 |
|
$ |
1,071 |
|
Research and development |
|
17,898 |
|
|
18,741 |
|
|
54,809 |
|
|
53,775 |
|
Selling, general and administrative |
|
8,643 |
|
|
9,000 |
|
|
25,293 |
|
|
27,205 |
|
|
|
|
|
|
|
|
|
|
Total
stock-based compensation |
$ |
27,409 |
|
$ |
28,101 |
|
$ |
82,796 |
|
$ |
82,051 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended October 31, |
|
Nine Months Ended October 31, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
(unaudited,
in thousands) |
Acquisition-related costs: |
|
|
|
|
|
|
|
Cost of revenue |
$ |
757 |
|
$ |
757 |
|
$ |
2,271 |
|
$ |
2,271 |
Research and development |
|
— |
|
|
— |
|
|
— |
|
|
— |
Selling, general and administrative |
|
520 |
|
|
520 |
|
|
1,560 |
|
|
1,578 |
|
|
|
|
|
|
|
|
Total
acquisition-related costs |
$ |
1,277 |
|
$ |
1,277 |
|
$ |
3,831 |
|
$ |
3,849 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended October 31, |
|
Nine Months Ended October 31, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
(unaudited,
in thousands) |
Restructuring expense: |
|
|
|
|
|
|
|
Cost of revenue |
$ |
66 |
|
$ |
— |
|
$ |
66 |
|
$ |
— |
Research and development |
|
672 |
|
|
— |
|
|
672 |
|
|
— |
Selling, general and administrative |
|
114 |
|
|
— |
|
|
114 |
|
|
— |
|
|
|
|
|
|
|
|
Total
restructuring expense |
$ |
852 |
|
$ |
— |
|
$ |
852 |
|
$ |
— |
|
|
|
|
|
|
|
|
The difference between GAAP and non-GAAP gross margin was 3.3%
and 1.3%, or $1.7 million and $1.1 million, for the three months
ended October 31, 2023 and October 31, 2022, respectively. The
difference between GAAP and non-GAAP gross margin was 2.9% and
1.4%, or $5.0 million and $3.3 million, for the nine months ended
October 31, 2023 and October 31, 2022, respectively. The
differences were due to the effect of stock-based compensation,
amortization of acquisition-related costs and restructuring
expense.
AMBARELLA,
INC. |
RECONCILIATION OF GAAP TO NON-GAAP DILUTED EARNINGS
(LOSSES) PER SHARE |
(in
thousands, except share and per share data) |
|
|
|
|
|
|
|
|
|
Three Months Ended October 31, |
|
Nine Months Ended October 31, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
(unaudited) |
GAAP net
loss |
$ |
(41,710 |
) |
|
$ |
(19,809 |
) |
|
$ |
(108,810 |
) |
|
$ |
(54,281 |
) |
|
|
|
|
|
|
|
|
Non-GAAP
adjustments: |
|
|
|
|
|
|
|
Stock-based
compensation expense |
|
27,409 |
|
|
|
28,101 |
|
|
|
82,796 |
|
|
|
82,051 |
|
Acquisition-related costs |
|
1,277 |
|
|
|
1,277 |
|
|
|
3,831 |
|
|
|
3,849 |
|
Restructuring expense |
|
852 |
|
|
|
— |
|
|
|
852 |
|
|
|
— |
|
Income tax
effect |
|
994 |
|
|
|
(104 |
) |
|
|
(1,910 |
) |
|
|
2,525 |
|
Non-GAAP net
income (loss) |
$ |
(11,178 |
) |
|
$ |
9,465 |
|
|
$ |
(23,241 |
) |
|
$ |
34,144 |
|
|
|
|
|
|
|
|
|
GAAP -
diluted weighted average shares |
|
40,053,251 |
|
|
|
38,582,584 |
|
|
|
39,710,248 |
|
|
|
38,185,421 |
|
Non-GAAP -
diluted weighted average shares |
|
40,053,251 |
|
|
|
39,090,050 |
|
|
|
39,710,248 |
|
|
|
38,967,335 |
|
|
|
|
|
|
|
|
|
GAAP -
