Ambarella Inc. (NASDAQ: AMBA) reported its financial results for the second quarter late on Tuesday, which handily beat Wall Street estimates. Shares of the company are up 20% this morning after it said its revenue in the current quarter will hit a five-year high.
Ambarella remained in $7.2 million of net loss in Q2 that translates to 20 cents per share. On an adjusted basis, it earned 35 cents per share in the recent quarter. The semiconductor company generated $79.3 million in sales that translates to an annualised growth of 50%.
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In comparison, analysts had called for 25 cents of adjusted EPS on $75.7 million in sales. Ambarella attributed its market-beating results to strong demand for its chips that are widely used in security cameras and cars. Sales from these two segments made up 90% of the company’s total Q2 revenue.
For the fiscal third quarter, Ambarella now forecasts $88 million to $92 million in revenue. Since its inception in 2004, the California-based company has recorded over $90 million in sales only two times, the most recent being in Q3 of 2016.
The Nasdaq-listed company expects its gross margin to fall in the range of 61% to 63% this quarter on up to $37.5 million in operating expenses, as per its earnings press release.
CEO Fermi Wang’s remarks
Commenting on the financial update, CEO Fermi Wang acknowledged the global chip shortage but said:
“While the significant industry-wide supply chain challenges persist, we expect fiscal 2022 to represent a major inflexion in our business, and we are excited about our future.”
At 62.3%, the gross margin in Q2 was also up from 61.8% in the comparable quarter of last year. Also on Tuesday, Rosenblatt Securities reiterated its ‘buy’ rating for Ambarella with a price target of $145 that represents a more than 15% upside from here.
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