Q4 2024 Ambarella Inc Earnings Call
Participants
Louis Gerhardy; VP, Corporate Development; Ambarella Inc
Fermi Wang; CEO & Co-Founder; Ambarella Inc
John Young; CFO; Ambarella Inc
Neil Young; Analyst; Needham & Company, LLC
Christopher Rolland; Analyst; Susquehanna International Group, LLC
Matt Ramsey; Analyst; TD Securities(USA)LLC
Tore Svanberg; Analyst; Stifel Financial Corp
Ross Seymore; Analyst; Deutsche Bank Corporation
Kevin Cassidy; Analyst; Rosenblatt Securities Inc.
Joe Moore; Analyst; Morgan Stanley
Presentation
Operator
Good day, and thank you for standing by, and welcome to Ambarella's fourth quarter and fiscal year 2024 earnings conference call. At this time, all participants on a listen-only mode (Operator Instructions)
Please note that today's conference is being recorded. I will now hand the conference over to your speaker host, Mr. Louis Gerhardy, VP of Corporate Development and Investor Relations. Please go ahead..
Louis Gerhardy
Thank you, Lydia. And good afternoon and thank you for joining our fourth quarter and full year fiscal 2024 financial results conference call. On the call with me today is Dr. Fermi Wang, President and CEO, and John Young, CFO. Primary purpose of today's call is to provide you with information regarding the results for our fourth quarter and full year fiscal 2024.
The discussion today and the responses to your questions will contain forward-looking statements regarding our projected financial results, financial prospects, market growth and demand for our solutions among other things. These statements are based on currently available information and subject to risks, uncertainties and assumptions.
Should any of these risks or uncertainties materialize or should our assumptions prove to be incorrect. Our actual results could differ materially from these forward looking statements under no obligation to update these statements. These risks, uncertainties and assumptions as well as other information on potential risk factors that could affect our financial results are more fully described in the documents we file with the SEC.
Access to our fourth quarter and full year fiscal 2024 results press release, transcripts, historical results, SEC filings and a replay of today's call can be found on the Investor Relations page of our website. With the content of today's call as well as the materials posted on our website are Ambarella's property and cannot be reproduced or transcribed without our prior written consent.
Fermi will now provide a business update for the quarter. John will review the financial results and outlook, and then we'll be all available for your questions. Fermi.
Fermi Wang
Thank you, Louis, and good afternoon. Thank you for joining our call today.
In the fourth quarter of fiscal '24, revenue increased about 2% sequentially, and we slightly exceeded the midpoint of our guidance range. Thanks to the early actions we took to help our customers navigate their excess inventory. Our business continues to stabilize and is beginning to recover. For the full fiscal year '24, our revenue declined 32.9% year over year as our customers digested inventory resulting from the industry-wide semiconductor cyclical downturn.
Looking ahead to fiscal year '25, we continue to expect both our automotive and IoT business to grow the cyclical challenges winds and the secular growth AI strategy emerges. Our customers currently have a cumulative installed base of more than 20 million AI inference SoCs, all from our 10 nanometer CV2 family and the final meter CV5. This is based on approximately 280 customer products that have reached production on a cumulative basis.
The CV2 family is expected to continue to be the key driver of our revenue growth in fiscal year 25. Our ARPU for business, all in eight applications represented approximately 60% of total fiscal '24 revenue and was the key factor in the mid-teens percentage year-over-year increase in our blended ASP.
The trend to a richer mix of AI revenue and higher averaging selling price is expected to continue. In particular, the CV3, SoC family enters production at this time, virtually all of our customers new design activity involves our AI inference processors. In fact, this was the first year at CES where all of our SOC demos more than 30 well based on our AI inference products.
Fiscal 2024 was certainly challenging for most of the industry. However, there were key industry developments and the company specific achievements that we believe leave us very well positioned for growth as the market recovery plays out. For the industry in the past, the AI processor opportunity had primarily been represented by training GPUs in server, located in data centers, and this is a market that we do not serve. However, in the last year, the important role and opportunity for inference processors, in particular at age has become better understood, and this is exactly where we have been focused on.
