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 2018 ended October 31, 2017.
- Revenue for the third quarter of fiscal 2018 was $89.1 million,
down 11.4% from $100.5 million in the same period in fiscal 2017.
For the nine months ended October 31, 2017, revenue was $224.8
million, up 0.9% from $222.8 million for the nine months ended
October 31, 2016.
- Gross margin under U.S. generally accepted accounting
principles (GAAP) for the third quarter of fiscal 2018 was 63.6%,
compared with 66.0% for the same period in fiscal 2017. For the
nine months ended October 31, 2017, GAAP gross margin was 63.3%,
compared with 65.8% for the nine months ended October 31,
2016.
- GAAP net income for the third quarter of fiscal 2018 was $11.7
million, or $0.34 per diluted ordinary share, compared with GAAP
net income of $29.0 million, or $0.84 per diluted ordinary share,
for the same period in fiscal 2017. GAAP net income for the nine
months ended October 31, 2017 was $17.6 million, or $0.51 per
diluted ordinary share. This compares with GAAP net income of $39.5
million, or $1.15 per diluted ordinary share, for the nine months
ended October 31, 2016.
Financial results on a non-GAAP basis for the third quarter of
fiscal 2018 are as follows:
- Gross margin on a non-GAAP basis for the third quarter of
fiscal 2018 was 64.0%, compared with 66.3% for the same period in
fiscal 2017. For the nine months ended October 31, 2017, non-GAAP
gross margin was 63.8%, compared with 66.1% for the nine months
ended October 31, 2016.
- Non-GAAP net income for the third quarter of fiscal 2018 was
$25.7 million, or $0.75 per diluted ordinary share. This compares
with non-GAAP net income of $38.4 million, or $1.11 per diluted
ordinary share, for the same period in fiscal 2017. Non-GAAP net
income for the nine months ended October 31, 2017 was $55.6
million, or $1.61 per diluted ordinary share. This compares with
non-GAAP net income of $68.4 million, or $2.00 per diluted ordinary
share, for the nine months ended October 31, 2016.
Based on information available as of today, Ambarella is
offering the following guidance for the fourth quarter of fiscal
year 2018, ending January 31, 2018:
- Revenue is expected to be between $68.0 million and $72.0
million
- Gross margin on a non-GAAP basis is expected to be between
62.0% and 63.5%
- Operating expenses on a non-GAAP basis are expected to be
between $28.5 million and $30.0 million
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 cash, cash equivalents and marketable securities on hand
at the end of the third fiscal quarter of 2018 was $414.0 million,
compared with $372.1 million at the end of the same quarter a year
ago.
Stock Repurchase
In the third quarter of fiscal year 2018, the company
repurchased a total of 269,540 shares for total consideration of
approximately $12.8 million. Under the current $50 million
repurchase program that was announced in June 2017 and commenced on
July 1st, the company repurchased a total of 313,959 ordinary
shares for total cash consideration of approximately $15.0 million.
As of October 31, 2017, there was approximately $35.0 million
available for repurchases under the repurchase program through June
30, 2018.
“During the quarter, we continued our solid execution in support
of the development and delivery of our next generation of computer
vision solutions. We met our aggressive goal of demonstrating our
CV1 performance to customers and commenced sampling in the security
and automotive markets,” said Fermi Wang, CEO of Ambarella.
