Core Insights - Ambarella, Inc. is advancing generative AI capabilities at the edge, showcasing its leadership in edge AI semiconductor technology with 30 million cumulative units shipped [1][5] Group 1: Product and Technology Advancements - Ambarella's latest demonstrations at ISC West highlight its scalable, high-performance reasoning and vision AI applications using the CVflow® 3.0 AI SoC portfolio, supporting GenAI models ranging from 0.5 to 34 billion parameters [3][4] - The company is debuting live demonstrations of DeepSeek GenAI models across different price/performance levels of its SoC portfolio, emphasizing real-time AI-powered security and analytics [3][4] - Ambarella's SoCs enable advanced reasoning capabilities without cloud processing, allowing deployment of the same AI models across various product tiers [4][5] Group 2: Competitive Differentiation - Ambarella distinguishes itself by providing integrated solutions that combine image processing, encoding, and system-level functions within its AI SoCs, rather than offering standalone AI accelerators [5] - The company emphasizes its superior AI performance per watt, which has facilitated the rapid deployment of over 30 million edge AI SoCs in the market [5] Group 3: Developer Ecosystem and Applications - Ambarella is focused on supporting edge AI developers through its Cooper™ Developer Platform and AI Model Garden, enhancing ease of use for developers [5][6] - The applications of Ambarella's technology span various sectors, including smart security, retail analytics, public safety, and industrial monitoring, enabling real-time video analysis and predictive maintenance [6][8]