Internally we achieved four key milestones during the last year. First, we have now shipped more than 500,000 units of our first 5-nanometer SoC CV5, and we expect our shipments in fiscal year 2025 to approximately double. Most of CV5 volume is currently in our IoT business, although we expect an automotive OE to start production in the second half of the year, the fact that we have already achieved the high volume mass production of the final meter helps pave the way for our other finally, 5-nanometer SoC such as the CV3 family.
Second, the automotive market with simple both the high end production version of our 5-nanometer CV3 as well as a final meter version for China. At the high end, we simple CV3-AD685 targeting L3 and above autonomy. And this central domain controller is currently evaluated, is in evaluation at multiple OEMs and tier ones globally.
So far, we are finding success in L3 and above commercial vehicles for the basic highway L2 plus actually in China, we introduced a CV72AQ and we have numerous tier one design wins and OEM discussions underway.
Third, we introduced our generative AI. Gen AI strategy for the age of the network, and we are sampling our 5-nanometer and one processor targeting H applications, reservoir IoT devices to edge servers.
Fourth, we'll continue to build out the CV3 automotive platform to offer our tier one and OEM customers turnkey options with our software stack and our are essentially process HT radar algorithms.
We started New Year at the Consumer Electronics shows CES, where we hosted over 200 customer meetings and made a number of significant announcement for automotive Gen AI and our new Cooper development platform. We were pleased to receive our CES Innovation Award for the 2nd year in a row. This time for our centralized radar processing architecture.
In December, we unveiled our first our latest software stack for Level two plus and higher autonomous driving applications. This software is optimized and can scale cross our entire CV3 processor family, enabling all year to get to market faster and reduce development costs. The new software stack, including the perception, fusion and planning layers, is primarily deep learning-based, which allows software development to scale more easily, resulting in a more accurate solution.
Finally, and most important, we will now we rely on high-resolution camera and the radar perception data to create a real-time map inside the vehicle. And for this reason, we made the use of stored HD maps that may contest stale data could result in improved results and reduce costs for OEM if needed.
The software stack is available in modules and can be combined with ROES also for intellectual property during the CES show we demonstrated stack running on a single CV3 automotive AI to main processor in our own autonomous vehicles, successfully completing over 150 a ton of drug right the demonstration integrate our oxalate radar L was for the first time.
We also announced the expansion of CV3 processor family with the addition of our CV3 86 refi and the six five, our SOCs, the new CV3 dash AD. 65 supports us sending suite that includes multiple cameras and radars to Enable Midstream Level two plus feature set such as highway autopilot and automated parking in addition to meeting the GSR two and uncap centers.
Additionally, the 655 enables advanced Level two plus with urban autopilot as well as the support for additional cameras, radars and other sensors with the previously announced flagship 685 SOC, along with a channel-focused CV, 72 AQSOC, the CV3 family of four processors now covers the full range of AD and ADA solutions from mainstream to premium passenger vehicles, the new CV3 Dash eight USOC.s. We dosed by our partner, Continental Codere, Kodiak robotics are leading autonomous vehicle company focused on tracking and a defense auto announced that it had selected our CV3 dash 86 85 AI domain controller for its next-generation autonomous vehicles.
In IoT markets during CES, we announced where we are bringing churn AI capabilities to the age through the introduction of our own one processor for on-premises applications. This SOC support up to 34 billion parameters, multimodal larger language models, Talgo aims with low power consumption, enabling gen A for age applications. We demonstrated a multimodal Aero is running on the new one processor at a fraction of the power per inference of leading GPU solutions.
And brought an end to bring G&A to a wide range of applications, including video security, robotics and industrial applications. Contact computer announced it was permanently with Embraer to develop products based on our CV3 dash 86 85 CV72, a new one processor to address cutting edge AI devices. This offerings address the growing market demand for diverse range of neural network and AI apps, and that will empower business across sectors, including autonomous vehicle, smart surveillance, robotics and healthcare.
