Ambarella (AMBA) Q3 Earnings and Revenues Beat Estimates
Ambarella's (AMBA) third-quarter fiscal 2022 results reflect strong performance of the automotive and security camera businesses.
Ambarella AMBA reported third-quarter fiscal 2022 non-GAAP earnings of 57 cents per share, which outpaced the Zacks Consensus Estimate by 16.3%. The reported figure jumped over six-fold from the prior-year quarter’s earnings of 9 cents per share.
Revenues of $92.2 million beat the consensus mark of $90.5 million and increased 64% year over year. Ambarella’s top-line growth was primarily driven by improvement in the automotive and security camera businesses.
Customer & Market Details
Ambarella had two customers that contributed more than 10% in the reported quarter. WT Microelectronics, a fulfillment partner in Taiwan, which serves multiple customers in Asia, accounted for 63% of the company’s revenues. Chicony, a Taiwanese original equipment manufacturer, which manufactures for multiple customers, contributed 13%.
Moreover, the company noted that it continues to gain system-on-a-chip (“SoC”) share in the professional security-camera market outside China. Momentum in Ambarella’s CV flow SoCs in professional IP cameras across all geographies continued in the reported quarter.
Non-GAAP gross margin was 63.1%, up 40 basis points (bps) year over year in the third quarter.
A healthy customer mix supported by impressive operational execution aided gross-margin expansion during the third quarter, partially offset by higher expenses incurred to overcome supply-chain challenges.
On a non-GAAP basis, operating expenses were $35.6 million, down 2.2% sequentially. Non-GAAP operating expenses were slightly below the low-end of the company’s prior guidance due to the timing of non-recurring research & development expenses.
Headcount at the end of the third quarter (before the closure of Oculii buyout transaction) was 824, with about 82% of the employees dedicated to engineering. Roughly 69% of these engineers are developing software and algorithms.
Net inventory was $47 million as of Oct 31, 2021, up 11.6% sequentially.
Balance Sheet & Cash Flow
As of Oct 31, 2021, Ambarella had cash and cash equivalents & marketable securities of $457.8 million compared with $449.2 million as of Jul 31, 2021.
During the third quarter, the company generated an operating cash outflow of $8.3 million.
For fourth-quarter fiscal 2022, revenues are expected between $88.5 million and $91.5 million. Non-GAAP gross margin is anticipated to be 63-64%. Non-GAAP operating expenses are projected to be $39-$41 million.
Zacks Rank & Stocks to Consider
Ambarella currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector are Advanced Micro Devices AMD, Qualcomm QCOM and CDW Corporation CDW, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Advanced Micro Devices’ fourth-quarter 2021 earnings has been revised upward by 7 cents to 75 cents per share over the past 60 days. For 2021, earnings estimates have moved north by 1 cent to $2.64 per share in the last 60 days.
Advanced Micro Devices’ earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 14%. Shares of AMD have rallied 72.7% in the YTD period.
The consensus mark for Qualcomm’s first-quarter fiscal 2022 earnings has been raised to $3.01 per share from $2.63 in the past 30 days. For fiscal 2022, earnings estimates have been revised upward by 14.1% to $10.49 per share in the past 30 days.
Qualcomm’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 11.2%. Shares of QCOM stock have gained 18.5% YTD.
CDW’s consensus estimate for fourth-quarter fiscal 2021 earnings has been raised to $1.87 per share from $1.83 in the past 30 days. For fiscal 2021, earnings estimates have moved north by 1.4% to $7.81 per share over the past 30 days.
CDW’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 12.2%. Shares of CDW stock have appreciated 43.7% YTD.
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