Ambarella Soars 20% After Beating Q2 Earnings Expectations, Boosting Fiscal Year Revenue Outlook

Ambarella’s share price surged by 20% on Friday, following the release of the company’s robust Q2 results and optimistic guidance for Q3.

The semiconductor and software company specializing in edge artificial intelligence systems-on-chip reported revenue figures that exceeded expectations. For the third quarter, Ambarella anticipates revenue between $100 million and $108 million, surpassing LSEG’s projected $91 million.

The firm has also raised its fiscal year revenue growth outlook, forecasting a range of 31-35%, with the midpoint reaching $379 million – significantly higher than LSEG’s expectation of $350 million.

CEO Fermi Wang expressed optimism during a call with analysts, highlighting the company’s ability to address a growing array of edge AI applications due to its extensive research and development investment over the past few years. Specifically, Wang pointed towards strength in portable video, robotic aerial drones, and edge infrastructure.

Edge computing refers to the practice of processing and storing data directly at device level rather than remotely in cloud-based data centers.

In Q2, Ambarella posted a net loss of $20 million, representing a 47 cents per share loss. This is an improvement compared to the same quarter last year, during which the company reported a net loss of $35 million, equating to an 85 cents per share loss. The company attributed the decrease in earnings to stock-based compensation and amortization of acquisition-related costs.

Earlier in June, Bloomberg reported that Ambarella was considering a potential sale and had engaged in discussions with several banks. The share price increase on Friday can be partially attributed to this news.