AMBA - Earnings call transcript Q3 2018

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Operator

Good day, ladies and gentlemen. And welcome to the Ambarella Third Quarter Fiscal Year 2018 Earnings Conference Call.

As a reminder, this call is being recorded. I would now like to introduce your host for today’s conference, Ms. Deborah Stapleton, Investor Relations. Ms. begin. may you Stapleton,

Deborah Stapleton

afternoon, financial welcome you results us Good fiscal for Ambarella’s quarter today. XXXX conference everyone. you. to And third joining Thank call. Thank

markets, results, George Wang, will our responses call develop and today’s to prospects, today contain These differ statements. third could company’s and incorrect, or risks, provide financial regarding any will and the commercialize Dr. subject these materialize quarter from speakers information to The our forward-looking things. materially Fermi your with our uncertainties Should fiscal uncertainties Our CEO; should purpose answers are be be demand is our other projected of assumptions solutions and actual for or to statements and our forward-looking effort these Laplante, and you of results. assumptions. CFO. primary discussion financial results new to President our technologies, regarding statements risks XXXX to among The prove

call of results Dr. I our a can quarter Investor X, now the under annual and portion no as other Fermi XXXX We our second documents file well XX-K for SEC, statements. for could factors today’s in third potential call risk XXXX release, fully are fiscal SEC uncertainties the on to we the affect September March XXXX. will on Form and be the on described with as obligation that year Wang. risks, of on Access we filed website. the more these are including XX, of turn fiscal the to financial assumptions, information report results XX-Q Form historical Relations and to over on that update our replay that the quarter These filed XXXX found filings press the results,

Dr. Fermi Wang

Thank and you, afternoon. good Deb,

from of period Our million, prior a the revenue XX.X% QX was $XX.X year. decrease representing the same XXXX in

was automotive markets. revenue our progress -- we computer strong for X.X% very our and with than are design in enjoyed non-GoPro we last in our win year, development camera our was last And lower solutions. and the vision security momentum our of higher revenue execution Although, pleased and IP target,

third humans the be CVX chip key new traditional CVX and strengths combines automotive to on security and the for by IP assembled and new processing Based the watched is CVX In CVX vision. the demonstrated including our customers. applications quarter and to requirements recognition. learning the designed with stereovision capturing architecture, imaging camera resolution advanced for deep required in particular, During level performance to video we update support our and Ambarella’s motion architecture for high perception

advanced an the in performance aggressive and has Systems And including demonstrating met of many we of our our in features Consumer forward CVX features, for chip, CVX targets Show Electronics look to update, advanced consumption. power the at January. As ADAS

and in the OEM to CVX, on applications multiple transitioning our Beyond in are primarily from SoC advanced target generation XX-nanometer security, next OEM spending that architecture. drone, ADAS, car fully automotive new autonomous original ultimately or applications. value automotive SoCs recorders a we opportunities recorders, dash will based electronic see CVX equipment year technology, wins deliver Asia. the VR the process assistance vehicles. driver we are mirror, systems high surround of design of Leveraging view, and and aftermarket from are cameras car Initially, remain coming revenue first the solutions that to the half on IP target markets, In camera in

rear car makers we This and chip planning a mirrors, both in anticipate applications major designs augment camera single rear the actively year the commercial includes or automotive mirrors also We as for world’s of future placed single-camera with and of view China, deliver electronic to makers deployment the be are these for mirror future can generations that now engaged electronic are largest as solutions triple vehicles. the next from electronic on world’s that leading mirror well cars mirrors. now Most revenue market. and beginning view models side automotive

critical Looking applications. our see vision we automotive for required will ADAS forward, computer feature as of many component a of be automotive solution