Revenue Sources and Market Focus - Ambarella's revenue primarily comes from human-viewing applications, including IP security cameras and drones, with a focus on machine sensing since 2018[20]. - Sales to customers in Asia accounted for approximately 85%, 79%, and 79% of total revenue in the fiscal years ended January 31, 2025, 2024, and 2023, respectively, indicating a strong reliance on the Asian market[59]. - The customer WT Microelectronics Co., Ltd. accounted for approximately 63% of total revenue in fiscal year 2025, highlighting the company's dependence on a limited number of customers for significant revenue[62]. - A significant portion of revenue is derived from a limited number of customers, with WT Microelectronics Co., Ltd. accounting for approximately 63% of total revenue in fiscal year 2025[112]. - Approximately 63%, 53%, and 57% of revenue was derived from sales through a single distributor, WT, for the fiscal years ended January 31, 2025, 2024, and 2023, respectively[156]. Product Development and Technology - The latest CV3 AI central domain controller is designed for partially to fully automated driving applications, enhancing sensor fusion and planning capabilities[22]. - The N1 SoC can run large language models (LLMs) with up to 34 billion parameters, targeting IoT applications in industrial robotics and intelligent healthcare[23]. - The CV7 family offers a leading combination of low power and high performance for automotive and IoT edge AI applications, built on advanced 5nm process technology[21]. - Ambarella's acquisition of Oculii enhances its radar perception capabilities, improving resolution, range, and accuracy for mobility applications[24]. - The CV3-AD family of automotive AI domain controllers targets L2+ to L4 autonomous vehicles, featuring a 20x performance increase over the previous generation[38]. - Ambarella's AI SoCs are optimized for edge inference, providing low latency and high accuracy while minimizing power consumption[27]. - The company introduces two to three new silicon products annually, leveraging flexible software development kits to meet diverse market needs[37]. - The company has developed multiple generations of AI accelerator architecture, with third generation CVflow-based SoCs enabling efficient processing for transformer AI networks, crucial for next-generation automotive and generative AI markets[39]. - The company’s proprietary AmbaCast architecture provides up to 2x better compression efficiency with H.265 compared to H.264, enhancing video processing capabilities[56]. - The company’s CVflow architecture supports large language model inferencing with models up to 34 billion parameters on a single N-1 SoC, showcasing its advanced processing capabilities[52]. - The company’s software modules include features for automotive applications such as ADAS and autonomous driving systems, enhancing its product offerings[44]. - The company’s CVflow processors are designed for deep learning and HD radar processing, covering a broad range of consumer, professional, and automotive requirements with power efficiency[48]. - The company’s advanced image processing capabilities allow for capturing raw sensor data at up to 32-megapixel (8K) resolution at 60 frames per second, improving overall image quality[55]. Research and Development - Approximately 75% of the company's employees are engaged in research and development, focusing on integrating AI functionality into video processing solutions[72]. - The company has established four research and development design centers located in the United States, China, Italy, and Taiwan[73]. - Research and development expenses were $226.1 million, $215.1 million, and $204.9 million for fiscal years 2025, 2024, and 2023, respectively, with expectations for future increases[125]. - The company is increasing investments in research and development to target key markets such as automotive OEM and robotics[128]. - The company expects an increase in research and development expenditures compared to prior periods to support new technology and solutions[142]. Market Risks and Competition - The company anticipates increased competition in the semiconductor market, particularly in AI and video processing, which may lead to price pressure and reduced profitability[74][76]. - The company may face increased competition in the future, which could adversely affect revenue and market share[95]. - The semiconductor industry is highly cyclical, characterized by rapid technological change and price erosion, which could adversely affect business and operating results[131]. - The semiconductor industry is experiencing cyclical conditions, leading to unpredictable quarterly operating results and potential declines in margins and profitability[141]. - Competition in the semiconductor market is expected to intensify, which could result in price pressure and reduced profitability[116]. Supply Chain and Manufacturing - The company employs a fabless business model, outsourcing manufacturing to third-party foundries, which allows for flexibility and reduced capital requirements[67]. - The company currently manufactures solutions using 10nm and 5nm process nodes, with a substantial majority of SoCs supplied by Samsung Electronics Corporation[68]. - Global supply chain challenges have previously led to a semiconductor supply shortage, affecting manufacturing lead times and revenue[103]. - Shortages or increased costs of wafers and materials could adversely impact gross margins and lead to reduced revenues[106]. - The company relies on third-party foundries for manufacturing, which may lead to challenges in meeting customer demand and could negatively impact revenue[131]. - The company does not have long-term supply contracts with most primary third-party vendors, leading to potential supply constraints and pricing pressures[151]. - The company relies on third parties for manufacturing operations, and any disruptions could significantly impact production and customer relationships[149]. Financial Performance and Customer Dependence - The company faces significant risks if customers do not design its solutions into their products or if those products are not commercially successful, which could harm revenue[96]. - Demand for SoCs is influenced by customer product demand, which can fluctuate due to market conditions, leading to potential revenue shortfalls and excess inventory[110]. - The company has increased inventory levels due to longer manufacturing times and increased customer demand during fiscal year 2023, although inventory conditions have generally returned to normal[109]. - The complexity of the company's solutions could lead to unforeseen delays or expenses, impacting market adoption and operating costs[95]. - The company faces risks associated with international operations, including geopolitical instability and compliance with local laws[136]. Regulatory and Compliance Issues - The company is subject to governmental export and import controls, which could impair its ability to compete in international markets, particularly in China[99]. - Compliance with U.S. export controls is necessary, and failure to obtain required licenses could harm international sales and revenue[170]. - The company is subject to evolving privacy and data protection regulations, which may require significant changes to products and practices[175]. - Non-compliance with anti-corruption laws could result in penalties and adversely affect the company's operations and reputation[176]. - The company implemented an anti-corruption compliance program but cannot guarantee that all employees and partners will adhere to policies, which could lead to significant legal and financial repercussions[177]. - Compliance with increasingly complex environmental regulations may delay operations and increase costs, particularly due to the EU's RoHS directive and similar regulations in other jurisdictions[178]. - Failure to comply with environmental laws could result in fines, penalties, and disruptions in product shipments, adversely affecting business relationships and operational results[179]. - The company is subject to costly regulatory compliance requirements, including Section 404 of the Sarbanes-Oxley Act, which could harm business and operating results if not adhered to[180]. Cybersecurity and Operational Risks - The company’s cybersecurity risk management program is ISO 27001 certified and includes regular assessments and incident response plans[212]. - The Board of Directors oversees cybersecurity risks and receives updates on significant incidents, ensuring management accountability[218]. - The company conducts mandatory cybersecurity training for personnel and performs phishing tests to maintain awareness among employees[221]. - Security breaches pose a material risk to the company, potentially leading to unauthorized access to confidential information and significant costs[120]. - The company is vulnerable to operational disruptions from various risks, including technical breakdowns and geopolitical conditions, particularly in Taiwan or China[207]. - Climate change may lead to increased frequency and intensity of natural disasters, impacting the company's supply chain and customer demand[210]. Intellectual Property and Legal Risks - The company may face significant costs and operational impacts from potential intellectual property litigation, which is common in the semiconductor industry[193]. - The use of open source software in products may expose the company to risks that could compromise proprietary intellectual property[196]. - The company monitors open source software usage to prevent unintended disclosures of proprietary code, but risks remain if third-party software incorporates such elements[197]. - The trading price of the company's ordinary shares has ranged from a low of $36.02 to a high of $227.59 since February 1, 2020, indicating high volatility[198]. - The company faces potential significant legal expenses and damages related to alleged intellectual property infringements, which could impact financial performance[199]. Economic and Market Conditions - Global economic conditions, including inflation and recessionary concerns, may negatively impact customer demand and operating expenses[163]. - Trade tensions between the U.S. and China, including tariffs and export controls, create an uncertain business environment that could affect future operations[164]. - Restrictions on selling products to certain Chinese customers due to the BIS Entity List may lead to loss of market share and revenue[169]. - Fluctuations in currency exchange rates may adversely affect operating results, particularly with significant sales denominated in U.S. dollars[143]. - The semiconductor market has experienced extreme price and volume fluctuations, which may not correlate with the company's actual operating performance[200].