Compound demonstrated PCA add-in cards based on our one was showing automotive ECUs based on CV3 AD86. We also introduced and demonstrated our new Cooper evolve this platform. Cooper offers seamless integration of software, how extended are fine-tuned air models and the services that provide the universal support for ever us entire portfolio. With EISOC.s, we have now successfully deployed copper to some of our IoT customers worldwide.
I will now quickly highlight some of the customer progress announcement made during the last quarter.
Your Chinese automotive market will continue to expand our position in this important market. During the quarter, GAC auto announced I am S-MAX passenger car was combination driver monitoring and in-cabin sensing based on our CV25 AQ automotive air of the composites. GAC also introduce Trump from GM eight passenger car with driver monitoring and the multichannel actual occupant monitoring. Also based on our CV. 25 AQ.
And in January, sharp home unveiled its x nine, maybe even including an electronic mirror system based on our A12 automotive pieces and even enterprise IoT market career market, either Harvey just introduced multiple models based on AIBGSOC., including 4K and the full channel multidirectional cameras based on our CV2 SOCs and Ai thermal camera based on our CV22 SOC, our Korean camera supplier IDs introduced a two mega pixel Voice over IP video Intercom based on our CV28 vessels.
Taiwan-based Fuel Tech also introduces a new 87 dash V3 family of IP camera based on our CV22 AISOCs and featuring fixed odds and Bully models. With this, a couple of the pack capabilities and the home monitoring market. Canadian service provider, Telus announced his home video doorbell camera based on our CV. 28 MAISOCIV and featuring advanced AI ARCTIC detection.
In summary, looking forward, our key objectives to restore revenue growth and profitability while continuing to drive our strategic R&D priorities for AI inference processor opportunities at the edge. To achieve this goal, we are highly focused on commercialization of technology and products we have developed in particular converting the multiple RFIs and RFQs we are currently working on for CV2 and CV3 into awarded business.
Furthermore, returning our IoT business to his positive secular growth trajectory is a very important and this group of 30 business development for AI one.
In conclusion, we have not seen this -- we have not been distracted by the prolonged industry-wide cyclical downturn. And then we see the secular trends we address safety, security and automation remaining very strong.
The increased market patient on inference processing, in particular at age is aligned with where we have been investing. In the new year we're very excited about the opportunities we're working on and look forward to book more business into one color, and I'm excited about what we have, what we will achieve in the years ahead.
With that, John will now discuss the Q4 and the full year fiscal year 2024 results and outlook in more details.
John Young
Thank you for Fermi. Before I begin, I would like to say that I'm honored to assume the CFO role. I have been working with the team for seven years and I'm very excited to help the company as it pursues growth in its target markets.
I'll now review the financial highlights for the fourth quarter and full fiscal year 2020 24 ending January 31, 2024.
I will also provide a financial outlook for our first quarter of fiscal year 2025 ending April 30, 2024. I will be discussing non-GAAP results and ask that you refer to today's press release for a detailed reconciliation of GAAP to non-GAAP results. For non-GAAP reporting, we have eliminated stock-based compensation expense, along with acquisition-related and restructuring costs adjusted for the impact of taxes.
Fiscal year 2024 revenue decreased 32.9% to $226.5 million. Iot revenue was about two thirds of the total revenue and declined about 40% for the year. Auto revenue represented the balance of revenue and declined about 14% for the year.
From a product point of view, a large majority of our fiscal 2024 revenue decline was from our human viewing video processor SoC's for fiscal year 2024. Non-GAAP gross margin was 63.3% versus 63.9% in fiscal 2023. Non- GAAP operating expense increased 3.9% for the year versus 17.6% in the prior year. Ending cash and marketable securities totaled $219.9 million, up from $206.9 million at the end of the prior year.
For fiscal Q4, revenue was $51.6 million, slightly above the midpoint of our prior guidance range, up 2% from the prior quarter and down 38% year over year. non-GAAP gross margin for fiscal Q4 was 62.5%, in line with our prior guidance range.