diluted net loss per share |
$ |
(1.04 |
) |
|
$ |
(0.51 |
) |
|
$ |
(2.74 |
) |
|
$ |
(1.42 |
) |
Non-GAAP
adjustments: |
|
|
|
|
|
|
|
Stock-based
compensation expense |
|
0.68 |
|
|
|
0.73 |
|
|
|
2.08 |
|
|
|
2.15 |
|
Acquisition-related costs |
|
0.03 |
|
|
|
0.03 |
|
|
|
0.10 |
|
|
|
0.10 |
|
Restructuring expense |
|
0.02 |
|
|
|
— |
|
|
|
0.02 |
|
|
|
— |
|
Income tax
effect |
|
0.03 |
|
|
|
— |
|
|
|
(0.05 |
) |
|
|
0.07 |
|
Effect of
Non-GAAP - diluted weighted average shares |
|
— |
|
|
|
(0.01 |
) |
|
|
— |
|
|
|
(0.02 |
) |
Non-GAAP -
diluted net income (loss) per share |
$ |
(0.28 |
) |
|
$ |
0.24 |
|
|
$ |
(0.59 |
) |
|
$ |
0.88 |
|
|
|
|
|
|
|
|
|
AMBARELLA,
INC. |
|
CONDENSED
CONSOLIDATED BALANCE SHEETS |
|
(unaudited,
in thousands) |
|
|
|
|
|
|
|
|
October
31, |
|
January
31, |
|
|
|
|
2023 |
|
|
|
2023 |
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
Current
assets: |
|
|
|
|
|
Cash and cash equivalents |
$ |
143,787 |
|
|
$ |
113,541 |
|
|
|
Marketable debt securities |
|
78,549 |
|
|
|
93,322 |
|
|
|
Accounts receivable, net |
|
22,968 |
|
|
|
51,987 |
|
|
|
Inventories |
|
30,783 |
|
|
|
40,486 |
|
|
|
Restricted cash |
|
7 |
|
|
|
8 |
|
|
|
Prepaid expenses and other current assets |
|
3,728 |
|
|
|
5,288 |
|
|
|
Total current assets |
|
279,822 |
|
|
|
304,632 |
|
|
|
|
|
|
|
|
|
Property and
equipment, net |
|
10,917 |
|
|
|
11,814 |
|
|
|
Deferred tax
assets, non-current |
|
22,952 |
|
|
|
19,276 |
|
|
|
Intangible
assets, net |
|
58,805 |
|
|
|
58,497 |
|
|
|
Operating
lease right-of-use assets, net |
|
5,760 |
|
|
|
8,339 |
|
|
|
Goodwill |
|
303,625 |
|
|
|
303,625 |
|
|
|
Other
non-current assets |
|
2,748 |
|
|
|
4,012 |
|
|
|
|
|
|
|
|
|
Total assets |
$ |
684,629 |
|
|
$ |
710,195 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
Accounts payable |
|
9,298 |
|
|
|
17,845 |
|
|
|
Accrued and other current liabilities |
|
57,991 |
|
|
|
56,655 |
|
|
|
Operating lease liabilities, current |
|
3,553 |
|
|
|
3,539 |
|
|
|
Income taxes payable |
|
2,391 |
|
|
|
4,112 |
|
|
|
Deferred revenue, current |
|
2,596 |
|
|
|
1,311 |
|
|
|
Total current liabilities |
|
75,829 |
|
|
|
83,462 |
|
|
|
|
|
|
|
|
|
Operating
lease liabilities, non-current |
|
2,316 |
|
|
|
5,097 |
|
|
|
Other
long-term liabilities |
|
14,696 |
|
|
|
15,548 |
|
|
|
|
|
|
|
|
|
Total liabilities |
|
92,841 |
|
|
|
104,107 |
|
|
|
|
|
|
|
|
|
Shareholders' equity: |
|
|
|
|
|
Preference shares |
|
— |
|
|
|
— |
|
|
|
Ordinary shares |
|
18 |
|
|
|
18 |
|
|
|
Additional paid-in capital |
|
667,313 |
|
|
|
572,076 |
|
|
|
Accumulated other comprehensive loss |
|
(1,219 |
) |
|
|
(492 |
) |
|
|
Retained earnings (accumulated deficit) |
|
(74,324 |
) |
|
|
34,486 |
|
|
|
Total shareholders’ equity |
|
591,788 |
|
|
|
606,088 |
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders' equity |
$ |
684,629 |
|
|
$ |
710,195 |
|
|
|
|
|
|
|
|
|
Contact:
Louis Gerhardy408.636.2310lgerhardy@ambarella.com
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