“We continue to invest in leading edge technology to expand our
market opportunities, both in current markets, and in a broad range
of new automotive applications,” 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 2018 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. (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, drone cameras and automotive video processing
solutions. Ambarella is currently combining advanced computer
vision technology with its state-of-the-art video to enable the
next generation of intelligent cameras, advanced driver assistance
systems (ADAS) and autonomous vehicles. 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 2018 ending January 31, 2018, and the comments of our
CEO relating to the company’s markets, ability of the company to
expand its opportunities, and the ability of the company to develop
and commercialize new technologies, including computer vision
functionality. 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 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 market;
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 2017 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 2018 ended October 31, 2017 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 2018, 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 2018, 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, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
|
|
|
Revenue |
|
$ |
89,062 |
|
$ |
100,490 |
|
$ |
224,827 |
|
$ |
222,789 |
|
|
|
|
|
|
|
|
|
Cost of revenue |
|
|
32,448 |
|
|
34,167 |
|
|
82,445 |
|
|
76,289 |
Gross
profit |
|
|
56,614 |
|
|
66,323 |
|
|
142,382 |
|
|
146,500 |
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
Research
and development |
|
|
29,796 |
|
|
25,967 |
|
|
83,936 |
|
|
74,076 |
Selling,
general and administrative |
|
|
11,700 |
|
|
10,686 |
|
|
35,406 |
|
|
32,144 |
|
|
|
|
|
|
|
|
|
Total operating
expenses |
|
|
41,496 |
|
|
36,653 |
|
|
119,342 |
|
|
106,220 |
|
|
|
|
|
|
|
|
|
Income from
operations |
|
|
15,118 |
|
|
29,670 |
|
|
23,040 |
|
|
40,280 |
|
|
|
|
|
|
|
|
|
Other income |
|
|
319 |
|
|
132 |
|
|
696 |
|
|
330 |
|
|
|
|
|
|
|
|
|
Income before
income taxes |
|
|
15,437 |
|
|
29,802 |
|
|
23,736 |
|
|
40,610 |
|
|
|
|
|
|
|
|
|
Provision for income
taxes |
|
|
3,713 |
|
|
757 |
|
|
6,145 |
|
|
1,150 |
|
|
|
|
|
|
|
|
|
Net
income |
|
$ |
11,724 |
|
$ |
29,045 |
|
$ |
17,591 |
|
$ |
39,460 |
|
|
|
|
|
|
|
|
|
Net income per share
attributable to ordinary shareholders: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.35 |
|
$ |
0.89 |
|
$ |
0.53 |
|
$ |
1.21 |
Diluted |
|
$ |
0.34 |
|
$ |
0.84 |
|
$ |
0.51 |
|
$ |
1.15 |
Weighted-average shares used to compute net income per
share |
|
|
|
|
|
|
|
attributable to ordinary shareholders: |
|
|
|
|
|
|
|
|
Basic |
|
|
33,128,761 |
|
|
32,670,784 |
|
|
33,203,432 |
|
|
32,552,077 |
Diluted |
|
|
34,358,893 |
|
|
34,599,992 |
|
|
34,538,968 |
|
|
34,242,065 |
|
|
|
|
|
|
|
|
|
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, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
(unaudited, in thousands) |
|
Stock-based
compensation: |
|
|
|
|
|
|
|
|
Cost of
revenue |
$ |
343 |
|
$ |
282 |
|
$ |
978 |
|
$ |
773 |
|
Research
and development |
|
8,906 |
|
|
7,804 |
|
|
25,532 |
|
|
21,396 |
|
Selling,
general and administrative |
|
5,419 |
|
|
4,621 |
|
|
15,565 |
|
|
13,305 |
|
|
|
|
|
|
|
|
|
|
Total
stock-based compensation |
$ |
14,668 |
|
$ |
12,707 |
|
$ |
42,075 |
|
$ |
