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Ambarella Stock Soars 20% on Narrower-Than-Expected Q2 Loss
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Ambarella (AMBA - Free Report) shares were trading more than 20% higher during the pre-market session today as the company reported a narrower-than-expected loss for the second quarter of fiscal 2025. It reported a non-GAAP loss of 13 cents per share for the quarter, narrower than the Zacks Consensus Estimate of a loss of 19 cents.
The bottom-line result also compared favorably with the year-ago quarter’s non-GAAP loss of 15 cents per share. The improvement was due to higher revenues and prudent expense management actions.
Second-quarter revenues of $63.7 million grew 2.6% year over year and 17% sequentially. The top line surpassed the consensus mark of $62.2 million. The robust sequential growth was driven by an improvement in both Auto and IoT segment revenues with robust growth in the edge AI division.
Ambarella had two logistics and original design manufacturers customers that contributed more than 10% to total revenues in the reported quarter. WT Microelectronics, a partner in Taiwan that serves multiple customers in Asia, accounted for 63% of the company’s second quarter revenues. Hakuto, which serves as a distributor in Japan, represented 10% of AMBA’s second-quarter revenues.
The traction in AMBA’s CV flow system-on-a-chip in professional IP cameras continued in the reported quarter. The company expects the CV2 family to be the key driver of the company’s revenue growth in fiscal 2025.
Ambarella’s Q2 Operating Details
The non-GAAP gross margin was 63.3%, down 130 basis points year over year.
On a non-GAAP basis, operating expenses were $47.7 million, up from $46 million in the year-ago quarter. Non-GAAP operating expenses were also within the company’s guidance range of $47.5-$49.5 million due to its expense management actions and the timing of spending between quarters.
Balance Sheet of AMBA
As of July 31, 2024, Ambarella had cash and cash equivalents & marketable securities of $219.8 million compared with $203.3 million as of April 30, 2024.
Q3 2025 Guidance for Ambarella
Based on recent customer feedback and continued momentum in bookings, Ambarella expects stability in near-term revenues. It forecasts third-quarter fiscal 2025 revenues between $77 million and $81 million, with sequential growth in IoT and Auto segments.
For the fiscal third quarter, the non-GAAP gross margin is anticipated in the band of 62.5-64.0%. Non-GAAP operating expenses are projected in the range of $49-$51 million.
Zacks Rank & Stocks to Consider
Ambarella currently carries a Zacks Rank #3 (Hold). Shares of AMBA have lost 13.9% year to date (YTD).
The consensus mark for Aspen’s 2025 earnings has been revised upward by 70 cents to $7.43 per share over the past 30 days, indicating a 12.8% year-over-year increase. It has a long-term earnings growth expectation of 13.1%. The stock has lost 2.7% YTD.
The Zacks Consensus Estimate for Celestica’s 2024 earnings has been revised upward by 33 cents to $3.65 per share in the past 30 days, suggesting year-over-year growth of 50.2%. Shares of Celestica have surged 72% YTD.
The Zacks Consensus Estimate for Arista’s 2024 earnings has been revised upward by 30 cents to $8.24 per share in the past 30 days, indicating an increase of 18.73% on a year-over-year basis. Shares of ANET have jumped 46.7% YTD. It has a long-term earnings growth expectation of 17.2%.
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Ambarella Stock Soars 20% on Narrower-Than-Expected Q2 Loss
Ambarella (AMBA - Free Report) shares were trading more than 20% higher during the pre-market session today as the company reported a narrower-than-expected loss for the second quarter of fiscal 2025. It reported a non-GAAP loss of 13 cents per share for the quarter, narrower than the Zacks Consensus Estimate of a loss of 19 cents.
The bottom-line result also compared favorably with the year-ago quarter’s non-GAAP loss of 15 cents per share. The improvement was due to higher revenues and prudent expense management actions.
Second-quarter revenues of $63.7 million grew 2.6% year over year and 17% sequentially. The top line surpassed the consensus mark of $62.2 million. The robust sequential growth was driven by an improvement in both Auto and IoT segment revenues with robust growth in the edge AI division.
Ambarella, Inc. Price, Consensus and EPS Surprise
Ambarella, Inc. price-consensus-eps-surprise-chart | Ambarella, Inc. Quote
AMBA’s Q2 Customer & Market Details
Ambarella had two logistics and original design manufacturers customers that contributed more than 10% to total revenues in the reported quarter. WT Microelectronics, a partner in Taiwan that serves multiple customers in Asia, accounted for 63% of the company’s second quarter revenues. Hakuto, which serves as a distributor in Japan, represented 10% of AMBA’s second-quarter revenues.
The traction in AMBA’s CV flow system-on-a-chip in professional IP cameras continued in the reported quarter. The company expects the CV2 family to be the key driver of the company’s revenue growth in fiscal 2025.
Ambarella’s Q2 Operating Details
The non-GAAP gross margin was 63.3%, down 130 basis points year over year.
On a non-GAAP basis, operating expenses were $47.7 million, up from $46 million in the year-ago quarter. Non-GAAP operating expenses were also within the company’s guidance range of $47.5-$49.5 million due to its expense management actions and the timing of spending between quarters.
Balance Sheet of AMBA
As of July 31, 2024, Ambarella had cash and cash equivalents & marketable securities of $219.8 million compared with $203.3 million as of April 30, 2024.
Q3 2025 Guidance for Ambarella
Based on recent customer feedback and continued momentum in bookings, Ambarella expects stability in near-term revenues. It forecasts third-quarter fiscal 2025 revenues between $77 million and $81 million, with sequential growth in IoT and Auto segments.
For the fiscal third quarter, the non-GAAP gross margin is anticipated in the band of 62.5-64.0%. Non-GAAP operating expenses are projected in the range of $49-$51 million.
Zacks Rank & Stocks to Consider
Ambarella currently carries a Zacks Rank #3 (Hold). Shares of AMBA have lost 13.9% year to date (YTD).
Some better-ranked stocks in the broader technology sector are Aspen Technology (AZPN - Free Report) , Celestica (CLS - Free Report) and Arista Networks (ANET - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus mark for Aspen’s 2025 earnings has been revised upward by 70 cents to $7.43 per share over the past 30 days, indicating a 12.8% year-over-year increase. It has a long-term earnings growth expectation of 13.1%. The stock has lost 2.7% YTD.
The Zacks Consensus Estimate for Celestica’s 2024 earnings has been revised upward by 33 cents to $3.65 per share in the past 30 days, suggesting year-over-year growth of 50.2%. Shares of Celestica have surged 72% YTD.
The Zacks Consensus Estimate for Arista’s 2024 earnings has been revised upward by 30 cents to $8.24 per share in the past 30 days, indicating an increase of 18.73% on a year-over-year basis. Shares of ANET have jumped 46.7% YTD. It has a long-term earnings growth expectation of 17.2%.