B4LLSSummary Following my coverage of Ambarella Inc. (NASDAQ:AMBA), I recommended a hold rating as I was concerned about the headwinds in the automotive markets and the setbacks that AMBA has faced in the surveillance segment. This post is to provide an update on my thoughts on the business and stock. I am revising my hold rating to a buy rating as I am now focused on FY26 performance, where I expect AMBA to see a strong acceleration in growth. Management comments on inventories and 4Q23 guidance hint t ...

Ambarella (AMBA) , in a bid to bring generative artificial intelligence (AI) to edge endpoint devices and on-premise hardware, has unveiled its N1 System on Chips (SoCs) Series that runs multi-modal large language models (LLMs) and supports up to 34 billion parameters. The product will be showcased at the Consumer Electronic Show 2024.The solution is built on CV3-HD architecture that was initially used to power Advanced Driver Assistance Systems. The new N1 SoCs are built on this capability that utilizes ex ...

SANTA CLARA, Calif., Jan. 09, 2024 (GLOBE NEWSWIRE) -- Ambarella, Inc. (NASDAQ:AMBA), an edge AI semiconductor company, today announced during CES the latest additions to its CV3-AD family of automotive AI domain controllers—the CV3-AD635 and CV3-AD655 systems-on-chip (SoCs). The new CV3- AD635 supports a sensing suite that includes multiple cameras and radars to enable mainstream L2+ feature sets, such as highway autopilot and automated parking, in addition to meeting the GSR2 and NCAP standards. Additiona ...

SANTA CLARA, Calif., Jan. 08, 2024 (GLOBE NEWSWIRE) -- Ambarella, Inc. (NASDAQ:AMBA), an edge AI semiconductor company, today announced during CES that it is demonstrating multi-modal large language models (LLMs) running on its new N1 SoC series at a fraction of the power-per-inference of leading GPU solutions. Ambarella aims to bring generative AI—a transformative technology that first appeared in servers due to the large processing power required—to edge endpoint devices and on-premise hardware, across a ...

As the year 2024 begins, the investment environment is brimming with potential, notably in the field of autonomous driving. Among them, a handful stand out as the most exciting and hottest autonomous driving stocks, catching the attention of astute investors. This industry, which was previously a faraway dream, is now on its way to becoming a reality rich in innovation and promise. As we negotiate the complex maze of market patterns, it becomes evident that these stocks are about more than simply futuristic ...

Ambarella’s (AMBA) CV3-AD685 AI domain control system-on-chip (SoC), introduced in January 2023, is set to power Kodiak Robotics’ autonomous vehicles. CV3-AD685 was first introduced for Level 2+ and Level 4 autonomous vehicles.Level 2+ autonomous vehicles have capabilities like adaptive cruise control, lane centering and automatic braking, and Level 4 vehicles come with even higher levels of self-driving capability.The new CV3-AD685 AI engine is a major leap forward from the previous version (CV2 SoCs). It ...

SANTA CLARA, Calif. and MOUNTAIN VIEW, Calif., Jan. 02, 2024 (GLOBE NEWSWIRE) -- Ambarella, Inc. (NASDAQ:AMBA), an edge AI semiconductor company, and Kodiak Robotics, Inc., a leading autonomous vehicle company focused on trucking and defense, today announced that Kodiak selected Ambarella's CV3-AD685 AI domain control system-on-chip (SoC) as a complete embedded compute solution for its next-generation autonomous vehicles. This SoC provides a complete embedded solution for Kodiak's multi-sensor perception, f ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended October 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-35667 AMBARELLA, INC. (Exact name of registrant as specified in its charter) Cayman Islands 98-0459628 (State or other jurisd ...

Ambarella, Inc. (NASDAQ:AMBA) Q3 2024 Earnings Conference Call November 30, 2023 4:30 PM ET Company Participants Louis Gerhardy - Vice President, Corporate Development Fermi Wang - President and Chief Executive Officer Brian White - Chief Financial Officer John Young - Vice President, Finance Conference Call Participants Joe Moore - Morgan Stanley Jeremy Kwan - Stifel Matt Myers - Susquehanna Kevin Cassidy - Rosenblatt Securities Neil Young - Needham & Company Martin Yang - Oppenheimer & Company Operator Th ...