35,474 |
|
|
|
|
|
|
|
|
|
|
|
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, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
(unaudited) |
GAAP net income |
$ |
11,724 |
|
|
$ |
29,045 |
|
|
$ |
17,591 |
|
|
$ |
39,460 |
|
|
|
|
|
|
|
|
|
Non-GAAP
adjustments: |
|
|
|
|
|
|
|
Stock-based
compensation expense |
|
14,668 |
|
|
|
12,707 |
|
|
|
42,075 |
|
|
|
35,474 |
|
Income tax effect |
|
(686 |
) |
|
|
(3,312 |
) |
|
|
(4,043 |
) |
|
|
(6,550 |
) |
Non-GAAP net
income |
$ |
25,706 |
|
|
$ |
38,440 |
|
|
$ |
55,623 |
|
|
$ |
68,384 |
|
|
|
|
|
|
|
|
|
GAAP - diluted weighted
average shares |
|
34,358,893 |
|
|
|
34,599,992 |
|
|
|
34,538,968 |
|
|
|
34,242,065 |
|
Non-GAAP - diluted
weighted average shares |
|
34,358,893 |
|
|
|
34,599,992 |
|
|
|
34,538,968 |
|
|
|
34,242,065 |
|
|
|
|
|
|
|
|
|
GAAP - diluted net
income per share |
$ |
0.34 |
|
|
$ |
0.84 |
|
|
$ |
0.51 |
|
|
$ |
1.15 |
|
Non-GAAP
adjustments: |
|
|
|
|
|
|
|
Stock-based
compensation expense |
|
0.43 |
|
|
|
0.37 |
|
|
|
1.22 |
|
|
|
1.04 |
|
Income tax effect |
|
(0.02 |
) |
|
|
(0.10 |
) |
|
|
(0.12 |
) |
|
|
(0.19 |
) |
Non-GAAP - diluted net
income per share |
$ |
0.75 |
|
|
$ |
1.11 |
|
|
$ |
1.61 |
|
|
$ |
2.00 |
|
|
|
|
|
|
|
|
|
The difference between GAAP and non-GAAP gross margin was 0.4%
and 0.3%, or $343,000 and $282,000 for the three months ended
October 31, 2017 and 2016, respectively. The difference between
GAAP and non-GAAP gross margin was 0.5% and 0.3%, or $978,000 and
$773,000 for the nine months ended October 31, 2017 and 2016,
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, |
|
|
2017 |
|
2017 |
|
|
|
|
|
|
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and
cash equivalents |
$ |
320,933 |
|
|
$ |
322,872 |
|
|
Marketable securities |
|
93,085 |
|
|
|
82,522 |
|
|
Accounts
receivable, net |
|
47,197 |
|
|
|
38,596 |
|
|
Inventories |
|
21,097 |
|
|
|
20,145 |
|
|
Restricted cash |
|
9 |
|
|
|
8 |
|
|
Prepaid
expenses and other current assets |
|
4,008 |
|
|
|
4,392 |
|
|
Total
current assets |
|
486,329 |
|
|
|
468,535 |
|
|
|
|
|
|
|
Property
and equipment, net |
|
5,666 |
|
|
|
4,988 |
|
|
Deferred
tax assets, non-current |
|
6,536 |
|
|
|
5,774 |
|
|
Intangible assets, net |
|
15,241 |
|
|
|
4,149 |
|
|
Goodwill |
|
26,601 |
|
|
|
26,601 |
|
|
Other non-current
assets |
|
2,214 |
|
|
|
2,224 |
|
|
|
|
|
|
|
Total
assets |
$ |
542,587 |
|
|
$ |
512,271 |
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY |
|
|
|
|
Current
liabilities: |
|
|
|
|
Accounts
payable |
|
26,208 |
|
|
|
19,955 |
|
|
Accrued
and other current liabilities |
|
26,578 |
|
|
|
26,448 |
|
|
Income
taxes payable |
|
2,447 |
|
|
|
568 |
|
|
Deferred
revenue |
|
5,219 |
|
|
|
7,425 |
|
|
Total
current liabilities |
|
60,452 |
|
|
|
54,396 |
|
|
|
|
|
|
|
Other
long-term liabilities |
|
13,071 |
|
|
|
3,241 |
|
|
|
|
|
|
|
Total
liabilities |
|
73,523 |
|
|
|
57,637 |
|
|
|
|
|
|
|
Shareholders'
equity: |
|
|
|
|
Preference shares |
|
— |
|
|
|
— |
|
|
Ordinary
shares |
|
15 |
|
|
|
15 |
|
|
Additional paid-in capital |
|
209,161 |
|
|
|
212,276 |
|
|
Accumulated other comprehensive loss |
|
(116 |
) |
|
|
(70 |
) |
|
Retained
earnings |
|
260,004 |
|
|
|
242,413 |
|
|
Total
shareholders’ equity |
|
469,064 |
|
|
|
454,634 |
|
|
|
|
|
|
|
Total
liabilities and shareholders' equity |
$ |
542,587 |
|
|
$ |
512,271 |
|
|
|
|
|
|
|
Contact:
Deborah Stapleton650.815.1239deb@stapleton.com
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