Non-GAAP operating expense was $44.1 million, approximately flat with the prior quarter and below our prior guidance range of $45 million to $48 million, driven by continued expense management and the timing of spending between quarters. We remain on track to our internal product development milestones.
Q4 net interest and other income was $2.1 million. Q4 non-GAAP tax provision was approximately $119,000. In fiscal Q4, we recorded a onetime GAAP noncash tax charge of $22.7 million, establishing a valuation allowance on certain US deferred tax assets that were deemed more likely than not to be unrealized will in the foreseeable future.
This valuation allowance was excluded from fiscal Q4 and non-GAAP tax provision consistent with our historical practice for changes to tax valuation allowances. This adjustment is a non-cash tax charge required by GAAP based on the proportion of taxable income in the United States. We reported a non-GAAP net loss of $9.8 million or a $0.24 loss per diluted share.
Now I'll turn to our balance sheet and cash flow. Fiscal Q4 cash and marketable securities decreased $2.4 million from the prior quarter to 219.9 million. Receivables days of sales outstanding increased from 42 days in the prior quarter to 44 days. Well, days of inventory decreased from 145 to 131 days.
Inventory dollars declined 6% sequentially and declined 28% from a year ago. Operating cash outflow was $4 million for the quarter and for the full year, we generated operating cash inflow of $19 million. Capital expenditures for tangible and intangible assets were $1.9 million for the quarter and $12 million for the year.
We had two logistics and ODM companies representing 10% or more of our revenue in Q4. WT Microelectronics, a fulfillment partner in Taiwan that ships to multiple customers in Asia came in at 55% of revenue for the fourth quarter and 53% for the full fiscal year 2024 accounting and ODM, who manufactures for multiple end customers was 14% of revenue for both the quarter and the full fiscal year 2024.
I'll now discuss the outlook for the first quarter of fiscal year 2025. Our early actions during the cyclical downturn in the semiconductor industry have helped our customers navigate their high inventory balances, and these actions are now enabling our business to stabilize and begin to recover. For fiscal Q1, we estimate our total revenue will be in the range of $52 million to $56 million. We expect sequential growth in both IoT and auto.
We expect fiscal Q1 non-GAAP gross margin to be in the range of 61.5% to 63%. We expect non-GAAP OpEx in the first quarter to be in the range of $46 million to $49 million with the increase compared to Q4, driven by new product development costs and employee related expenses, which we were able to delay in previous quarters.
We estimate net interest income to be approximately $1.5 million and our non-GAAP tax expense to be approximately $500,000 and our diluted share count to be approximately $40.8 million shares.
Ambarella will be participating in a fireside chat and hosting one-on-one and group meetings on February 29 in New York City at Cisco harness technology conference. We will also be participating in Morgan Stanley's TMT Conference in San Francisco on Monday, March f4. On March 18, we will participate in the ROTH Conference in Southern California. We hope to see you at one of these events, please contact us for more details.
Thank you for joining our call today. And with that, I will turn the call over to the operator for questions.
Question and Answer Session
Operator
Thank you. (Operator Instructions)
[Quin Bong], Needham.
Neil Young
Hey, this is Neil Young on for Quinn Bong. Thank you for taking my questions. So you said you're seeing project delays from Tier ones and OEMs as well as volume reductions and planned projects, which you called out more of an inventory issue. How that inventory improvement for our I should say is that inventory improvement progressing ahead of where you thought it would? And if so, are you starting to get the sense that these projects will resume soon? And then I had a follow-up.
Fermi Wang
So you are referring to how we sell it, but a quarter before.
Neil Young
Yes.
Fermi Wang
So I think in November, when we provide, -- I think early December, when we provide our final guidance for this year. I think we talk about the there's a project push-out and OEOE and tier ones, also some decisions for new party also cultivate. And also there some inventory, I think we are seeing is still consistent with what we have said in November and December last year. I think there's no new updates, and I don't think we haven't seen slow development in terms of a further project got delayed or pushed out.
Neil Young
Okay. So on the auto side, regarding inventory, you aren't seeing any improvements.
Fermi Wang
We haven't seen any improvement, but we are not seeing there is it's getting worse.