It has been about a month since the last earnings report for Ambarella (AMBA) . Shares have lost about 16.1% in that time frame, underperforming the S&P 500.Will the recent negative trend continue leading up to its next earnings release, or is Ambarella due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.How Have Estimates Been Moving Since Then?It tur ...

One stock that might be an intriguing choice for investors right now is Ambarella (AMBA) . This is because this security in the Electronics - Semiconductorsspace is seeing solid earnings estimate revision activity, and is in great company from a Zacks Industry Rank perspective.This is important because, often times, a rising tide will lift all boats in an industry, as there can be broad trends taking place in a segment that are boosting securities across the board. This is arguably taking place in the Compu ...

Core Viewpoint - Ambarella's stock experienced a significant drop of 17% following the release of its fiscal 2025 fourth-quarter results, despite strong revenue growth and profitability, presenting a potential buying opportunity for investors [2][3]. Financial Performance - Ambarella's fiscal Q4 revenue increased by 63% year over year to $84 million, surpassing the consensus expectation of $78 million [3]. - The company reported a non-GAAP profit of $0.11 per share, a notable improvement from a loss of $0.24 per share in the same quarter last year [3]. Market Dynamics - The demand for edge AI applications has accelerated Ambarella's growth, with 70% of its revenue in fiscal 2025 coming from edge AI processor sales [4][7]. - The edge AI market is projected to grow by 2.3 times over the next five years, driven by increased adoption in the markets Ambarella serves [6]. Product Development - Ambarella's AI capabilities in its computer vision processors enable advanced image and video interpretation, positioning the company well for future demand in edge AI devices [5]. - The introduction of smaller and optimized models is expected to enhance AI processing capabilities at the edge, further supporting revenue growth [8]. Future Outlook - Ambarella anticipates fiscal Q1 revenue to reach $84 million, representing a 54% increase from the previous year [9]. - Analysts have raised revenue growth expectations for Ambarella over the next three fiscal years, indicating confidence in the company's long-term prospects [9][11]. Valuation - The recent stock price drop has reduced Ambarella's price-to-sales ratio to 9, making it relatively attractive compared to the U.S. technology sector's average of 7.7 [10]. - The 12-month price target for Ambarella is set at $95, suggesting a potential 55% increase from current levels, reinforcing the case for investment [12].

Ambarella, Inc.'s (AMBA) shares soared 11.3% during Wednesday’s extended trading session following the company’s reported stronger-than-expected fourth-quarter fiscal 2025 results. It reported fourth-quarter non-GAAP earnings of 11 cents per share, which compared favorably with the Zacks Consensus Estimate of a loss of a penny. The bottom line also experienced a robust improvement from the year-ago quarter’s loss of 24 cents per share.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar. ...

