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Ambarella Inc (AMBA) Reports Q3 Fiscal Year 2024 Results with Strategic Focus on AI SoCs

  • Ambarella Inc (NASDAQ:AMBA) reports a decrease in revenue to $50.6 million in Q3 FY2024 from $83.1 million in the same quarter last year.

  • Non-GAAP net loss per share at $0.28, compared to a net income per share of $0.24 in Q3 FY2023.

  • Total cash, cash equivalents, and marketable debt securities increased to $222.3 million from $199.0 million in Q3 FY2023.

  • Company CEO anticipates a return to revenue growth in Fiscal 2025 with advancements in 5nm SoCs.

On November 30, 2023, Ambarella Inc (NASDAQ:AMBA) released its 8-K filing, announcing the financial results for the third quarter of fiscal year 2024, which ended on October 31, 2023. The company, known for its edge AI semiconductor technology, faced a challenging quarter with a significant decrease in revenue compared to the same period last year.

Financial Performance Overview

Ambarella Inc (NASDAQ:AMBA) reported a decline in revenue to $50.6 million in Q3 FY2024, down from $83.1 million in Q3 FY2023. The gross profit also saw a decrease to $29.9 million compared to $51.7 million in the prior year's quarter. The company experienced a net loss of $41.7 million, or $1.04 per share, compared to a net loss of $19.8 million, or $0.51 per share, in the same quarter of the previous fiscal year.

Non-GAAP Financial Measures

On a non-GAAP basis, the net loss per share was $0.28 for Q3 FY2024, which contrasts with a net income per share of $0.24 for Q3 FY2023. Non-GAAP financial measures exclude the impact of stock-based compensation, acquisition-related costs, restructuring expense, and certain tax impacts. The reconciliation between GAAP and non-GAAP financial measures is provided in the company's financial statements, which detail the adjustments made.

Liquidity and Capital Resources

The company's total cash, cash equivalents, and marketable debt securities stood at $222.3 million at the end of Q3 FY2024, an increase from $199.0 million at the end of Q3 FY2023. This indicates a solid liquidity position, which is crucial for the company's ongoing investments in research and development.

Strategic Developments and Future Outlook

Ambarella Inc (NASDAQ:AMBA) remains committed to its strategic R&D priorities, focusing on the introduction of a portfolio of SoCs and software targeting sophisticated AI inference workloads. The company's CEO, Fermi Wang, expressed optimism about the progress with inventory reduction efforts by customers and anticipates a return to revenue growth in Fiscal 2025. The 5nm SoCs, particularly the CV5, are expected to generate meaningful revenue in the next fiscal year.

Balance Sheet Highlights

The balance sheet reflects a decrease in total assets from $710.2 million at the end of January 2023 to $684.6 million at the end of October 2023. Current assets decreased, primarily due to a reduction in accounts receivable and inventories. Shareholders' equity decreased slightly from $606.1 million to $591.8 million, mainly due to the net loss incurred during the period.

Conclusion and Analyst Expectations

While Ambarella Inc (NASDAQ:AMBA) faces headwinds with a decrease in revenue and net loss, the company's strategic focus on developing advanced AI SoCs and the expected return to revenue growth in Fiscal 2025 provide a positive outlook for the future. Investors and analysts will be closely monitoring the company's progress in commercializing its new SoC platforms and its ability to capture growth opportunities in the automotive and AI markets.

For more detailed information, investors are encouraged to review the full financial statements and management's commentary in Ambarella Inc (NASDAQ:AMBA)'s 8-K filing.

Explore the complete 8-K earnings release (here) from Ambarella Inc for further details.

This article first appeared on GuruFocus.