On Friday, shares of image processing chip developer Ambarella Inc. (AMBA Quick QuoteAMBA - Free Report) are popping, up over 9% in afternoon trading after the company reported strong fiscal 2017 first quarter results on Thursday after the bell.

For Q1, Ambarella reported GAAP earnings of $0.05 per diluted share, beating the Zacks Consensus Estimate of $0.02 per share. Net income came in at $1.8 million for the quarter. On an adjusted (non-GAAP) basis, net income was $11.4 million, or $0.34 per share. Gross margin fell 20 basis points year-over-year, to 64.6%.

Revenues came in at $57 million, also surpassing the Zacks Consensus Estimate of $56 million but declining 19.5% year-over-year.

"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, " CEO Fermi Wang said in a statement.

Ambarella's board announced the approval of a $75 million stock repurchase program, which will run for six months starting in the second quarter of fiscal 2017.

For Q2, Ambarella expects revenue in the range of $60 million-$66 million, or about a 25% decline at the midpoint; adjusted gross margin is projected to be between 60.5%-63.5%.

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