Ambarella Inc (NASDAQ:AMBA) has released its Q1 2019 results in which the company reported profits that beat Wall Street consensus estimates, and as a result, AMBA stock gained 8% on Wednesday.
Despite the macroeconomic risks that threatened the growth of the Santa Clara-based video processing chip maker, it nonetheless managed to generate profit as the company makes progress in computer vision space.
Results Beat Estimates
Ambarella’s revenue was $47 million, which was slightly more than the midpoint guidance the company gave in March. The company generated net income of $0.3 million, or EPS of $0.01, which was a decline from $0.13 per share reported last year, but this was still way over the consensus estimate of a net loss per share of $0.05.
The adjusted gross margin declined 2.2% year-over-year to 59.6%, which was well within the guidance provided between 59% and 60%. Sales declined by 17% from the same period a year ago to $47.2 million, which was still within analysts’ estimates that predicted sales to be around $47 million.
Although the company did not acquire any shares in the quarter, management did approve a $50 million stock purchase program that will be valid up to June 30, 2020. The company ended the quarter with cash and cash equivalents plus marketable securities of $366.2 million up from $358.9 million in the previous quarter.
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AMBA stock is up a whopping 8% and now trading at $42.92.
Future Revenue to be Defined by CV Devices
The CEO of Ambarella, Fermi Wang, indicated that the company’s team is focused on building a foundation for the multi-billion growth opportunity in computer vision artificial intelligence markets. Wang said that despite the ongoing volatile and geopolitical uncertainties, the company is determined to demonstrate that its execution is still strong.
He added the company is expecting mass production revenue this quarter from its second computer vision device CV25 as well as with several other CV devices that are in production. The CEO stated that with more computer vision design wins and new products and technology development, the company expects to see CV revenue gaining traction in professional security camera, consumer security camera, and automotive markets.
After today’s gain, AMBA stock is up over 20% since the beginning of this year. However, the stock is still down about 18% from May’s peak price of $52.
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