Neil Young
Okay, thanks. And then my follow-up. So in the past, you talked about how the first CV3 revenue would come from China. I believe in your opening remarks, I heard you say you're engaged in discussion with multiple Tier ones and already have multiple design wins on the way. And if that's the case. When do you think you'll see first revenue from those wins? And then maybe just an update on the demand environment in China.
Fermi Wang
Right. So for CV 72 AQ we expected that the first revenue from those design wins will be in a fiscal calendar year 2026 that we have been. We have talked about this in a previous call. And of the basically that was a low CV 72 ECU is a basically the low end of CV3 family and addressing a first level of level two plus, for example, for the eight as plus a smart parking. So that's a no market in China. And we're working on a we already have design with Tier one and working with OEM design wins right now.
So , but I think for the market, the volume point of view, I think China continue to be one of the focus area that we are in are because I think that on from the I think everybody see the EV development in China and we believe autonomous driving also will happen in China faster than any other area. So that's definitely we believe we can monetize our CV3 technology in China faster than any other area.
Operator
Christopher Rolland, Susquehanna.
Christopher Rolland
Hi, thanks for the question. Just about your N1 product. Maybe even any more thoughts on how large this could be and for you guys, have you considered or has anyone talked about combining multiple chips into a server or appliance? And then lastly, does, does this meet the Chinese compute restrictions for import as well? Thanks.
Fermi Wang
Right. So first of all, in terms of oh one, we definitely believe that we could. First of all, we can't technically we can put a multiple chip together and to serve a high end solution. But so far, we believe a single chip solution at age well meet our documents for a lot of our current customer, maybe even new customers by to see your point, if we want to go to the Ag Service side that with the multiple of chip will provide a better solution, definitely, that's the direction we are looking at.
And the current solution that, for example, with them or with our partners building PCIE card today is a single chip solution by can be multiple chips in the future.
Our potential over the American, the regulation, I think it won't because our architecture, although we can provide high performance at very low power consumption per hour, total pops number as well as a bandwidth, much lower than our competition. And that's our strength of our architecture that we can use a smaller top number and lower bandwidth to achieve a similar or higher performance.
Christopher Rolland
Great. Thank you for --
Louis Gerhardy
Chris, in terms of the market size from, we've had many discussions, you know, at CES and afterwards with customers on our Gen AI and LOM products. And we see really good feedback about what these products can do and many customers we found out just we're not aware of that Gen AI models like love a good run so efficiently on a sub 50 watt SOC.
And so this has triggered a lot of discussions with our customers and how they're going to use the product and we're going to wait to put some market sizing figures out until we're a little bit farther down that process. But the feedback's really good, especially doing this on that sub 50 watt SOC.
Fermi Wang
Great. DO you have a follow up Chris?
Christopher Rolland
Yes. Maybe around the kind of edge AI and camera opportunity, maybe if you could describe that. I mean, there's so much focus on auto, but next-gen like security cameras with all this AI functionality, like what are growth rates for that market. You have now visibility into a funnel to kind of refresh that and look to reinvigorate and reinvigorate that market and what kind of growth could we be talking for kind of that edge market as well with your products? Thanks.
John Young
Okay. Well for our SAM We haven't updated it for Gen AI kind of like the prior discussion. So we're still sizing that up. But the prior SAM CAGR if you will, that we talked about it was in the low 10s range thinking of a five year, SAM kegger for that market. But that does not include the January ad products and we're going to take a little bit longer to put those numbers.
And in terms of kind of the insight into of building momentum in this market and any sort of funnel, I'll pass it off to Fermi.
Fermi Wang
Yes. In fact, you know, although we talk a lot about auto because that's a huge opportunity, but we never underestimate the importance of a security camera market for us. This is really a big portion of our revenue and we continue to believe, but the HGAI application for security cameras important for us, and we continue to develop new platform. For example, we announced the CV72, and we'll announce new chips for this market are in the near future.
So I think we believe that a AI or a high performance team at demand in security camera continue to grow, and we want to be a continue to be the player and the dominant player on the main administering high bottom line.
