Ambarella, Inc. (NASDAQ:AMBA), a leading developer of
low-power, HD and Ultra HD video compression and image processing
semiconductors, today announced financial results for its third
quarter of fiscal year 2017 ended October 31, 2016.
- Revenue for the third quarter of fiscal 2017 was $100.5
million, up 7.8% from $93.2 million in the same period in fiscal
2016. For the nine months ended October 31, 2016, revenue was
$222.8 million, down 10.3% from $248.4 million for the nine months
ended October 31, 2015.
- Gross margin under U.S. generally accepted accounting
principles (GAAP) for the third quarter of fiscal 2017 was 66.0%,
compared with 65.7% for the same period in fiscal 2016. For the
nine months ended October 31, 2016, GAAP gross margin was 65.8%,
compared with 65.2% for the nine months ended October 31,
2015.
- GAAP net income for the third quarter of fiscal 2017 was $29.0
million, or $0.84 per diluted ordinary share, compared with GAAP
net income of $29.5 million, or $0.87 per diluted ordinary share,
for the same period in fiscal 2016. GAAP net income for the nine
months ended October 31, 2016 was $39.5 million, or $1.15 per
diluted ordinary share. This compares with GAAP net income of $71.4
million, or $2.12 per diluted ordinary share, for the nine months
ended October 31, 2015.
Financial results on a non-GAAP basis for the third quarter of
fiscal 2017 are as follows:
- Gross margin on a non-GAAP basis for the third quarter of
fiscal 2017 was 66.3%, compared with 65.9% for the same period in
fiscal 2016. For the nine months ended October 31, 2016, non-GAAP
gross margin was 66.1%, compared with 65.4% for the nine months
ended October 31, 2015.
- Non-GAAP net income for the third quarter of fiscal 2017 was
$38.4 million, or $1.11 per diluted ordinary share. This compares
with non-GAAP net income of $36.6 million, or $1.08 per diluted
ordinary share, for the same period in fiscal 2016. Non-GAAP net
income for the nine months ended October 31, 2016 was $68.4
million, or $2.00 per diluted ordinary share. This compares with
non-GAAP net income of $90.0 million, or $2.67 per diluted ordinary
share, for the nine months ended October 31, 2015.
Based on information available as of today, Ambarella is
offering the following guidance for the fourth quarter of fiscal
year 2017, ending January 31, 2017:
- Revenue is expected to be between $84.0 million and $87.0
million
- Gross margin on a non-GAAP basis is expected to be between
64.0% and 65.5%
- Operating expenses on a non-GAAP basis are expected to be
between $25.5 million and $27.0 million
- Effective tax rate on a non-GAAP basis is expected to be
between 11% and 12%
Ambarella reports gross margin, net income and earnings per
share in accordance with GAAP and, additionally, on a non-GAAP
basis. Non-GAAP financial information for the third fiscal quarter
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 and earnings 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 of cash, cash equivalents and marketable securities on
hand at the end of the third fiscal quarter of 2017 was $372.1
million, compared with $276.7 million at the end of the same
quarter a year ago.
Stock Repurchase
Ambarella’s Board of Directors has authorized an extension of
the duration of the current share repurchase plan initially
authorized in June 2016, to allow the repurchase of up to an
aggregate of $75 million of the company’s ordinary shares
through June 30, 2017. As of December 1, 2016, Ambarella has
repurchased a total of 405,089 shares for total cash consideration
of $20.2 million. No repurchases were made under the program
in the third fiscal quarter ended October 31, 2016.
Repurchases under the program may be made from time-to-time through
open market purchases or through privately negotiated transactions
subject to market conditions, applicable legal requirements and
other relevant factors. 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. The repurchase program will be funded using
Ambarella’s working capital.
“We are very proud to have achieved more than $100 million in
revenue in the quarter, a new milestone," said Fermi Wang, CEO of
Ambarella. "We saw continued revenue growth in IP security,
home monitoring and the automotive camera markets, as well as a
ramp in revenue from action sports cameras for the holiday season.
We were also pleased to enable the introduction of a new generation
of products, offering 4Kp60 video performance for the first time,”
he said.
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, chief
executive officer, and George Laplante, chief financial officer, to
discuss the third quarter fiscal year 2017 results. The call can be
accessed by dialing 877-304-8963 in the USA; international callers
should dial 760-666-4834. Participant passcode is “Ambarella.”
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, Inc. (NASDAQ:AMBA), is a leading developer of
low-power, high-definition (HD) and Ultra HD video compression and
image processing solutions. The company’s products are used in a
variety of HD cameras including security IP-cameras, sports
cameras, wearable cameras, flying cameras and automotive video
camera recorders. Ambarella compression chips are also used in
broadcasting TV programs worldwide. Ambarella is the recipient of
the Global Semiconductor Alliance 2015 awards for “Most Respected
Public Semiconductor Company” and “Best Financially Managed
Semiconductor Company,” with annual sales of between $100M and
$500M.
