Ambarella, Inc. (NASDAQ:AMBA) Q1 2023 Earnings Conference Call May 31, 2022 4:30 PM ET Company Participants Louis Gerhardy - Corporate Development Dr. Fermi Wang - President and CEO Brian White - Chief Financial Officer Conference Call Participants Joe Moore - Morgan Stanley Ross Seymore - Deutsche Bank Quinn Bolton - Needham & Company Matt Ramsay - Cowen David Kelley - Jefferies Tristen Barra - Baird Andrew Buscaglia - Berenberg Kevin Cassidy - Rosenblatt Securities Jeremy Kwan - Stifel Suji Desilva - ROTH ...

Ambarella, Inc. (NASDAQ:AMBA) Q4 2022 Earnings Conference Call February 28, 2022 4:30 PM ET Company Participants Louis Gerhardy - Corporate Development Dr. Fermi Wang - President & Chief Executive Officer John Young - Vice President, Finance Conference Call Participants Matt Ramsay - Cowen Gary Mobley - Wells Fargo Ross Seymore - Deutsche Bank Andrew Buscaglia - Berenberg Joe Moore - Morgan Stanley Kevin Cassidy - Rosenblatt Securities Tore Svanberg - Stifel Quinn Bolton - Needham Vivek Arya - Bank of Ameri ...

Financial Data and Key Metrics Changes - Revenue for Q3 was $92.2 million, representing a sequential increase of 16% from Q2 and a 64% increase year-over-year [19][20] - Non-GAAP gross margin for Q3 was 63.1%, slightly above the previous quarter's 62.8% [20] - Non-GAAP net income for Q3 was $22.2 million or $0.57 per diluted share, compared to $13.1 million or $0.35 per diluted share in Q2 [20] Business Line Data and Key Metrics Changes - Automotive and IoT camera revenue combined increased more than 10% sequentially [19] - CV (Computer Vision) revenue represented more than 25% of total revenue, with unique CV customers in production quadrupling year-over-year [7][8] - The automotive revenue funnel has tripled from approximately $600 million to about $1.8 billion [8][34] Market Data and Key Metrics Changes - The professional IP security camera market is experiencing strong revenue growth, particularly outside of China [11][12] - In the automotive sector, the company has shipped over 1 million CV SoCs into the automotive market [8] - The Chinese market for professional security cameras is seeing reduced government spending, impacting major customers like Hikvision and Dahua [41][78] Company Strategy and Development Direction - The acquisition of Oculii aims to enhance the company's capabilities in AIoT processing and radar perception technology [6][16] - The company is focusing on integrating radar technology into its SoCs, with plans to launch products targeting Level 2 ADAS applications by late next year [39] - Continued investment in R&D, with 59% of revenue allocated to R&D over the past three years, is expected to drive future growth [15] Management's Comments on Operating Environment and Future Outlook - Management noted that supply chain challenges remain significant, particularly with shortages of components affecting customer production [7][23] - The company anticipates total revenue for Q4 to be in the range of $88.5 million to $91.5 million, with automotive revenue expected to increase sequentially [24] - Management expressed confidence in achieving record revenue this year despite supply constraints [7][18] Other Important Information - The company has a total headcount of 824, with 82% dedicated to engineering [21] - Cash and marketable securities increased to $457.8 million from $449.2 million in the previous quarter [22] - The company plans to participate in several upcoming investor conferences and a Capital Markets Day on January 4th [25] Q&A Session Summary Question: What factors are influencing the Q4 guidance? - Management indicated that seasonality and supply chain issues are impacting the Q4 guidance, with a smaller expected decline than historical averages due to product mix changes [29] Question: What is the expected growth from CV revenue? - The majority of growth is expected to come from ASP increases, with CV units cumulatively reaching 5 million, including 1 million in automotive [30][31] Question: Can you elaborate on the $1.8 billion revenue funnel? - The funnel has tripled, with a significant portion being CV SoCs, and no radar revenue included yet [34] Question: What is the timeline for integrating Oculii's technology? - Integration of Oculii's software into the CV2 family is expected to yield products for Level 2 ADAS applications by late next year [39] Question: How is the security camera market evolving? - Outside of China, the company is performing well, while Hikvision and Dahua are facing challenges due to reduced government spending and inventory issues [41][78] Question: What is the impact of supply chain constraints on revenue? - Management did not quantify lost revenue but acknowledged that supply constraints are affecting shipments [72]