Operator
Matt Ramsey, TD Cowen.
Matt Ramsey
Good afternoon, guys, and thank you I guess, Fermi , I wanted to follow up with you on that some of the initial feedback on the N1 from an inference perspective, it's I guess it's not a surprise to me given and that the engineering and architecture teams are getting good feedback on low power in France.
I guess my question is, as you get that good feedback and you're interacting with customers that can potentially ramp this product over time given kind of where the P&L is for you guys right now during the correction, what's the business model over the next 12 to 18 months to start to really build the business around this and get something that could ramp at scale given the software investments that you need, et cetera.
Are you are customers willing? And are you willing to do sort of in our e-payment arrangements? Are people willing to invest alongside you on software? I'm just trying to figure out I can see big potential here, but there's also some limitations on capital given where the business is and I'm trying to understand what the discussions are to get you from point A to point B if this is going to be a big problem, right?
Fermi Wang
So I think you can make a good point. I think for the oh one, a development is going to be significant for us. But that's why we are open for any kind of business model, including from partnership to our numbers. I think with oh one, we really cannot address of some of the customers, particularly our existing customer demand and also on the sulfur.
In fact, you know, we can dan will show you that our investment on the software and tools and the silicon can be leveraged for our first generation chip. So from that point of view, I think our in our maturity, our investment for oh one's done. So the real question is what's our roadmap moving forward and that we, for example, if we look at corporate development, all of which is defined cooper for other purpose, but definitely directly apply to our own development.
So let's talk for further our area. And fortunately, I our roadmap. I think that's worth of convenience, right? I think it's from a PR point of view we want to do this. We need to continue to invest in R&D for new chips and maybe even new silver. So from that point of view, I agree with you that we have to look at all the possible scenarios, including a partnership as well as an NDA.
So for the So some of our e-payment is for us to pay for the current cost. But I think, you know, based on the feedbacks become very clear, that is not and is not only for the data center and we'll penetrate to the H device and our current existing customer future customer all want our OEM partner roadmap. So I think that we need to be flexible to develop a roadmap of our of our customer and we have to figure out our English in sometime this year.
Matt Ramsey
Yeah, Thank you for all the thoughts.
They're firming up. I guess as my follow-up question, where but the revenue levels are right now. You guys have been consistent the last couple of quarters that you're working with the customer base who burn through inventory that they had built and you're clearly under-shipping and sell through by a pretty significant margin to do that.
So I mean, I asked this last quarter and maybe it was too early to ask, but now that we've had three more months. You have a feel now as to what the steady steady-state sell through revenue level of the business is currently just the designs you won, particularly in the security camera business is what it what sell through and what's the market size right now after we've gone way up and way down on the inventory correction, what's kind of the steady-state sell-through that you're under shipping to burn through inventory? Do you have an estimate for that?
Fermi Wang
Yeah, so we are trying very hard to understand numbers. So let me give you my thoughts. I think if I look at the number that at peak, we shipped probably $92 million a quarter at the bottom, we ship roughly $50 million and the whole we do carry all of statistics and the numbers that the model we built, we feel that midpoint of that two number is probably the a comfortable level for us and we are definitely working hard to go to the traditional level. So I think roughly in the $70 million range is probably either the number we are shooting for Quadna, everything could equal equalized.
Operator
Tore Svanberg, Stifel.
Tore Svanberg
Yes, thank you. My first question for me. So you talked about fiscal '25, you expect to see growth in both auto and IoT. I was just hoping you could give us a little bit more sort of the puts and takes and how you think the year to progress, obviously, there's still probably some lingering inventory, especially on the auto side. Any more color you can give us as far as the growth you're expecting in both segments this year?
Fermi Wang
You are talking about CV5 or overall.
Tore Svanberg
Now talking about it, you mentioned you expect both segments to grow this year. So if you could just give us a little more sort of the dynamics there?