Financial Data and Key Metrics Changes - For fiscal year 2024, revenue decreased by 32.9% year-over-year to $226.5 million, with IoT revenue accounting for about two-thirds of total revenue and declining approximately 40% for the year [21] - Fiscal Q4 revenue was $51.6 million, up 2% sequentially but down 38% year-over-year, with a non-GAAP gross margin of 62.5% [22][21] - Non-GAAP operating expenses for fiscal year 2024 increased by 3.9%, while cash and marketable securities totaled $219.9 million, up from $206.9 million at the end of the prior year [21][24] Business Line Data and Key Metrics Changes - The AI inference business represented approximately 60% of total fiscal 2024 revenue, contributing to an increase in blended average selling price (ASP) [6] - IoT revenue was significantly impacted by a decline in human viewing video processor SoCs, while automotive revenue decreased by about 14% for the year [21] - The CV2 family is expected to continue driving revenue growth, with a cumulative install base of over 20 million AI inference SoCs [6] Market Data and Key Metrics Changes - The automotive market is seeing a shift towards higher autonomy levels, with the CV3 SoC family entering production and multiple design wins in progress [9][12] - The company is focusing on the Chinese market, anticipating faster monetization of CV3 technology due to the rapid development of EVs and autonomous driving in the region [35] Company Strategy and Development Direction - The company aims to restore revenue growth and profitability while focusing on AI inference opportunities at the edge [17] - A new generative AI strategy has been introduced, targeting applications from IoT devices to edge servers, with significant partnerships and product developments underway [14][10] - The Cooper development platform is expected to enhance customer engagement and streamline software development across different silicon platforms [56] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges faced in fiscal 2024 but expressed optimism about recovery as inventory issues stabilize [5][18] - The company expects growth in both automotive and IoT segments for fiscal year 2025, driven by new product introductions and design wins [54][55] - The management highlighted the importance of AI performance demand in security cameras and the ongoing development of new platforms for this market [44] Other Important Information - The company received a CES Innovation Award for its centralized radar processing architecture, showcasing its commitment to innovation [10] - The CV3 family of processors now covers a full range of advanced driver-assistance systems (ADAS) solutions, with significant endorsements from partners [12] Q&A Session Summary Question: Inventory improvement and project delays - Management indicated that inventory improvement is consistent with previous statements, with no new developments regarding project delays [32][34] Question: Revenue from CV3 design wins in China - The first revenue from CV3 design wins is expected in calendar year 2026, with a focus on the growing EV market in China [34] Question: N1 product potential and competitive landscape - The N1 product is expected to meet significant demand, with discussions ongoing about combining multiple chips for high-end solutions [38][40] Question: Growth expectations for IoT and automotive segments - Management expects IoT growth driven by the CV2 family and automotive growth through new design wins, despite a weak overall market [54][55] Question: ASP changes and future pricing - ASP for CV2 is expected to range from high single digits to around $30, while CV5 is anticipated to be between low $30s to high $40s [60] Question: N1 product and edge processing - The competitive landscape includes low-end GPUs, but the company believes its SoC offers superior performance at lower power consumption [66] Question: Future process technology - The company plans to explore next-generation process technologies beyond 5-nanometer as market demands evolve [69] Question: Applications for CV5 - CV5 is expected to address applications in the EV truck space, with details to be announced as the customer prepares for product launch [72]

Core Insights - Ambarella (AMBA) reported quarterly earnings of $0.11 per share, exceeding the Zacks Consensus Estimate of a loss of $0.01 per share, and showing improvement from a loss of $0.24 per share a year ago, resulting in an earnings surprise of 1,200% [1] - The company achieved revenues of $84.02 million for the quarter ended January 2025, surpassing the Zacks Consensus Estimate by 7.52% and increasing from $51.62 million year-over-year [2] - Ambarella has consistently surpassed consensus EPS and revenue estimates over the last four quarters [2] Earnings Outlook - The sustainability of Ambarella's stock price movement will depend on management's commentary during the earnings call and future earnings expectations [3][4] - Current consensus EPS estimate for the upcoming quarter is -$0.09 on revenues of $73.9 million, and -$0.14 on revenues of $321.35 million for the current fiscal year [7] Industry Context - The Electronics - Semiconductors industry, to which Ambarella belongs, is currently ranked in the bottom 46% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Ambarella's stock performance [5]

