Ambarella Inc (NASDAQ:AMBA) shares are diving on Friday after the company released its first‑quarter results and paired them with second‑quarter sales guidance that landed below Wall Street expectations at the midpoint. Here’s what you should know.
- Ambarella stock is showing notable weakness. What’s behind AMBA decline?
Q1 Results Top Estimates
Ambarella reported earnings of 11 cents per share, edging past the 10 cent consensus estimate and improving sharply from the 7 cents it posted a year earlier. Revenue for the quarter came in at nearly $100.36 million, slightly above the approximately $100.14 million analysts were looking for and up nearly 17% from the same period last year. The company's official release from Santa Clara noted that total revenue for the quarter was $100.4 million.
On a non‑GAAP basis, gross margin was 59.9%, compared with 62% last year, and non‑GAAP net income reached $5 million, or 11 cents per share, up from $3 million and 7 cents per share a year earlier.
Ambarella ended the quarter with $277.8 million in cash, cash equivalents and marketable debt securities, down from $312.6 million in the prior quarter but above the $259.4 million it held at the same time last year.
CEO Fermi Wang said the company met its financial targets while continuing to strengthen its edge AI platform. He highlighted record automotive revenue driven by rapid adoption of AI in commercial vehicles and expressed confidence in the company's ability to support increasingly complex AI workloads with new products that carry higher average selling prices.
Q2 Guidance Pressures The Stock
Despite the solid first-quarter performance, the stock is under pressure because the company's second‑quarter revenue forecast did not meet expectations at the midpoint. Ambarella projected second-quarter sales between $105 million and $111 million, while analysts were looking for roughly $107.4 million.
The company also expects non‑GAAP gross margin to land between 59% and 60.5% and anticipates non‑GAAP operating expenses between $56 million and $59 million.
AMBA Shares Are Dropping
AMBA Price Action: Ambarella shares were down 20.27% at $73.22 at the time of publication on Friday, according to Benzinga Pro.
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