For more information about Ambarella, 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 fourth quarter of
fiscal year 2017, ending January 31, 2017, and the comments of our
CEO relating to growth of the company’s markets, product ramps for
the holiday season, and the ability of the company’s new products
to generate design wins and revenue. 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 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 retain and expand customer relationships and to
achieve design wins; the expansion of our current markets and our
ability to successfully enter new 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 2016 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
quarter of fiscal year 2017 ended October 31, 2016 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 third quarter of
fiscal year 2017, the company has provided below reconciliations
between 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 2017,
a reconciliation of non-GAAP gross margin, non-GAAP operating
expenses and non-GAAP effective tax rate 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, |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
Revenue |
|
$ |
100,490 |
|
|
$ |
93,200 |
|
|
$ |
222,789 |
|
|
$ |
248,406 |
|
|
|
|
|
|
|
|
|
|
Cost of revenue |
|
|
34,167 |
|
|
|
31,938 |
|
|
|
76,289 |
|
|
|
86,378 |
|
Gross
profit |
|
|
66,323 |
|
|
|
61,262 |
|
|
|
146,500 |
|
|
|
162,028 |
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
Research and development |
|
|
25,967 |
|
|
|
22,062 |
|
|
|
74,076 |
|
|
|
59,485 |
|
Selling, general and
administrative |
|
|
10,686 |
|
|
|
8,873 |
|
|
|
32,144 |
|
|
|
26,970 |
|
|
|
|
|
|
|
|
|
|
Total operating
expenses |
|
|
36,653 |
|
|
|
30,935 |
|
|
|
106,220 |
|
|
|
86,455 |
|
|
|
|
|
|
|
|
|
|
Income from
operations |
|
|
29,670 |
|
|
|
30,327 |
|
|
|
40,280 |
|
|
|
75,573 |
|
|
|
|
|
|
|
|
|
|
Other income |
|
|
132 |
|
|
|
169 |
|
|
|
330 |
|
|
|
323 |
|
|
|
|
|
|
|
|
|
|
Income before
income taxes |
|
|
29,802 |
|
|
|
30,496 |
|
|
|
40,610 |
|
|
|
75,896 |
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes |
|
|
757 |
|
|
|
1,035 |
|
|
|
1,150 |
|
|
|
4,484 |
|
|
|
|
|
|
|
|
|
|
Net
income |
|
$ |
29,045 |
|
|
$ |
29,461 |
|
|
$ |
39,460 |
|
|
$ |
71,412 |
|
|
|
|
|
|
|
|
|
|
Net income per share
attributable to ordinary shareholders: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.89 |
|
|
$ |
0.93 |
|
|
$ |
1.21 |
|
|
$ |
2.27 |
|
Diluted |
|
$ |
0.84 |
|
|
$ |
0.87 |
|
|
$ |
1.15 |
|
|
$ |
2.12 |
|
Weighted-average shares used to compute net income per
share |
|
|
|
|
|
|
|
attributable to ordinary shareholders: |
|
|
|
|
|
|
|
|
Basic |
|
|
32,670,784 |
|
|
|
31,815,588 |
|
|
|
32,552,077 |
|
|
|
31,476,668 |
|
Diluted |
|
|
34,599,992 |
|
|
|
33,899,202 |
|
|
|
34,242,065 |
|
|
|
33,758,541 |
|
|
|
|
|
|
|
|
|
|
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 October 31, |
|
Nine Months Ended October 31, |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
(unaudited, in thousands) |
|
Stock-based
compensation: |
|
|
|
|
|
|
|
|
Cost of revenue |
$ |
282 |
|
|
$ |
157 |
|
|
$ |
773 |
|
|
$ |
408 |
|
|
Research and development |
|
7,804 |
|
|
|
5,201 |
|
|
|
21,396 |
|
|
|
11,966 |
|
|
Selling, general and
administrative |
|
4,621 |
|
|
|
2,587 |
|
|
|
13,305 |
|
|
|
7,174 |
|
|
|
|
|
|
|
|
|
|
|
Total
stock-based compensation |
$ |
12,707 |
|
|
$ |
7,945 |
|
|
$ |
35,474 |
|
|
$ |
19,548 |
|
|
|
|
|
|
|
|
|
|
|
|
AMBARELLA, INC. |
RECONCILIATION OF GAAP TO NON-GAAP DILUTED
EARNINGS PER SHARE |
(in thousands, except share and per share
data) |
|
|
|
|
|
|
|
|
|
Three Months Ended October 31, |
|
Nine Months Ended October 31, |
