Ambarella ( AMBA Quick Quote AMBA - Free Report) reported second-quarter fiscal 2023 non-GAAP earnings of 20 cents per share, which matched the Zacks Consensus Estimate. The reported figure declined 42.9% from the prior-year quarter’s earnings of 35 cents per share.
Revenues jumped 2% year over year to $80.9 million and surpassed the consensus mark of $80.3 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 two 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 59% of the company’s revenues. Chicony, a Taiwan-based electronics manufacturer serving multiple IOT customers, represented 13% of the company’s revenues.
The momentum in AMBA’s CV flow system-on-a-chip in professional IP cameras across all geographies continued in the reported quarter.
The non-GAAP gross margin was 64.5%, up 170 basis points year over year in the fiscal second 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 $44.2 million, up 11.1% sequentially. Non-GAAP operating expenses were higher than the midpoint of the company’s prior guidance, mainly driven by the engineering materials for new products.
Net inventory was $40.1 million as of Jul 31, 2022, down 0.34% sequentially.
As of Jul 31, 2022, Ambarella had cash and cash equivalents & marketable securities of $197.9 million compared with $200.6 million as of Apr 30, 2022.
For the third quarter of fiscal 2023, revenues are expected between $81 million and $85 million. The non-GAAP gross margin is anticipated at 63-64%.
Non-GAAP operating expenses are projected in the range of $44-$46 million.
Management noted that supply-chain constraints would continue to remain a concern in the third quarter of fiscal 2023.
Zacks Rank & Key Picks
Ambarella currently carries a Zacks Rank #4 (Sell). Shares of AMBA have declined 35.9% in the past year.
Some better-ranked stocks from the broader Computer and Technology sector are Clearfield ( CLFD Quick Quote CLFD - Free Report) , Silicon Laboratories ( SLAB Quick Quote SLAB - Free Report) and Taiwan Semiconductor ( TSM Quick Quote TSM - Free Report) . While Clearfield and Silicon Laboratories flaunt a Zacks Rank #1 (Strong Buy), Taiwan carries a Zacks Rank #2 (Buy). You can see . the complete list of today's Zacks #1 Rank stocks here The Zacks Consensus Estimate for Clearfield's fourth-quarter fiscal 2022 earnings has been revised 10 cents north to 80 cents per share over the past 30 days. For fiscal 2022, earnings estimates have moved 36 cents north to $3.13 per share in the past 30 days. Clearfield’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 33.9%. Shares of CLFD have increased 160.9% in the past year. The Zacks Consensus Estimate for Silicon Laboratories’ third-quarter 2022 earnings has increased 22.9% to $1.02 per share over the past 30 days. For 2022, earnings estimates have moved 14.2% up to $4.18 per share in the past 30 days. Silicon Laboratories’ earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 63.6%. Shares of SLAB have decreased 18.7% in the past year. The Zacks Consensus Estimate for Taiwan Semiconductor's third-quarter 2022 earnings has been revised a penny southward to $1.69 per share over the past 30 days. For 2022, earnings estimates have moved 41 cents north to $6.30 per share in the past 60 days. TSM's earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 3.9%. Shares of the company have decreased 31.3% in the past year.