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Ambarella, Inc.'s AMBA shares soared 11.3% during Wednesday’s extended trading session following the company’s reported stronger-than-expected fourth-quarter fiscal 2025 results. It reported fourth-quarter non-GAAP earnings of 11 cents per share, which compared favorably with the Zacks Consensus Estimate of a loss of a penny. The bottom line also experienced a robust improvement from the year-ago quarter’s loss of 24 cents per share.
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Ambarella’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 356.3%.
Ambarella’s fourth-quarter revenues soared 62.8% year over year to $84 million and beat the Zacks Consensus Estimate of $78.1 million. Quarterly revenues also exceeded management’s guidance range of $76-$80 million.
The stronger-than-expected top-line performance was primarily driven by momentum in the Internet of Things (IoT) and auto business segments, complemented by an increasing demand for AI-based processors.
Ambarella, Inc. Price, Consensus and EPS Surprise
Ambarella, Inc. price-consensus-eps-surprise-chart | Ambarella, Inc. Quote
Ambarella’s Q4 Details
Ambarella had one logistics and original design manufacturer (ODM) customer that contributed more than 10% to total revenues in the reported quarter. WT Microelectronics, a partner in Taiwan that serves multiple customers in Asia, accounted for 60.9% of the company’s fourth-quarter revenues.
The solid momentum in Ambarella’s CV flow system-on-a-chip in professional IP cameras continued in the reported quarter. The company expects CV2, CV5 and CV7 to be the key drivers of its revenue growth in fiscal 2026.
Gross margin on a non-GAAP basis for the fourth quarter of fiscal 2025 was 62%, which was 50 basis points lower than the year-ago quarter’s 62.5% primarily due to unfavorable product mix. Non-GAAP operating expense in the fourth quarter was $48.7 million, below the low end of management’s prior guidance range of $49-$52 million, driven by continued expense management and the timing of spending between quarters.
AMBA’s Balance Sheet & Cash Flow
Ambarella’s cash, cash equivalents and marketable debt securities on hand at the end of the fourth quarter of fiscal 2025 were $250.3 million, compared with $226.5 million at the end of the prior quarter and $219.9 million at the end of the same quarter a year ago.
AMBA generated an operating cash flow of $25.4 million and a free cash flow of $21.2 million. In fiscal 2025, the company generated operating cash flow and free cash flow of $33.8 million and $23.5 million, respectively.