Ambarella Reports 2.6% Revenue Growth in Q2, Net Loss Increases Amid Rising Expenses

Ambarella, Inc. reported its financial results for the second quarter and first half of fiscal year 2025, ending July 31, 2024. The company achieved revenue of $63.7 million for the three months ended July 31, 2024, reflecting a 2.6% increase from $62.1 million in the same period of the previous year. However, for the six months ended July 31, 2024, revenue decreased by 4.9% to $118.2 million from $124.3 million in the prior year. The increase in quarterly revenue was attributed to higher product unit shipments and the adoption of computer vision (CV)-based solutions, which typically command higher average selling prices.

Gross profit for the three months ended July 31, 2024, was $38.7 million, slightly up from $38.5 million a year earlier. For the six-month period, gross profit fell to $71.9 million from $76.0 million. Operating expenses rose to $75.0 million for the quarter, compared to $73.8 million in the prior year, and totaled $147.6 million for the six months, up from $146.9 million. Consequently, the company reported a loss from operations of $36.3 million for the three months and $75.7 million for the six months, both higher than the losses recorded in the same periods of the previous year.

Net loss for the three months ended July 31, 2024, was $34.9 million, compared to $31.2 million in the same period of 2023. For the six months, the net loss increased to $72.8 million from $67.1 million. The increase in net loss was primarily due to higher engineering-related expenses and lower revenue.

Ambarella's cash and cash equivalents rose to $153.9 million as of July 31, 2024, up from $144.9 million at the end of January 2024. Total assets decreased to $650.3 million, while total current liabilities increased to $91.5 million. The accumulated deficit grew to $207.8 million, reflecting ongoing operational losses.

Strategically, the company extended its office leases in Shanghai, Shenzhen, and Italy, resulting in an additional $3.3 million in operating lease liabilities. Ambarella continues to focus on expanding its presence in the IoT and automotive markets, emphasizing the development of AI and CV technologies. The company faces challenges, including reliance on a limited number of customers and distributors, which accounted for a significant portion of its revenue.

Overall, while Ambarella experienced a slight increase in quarterly revenue, the company continues to grapple with rising operational losses and a decrease in overall revenue for the first half of the fiscal year.