Ambarella Reports Strong Q3 FY2025 Results, Driven by Edge AI Growth

Ambarella, Inc. Announces Third Quarter Fiscal Year 2025 Financial Results - Ambarella (NASDAQ:AMBA)

SANTA CLARA, Calif., Nov. 26, 2024 (GLOBE NEWSWIRE) -- Ambarella, Inc. AMBA, an edge AI semiconductor company, today announced financial results for its third quarter of fiscal year 2025 ended October 31, 2024. Revenue for the third quarter of fiscal 2025 was $82.7 million, up 63% from $50.6 million in the same period in fiscal 2024. For the nine months ended October 31, 2024, revenue was $200.9 million, up 15% from $174.9 million for the nine months ended October 31, 2023.Gross margin under U.S. generally accepted accounting principles (GAAP) for the third quarter of fiscal 2025 was 60.6%, compared with 59.3% for the same period in fiscal 2024. For the nine months ended October 31, 2024, GAAP gross margin was 60.7%, compared with 60.6% for the nine months ended October 31, 2023. GAAP net loss for the third quarter of fiscal 2025 was $24.1 million, or loss per diluted ordinary share of $0.58, compared with GAAP net loss of $41.7 million, or loss per diluted ordinary share of $1.04, for the same period in fiscal 2024. GAAP net loss for the nine months ended October 31, 2024 was $96.9 million or loss per diluted ordinary share of $2.36. This compares with GAAP net loss of $108.8 million, or loss per diluted ordinary share of $2.74, for the nine months ended October 31, 2023. Financial results on a non-GAAP basis for the third quarter of fiscal 2025 are as follows: Gross margin on a non-GAAP basis for the third quarter of fiscal 2025 was 62.6%, compared with 62.6% for the same period in fiscal 2024. For the nine months ended October 31, 2024, non-GAAP gross margin was 63.0%, compared with 63.5% for the nine months ended October 31, 2023.Non-GAAP net income for the third quarter of fiscal 2025 was $4.5 million, or earnings per diluted ordinary share of $0.11. This compares with non-GAAP net loss of $11.2 million, or loss per diluted ordinary share of $0.28, for the same period in fiscal 2024. Non-GAAP net loss for the nine months ended October 31, 2024 was $11.6 million, or loss per diluted ordinary share of $0.28. This compares with non-GAAP net loss of $23.2 million, or loss per diluted ordinary share of $0.59, for the nine months ended October 31, 2023. Based on information available as of today, Ambarella is offering the following guidance for the fourth quarter of fiscal year 2025, ending January 31, 2025: Revenue is expected to be between $76.0 million and $80.0 million. Gross margin on a non-GAAP basis is expected to be between 61.5% and 63.0%.Operating expenses on a non-GAAP basis are expected to be between $49.0 million and $52.0 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 2025 was $226.5 million, compared with $219.8 million at the end of the prior quarter and $222.3 million at the end of the same quarter a year ago. "Company specific factors are more than offsetting broad market weakness, and we are reporting 30% sequential revenue growth in fiscal Q3, above the high-end of our guidance range, with strength led again by our customers' new products, especially those incorporating our higher priced AI inference processors. Edge AI revenue represented about 70% of our total revenue, establishing a new record level, and this momentum is expected to enable growth in both our IoT and Auto markets in F2025 and F2026," said Fermi Wang, President and CEO. "With the anticipated revenue growth, we intend to drive positive operating leverage and build upon our 15 consecutive fiscal years of positive free-cash-flow." 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 John Young, Chief Financial Officer, to discuss the third quarter of fiscal year 2025 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 2025 ending January 31, 2025, and the comments of our CEO relating to our expectation of future revenue growth, customer demand for our edge AI inference products, the growth potential of our new products, and our ability to generate positive free-cash flow in future periods. 