For car example, spot advanced driver computer vision human believe Forward safety. for advantages to video combined the car quality future generations highest surround and best level blind image Warning, with Warning Ambarella’s enable of makers recorders, such the electronic may deliver detection. process in System, and powerful mirror experience vision with systems features Collision as Departure pedestrian of include will view HD the We Lane

that believe provide capability. further future encoding leveraging systems events Ambarella’s a many record video also will to video of ADAS require of advanced We recording

in case During models navigation Honda recording high-quality lot drive parking by be on car wide accidents conditions. for quarter an car we while Chicony price infotainment car storage video and systems. the recorders XXXp the a security WiFi watched model and AXLA vehicle’s in recording The recorder featuring lighting on video HD points. similarly introduced In IP video infotainment allow performance and connectivity with across Honda’s SXL and DXX vision processor, and BAIC’s for Ambarella’s the evidence full to processing HDI recorders analytics mode recorder recorders market, offer video based camera Ambarella’s includes makers SoC. professional GL a integrate and challenging China HD requirements Senova HD parking increasing see camera In car with includes includes both recording to range to new video new the introduced a of provide powered BAIC and the Chicony full systems. computer of on video frame simultaneous smartphone advanced

demonstrated IP capabilities. the assembled our camera new chip makers for a these the we leading quarter, as platform the next-generation and CVX During with of cameras development

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the of the During application pleased to from was successful news CNN of a learn has its our on the capture current drone aerial part first research the automotive product in gathering. that years fly range FAA CNN over and to people of over the were we invest expand of leading and in are technology crowd for snap broader waiver quarter In market and network in waver to market kind news received video CNN’s opportunity to of Robotics. and we edge two summary, new both testing Vantage applications. of continuing

very We delivering for with meeting the computer the on financials to and I to with their forward details pleased to you our are in over at the look our George next-generation XXXX CES vision show progress many and solutions more hand guidance demonstrate now for of QX. capabilities.

George Laplante

Thank this you, the QX XXXX Fermi, third will year. good XXXX, as I financial as the highlights of review afternoon, Today ended outlook XX, for my and October the focus for fiscal well quarter financial everyone. of fiscal on

of GAAP ask to During non-GAAP the that press discuss for reconciliation a release results. non-GAAP you and refer detailed to today’s call I’ll results

stock-based of for have adjusted compensation non-GAAP eliminated expense taxes. for For QX impact reporting the we

XXXX QX year. declined X.X% a same million $XXX.X to season. revenue in revenue holiday million. was the quarter of partially the the the for million, year-over-year from by to drone led markets, by IP product decline followed prior we prior represents IP growth in period In moderate builds in growth American million $XX.X wearable by the a grew finishing $XX.X the quarter $XX.X revenues of revenues. in million North strong the period security revenue year-over-year year in In year. consumer decrease in the previous growth non-GoPro and same in security, QX QX offset of non-GoPro saw strong year-over-year the compared from selling Our inline in the XX.X% GoPro $XX.X at auto

to revenues monitoring costs, an of third Solid with in revenue fiscal low-end revenues. in is increased from discussed XX% adding quarter DJI’s from were continued higher in Approximately of the cash cash quarter Non-GAAP QX shares, OEM employees drone of in plus dedicated IP year the diluted compared consumer Gross diluted third the quarter, as located by QX compared million growth in recorders due about effective of aftermarket increases engineering. the of the camera development in inline XXXX XX.X% prior most offset to million, quarter. were year. improved of end we QX XX% down end tax was for to particularly for video of margin securities in in Non-GAAP at impacting a quarter. diluted Tier We the or of million better quarter $XX.X XXXX. $XX.X with XX.X%. from compared good QX due addition headcount million Drone quarter with per XX.X the per The for compared million X primarily to year sports margin XX% Asia. non-GAAP at spark home of the sales from market, customers in $XX.X resulted increased million to drone for security, $XXX was the products the the previous operations bonuses. the for ended income net expenses ordinary of last quarter compared quarter net XX.X in year. to from last $XX.X to share, provision $X.XX non-GAAP auto preceding in chip automotive decline as in from consumer mix the as year diluted the shares drone to Non-GAAP on income year-over-year partially QX increase shipments $X.XX for year. the in in the or quarter share gross million QX ordinary of market. weakness well the as as total and rate the the $XX.X executive earnings was marketable XXX, XX%, $XX.X third period likely Total million, end of were -- previous ordinary fiscal operating per primarily QX prior annual non-GAAP OpEx for In ordinary based was of same headcount this result share diluted previous for previous QX the and and XXX million a

company the price an of total at for in quarter repurchased million. $XX the shares of $XX.X number June approximately shares During the purchased inception XXXX the of is total The at average of $XX.XX consideration since programs for average repurchase total $XX.X an price of XXX,XXX of X,XXX,XXX consideration share million.

