Company Update (NASDAQ:AMBA): Ambarella Inc Announces First Quarter Fiscal Year 2017 Financial Results


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 first quarter of fiscal year 2017 ended April 30, 2016.

  • Revenue for the first quarter of fiscal 2017 was $57.2 million, down 19.5% from $71.0 million in the same period in fiscal 2016.
  • Gross margin under U.S. generally accepted accounting principles (GAAP) for the first quarter of fiscal 2017 was 64.2%, compared with 64.7% for the same period in fiscal 2016.
  • GAAP net income for the first quarter of fiscal 2017 was $1.8 million, or $0.05 per diluted ordinary share, compared with GAAP net income of $18.9 million, or $0.56 per diluted ordinary share, for the same period in fiscal 2016.

Financial results on a non-GAAP basis for the first quarter of fiscal 2017 are as follows:

  • Gross margin on a non-GAAP basis for the first quarter of fiscal 2017 was 64.6%, compared with 64.8% for the same period in fiscal 2016.
  • Non-GAAP net income for the first quarter of fiscal 2017 was $11.4 million, or $0.34 per diluted ordinary share. This compares with non-GAAP net income of $23.7 million, or $0.71 per diluted ordinary share, for the same period in fiscal 2016.

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 first 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 first fiscal quarter of 2017 was $323.8 million, compared with $235.2 million at the end of the same quarter a year ago.

Stock Repurchase

Ambarella also announced that its Board of Directors has authorized the repurchase of up to $75 million of its ordinary shares over a six month period commencing in the second quarter of fiscal 2017. 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 and any repurchased shares will be available for general corporate purposes.

“We are pleased with our execution during the first fiscal quarter of 2017, as we introduced our first 14nm IP camera SoC and continued to see strong design win momentum for our new 4K and HEVC SoC families across all market segments,” said Fermi Wang, CEO of Ambarella. “While near term headwinds continue in the wearable sports camera market, and we expect some adverse impact to our business caused by the disruption in supply of Sony image sensors to our customers as a result of the April 2016 Japanese earthquake, we remain confident of renewed revenue growth based on our technology leadership, product roadmap and the potential of our current and future markets.” (Original Source)

Shares of Ambarella are up over 3% to $44 in after-hours trading. AMBA has a 1-year high of $129.19 and a 1-year low of $33.39. The stock’s 50-day moving average is $40.50 and its 200-day moving average is $45.01.

On the ratings front, Ambarella has been the subject of a number of recent research reports. In a report issued on May 31, Canaccord Genuity analyst Matt Ramsay reiterated a Buy rating on AMBA, with a price target of $65, which implies an upside of 56.0% from current levels. Separately, on the same day, Deutsche Bank’s Ross Seymore maintained a Hold rating on the stock and has a price target of $45.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Matt Ramsay and Ross Seymore have a total average return of -2.6% and 22.6% respectively. Ramsay has a success rate of 50.7% and is ranked #3358 out of 3896 analysts, while Seymore has a success rate of 75.2% and is ranked #10.

Overall, 6 research analysts have assigned a Hold rating and 7 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $60.00 which is 44.0% above where the stock opened today.

Ambarella, Inc. is a developer of semiconductor processing solutions for video that enable high-definition video capture, sharing and display. The company combines its processor design capabilities with its expertise in video and image processing, algorithms and software to provide a technology platform that is designed to be scalable across multiple applications and enable rapid and efficient product development. Its system-on-a-chip, or SoC, designs fully integrate high-definition video processing, image sensor processing, audio processing and system functions onto a single chip, delivering exceptional video and image quality, differentiated functionality and low power consumption. The company’s technology is also used in television broadcasting with a significant amount of TV programming worldwide being transmitted using Ambarella compression chips. Its Ambarella SoCs are well-suited to drive the latest generation of high-definition security IP cameras.