Revenue Performance - Revenue for Q4 fiscal 2025 was $84.0 million, up 62.8% from $51.6 million in Q4 fiscal 2024[3] - For the fiscal year ended January 31, 2025, revenue was $284.9 million, up 25.8% from $226.5 million for the fiscal year ended January 31, 2024[3] - The company expects Q1 fiscal 2026 revenue to be between $81.0 million and $87.0 million[3] - The company anticipates mid to high teens revenue growth in fiscal 2026, driven by 5nm products including the CV5 and CV7 families[6] Profitability - GAAP net loss for Q4 fiscal 2025 was $20.2 million, or loss per diluted share of $0.48, compared to a net loss of $60.6 million, or loss per diluted share of $1.50, in Q4 fiscal 2024[3] - Non-GAAP net profit for Q4 fiscal 2025 was $4.8 million, or earnings per diluted share of $0.11, compared to a non-GAAP net loss of $9.8 million, or loss per diluted share of $0.24, in Q4 fiscal 2024[3] - For the three months ended January 31, 2025, GAAP net loss was $20,234 thousand compared to a net loss of $60,607 thousand for the same period in 2024[19] - Non-GAAP net income for the three months ended January 31, 2025, was $4,767 thousand, compared to a loss of $9,825 thousand in 2024[19] Margins - Gross margin for Q4 fiscal 2025 was 60.0%, compared to 59.8% for the same period in fiscal 2024[3] - Non-GAAP gross margin is expected to be between 61.0% and 62.5% for Q1 fiscal 2026[3] - The difference between GAAP and non-GAAP gross margin was 2.0% for the three months ended January 31, 2025, amounting to $1.7 million[18] Cash and Assets - Total cash, cash equivalents, and marketable debt securities at the end of Q4 fiscal 2025 was $250.3 million, up from $226.5 million at the end of the prior quarter[5] - Total current assets increased to $320,551 thousand as of January 31, 2025, from $280,157 thousand in 2024[21] - Cash and cash equivalents remained relatively stable at $144,622 thousand in 2025 compared to $144,914 thousand in 2024[21] - The company reported total assets of $688,968 thousand as of January 31, 2025, up from $657,655 thousand in 2024[21] Liabilities and Deficits - Total liabilities rose to $127,556 thousand in 2025 from $97,784 thousand in 2024[21] - The accumulated deficit increased to $252,057 thousand in 2025 from $134,931 thousand in 2024[21] Stock-Based Compensation and Acquisition Costs - Total stock-based compensation for the twelve months ended January 31, 2025, was $108,043 thousand, a decrease from $111,316 thousand in 2024[18] - Total acquisition-related costs for the twelve months ended January 31, 2025, were $5,044 thousand, slightly down from $5,108 thousand in 2024[18] Product Shipment - Cumulatively, the company has shipped about 30 million edge AI processors, marking a quarterly and annual record[6]

Core Viewpoint - Ambarella, Inc. reported strong financial results for the fourth quarter and full year of fiscal 2025, highlighting significant revenue growth driven by edge AI products and providing optimistic guidance for fiscal 2026 [1][4]. Financial Performance - Fourth quarter revenue reached $84.0 million, a 62.8% increase from $51.6 million in the same period of fiscal 2024 [5]. - For the fiscal year ended January 31, 2025, total revenue was $284.9 million, up 25.8% from $226.5 million in fiscal 2024 [5]. - Gross margin for the fourth quarter was 60.0%, slightly up from 59.8% year-over-year, while the fiscal year gross margin was 60.5%, compared to 60.4% in the previous year [5]. - The company reported a GAAP net loss of $20.2 million for the fourth quarter, improving from a loss of $60.6 million in the same quarter of fiscal 2024 [5]. - Non-GAAP net profit for the fourth quarter was $4.8 million, compared to a non-GAAP net loss of $9.8 million in the same period last year [5]. Cash Position - At the end of the fourth quarter of fiscal 2025, Ambarella had total cash, cash equivalents, and marketable debt securities of $250.3 million, an increase from $226.5 million in the prior quarter and $219.9 million year-over-year [3]. Future Guidance - For the first quarter of fiscal 2026, Ambarella expects revenue between $81.0 million and $87.0 million, with a non-GAAP gross margin projected between 61.0% and 62.5% [5]. - The company anticipates mid to high teens revenue growth in fiscal 2026, driven by its 5nm products, particularly the CV5 and CV7 families [4]. Market Position - Over 70% of Ambarella's total revenue in fiscal 2025 came from edge AI products, marking both a quarterly and annual record [4]. - The company has shipped approximately 30 million edge AI processors, integrating proprietary deep learning AI accelerators [4]. Operational Insights - Ambarella's focus on efficient operations aims to drive positive operating leverage moving forward [4]. - The company continues to invest in research and development, with operating expenses for R&D reaching $226.1 million for the fiscal year [16]. Conference Call - A conference call is scheduled to discuss the fourth quarter results, providing further insights into the company's performance and future strategies [6].