Ambarella, Inc. Announces Second Quarter Fiscal Year 2023 Financial Results

Santa Clara, California, UNITED STATES


SANTA CLARA, Calif, Aug. 30, 2022 (GLOBE NEWSWIRE) -- Ambarella, Inc. (NASDAQ: AMBA), an edge AI vision silicon company, today announced financial results for its second quarter of fiscal year 2023 ended July 31, 2022.

  • Revenue for the second quarter of fiscal 2023 was $80.9 million, up 2% from $79.3 million in the same period in fiscal 2022. For the six months ended July 31, 2022, revenue was $171.2 million, up 15% from $149.5 million for the six months ended July 31, 2021.
  • Gross margin under U.S. generally accepted accounting principles (GAAP) for the second quarter of fiscal 2023 was 63.1%, compared with 62.3% for the same period in fiscal 2022. For the six months ended July 31, 2022, GAAP gross margin was 62.9%, compared with 62.3% for the six months ended July 31, 2021.
  • GAAP net loss for the second quarter of fiscal 2023 was $23.7 million, or loss per diluted ordinary share of $0.62, compared with GAAP net loss of $7.2 million, or loss per diluted ordinary share of $0.20, for the same period in fiscal 2022. GAAP net loss for the six months ended July 31, 2022 was $34.5 million, or loss per diluted ordinary share of $0.91. This compares with GAAP net loss of $18.0 million, or loss per diluted ordinary share of $0.50, for the six months ended July 31, 2021.

Financial results on a non-GAAP basis for the second quarter of fiscal 2023 are as follows:

  • Gross margin on a non-GAAP basis for the second quarter of fiscal 2023 was 64.5%, compared with 62.8% for the same period in fiscal 2022. For the six months ended July 31, 2022, non-GAAP gross margin was 64.2%, compared with 62.8% for the six months ended July 31, 2021.
  • Non-GAAP net income for the second quarter of fiscal 2023 was $7.6 million, or earnings per diluted ordinary share of $0.20. This compares with non-GAAP net income of $13.1 million, or earnings per diluted ordinary share of $0.35, for the same period in fiscal 2022. Non-GAAP net income for the six months ended July 31, 2022 was $24.7 million, or earnings per diluted ordinary share of $0.63. This compares with non-GAAP net income of $22.1 million, or earnings per diluted ordinary share of $0.58, for the six months ended July 31, 2021.

Based on information available as of today, Ambarella is offering the following guidance for the third quarter of fiscal year 2023, ending October 31, 2022:

  • Revenue is expected to be between $81.0 million to $85.0 million.  
  • Gross margin on a non-GAAP basis is expected to be between 63.0% and 64.0%.
  • Operating expenses on a non-GAAP basis are expected to be between $44.0 million and $46.0 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 and acquisition-related costs adjusted for the associated tax impact, which includes the effect of any benefits or shortfalls recognized. 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 second quarter of fiscal 2023 was $197.9 million, compared with $200.6 million at the end of the prior quarter and $449.2 million at the end of the same quarter a year ago. Ambarella fully liquidated its debt security investments by the end of the third quarter of fiscal 2022 to finance the acquisition of Oculii Corp. During Q2 the company resumed its investment in debt securities.

“Computer vision (“CV”) revenue increased significantly year-over-year in Q2 and our cumulative CV shipments now exceed 10 million SoCs, including more than 20% shipped into the automotive market. Significant milestones were achieved in the quarter; we provided in-person demonstrations of CV3, our central domain controller for mobility applications, with the full functionality demonstrated across multiple live cameras. The superior efficiency and scalability were clearly recognized and well received. We are also proud that CV5, our first 5nm processor, entered mass production in Q2, ahead of expectations,” said Fermi Wang, President and CEO. “Q2 results were as expected; we absorbed the worst of the China lockdown and the 14nm shortage, while our customers’ kitting challenges remained persistent.”

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 Brian White, Chief Financial Officer, to discuss the second quarter of fiscal year 2023 results. The call can be accessed by dialing 877-304-8963 in the USA; international callers should dial 760-666-4834. Please dial in ten minutes prior to the scheduled conference call time. 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 and computer vision 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 processing and powerful deep neural network processing to enable intelligent perception, fusion and central processing systems to extract valuable data from high-resolution video and radar streams. 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 third quarter of fiscal year 2023 ending October 31, 2022, and the comments of our CEO relating to supply-chain challenges faced by the Company and potential customer acceptance of our CV3 and CV5 SoCs. 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, risks associated with global health conditions and associated risk mitigation measures; global economic and political conditions, including possible trade tariffs and restrictions; supply chain challenges in the semiconductor industry and markets we serve; revenue being generated from new customers or design wins, neither of which is assured; the commercial success of our customers’ products; our growth strategy; our ability to anticipate future market demands and future needs of our customers, particularly for computer vision applications; our ability to introduce new and enhanced solutions; our ability to gain customer acceptance of our new SoC solutions; our ability to develop, and to generate revenue from, new advanced technologies, such as computer vision functionality; 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; 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 2022 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 second fiscal quarter ended July 31, 2022 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 second quarter of fiscal year 2023, 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 third quarter of fiscal year 2023, 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 July 31, Six Months Ended July 31,
 2022 2021 2022 2021
    
Revenue$80,884  $79,327  $171,189  $149,460 
        
Cost of revenue 29,820   29,908   63,578   56,276 
Gross profit 51,064   49,419   107,611   93,184 
        