Fermi Wang
Right. So I think for the mobile IoT for first, I think for IoT, it's pretty clear that you know, with the CV2 product line that we have been growing a CV revenue from close to 60% last year. And we want we believe that the momentum seems to family will continue, particularly after the inventory problem is behind us.
So I think at that point, I think CV2 family will drive the growth for us. But more importantly, I think in our in my script, we talk about CV. five was our ramping last year, we did 0.5 million units. And this year, we probably could have doubled, and that will also consume a ASP could be meaningful growth for us. So I think that square on IoT side.
On automotive side, I definitely think that the ARM first of all, that we continue to announce of the CV2 design win in a DAS in OMSCMS on the electronic mirror and recorders most us continue to be a big portion of our revenue. But also we are announced announcing some partnership with a with a CV3 , a 30 customer that we have started delivering samples and also partnership on our East.
That will definitely play a role in our RCV3 revenue are in our automotive revenues in. So I think overall, although that on automotive market continued to be weak based on the feedback on it, but the size of the market. But I still believe that we are a small player in automotive space and we are trying to be big ones.
The process we're looking at more along the line, our growth with the current design wins. So I think that's how we feel comfortable that the automotive will also have growth this year.
John Young
Yes, Tore from a product point of view in fiscal '25 in our AI inference products, both Thomas Doll CV. two will be more than 100% of our growth. That means the video processor business will, which was down substantially, as John mentioned, in fiscal '24, that dropped about $80 million, that rate of decline in video processors will begin to really taper off in fiscal '25. Did you have a follow up Tore?
it's very helpful as my follow-up.
Tore Svanberg
It's very helpful as my follow-up. I was I was pretty impressed with the new Cooper developer platform when I saw your samples at CES. And I was just wondering how that's developing that platform is helping you secure, as you know, more business activity because it does seem like it was an important piece of the pie that was missing. But obviously now that you have it readily available.
Fermi Wang
In fact, they're all existing customers are eager to get a handle on the Cooper tells me a lot about how much they like this development because now it's become very easy for them to port our software, a shoe to defend a Ambarella platform of different Siliconix and also is easy to transfer the sulfur and the function or AIL was from chip to chip.
So this whole development is important, not only for us, but also for our customers and us. And I think and for the existing customer, they'll make their devices more even more comfortable and faster. So it will help us to keep existing customers, but also for the new customer, even in an era in part I think that we hope we can provide our environmental customer quickly can convert their software algorithm to run on our chip is important for our designers.
Operator
Ross Seymore, Deutsche Bank.
Ross Seymore
I think from a question when I think about the ASP that you mentioned for going from CV2 to CV5 or even backwards. Looking to the CV2 itself. Can you just walk us through again kind of orders of magnitude or rack pricing ranges. How much were ASPs a tailwind in calendar year '24? And what do you expect them to be in calendar '25?
Fermi Wang
Our rights offering are first of all right. So for CV2 family, I think we talk about the price can be anywhere from the high single digit to the probably $30 range. And that's an average is probably high 10s. That's a CV2 families.
And the CV5 we're talking about anywhere from a, you know, a low 30s to high 40s in a rich and that's a and with our run rate, we think that we can maintain a very healthy amount of ASP., both our gross margin outlook for polymers and then on the CV5 but the fact we have CV72 that we mentioned a price range is similar to semi five, but for IoT is a different paradigm. So I think and then we stop our CV3 of our CV72 to a two or CV3, 685. So that just gives you an idea of ASP change.
Ross Seymore
Great. Thanks for that detail for me. And then I guess you talked about the year and growing in both sides of the business. Obviously, we have the first quarter guidance and talked about a little bit of trajectory in the prior question on both your two sides of your business.
But if we think about the end of the second half versus the first half, it seems like you need some relatively sizable sequential increases on a percentage basis to get to that sort of number, do you think you will be well within those kind of those average of roughly 70 million true sell-through numbers? And if so, is that kind of a second half dynamic? And then I guess is that more just about shipping to demand, so the inventory headwinds abate or is it about new products?
