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Ambarella (AMBA) Q1 Earnings & Revenues Beat Estimates

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Ambarella (AMBA - Free Report) reported first-quarter fiscal 2023 non-GAAP earnings of 44 cents per share, outpacing the Zacks Consensus Estimate of a loss of 20 cents per share. The reported figure soared 91.3% from the prior-year quarter’s earnings of 23 cents per share.

Revenues surged 29% year over year to $90.3 million and narrowly surpassed the consensus mark of $90 million. The robust year-over-year top-line growth was primarily driven by an improvement in the automotive and security camera businesses.

Customer & Market Details

Ambarella had three customers that contributed more than 10% in the reported quarter. WT Microelectronics, a fulfillment partner in Taiwan that serves multiple customers in Asia, accounted for 57% of the company’s revenues. Hakuto, a Japanese distributor for automotive customers, contributed 10%, while Chicony, a Taiwan-based electronics manufacturer serving multiple IOT customers, represented 11% of the company’s revenues.

Ambarella, Inc. Price, Consensus and EPS Surprise

Ambarella, Inc. Price, Consensus and EPS Surprise

Ambarella, Inc. price-consensus-eps-surprise-chart | Ambarella, Inc. Quote

The momentum in AMBA’s CV flow system-on-a-chip in professional IP cameras across all geographies continued in the reported quarter.

Operating Details

The non-GAAP gross margin was 63.8%, up 90 basis points year over year in the fiscal first quarter.

A healthy customer and product mix, supported by stable price movements, aided the gross-margin expansion in the quarter reported.

On a non-GAAP basis, operating expenses were $39.8 million, down 1.2% sequentially. Non-GAAP operating expenses were slightly lower than the midpoint of the company’s prior guidance, mainly driven by the timing of new product development activities.

Net inventory was $41.5 million as of Apr 30, 2022, down 8.2% sequentially.

Balance Sheet & Cash Flow

As of Apr 30, 2022, Ambarella had cash and cash equivalents & marketable securities of $200.6 million compared with $171 million as of Jan 31, 2022.

In the fiscal first quarter, the company generated operating cash flow of $34 million.

Guidance

For the second quarter of fiscal 2023, revenues are expected between $78 million and $82 million. The non-GAAP gross margin is anticipated at 63-64%.

Non-GAAP operating expenses are projected in the range of $42-$45 million.

Management noted that supply-chain constraints would continue to remain a concern in the second quarter of fiscal 2023.

Zacks Rank & Key Picks

Ambarella currently carries a Zacks Rank #4 (Sell). Shares of AMBA have declined 15.8% in the past year.

Some better-ranked stocks from the broader Computer and Technology sector are Avnet (AVT - Free Report) , Analog Devices (ADI - Free Report) and Axcelis Technologies (ACLS - Free Report) . While Avnet and Analog Devices each sport a Zacks Rank #1 (Strong Buy), Axcelis carries a Zacks Rank of 2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

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The Zacks Consensus Estimate for Analog Devices' third-quarter fiscal 2022 earnings has been revised 5 cents upward to $2.42 per share over the past seven days. For fiscal 2022, earnings estimates have moved 16 cents north to $9.24 per share in the past seven days.

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The Zacks Consensus Estimate for Axcelis' second-quarter 2022 earnings has been revised 3 cents upward to 99 cents per share over the past 30 days. For 2022, The Zacks Consensus Estimate for Axcelis' earnings has moved 41 cents north to $4.40 per share in the past 30 days.

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