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Ambarella (AMBA) Down 7.7% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Ambarella (AMBA - Free Report) . Shares have lost about 7.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Ambarella due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Ambarella Q2 Loss Narrower Than Expected
Ambarella 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.
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.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
The consensus estimate has shifted 22.25% due to these changes.
VGM Scores
Currently, Ambarella has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. However, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Ambarella has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Ambarella (AMBA) Down 7.7% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Ambarella (AMBA - Free Report) . Shares have lost about 7.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Ambarella due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Ambarella Q2 Loss Narrower Than Expected
Ambarella 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.
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.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
The consensus estimate has shifted 22.25% due to these changes.
VGM Scores
Currently, Ambarella has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. However, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Ambarella has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.