Operating expenses:       
Research and development 52,338   39,558   99,028   77,432 
Selling, general and administrative 18,914   15,821   39,269   31,848 
        
Total operating expenses 71,252   55,379   138,297   109,280 
        
Loss from operations (20,188)  (5,960)  (30,686)  (16,096)
        
Other income (expense), net (26)  218   60   811 
        
Loss before income taxes (20,214)  (5,742)  (30,626)  (15,285)
        
Provision for income taxes 3,436   1,414   3,846   2,689 
        
Net loss$(23,650) $(7,156) $(34,472) $(17,974)
        
Net loss per share attributable to ordinary shareholders:       
Basic$(0.62) $(0.20) $(0.91) $(0.50)
Diluted$(0.62) $(0.20) $(0.91) $(0.50)
Weighted-average shares used to compute net loss per share       
attributable to ordinary shareholders:       
Basic 38,258,341   36,442,536   37,986,839   36,191,420 
Diluted 38,258,341   36,442,536   37,986,839   36,191,420 
        

The following tables present details of stock-based compensation and acquisition-related costs included in each functional line item in the condensed consolidated statements of operations above:

 Three Months Ended July 31, Six Months Ended July 31,
 2022
 2021
 2022
 2021
 (unaudited, in thousands)
Stock-based compensation:       
Cost of revenue$362  $359  $711  $682 
Research and development 17,883   11,525   35,034   22,719 
Selling, general and administrative 8,664   7,488   18,205   14,813 
        
Total stock-based compensation$26,909  $19,372  $53,950  $38,214 


 Three Months Ended July 31, Six Months Ended July 31,
 2022
 2021
 2022
 2021
 (unaudited, in thousands)
Acquisition-related costs:       
Cost of revenue$757  $  $1,514  $ 
Research and development           
Selling, general and administrative 522      1,058    
        
Total acquisition-related costs$1,279  $  $2,572  $ 
        

The difference between GAAP and non-GAAP gross margin was 1.4% and 0.5%, or $1.1 million and $0.4 million, for the three months ended July 31, 2022 and July 31, 2021, respectively. The difference between GAAP and non-GAAP gross margin was 1.3% and 0.5%, or $2.2 million and $0.7 million, for the six months ended July 31, 2022 and July 31, 2021, respectively. The differences were due to the effect of stock-based compensation and the amortization of acquisition-related costs.

 
AMBARELLA, INC.
RECONCILIATION OF GAAP TO NON-GAAP DILUTED EARNINGS (LOSSES) PER SHARE
(in thousands, except share and per share data)
        
 Three Months Ended July 31, Six Months Ended July 31,
 2022 2021 2022 2021
 (unaudited)
GAAP net loss$(23,650) $(7,156) $(34,472) $(17,974)
        
Non-GAAP adjustments:       
Stock-based compensation expense 26,909   19,372   53,950   38,214 
Acquisition-related costs 1,279      2,572    
Income tax effect 3,075   932   2,629   1,831 
Non-GAAP net income$7,613  $13,148  $24,679  $22,071 
        
GAAP - diluted weighted average shares 38,258,341   36,442,536   37,986,839   36,191,420 
Non-GAAP - diluted weighted average shares 38,809,422   38,044,906   38,905,976   38,063,110 
        
GAAP - diluted net loss per share$(0.62) $(0.20) $(0.91) $(0.50)
Non-GAAP adjustments:       
Stock-based compensation expense 0.71   0.53   1.42   1.06 
Acquisition-related costs 0.03      0.07    
Income tax effect 0.08   0.03   0.07   0.05 
Effect of Non-GAAP - diluted weighted average shares    (0.01)  (0.02)  (0.03)
Non-GAAP - diluted net income per share$0.20  $0.35  $0.63  $0.58 
        


 
AMBARELLA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)
    
 July 31, January 31,
 2022 2022
    
ASSETS   
Current assets:   
Cash and cash equivalents$194,944  $171,043 
Marketable debt securities 2,970    
Accounts receivable, net 37,698   44,307 
Inventories 40,103   45,219 
Restricted cash 10   10 
Prepaid expenses and other current assets 7,138   6,169 
Total current assets 282,863   266,748 
    
Property and equipment, net 10,443   10,134 
Deferred tax assets, non-current 14,159   15,340 
Intangible assets, net 49,563   46,302 
Operating lease right-of-use assets, net 10,263   11,127 
Goodwill 303,625   303,625 
Other non-current assets 3,504   4,269 
    
Total assets$674,420  $657,545 
    
LIABILITIES AND SHAREHOLDERS' EQUITY   
Current liabilities:   
Accounts payable 22,074   31,170 
Accrued and other current liabilities 48,396   52,064 
Operating lease liabilities, current 3,506   3,391 
Income taxes payable 3,110   1,245 
Deferred revenue, current 457   1,414 
Total current liabilities 77,543   89,284 
    
Operating lease liabilities, non-current 7,024   8,322 
Other long-term liabilities 11,742   12,763 
    
Total liabilities 96,309   110,369 
    
Shareholders' equity:   
Preference shares     
Ordinary shares 17   17 
Additional paid-in capital 512,696   447,287 
Accumulated other comprehensive loss (2)   
Retained earnings 65,400   99,872 
Total shareholders’ equity 578,111   547,176 
    
Total liabilities and shareholders' equity$674,420  $657,545 
    

Contact:

Louis Gerhardy
408.636.2310
lgerhardy@ambarella.com