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
(unaudited) |
GAAP net income |
$ |
29,045 |
|
|
$ |
29,461 |
|
|
$ |
39,460 |
|
|
$ |
71,412 |
|
|
|
|
|
|
|
|
|
Non-GAAP
adjustments: |
|
|
|
|
|
|
|
Stock-based
compensation expense |
|
12,707 |
|
|
|
7,945 |
|
|
|
35,474 |
|
|
|
19,548 |
|
Acquisition cost |
— |
|
— |
|
— |
|
|
1,229 |
|
Income tax effect |
|
(3,312 |
) |
|
|
(771 |
) |
|
|
(6,550 |
) |
|
|
(2,197 |
) |
Non-GAAP net
income |
$ |
38,440 |
|
|
$ |
36,635 |
|
|
$ |
68,384 |
|
|
$ |
89,992 |
|
|
|
|
|
|
|
|
|
GAAP - diluted weighted
average shares |
|
34,599,992 |
|
|
|
33,899,202 |
|
|
|
34,242,065 |
|
|
|
33,758,541 |
|
Non-GAAP - diluted
weighted average shares |
|
34,599,992 |
|
|
|
33,899,202 |
|
|
|
34,242,065 |
|
|
|
33,758,541 |
|
|
|
|
|
|
|
|
|
GAAP - diluted net
income per share |
$ |
0.84 |
|
|
$ |
0.87 |
|
|
$ |
1.15 |
|
|
$ |
2.12 |
|
Non-GAAP
adjustments: |
|
|
|
|
|
|
|
Stock-based
compensation expense |
|
0.37 |
|
|
|
0.23 |
|
|
|
1.04 |
|
|
|
0.58 |
|
Acquisition cost |
— |
|
— |
|
— |
|
|
0.04 |
|
Income tax effect |
|
(0.10 |
) |
|
|
(0.02 |
) |
|
|
(0.19 |
) |
|
|
(0.07 |
) |
Non-GAAP - diluted net
income per share |
$ |
1.11 |
|
|
$ |
1.08 |
|
|
$ |
2.00 |
|
|
$ |
2.67 |
|
|
|
|
|
|
|
|
|
The difference between GAAP and non-GAAP gross margin was 0.3%
and 0.2%, or $282,000 and $157,000 for the three months ended
October 31, 2016 and 2015, respectively. The difference between
GAAP and non-GAAP gross margin was 0.3% and 0.2%, or $773,000 and
$408,000 for the nine months ended October 31, 2016 and 2015,
respectively. The difference was due to the effect of stock-based
compensation.
|
|
AMBARELLA,
INC. |
|
CONDENSED CONSOLIDATED BALANCE
SHEETS |
|
(unaudited, in thousands) |
|
|
|
|
|
|
|
|
October 31, |
|
January 31, |
|
|
|
|
2016 |
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
$ |
313,455 |
|
|
$ |
268,056 |
|
|
|
Marketable securities |
|
58,645 |
|
|
|
39,837 |
|
|
|
Accounts receivable, net |
|
41,394 |
|
|
|
39,408 |
|
|
|
Inventories |
|
23,340 |
|
|
|
18,167 |
|
|
|
Restricted cash |
|
8 |
|
|
|
7 |
|
|
|
Prepaid expenses and other current
assets |
|
4,762 |
|
|
|
4,170 |
|
|
|
Total current assets |
|
441,604 |
|
|
|
369,645 |
|
|
|
|
|
|
|
|
|
Property
and equipment, net |
|
4,291 |
|
|
|
3,448 |
|
|
|
Deferred
tax assets, non-current |
|
6,024 |
|
|
|
4,626 |
|
|
|
Intangible assets, net |
|
4,162 |
|
|
|
4,178 |
|
|
|
Goodwill |
|
26,601 |
|
|
|
26,601 |
|
|
|
Other non-current
assets |
|
2,162 |
|
|
|
2,117 |
|
|
|
|
|
|
|
|
|
Total assets |
$ |
484,844 |
|
|
$ |
410,615 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY |
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
Accounts payable |
|
28,364 |
|
|
|
14,175 |
|
|
|
Accrued liabilities |
|
23,332 |
|
|
|
23,778 |
|
|
|
Income taxes payable |
|
1,359 |
|
|
|
787 |
|
|
|
Deferred revenue |
|
6,885 |
|
|
|
10,077 |
|
|
|
Total current liabilities |
|
59,940 |
|
|
|
48,817 |
|
|
|
|
|
|
|
|
|
Other
long-term liabilities |
|
2,291 |
|
|
|
12,342 |
|
|
|
|
|
|
|
|
|
Total liabilities |
|
62,231 |
|
|
|
61,159 |
|
|
|
|
|
|
|
|
|
Shareholders'
equity: |
|
|
|
|
|
Preference shares |
— |
|
— |
|
|
Ordinary shares |
|
15 |
|
|
|
15 |
|
|
|
Additional paid-in capital |
|
198,554 |
|
|
|
176,306 |
|
|
|
Accumulated other comprehensive
loss |
|
(18 |
) |
|
|
(7 |
) |
|
|
Retained earnings |
|
224,062 |
|
|
|
173,142 |
|
|
|
Total shareholders’ equity |
|
422,613 |
|
|
|
349,456 |
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders'
equity |
$ |
484,844 |
|
|
$ |
410,615 |
|
|
|
|
|
|
|
|
|
Contact:
Deborah Stapleton
650.815.1239
deb@stapleton.com
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