Ambarella, Inc. Announces Third Quarter Fiscal Year 2024 Financial Results
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Ambarella, Inc. Announces Third Quarter Fiscal Year 2024 Financial Results

SANTA CLARA, Calif., Nov. 30, 2023 (GLOBE NEWSWIRE) -- Ambarella, Inc. (NASDAQ: AMBA), an edge AI semiconductor company, today announced financial results for its third quarter of fiscal year 2024 ended October 31, 2023.

Financial results on a non-GAAP basis for the third quarter of fiscal 2024 are as follows:

Based on information available as of today, Ambarella is offering the following guidance for the fourth quarter of fiscal year 2024, ending January 31, 2024:

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 2024 was $222.3 million, compared with $216.5 million at the end of the prior quarter and $199.0 million at the end of the third quarter of fiscal 2023.

“Our customers appear to be making progress with their inventory reduction efforts and we expect to return to revenue growth in Fiscal 2025,” said Fermi Wang, President and CEO. “We remain determined and focused on our strategic R&D priorities for the introduction of a portfolio of SoCs and software targeting more sophisticated AI inference workloads. Our 5nm SoCs are progressing well; CV5 the flagship of our CV2 family is forecasted to generate meaningful revenue in Fiscal 2025, we have received first silicon of CV3-AD685, the flagship of our CV3 platform, and we plan to demonstrate this to customers in December.”

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 third quarter of fiscal year 2024 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 2024 ending January 31, 2024, and the comments of our CEO relating to our customers’ efforts to reduce inventory, our anticipated future return to revenue growth in fiscal year 2025, our progress with commercializing our CV5 and CV3-AD685 SoCs, and our projected revenue growth in the automotive market, including our ability to achieve revenue levels associated with our projected six-year automotive funnel. 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 computer vision 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 and AI 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; 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 Quarterly Report on Form 10-Q for the second quarter of fiscal 2024, 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, 2023 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"). 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. Management uses these non-GAAP financial measures internally in analyzing the company’s financial results to assess operational 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. The company’s definitions of its non-GAAP financial measures may differ from the definitions used by other companies and, therefore, comparability may be limited, and other companies may not publish these non-GAAP financial measures. 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 2024, 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 2024, a reconciliation of the company’s guidance for non-GAAP gross margin and non-GAAP operating expenses to the closest corresponding GAAP measure is not available without unreasonable efforts 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,
   2023   2022   2023   2022 
     
Revenue $50,595  $83,096  $174,858  $254,285 
         
Cost of revenue  20,612   31,418   68,894   94,996 
Gross profit  29,983   51,678   105,964   159,289 
         
Operating expenses:        
Research and development  53,702   52,864   163,060   151,892 
Selling, general and administrative  18,246   18,944   55,750   58,213 
         
Total operating expenses  71,948   71,808   218,810   210,105 
         
Loss from operations  (41,965)  (20,130)  (112,846)  (50,816)
         
Other income, net  1,900   1,433   3,923   1,493 
         
Loss before income taxes  (40,065)  (18,697)  (108,923)  (49,323)
         
Provision (benefit) for income taxes  1,645   1,112   (113)  4,958 
         
Net loss $(41,710) $(19,809) $(108,810) $(54,281)
         
Net loss per share attributable to ordinary shareholders:       
Basic $(1.04) $(0.51) $(2.74) $(1.42)
Diluted $(1.04) $(0.51) $(2.74) $(1.42)
Weighted-average shares used to compute net loss per share       
attributable to ordinary shareholders:        
Basic  40,053,251   38,582,584   39,710,248   38,185,421 
Diluted  40,053,251   38,582,584   39,710,248   38,185,421 
         

 

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, 
  2023  2022  2023  2022 
 (unaudited, in thousands) 
Stock-based compensation:        
Cost of revenue$868 $360 $2,694 $1,071 
Research and development 17,898  18,741  54,809  53,775 
Selling, general and administrative 8,643  9,000  25,293  27,205 
         
