This article originally appeared as part of ongoing coverage in our premium Motley Fool Rule Breakers service...we hope you enjoy this complimentary peek!

Ambarella (NASDAQ:AMBA) reported stellar results in its earnings release on Sept. 4. The company reported results for the current quarter that easily cruised past the high-end of its guidance in revenue, gross margin, and net income. The company also issued guidance well above where the current sell-side analyst estimates sit today. In other words, the company knocked it out of the park.

Great revenue growth and margins drive strong earnings growth this quarter
Ambarella reported sales of $47 million, marking an increase of 24.6% from the same quarter last year. This handily beat Ambarella's own guidance of $43.5 million to $45.5 million issued last quarter.

Ambarella's CEO, Fermi Wang, pointed out on the call that the growth in IP security cameras, driven by growth in both professional IP security cameras, as well as in home security cameras, continued to be strong. On top of that, the company reported 65.1% non-GAAP gross margin, crushing the guidance of between 61.5% and 63.5% that management issued last quarter.

The better-than-expected revenue and margins led, unsurprisingly, to non-GAAP net income of $11.9 million, coming in well ahead of the guided range of $8 million to $9.5 million. This represented solid growth from the $7.7 million in non-GAAP net income the company generated in the same quarter last year.

A very strong outlook
Ambarella reported that it expects revenue for the current quarter to come in between $60 million and $64 million, well ahead of even the most bullish analyst estimate of $52.50 million. This also represents between 31% and 39% year-over-year revenue growth, which is actually an acceleration from the just-reported results. 

A slight offset to the good news, though, is that the company expects gross margin to come in between 60% and 62% for the current quarter, down from the 65.1% seen in the most recent quarter, and down a bit from the 63.8% in the same period last year.

While the gross margin decline might be a little unsettling, it's not really a cause for alarm; Ambarella's management has expressed that its long-term corporate gross margin target is between 60% and 63%, and the current guidance is within that range.

Additionally, Ambarella pointed out on the call that a significant driver of the robust revenue guidance is a ramp in sales of chips intended for consumer products (for example GoPro). Such products, as Ambarella's CFO noted on the company's last earnings call, typically carry lower gross margins than some of Ambarella's other products.

The real number to watch, then, is the guided earnings per share number -- the bottom line, so to speak. Ambarella guided to between $16 million and $18 million in non-GAAP net income, and a diluted share count of 32.2 million by the end of the current quarter. This implies a non-GAAP earnings-per-share range of between $0.49 and $0.56, blowing right past the $0.37 per share analyst consensus.

Foolish bottom line
It looks as though Ambarella continues to post impressive growth, driven by both a solid competitive positioning, as well as robust end-markets. It will be interesting to see how the story here unfolds during the next several years.

Ashraf Eassa has no position in any stocks mentioned. The Motley Fool recommends Ambarella and Apple. The Motley Fool owns shares of Ambarella and Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.