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 inference 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, AI functionality and advanced networks, including vision-language models and GenAI; 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 Annual Report on Form 10-K for our 2024 fiscal year, 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, 2024 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"). Management uses these non-GAAP financial measures internally in analyzing the company's financial results to assess operational performance and liquidity. The company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing its 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. 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 2025, 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 2025, a reconciliation of non-GAAP gross margin and non-GAAP operating expenses guidance to the closest corresponding GAAP measure is not available without unreasonable efforts on a forward-looking basis 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, 2024 2023 2024 2023 Revenue $82,653 $50,595 $200,850 $174,858 Cost of revenue 32,605 20,612 78,901 68,894 Gross profit 50,048 29,983 121,949 105,964 Operating expenses: Research and development 58,389 53,702 169,286 163,060 Selling, general and administrative 17,169 18,246 53,905 55,750 Total operating expenses 75,558 71,948 223,191 218,810 Loss from operations (25,510) (41,965) (101,242) (112,846) Other income, net 2,091 1,900 6,507 3,923 Loss before income taxes (23,419) (40,065) (94,735) (108,923) Provision (benefit) for income taxes 652 1,645 2,157 (113) Net loss $(24,071) $(41,710) $(96,892) $(108,810) Net loss per share attributable to ordinary shareholders: Basic $(0.58) $(1.04) $(2.36) $(2.74)Diluted $(0.58) $(1.04) $(2.36) $(2.74)Weighted-average shares used to compute net loss per share attributable to ordinary shareholders: Basic 41,479,459 40,053,251 41,128,068 39,710,248 Diluted 41,479,459 40,053,251 41,128,068 39,710,248 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, 2024 2023 2024 2023 (unaudited, in thousands)Stock-based compensation: Cost of revenue $899 $868 $2,339 $2,694 Research and development 18,637 17,898 54,653 54,809 Selling, general and administrative 7,311 8,643 23,503 25,293 Total stock-based compensation $26,847 $27,409 $80,495 $82,796 Three Months Ended October 31, Nine Months Ended October 31, 2024 2023 2024 2023 (unaudited, in thousands)Acquisition-related costs: Cost of revenue $757 $757 $2,271 $2,271 Research and development -- -- -- -- Selling, general and administrative 510 520 1,560 1,560 Total acquisition-related costs $1,267 $1,277 $3,831 $3,831 Three Months Ended October 31, Nine Months Ended October 31, 2024 2023 2024 2023 (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 2.0% and 3.3%, or $1.7 million and $1.7 million, for the three months ended October 31, 2024 and October 31, 2023, respectively. The difference between GAAP and non-GAAP gross margin was 2.3% and 2.9%, or $4.6 million and $5.0 million, for the nine months ended October 31, 2024 and October 31, 2023, 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, 2024 2023 2024 2023 (unaudited)GAAP net loss $(24,071) $(41,710) $(96,892) $(108,810) Non-GAAP adjustments: Stock-based compensation expense 26,847 27,409 80,495 82,796 Acquisition-related costs 1,267 1,277 3,831 3,831 Restructuring expense -- 852 -- 852 Income tax effect 416 994 1,016 (1,910)Non-GAAP net income (loss) $4,459 $(11,178) $(11,550) $(23,241) GAAP - diluted weighted average shares 41,479,459 40,053,251 41,128,068 39,710,248 Non-GAAP - diluted weighted average shares 41,632,232 40,053,251 41,128,068 39,710,248 GAAP - diluted net loss per share $(0.58) $(1.04) $(2.36) $(2.74)Non-GAAP adjustments: Stock-based compensation expense 0.65 0.68 1.96 2.08 Acquisition-related costs 0.03 0.03 0.09 0.10 Restructuring expense -- 0.02 -- 0.02 Income tax effect 0.01 0.03 0.03 (0.05)Effect of Non-GAAP - diluted weighted average shares -- -- -- -- Non-GAAP - diluted net income (loss) per share $0.11 $(0.28) $(0.28) $(0.59) AMBARELLA, INC. CONDENSED CONSOLIDATED BALANCE SHEETS(unaudited, in thousands) October 31, January 31, 2024 2024 ASSETS Current assets: Cash and cash equivalents $127,122 $144,914 Marketable debt securities 99,402 75,013 Accounts receivable, net 33,967 24,950 Inventories 36,592 29,043 Restricted cash 7 7 Prepaid expenses and other current assets 6,520 6,230 Total current assets 303,610 280,157 Property and equipment, net 9,684 10,439 Intangible assets, net 44,962 55,136 Operating lease right-of-use assets, net 5,952 5,250 Goodwill 303,625 303,625 Other non-current assets 2,956 3,048 Total assets $670,789 $657,655 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable 25,227 28,503 Accrued and other current liabilities 72,974 48,598 Operating lease liabilities, current 3,251 3,443 Income taxes payable 838 1,541 Deferred revenue, current 4,580 894 Total current liabilities 106,870 82,979 Operating lease liabilities, non-current 2,716 1,896 Other long-term liabilities 6,908 12,909 Total liabilities 116,494 97,784 Shareholders' equity: Preference shares -- -- Ordinary shares 19 18 Additional paid-in capital 786,396 694,967 Accumulated other comprehensive loss (297) (183)Accumulated deficit (231,823) (134,931)Total shareholders' equity 554,295 559,871 Total liabilities and shareholders' equity $670,789 $657,655 Contact: Louis Gerhardy 408.636.2310 lgerhardy@ambarella.com Market News and Data brought to you by Benzinga APIs

Ambarella, Inc. Announces Third Quarter Fiscal Year 2025 Financial Results By Investing.com

SANTA CLARA, Calif., Nov. 26, 2024 (GLOBE NEWSWIRE) -- Ambarella, Inc. (NASDAQ: NASDAQ:AMBA), an edge AI semiconductor company, today announced financial results for its third quarter of fiscal year 2025 ended October 31, 2024. Financial results on a non-GAAP basis for the third quarter of fiscal 2025 are as follows: Based on information available as of today, Ambarella is offering the following guidance for the fourth quarter of fiscal year 2025, ending January 31, 2025: 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 (EPA:TTEF) cash, cash equivalents and marketable debt securities on hand at the end of the third quarter of fiscal 2025 was $226.5 million, compared with $219.8 million at the end of the prior quarter and $222.3 million at the end of the same quarter a year ago. Company specific factors are more than offsetting broad market weakness, and we are reporting 30% sequential revenue growth in fiscal Q3, above the high-end of our guidance range, with strength led again by our customers' new products, especially those incorporating our higher priced AI inference processors. Edge AI revenue represented about 70% of our total revenue, establishing a new record level, and this momentum is expected to enable growth in both our IoT and Auto markets in F2025 and F2026, said Fermi Wang, President and CEO. With the anticipated revenue growth, we intend to drive positive operating leverage and build upon our 15 consecutive fiscal years of positive free-cash-flow. 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 John Young, Chief Financial Officer, to discuss the third quarter of fiscal year 2025 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 2025 ending January 31, 2025, and the comments of our CEO relating to our expectation of future revenue growth, customer demand for our edge AI inference products, the growth potential of our new products, and our ability to generate positive free-cash flow in future periods. 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 inference 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, AI functionality and advanced networks, including vision-language models and GenAI; 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 Annual Report on Form 10-K for our 2024 fiscal year, 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, 2024 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"). Management uses these non-GAAP financial measures internally in analyzing the company's financial results to assess operational performance and liquidity. The company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing its 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. 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 2025, 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 2025, a reconciliation of non-GAAP gross margin and non-GAAP operating expenses guidance to the closest corresponding GAAP measure is not available without unreasonable efforts on a forward-looking basis 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. 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: The difference between GAAP and non-GAAP gross margin was 2.0% and 3.3%, or $1.7 million and $1.7 million, for the three months ended October 31, 2024 and October 31, 2023, respectively. The difference between GAAP and non-GAAP gross margin was 2.3% and 2.9%, or $4.6 million and $5.0 million, for the nine months ended October 31, 2024 and October 31, 2023, respectively. The differences were due to the effect of stock-based compensation, amortization of acquisition-related costs and restructuring expense.