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CST: 15/10/2019 16:56:29   

Ambarella, Inc. Announces First Quarter Fiscal Year 2020 Financial Results

133 Days ago

SANTA CLARA, Calif., June 04, 2019 (GLOBE NEWSWIRE) -- Ambarella, Inc.  (NASDAQ: AMBA), a leading developer of low-power and high-resolution human and computer vision solutions, today announced financial results for its first quarter of fiscal year 2020 ended April 30, 2019.

  • Revenue for the first quarter of fiscal 2020 was $47.2 million, down 17% from $56.9 million in the same period in fiscal 2019.
  • Gross margin under U.S. generally accepted accounting principles (GAAP) for the first quarter of fiscal 2020 was 59.0%, compared with 61.3% for the same period in fiscal 2019.
  • GAAP net loss for the first quarter of fiscal 2020 was $17.3 million, or loss per diluted ordinary share of $0.53, compared with GAAP net loss of $10.0 million, or loss per diluted ordinary share of $0.30, for the same period in fiscal 2019.

 Financial results on a non-GAAP basis for the first quarter of fiscal 2020 are as follows:

  • Gross margin on a non-GAAP basis for the first quarter of fiscal 2020 was 59.6%, compared with 61.8% for the same period in fiscal 2019.
  • Non-GAAP net income for the first quarter of fiscal 2020 was $0.3 million, or earnings per diluted ordinary share of $0.01. This compares with non-GAAP net income of $4.5 million, or earnings per diluted ordinary share of $0.13, for the same period in fiscal 2019.

Recent order pull-ins from security camera customers in China, triggered by geopolitical factors, are impacting our revenue and gross margin.  Based on information available as of today, Ambarella is offering the following guidance for the second quarter of fiscal year 2020, ending July 31, 2019:

  • Revenue is expected to be between $51.0 million and $53.0 million.
  • Gross margin on a non-GAAP basis is expected to be between 57.0% and 59.0%.
  • Operating expenses on a non-GAAP basis are expected to be between $29.5 million and $31.5 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 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 numbers 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 first fiscal quarter of 2020 was $366.2 million, compared with $358.9 million in the prior quarter and $414.1 million at the end of the same quarter a year ago. 

“Our team continues to build the foundation for the multi-billion dollar growth opportunity in the AI and computer vision (CV) market.  Despite the increasingly volatile and uncertain geopolitical environment, which we continue to highlight, Ambarella’s execution remains strong,” said Fermi Wang, President and CEO.  “We expect mass production revenue in the current quarter from our second CV device, CV25, and with multiple CV devices now in production, with more CV design wins, and with new technology and products in development, we see three CV revenue waves taking shape; first in the professional security camera market, followed by the consumer security camera market and the automotive market.”          

Stock Repurchase 

In the first quarter of fiscal year 2020, the company did not repurchase shares.  During the second fiscal quarter, Ambarella’s Board of Directors authorized a new $50.0 million repurchase program through June 30, 2020. The repurchase program does not obligate the company to acquire any particular amount of ordinary shares, and it may be suspended at any time at the company’s discretion.

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 Casey Eichler, Chief Financial Officer, to discuss the first quarter of fiscal year 2020 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 security camera, advanced driver assistance (ADAS), electronic mirror, drive recorder, driver/cabin monitoring, autonomous driving, and other robotic applications.  Ambarella’s low-power and high-resolution video compression, image processing, and deep neural network processors and software enable cameras to become more intelligent by extracting valuable data from high-resolution video 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,” or similar expressions, including the guidance for the second quarter of fiscal year 2020 ending July 31, 2019, and the comments of our CEO relating to potential growth opportunities in the AI and CV markets, the company’s ability to generate design wins and potential revenue being generated from new design wins, future market trends and our ability to successfully compete in such markets.  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 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 growth strategy; our ability to anticipate future market demands and future needs of our customers; our ability to introduce new and enhanced 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 2019 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 first fiscal quarter ended April 30, 2019 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, and earnings 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 first quarter of fiscal year 2020, 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 second quarter of fiscal year 2020, 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 April 30,
      2019       2018  
     
     
Revenue   $   47,188     $   56,938  
         
Cost of revenue       19,335         22,046  
Gross profit       27,853         34,892  
         