QX. prior XX QX at remain Total As was sales in GoPro XX% quarter. came repurchase of XX.X% XX receivable $XX.X approximately of the million was was of the in at line of discuss targets. or days outlook $XX.X XX accounts this the of of prior for end sales inventory October had repurchase like QX XX, to there inventory, end Chicony XX.X% million million of XXXX, XX, Net of revenues, this came June to million WT at last end the $XX to in at million XXXX. customers days days XXXX. third year. at the sales accounts Accounts XX.X%, inventory at compared inventory and of available of revenue year the year. through compared I outstanding XX.X% outstanding, quarter for or or compares program XX days the with days the would Microelectronics fiscal to in year -- the We or in under $XX.X end represented QX. $XX.X QX to of XX%-plus compared three company receivable and now receivable

GoPro the quarter $XX.X same a $XX from decrease million of We revenues to million to between XX.X% between representing year. XX.X%, year. from in ending respectively, XX, expect and period approximately the expect January the be and last QX of the fourth in quarter to for XXXX million, $XX prior revenues $XX we In decline million

markets, IP revenue a the year-over-year moderate by in solid OEM offset security drone auto expect and decline market. increases in We

We of the to fiscal memory over part a year. revenues next high-speed in the expect next few shortage continue particularly impact of to early quarters,

included impacted shortages have in compared to of estimate of future XXXX guidance, XX.X%, and is an to and what year. of not XX.X% be it margins quarters. we the Although, will in extent clear to to between QX potential yet QX XX% in impact memory XX% the prior our We gross be QX of expected revenue estimated non-GAAP revenues QX

quarter. impact largest the to are revenues seeing As forecasted, China having we increased of security mix in professional negative margins the the

attributed As the compared can revenues. to sports the previous also be margin in camera decline year the to in of reduction some

We between QX and the increases. OpEx in coming increased chip -- expect increase non-GAAP million to from with million primarily fees be engineering $XX.X from headcount $XX and take QX, takeout

which our and assumes expectations in approximately of XX.X expect be range non-GAAP At Non-GoPro count million in relates revenues wearable effective lower for fiscal it the point approximately in drone consumer estimated QX has We growth this changed grow XX%, non-GoPro markets, much are the sports cameras, our as the offset to to estimate security, rate in not to quarter. including be diluted ‘XX. We the share by to XX% tax for shares. market. auto revenues

we expect time. clear provide some and visibility, at from revenues lack we Although, GoPro, this therefore, guidance unable to

operator Next to year margins we half, $XX end OpEx will million while $XX and to be high the margin million the range the during into to move we to expect estimate our of target Q&A our the gross million. million turn of first to $XXX back And for would call between to now manage I thank today. session. everyone I $XXX like it joining

Operator

you. [Operator of question Stifel. first with Our Kevin Instructions] comes line from Cassidy Thank the

Kevin Cassidy

of can a taking volumes for what to unit category In all that, compare XXX-degree results. for seeing on it’s at good maybe question it the you sports camera cameras? you adoption and and are kind new Thanks the my congratulations

Dr. Fermi Wang

stage XXX-degree. I think, early the Well, this of Kevin, is

start the You announced just that design shipping. can we most today, see of they

the to on conservative we sports we market, this we to this near a volume, would time but that hard a be this by for I future. camera, for market conservative, can the are us I because because -- think meaningful develop are in is technology market, We still it’s giving so but we believe compare to continue business new say

Kevin Cassidy

the Okay. said Thanks. you us can deployment of year, on -- give little will for you e-mirrors tighter? or e-mirrors, the next a that sorry, the be And quantify you automotive, it any e-cameras can

Dr. Fermi Wang

Yeah.

the this And second and win at of mentioned Tier electronic also next we have to time continue half later but we have we impacts, year, revenue the the announced activities lot Xs that First year, we’ll design OEMs start that a with seeing point. all, of mirrors. believe of at several we next from this

Kevin Cassidy

Thank Great. you. Okay.