Fermi Wang
But first of all, we didn't guide any quarter to be 70 million in our guidance we talk about, we believe that we can have growth this year and also believe that our Q1 guidance, but overall, I think if I look at, you know, the number of stories predicting I think is a reasonable and also that based on how we have seen with a and our customer demands and as well as our booking, I feel comfortable with the current the Q1 Q2 guidance.
Of course, Q3, Q4, we haven't seen enough bookings, but however, the momentum is there. So I think, you know, I am comfortable that we're going to grow and intensify our quarter two high quarter-to-quarter growth. We haven't provided any guidance on that yet.
John Young
Yes, and Ross, just to follow up on the ASP question, RESP in fiscal '24 grew about 15% year over year and looking into the next year, it really depends on the mix of video processor versus CV. But even within the CV.2 family, the ratio of CV5 to some of the lower end CV2 then, of course, we won't have CV3 revenue contributing in fiscal '25. So there should be some increase, but it's just hard to say how much now. Libya we can move onto the next question.
Operator
Kevin Cassidy, Rosenblatt.
Kevin Cassidy
Thanks for taking my question and congratulations on the strong results. If I try and run as your talking to customers about what is the competitive landscape, what are some of the alternative designs that they're looking at? Is the GPU still being considered even as a edge processor?
Fermi Wang
While some low end GPU being considered by the AG processor, you really need a SOC with very low power consumption. And with that GPU is merchandise considered. However, I do believe that the core com definitely have an ambition to come to this market. And when we compare to them, just like when we compare to them in the automotive space, I think we can deliver higher performance and lower power consumption. That's consistent to be the case. So I do believe we'll see growth looking at very similar competitors like ours, our automotive market.
Kevin Cassidy
Great. Thanks. And I think you're getting a lot of leverage out of the five nanometer process. You've got lots of I'd say our price performance ranges from that 5-nanometer, is there anything in your roadmap looking to go below five nanometer now?
Yes, we have to I think this week there's no chance will stay outside of either push will go for. However, I think it is really driven by two things. One is total can justify the cost and also whether that's a performance requirement, but I definitely believe that you'll start hearing us talk about the next generation of process selections in the near future.
Operator
(Operator Instructions) Joe Moore, Morgan Stanley.
Joe Moore
Thank you, Fermi you had alluded to some OEM wins for CV5 that start to ramp in the second half of the year. Can you talk about what applications you're addressing there?
Fermi Wang
It is an EV truck in a in a in Western space. And we've actually we have been working on this case for several years, and the customer doesn't allow us to talk about it just yet, but I think we are close to a to a announce their products, and I feel that we should not we feel comfortable to share. This gives us, but not to mention the customer name.
Joe Moore
Great. Thank you for that. And then I guess as far as the N1 product goes, you guys have kind of always shied away from doing anything in a phone, because you don't want to become a feature in a chipset. But obviously, a lot of the potential large language model inference could be devices like phones.
So can you just talk about what are their opportunities around that to do co-processors or where do you kind of draw the line for your participation?
Fermi Wang
Right, since both the telecom and media authority coker and the MediaTek operating groups are coming to introducing products used for space for now and I feel that our optimism is limited because of scale in all my idea is that even our phone, the phone because you have 5G connectivity, you might be able to use some at age, pursue leverage the 5G so we can connect to the cloud to run, but most of our functions at on a on the server side.
So with that, cellphone become of a limit opportunity for us, not only because of Qualcomm, MediaTek as a advantage in terms of market share there. But also the usage model is really not purely ages of combination Asia and in the cloud. So my feeling is we are going to look at pure H devices that focusing on a battery sensitive and also the latency sensitive applications, just like what we had before.
Joe Moore
Great, Thank you very much.
Fermi Wang
Thank you.
Operator
Thank you. And I'm showing no further questions in the queue at this time. I will now turn the call back over to Dr. Fermi Wang for any closing remarks.
Fermi Wang
Yeah, and I want to thank all of you for joining us today and looking forward to talk to you in a different conference or next time. Thank you.
Operator
Ladies and gentlemen, that does conclude our conference for today. Thank you for your participation. You may now disconnect.