Operating expenses:        
Research and development       33,017         31,664  
Selling, general and administrative       13,077         13,178  
         
Total operating expenses        46,094         44,842  
         
Loss from operations       (18,241 )       (9,950 )
         
Other income, net       2,196         792  
         
Loss before income taxes       (16,045 )       (9,158 )
         
Provision for income taxes       1,266         848  
         
Net loss   $   (17,311 )   $   (10,006 )
         
Net loss per share attributable to ordinary shareholders:        
Basic    $   (0.53 )   $   (0.30 )
Diluted    $   (0.53 )   $   (0.30 )
Weighted-average shares used to compute net loss per share       
attributable to ordinary shareholders:        
Basic        32,492,044         33,334,801  
Diluted        32,492,044         33,334,801  
         

The following table presents details of stock-based compensation expense included in each functional line item in the condensed consolidated statements of operations above:

         
  Three Months Ended April 30,  
    2019     2018  
     
  (unaudited, in thousands)  
Stock-based compensation:        
Cost of revenue $   267   $   315  
Research and development     10,204       8,760  
Selling, general and administrative     5,989       5,120  
         
Total stock-based compensation $   16,460   $   14,195  
         


The difference between GAAP and non-GAAP gross margin was 0.6% and 0.5%, or $0.3 million and $0.3 million, for the three months ended April 30, 2019 and April 30, 2018, respectively.  The differences were due to the effect of stock-based compensation. 

 
AMBARELLA, INC.
RECONCILIATION OF GAAP TO NON-GAAP DILUTED EARNINGS PER SHARE
(in thousands, except share and per share data)
       
  Three Months Ended April 30,
    2019       2018  
   
  (unaudited)
GAAP net loss $   (17,311 )   $   (10,006 )
       
Non-GAAP adjustments:      
Stock-based compensation expense     16,460         14,195  
Income tax effect     1,117         346  
Non-GAAP net income $   266     $   4,535  
       
GAAP - diluted weighted average shares     32,492,044         33,334,801  
Non-GAAP - diluted weighted average shares     33,463,035         34,512,592  
       
GAAP - diluted net loss per share $   (0.53 )   $   (0.30 )
Non-GAAP adjustments:      
Stock-based compensation expense     0.51         0.43  
Income tax effect     0.03         0.01  
Effect of Non-GAAP - diluted weighted average shares     —         (0.01 )
Non-GAAP - diluted net income per share $   0.01     $   0.13  
       

 

AMBARELLA, INC.  
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)
       
  April 30,   January 31,
   2019    2019
       
ASSETS      
Current assets:      
Cash and cash equivalents $   204,444     $   194,047  
Marketable debt securities     161,732         164,861  
Accounts receivable, net     26,457         26,212  
Inventories     17,635         18,252  
Restricted cash     11         11  
Prepaid expenses and other current assets     5,025         6,206  
Total current assets     415,304         409,589  
       
Property and equipment, net     6,383         6,728  
Deferred tax assets, non-current     10,566         10,587  
Intangible assets, net     10,134         10,936  
Operating lease right-of-use assets, net     7,911        
Goodwill     26,601         26,601  
Other non-current assets     2,352         2,412  
       
Total assets $   479,251     $   466,853  
       
LIABILITIES AND SHAREHOLDERS' EQUITY      
Current liabilities:      
Accounts payable     16,055         12,801  
Accrued and other current liabilities     22,523         24,700  
Operating lease liabilities, current     2,390        
Income taxes payable     682         993  
Deferred revenue, current     565         529  
Total current liabilities     42,215         39,023  
       
Operating lease liabilities, non-current     5,635        
Other long-term liabilities     8,963         8,341  
       
Total liabilities     56,813         47,364  
       
Shareholders' equity:      
Preference shares          
Ordinary shares     15         15  
Additional paid-in capital     208,522         188,516  
Accumulated other comprehensive income     351         97  
Retained earnings     213,550         230,861  
Total shareholders’ equity     422,438         419,489  
       
Total liabilities and shareholders' equity $   479,251     $   466,853  
       

Contact:

Louis Gerhardy
408.636.2310
lgerhardy@ambarella.com

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