Ambarella (AMBA) Made Losses In The Recent Quarter, Video Processors Are Now Key To Growth

The U.S. chipmaker Ambarella Inc. (AMBA) rose 8.86 percent on Wednesday to conclude the trading at $85.68. The company last week released its third quarter results for fiscal 2021. Against the backdrop of COVID-19, the company’s revenue dropped, but the segment of video streaming processors is still showing progress.

Ambarella’s revenue decreased 17.4 percent year on year to $56.1 million in the quarter ended October 31, 2020. The gross margin increased to 62% and the GAAP loss was $17.1 million, or $0.49 per share. A year ago, the loss reported by the company was $4.3 million and $0.13, per share.

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Ambarella forecasted revenuein the range of $56 – $60 million in the fourth quarter of fiscal year 2021 and a gross margin in the 59-61 percent range.

Due to developments in security and automation, Ambarella management expects revenue to grow in near future. The COVID-19 crisis has had a temporary negative effect on the production processes of Ambarella, but has speeded up the development of emerging technologies for video monitoring, robotics and video communication.

To ensure increased production in the coming quarters, Ambarella is increasing its employees in various regions. At the same time, Ambarella is able to acquire a share of competitors, particularly in China’s fast-growing IP video camera market. Not all consumers are confident in the uninterrupted supply of goods by Chinese manufacturers, according to Ambarella. In addition, large clients are searching for new alternative designs, and a competitive advantage can be gained by Ambarella’s CVflow chips, which use algorithms with artificial intelligence elements.

Ambarella Inc. (AMBA) stock’s performance over the past week is 18.59 percent while it has added 48.52 percent to its value in the past six months. Since beginning of the year, stock is up 29.97 percent and company’s market capitalization currently stands at $2.66 billion.


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