Ambarella(AMBA)2024-02-28 00:24Financial Data and Key Metrics Changes - For fiscal year 2024, revenue decreased by 32.9% year-over-year to 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 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 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]