Ambarella shares are down 8%, here is why

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Ambarella (NASDAQ: AMBA) is down 8% after the company reported its Q4 2022 earnings and revenue report.

Ambarella top earnings estimate

Revenue in Q4 2022 was $90.2 million, a YoY increase of 45% and beating estimates of $90.16 marginally. The company reported $0.45 per share earnings, beating analyst expectations of $0.42 by $0.03. non-GAAP net income was $17.9 million or $0.45 per share compared to $5.1 million or $0.14 per share a year ago. GAAP net loss in fiscal Q4 2022 was $9.2 million or $0.25 per share compared to $12.5 million or $0.35 per share a year ago. CEO Fermi Wang said:

Fiscal 2022 was an inflection year with record revenue and numerous milestones achieved. Computer vision revenue tripled and exceeded 25% of total revenue, driving our blended average selling price higher and fueling expansion of non-GAAP operating margin from 4% in fiscal 2021 to 19% in fiscal 2022.

The company reported revenue of $331.9 million for the full year, a 49% increase from $223 million reported a year ago. GAAP net loss for FY2022 was $26.4 million or $0.72 per diluted share compared to GAAP net loss of $59.8 million or $1.72 per diluted share for the year ended January 31, 2021. Non-GAAP net income for FY 2022 was $62.2 million or $1.61 per diluted share compared to $11.9 million or $0.33 per diluted common share.

Ambarella expects revenue of $88.5-$91.5 million in Q1 2023

Wang commented:

We acquired HD radar leader Oculii, and in fiscal 2023 our first 5nm SoC, CV5, is expected to generate revenue and CV3, our second 5nm SoC targeting the automotive domain controller market, is expected to sample.

For fiscal 2023 the company expects revenue of between $88.5 million and $91.5 million compared to a consensus of $90.88. non-GAAP gross margin is expected to range from 63% to 64%. In addition, Ambarella anticipates non-GAAP operating expenses of around $41 million to $43 million. Wang concluded:

We continue to face headwinds, including geopolitical, public health, and persistent supply chain challenges. Nevertheless, we believe we are now decisively established in front of the positive AIoT secular trends, and our commitment and execution are expected to drive CV to be 45% of total revenue in fiscal 2023.

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