Ambarella Inc (NASDAQ:AMBA), a leading developer of low-power, HD video compression and image processing semiconductors, today announced financial results for its second fiscal quarter ended July 31, 2015.

  • Revenue for the second quarter of fiscal 2016 was $84.2 million, up 79.3% from $47.0 million in the same period in fiscal 2015. For the six months ended July 31, 2015, revenue was $155.2 million, up 76.6% from $87.9 million for the six months ended July 31, 2014.
  • Gross margin under U.S. generally accepted accounting principles (GAAP) for the second quarter of fiscal 2016 was 65.1%, compared with 65.0% for the same period in fiscal 2015. For the six months ended July 31, 2015, GAAP gross margin was 64.9%, compared with 63.9% for the six months ended July 31, 2014.
  • GAAP net income for the second quarter of fiscal 2016 was $23.1 million, or $0.68 per diluted ordinary share, compared with GAAP net income of $9.3 million, or $0.29per diluted ordinary share, for the same period in fiscal 2015. GAAP net income for the six months ended July 31, 2015 was $42.0 million, or $1.25 per diluted ordinary share. This compares with GAAP net income of $14.6 million, or $0.46 per diluted ordinary share, for the six months ended July 31, 2014.

Financial results on a non-GAAP basis for the second fiscal quarter ended July 31, 2015 are as follows:

  • Gross margin on a non-GAAP basis for the second quarter of fiscal 2016 was 65.3%, compared with 65.1% for the same period in fiscal 2015. For the six months ended July 31, 2015, non-GAAP gross margin was 65.1 %, compared with 64.0% for the six months ended July 31, 2014.
  • Non-GAAP net income for the second quarter of fiscal 2016 was $29.7 million, or $0.88 per diluted ordinary share. This compares with non-GAAP net income of $11.9 million, or $0.37 per diluted ordinary share, for the same period in fiscal 2015. Non-GAAP net income for the six months ended July 31, 2015 was $53.4 million, or $1.58per diluted ordinary share. This compares with non-GAAP net income of $19.8 million, or $0.62 per diluted ordinary share, for the six months ended July 31, 2014.

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 excludes the impact of stock-based compensation, adjusted for the associated tax impact, and for the second quarter of fiscal 2016 also excludes certain costs associated with the acquisition of VisLab S.r.l. in June 2015. A reconciliation of the GAAP to non-GAAP gross margin, net income and earnings per share numbers, 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 second fiscal quarter of 2016 was $239.8 million, compared with $166.5 million at the end of the same quarter a year ago.

“We enjoyed a very strong second quarter, with a year-over-year revenue increase of 79.3 percent,” said Fermi Wang, president and CEO of Ambarella.  “Revenue from our existing wearable, IP security and automotive video recorder camera markets grew significantly in the quarter, and we saw solid growth from drones or flying cameras.  We also closed on the purchase of VisLab S.r.l., which adds a strong development team as well as advanced intellectual property in computer vision technology.  We look forward to continued success, as Ambarella enables the next generation of intelligent HD and Ultra HD cameras.” (Original Source)

In reaction to the earnings release, shares of Ambarella are down 1.76% to $88.03 in after-hours trading. AMBA has a 1-year high of $129.19 and a 1-year low of $33.35. The stock’s 50-day moving average is $108.56 and its 200-day moving average is $88.15.

On the ratings front, Ambarella has been the subject of a number of recent research reports. In a report released yesterday, Deutsche Bank analyst Ross Seymore maintained a Hold rating on AMBA, with a price target of $100, which represents a potential upside of 10.2% from where the stock is currently trading. Separately, on August 26, Stifel Nicolaus’ Kevin Cassidy maintained a Buy rating on the stock and has a price target of $115.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Ross Seymore and Kevin Cassidy have a total average return of 18.4% and 27.5% respectively. Seymore has a success rate of 60.4% and is ranked #103 out of 3742 analysts, while Cassidy has a success rate of 67.8% and is ranked #13.

Overall, 5 research analysts have assigned a Hold rating and 5 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 $101.06 which is 11.3% above where the stock opened today.

Ambarella Inc is a developer of semiconductor processing solutions for video that enable high-definition (HD), video capture, sharing and display.