What happened
Shares of Ambarella (AMBA +1.61%) were up 16.5% as of noon EDT Friday, after the video-processing chip specialist announced stronger-than-expected quarterly results.
More specifically for its fiscal second quarter ended July 31, Ambarella's quarterly revenue declined 9.7% year over year to $56.4 million, though it was still above the high end of guidance for a range of $51 million to $53 million. On the bottom line, that translated to adjusted net income of $7.3 million, or $0.21 per share -- down from $0.25 per share a year earlier, but absolutely crushing estimates of $0.02 per share.
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So what
Ambarella CEO Fermi Wang noted the company began mass-production shipments of computer-vision systems on a chip (CV SoCs) into the automotive market this quarter, and made "strong progress" toward its vision for transitioning "from a pure video processing company to an artificial intelligence video company."
Wang added that Ambarella's confidence has increased in its full fiscal-year outlook -- which includes seeing revenue in the second half climbing relative to the first half -- in spite of geopolitical uncertainty.
Now what
In the meantime, Ambarella expects fiscal third-quarter revenue to be between $63 million and $67 million, significantly above consensus estimates for revenue closer to $55.4 million.
Put simply, this was a straightforward quarterly beat followed by strong forward guidance. And even with shares of this tech leader up more than 30% year to date leading up to this report, it's hardly surprising to see Ambarella stock soaring in response.