PART I. FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company's financial statements for the period ended July 31, 2023, show a decrease in total assets and shareholders' equity compared to January 31, 2023, with a wider net loss for both the three and six-month periods driven by lower revenue and gross profit, though the company maintains a strong cash and marketable securities position Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | July 31, 2023 | January 31, 2023 | | :--- | :--- | :--- | | **Total Current Assets** | $286,647 | $304,632 | | **Total Assets** | $696,244 | $710,195 | | **Total Current Liabilities** | $74,690 | $83,462 | | **Total Liabilities** | $93,926 | $104,107 | | **Total Shareholders' Equity** | $602,318 | $606,088 | Condensed Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended July 31, 2023 | Three Months Ended July 31, 2022 | Six Months Ended July 31, 2023 | Six Months Ended July 31, 2022 | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | $62,121 | $80,884 | $124,263 | $171,189 | | **Gross Profit** | $38,462 | $51,064 | $75,981 | $107,611 | | **Loss from Operations** | $(35,339) | $(20,188) | $(70,881) | $(30,686) | | **Net Loss** | $(31,198) | $(23,650) | $(67,100) | $(34,472) | | **Diluted Net Loss Per Share** | $(0.79) | $(0.62) | $(1.70) | $(0.91) | Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Six Months Ended July 31, 2023 | Six Months Ended July 31, 2022 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $15,187 | $33,003 | | **Net cash used in investing activities** | $(7,969) | $(10,311) | | **Net cash provided by financing activities** | $1,756 | $1,209 | | **Cash, cash equivalents and restricted cash at end of period** | $122,523 | $194,954 | - The company's two largest customers, distributor WT Microelectronics and ODM Chicony Electronics, accounted for approximately **53.9%** and **13.7%** of total revenue, respectively, for the three months ended July 31, 2023[94](index=94&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reports a significant revenue decline of 23.2% for the quarter and 27.4% for the six months year-over-year, primarily due to customers reducing inventory levels, leading to increased operating losses, while the company focuses on advanced AI and computer vision SoCs for IoT, automotive, and industrial markets - The company's development efforts are focused on creating advanced AI technology, known as computer vision (CV), with its CVflow™ architecture, aimed at a broad range of applications including IP security cameras, automotive ADAS, and industrial/robotic applications[98](index=98&type=chunk) - Future revenue growth is expected to depend significantly on the expansion within camera markets with AI and computer vision technology, particularly in IoT and emerging automotive and industrial markets[100](index=100&type=chunk) - Global economic conditions, including high inflation and uncertainty in customer demand, have led some customers to reduce their inventory levels, which has negatively impacted and may continue to reduce demand for the company's products[107](index=107&type=chunk) [Results of Operations](index=22&type=section&id=Results%20of%20Operations) For the three and six months ended July 31, 2023, revenue decreased significantly compared to the prior year due to lower product shipments and customer inventory reduction, leading to a decline in gross margin from unfavorable product mix and increased inventory reserves, while operating expenses rose due to R&D investment Revenue Performance (in thousands) | Period | Revenue (2023) | Revenue (2022) | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Three Months** | $62,121 | $80,884 | $(18,763) | (23.2)% | | **Six Months** | $124,263 | $171,189 | $(46,926) | (27.4)% | - The decrease in revenue was primarily due to lower product unit shipments resulting from customer inventory reduction efforts and lower nonrecurring engineering (NRE) services, partially offset by the continued adoption of higher-priced CV-based solutions[104](index=104&type=chunk)[133](index=133&type=chunk) Gross Margin Performance | Period | Gross Margin (2023) | Gross Margin (2022) | Change | | :--- | :--- | :--- | :--- | | **Three Months** | 61.9% | 63.1% | (1.2)% | | **Six Months** | 61.1% | 62.9% | (1.8)% | - Gross margin decreased due to unfavorable product mix, increased inventory reserves from market weakness, and lower NRE project services[135](index=135&type=chunk) - R&D expenses increased by **4.9%** for the quarter and **10.4%** for the six-month period year-over-year, driven by higher personnel costs, increased SoC development costs due to the timing and number of chips in development, and higher engineering-related expenses[136](index=136&type=chunk) - A tax benefit of **$3.4 million** was recorded for the quarter, compared to a **$3.4 million** provision in the prior year, primarily due to the release of a **$3.6 million** valuation allowance on deferred tax assets of Oculii Corp and a tax benefit for Oculii's current year losses[139](index=139&type=chunk)[140](index=140&type=chunk) [Liquidity and Capital Resources](index=26&type=section&id=Liquidity%20and%20Capital%20Resources) As of July 31, 2023, the company held $216.5 million in cash, cash equivalents, and marketable debt securities, with net cash from operating activities decreasing to $15.2 million for the first six months of fiscal 2024, though management believes existing cash is sufficient for the next 12 months Cash Flow Summary (Six Months Ended July 31, in thousands) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $15,187 | $33,003 | | **Net cash used in investing activities** | $(7,969) | $(10,311) | | **Net