Total stock-based compensation$27,409 $28,101 $82,796 $82,051 
         


        
 Three Months Ended October 31, Nine Months Ended October 31,
  2023  2022  2023  2022
 (unaudited, in thousands)
Acquisition-related costs:       
Cost of revenue$757 $757 $2,271 $2,271
Research and development       
Selling, general and administrative 520  520  1,560  1,578
        
Total acquisition-related costs$1,277 $1,277 $3,831 $3,849
        

 


        
 Three Months Ended October 31, Nine Months Ended October 31,
  2023  2022  2023  2022
 (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 3.3% and 1.3%, or $1.7 million and $1.1 million, for the three months ended October 31, 2023 and October 31, 2022, respectively. The difference between GAAP and non-GAAP gross margin was 2.9% and 1.4%, or $5.0 million and $3.3 million, for the nine months ended October 31, 2023 and October 31, 2022, 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,
  2023   2022   2023   2022 
 (unaudited)
GAAP net loss$(41,710) $(19,809) $(108,810) $(54,281)
        
Non-GAAP adjustments:       
Stock-based compensation expense 27,409   28,101   82,796   82,051 
Acquisition-related costs 1,277   1,277   3,831   3,849 
Restructuring expense 852      852    
Income tax effect 994   (104)  (1,910)  2,525 
Non-GAAP net income (loss)$(11,178) $9,465  $(23,241) $34,144 
        
GAAP - diluted weighted average shares 40,053,251   38,582,584   39,710,248   38,185,421 
Non-GAAP - diluted weighted average shares 40,053,251   39,090,050   39,710,248   38,967,335 
        
GAAP - diluted net loss per share$(1.04) $(0.51) $(2.74) $(1.42)
Non-GAAP adjustments:       
Stock-based compensation expense 0.68   0.73   2.08   2.15 
Acquisition-related costs 0.03   0.03   0.10   0.10 
Restructuring expense 0.02      0.02    
Income tax effect 0.03      (0.05)  0.07 
Effect of Non-GAAP - diluted weighted average shares    (0.01)     (0.02)
Non-GAAP - diluted net income (loss) per share$(0.28) $0.24  $(0.59) $0.88 
        

 


AMBARELLA, INC.  
CONDENSED CONSOLIDATED BALANCE SHEETS 
(unaudited, in thousands) 
      
 October 31, January 31,  
  2023   2023   
      
ASSETS     
Current assets:     
Cash and cash equivalents$143,787  $113,541   
Marketable debt securities 78,549   93,322   
Accounts receivable, net 22,968   51,987   
Inventories 30,783   40,486   
Restricted cash 7   8   
Prepaid expenses and other current assets 3,728   5,288   
Total current assets 279,822   304,632   
      
Property and equipment, net 10,917   11,814   
Deferred tax assets, non-current 22,952   19,276   
Intangible assets, net 58,805   58,497   
Operating lease right-of-use assets, net 5,760   8,339   
Goodwill 303,625   303,625   
Other non-current assets 2,748   4,012   
      
Total assets$684,629  $710,195   
      
LIABILITIES AND SHAREHOLDERS' EQUITY     
Current liabilities:     
Accounts payable 9,298   17,845   
Accrued and other current liabilities 57,991   56,655   
Operating lease liabilities, current 3,553   3,539   
Income taxes payable 2,391   4,112   
Deferred revenue, current 2,596   1,311   
Total current liabilities 75,829   83,462   
      
Operating lease liabilities, non-current 2,316   5,097   
Other long-term liabilities 14,696   15,548   
      
Total liabilities 92,841   104,107   
      
Shareholders' equity:     
Preference shares       
Ordinary shares 18   18   
Additional paid-in capital 667,313   572,076   
Accumulated other comprehensive loss (1,219)  (492)  
Retained earnings (accumulated deficit) (74,324)  34,486   
Total shareholders’ equity 591,788   606,088   
      
Total liabilities and shareholders' equity$684,629  $710,195   
      

Contact:

Louis Gerhardy
408.636.2310
lgerhardy@ambarella.com


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