cash provided by financing activities** | $1,756 | $1,209 | - The decrease in cash from operating activities was primarily due to an increased net loss, partially offset by higher collections of accounts receivable and lower inventory purchases[145](index=145&type=chunk) - The Board of Directors extended the existing share repurchase program through June 30, 2024, with approximately **$49.0 million** available for repurchases as of July 31, 2023, though no shares were repurchased in the six months ended July 31, 2023[71](index=71&type=chunk)[148](index=148&type=chunk) - As of July 31, 2023, the company had manufacturing purchase obligations of **$24.6 million** and future payment commitments for software licenses of approximately **$8.8 million**[152](index=152&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=28&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are interest rate fluctuations and foreign currency risk, with its investment portfolio subject to interest rate changes without material impact, and foreign currency risk arising from operating expenses in local currencies, for which no hedging instruments are currently used - The company's investment portfolio is exposed to interest rate risk, but this is minimized by investing in a variety of highly liquid, low-credit-risk debt securities, with high interest rates generating higher interest income without a material negative impact[158](index=158&type=chunk) - Foreign currency risk exists as operating expenses in international locations (e.g., Taiwan, China, Europe) are paid in local currencies, while all product sales are denominated in U.S. dollars, and the company does not currently engage in hedging activities[159](index=159&type=chunk) [Controls and Procedures](index=29&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the Principal Executive Officer and Principal Financial Officer, evaluated the company's disclosure controls and procedures and concluded they were effective at a reasonable assurance level as of July 31, 2023, with no material changes in internal control over financial reporting during the quarter - Based on an evaluation as of July 31, 2023, the Principal Executive Officer and Principal Financial Officer concluded that the company's disclosure controls and procedures were effective at the reasonable assurance level[162](index=162&type=chunk) - No changes in internal control over financial reporting occurred during the fiscal quarter ended July 31, 2023, that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[163](index=163&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings) As of the reporting date, the company is not engaged in any material legal proceedings - The company is not engaged in any material legal proceedings at this time[165](index=165&type=chunk) [Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) The company identifies numerous risks to its business, including global semiconductor supply shortages, weak economic conditions, reliance on customer design wins and a limited number of major customers, challenges in penetrating new markets, competition, U.S.-China trade tensions, intellectual property litigation, cybersecurity threats, and the cyclical nature of the semiconductor industry - The business is exposed to risks from global semiconductor supply shortages and uncertain macroeconomic conditions, which have led some customers to reduce inventory levels, potentially reducing future demand[173](index=173&type=chunk)[174](index=174&type=chunk) - Revenue is highly dependent on securing 'design wins' with OEMs and the subsequent commercial success of their products, a process that is lengthy, costly, and uncertain[175](index=175&type=chunk)[176](index=176&type=chunk) - A significant portion of revenue comes from a limited number of customers, including distributor WT and ODM Chicony, where the loss of or a substantial reduction in purchases from a significant customer could harm financial results[196](index=196&type=chunk) - The company is subject to U.S. governmental export controls which could impair its ability to compete in international markets, particularly China, with several Chinese customers added to the BIS Entity List, restricting the company's ability to supply them[281](index=281&type=chunk)[282](index=282&type=chunk) - The semiconductor industry is highly competitive and litigious regarding intellectual property, exposing the company to risks of infringement claims from third parties, which could result in significant costs and potential indemnification obligations to customers[314](index=314&type=chunk)[318](index=318&type=chunk) [Other Information](index=58&type=section&id=Item%205.%20Other%20Information) During the fiscal quarter ended July 31, 2023, director Christopher Paisley adopted a Rule 10b5-1 trading plan for the potential sale of up to 12,000 ordinary shares - On June 21, 2023, director Christopher Paisley adopted a Rule 10b5-1 trading arrangement for the sale of up to **12,000 ordinary shares**, with the plan extending until June 28, 2024, or until all transactions are completed[339](index=339&type=chunk) [Exhibits](index=58&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including officer certifications required under the Sarbanes-Oxley Act and Inline XBRL data files - The exhibits filed with the report include certifications from the Principal Executive Officer and Principal Financial Officer as required by the Securities Exchange Act of 1934 and Section 1350 of U.S.C. Title 18[344](index=344&type=chunk) - The report includes Inline XBRL documents for financial data tagging, as required by the SEC[342](index=342&type=chunk)