Operator

you. Thank

Our of the next question line comes Matt with Genuity. Canaccord Ramsay from

Matt Ramsay

very Thank Good you much. everyone. afternoon,

and CVX sample that which was the give pleased us detail me to? was quarter. Maybe a to you. initial guys you were market product to there. that For of A, reception did you hear representative bit customers that the able a in you by able the more particularly product, into sample were the the segment could second, I about, Thank side maybe little customers to software on of received set And sample the you how

Dr. Fermi Wang

Right.

just So IP said, And a demoed will SDKs. sample, the the and I like in focus receive we markets markets we and demo receive some is that -- that our -- key those from of to and security. sample the these can key for our demoed the imagine customer two you customers it automotive us markets and

chips. to importantly next and CV we talk time start sample features, CV key fact, about consumption also just I power early can next CVX -- for probably that think the and family early in customer still more stage. And performance, we CV talk of particularly our But SoC unique to based strong I expect interest weeks our early a in we few a I our due sampled about. very roadmap our the it’s see because generation’s XX-nanometer we still year we ago. say have It’s this to technology,

features, and continue think, are most with to lot I that very the of think interested the I a roadmap, performance So evaluating. of to customers

We expect to see months. some several in fierce feedback

Matt Ramsay

helpful. That’s it. Got

bit in a know opportunities automotive the for ramps next space could the be me the the maybe automotive to family I very the you on market, you seems even on one and helpful year follow-up the spaces of few like areas, and calendar are for CV opportunity long automotive in other it little CV between Thank in CV in automotive before we comment contributes a exciting as of sales revenue view, today the where when have it revenue and Just run, because think you. the magnitude materially space. I e-mirrors growth for in surround a us the but over the pipe? to would understand really

Dr. Fermi Wang

me for I give for you I -- way. a hard -- to It’s a total revenue available different growth forecast, that look let the us. answer We question at but market can

that Our in surround current by mirrors, talking on available $X.X several total market, including view, recorders, and connected firms. market, auto, are years $X car, professional roughly billion public number the electronic security add But you billion. home if other based including ADAS and the to research we up can size our about autonomous grow published market

invest on terms potential look growth that that’s basically for how of about as security are we several going on heavily lot of because the opportunities continue Honda activity will now. video today and because on about that have really e-mirrors, we we had two decide we in we And recorder things revenue biggest to and right where talked those we is working near-term our like auto, us. the we’re they design e-mirrors, well wins at the and talked also a two become to So market that’s as camera, about

anymore. It’s is strong Japan surround continue are be for to that product And views. and in near-term, China, ADAS so for I recorders and recorders, separate becomes that international going opportunity think for to roadmap an to mention a I not want e-mirrors, in for us. term, e-mirrors longer And

front, camera video recorders based and front We will add view, the a ADAS surround all a will continue ADAS vision, continue current it roadmap. to of human but see function e-mirrors, like that for as into the as systems

And same autonomous the vision into well-positioned So as and to serve customers the our that’s are our develop to technology in CV both and vision the for why a in ambition automotive be product that future. human families. continue it’s build a those foundation video definitely I very computer use and we side to and to of think ADAS supplier we car CV future customer

Matt Ramsay

Thank question. you for my much very taking

Operator

Co. Charlie Dougherty question from the of Our next Anderson go & Please comes line with ahead.

Charlie Anderson

questions. requirements, for security it you increasing Yeah. referenced vision. your if for Thanks heard IP for taking computer in cameras script Fermi, my I sort of right

if terms maybe there you of I different content a versus features be pay in in available terms follow-up? that prices little in market could CV, commentary to there imagine for what more that of a describe other So I’ve wonder established any someone bit will people the the I got are you. then helpful would others, and

Dr. Fermi Wang

Right.

looking do at security like that, very people single-chip think do and really both there’s such I CV using today computer have that to solution or coming very to this and products think camera good that the market, all, and server is customer in no today our using two-chip professional of processing we solution connected video So a for point. what vision we good everybody’s vision of lot computer heard for can first is the and the home. I But

upside be chip in performance meant side competition kind ability is our So of the that for our at computer be on that same going price powerful single customer on that that gross of feature really any the that but leverage expect with will time -- be market. to security chip to with to trying But current focus on that -- video to based our the that think I we with will efficient compete is to on ASP is processing features the expect and IP provide we add margin more the importantly, and higher, vision definitely the this but position us. portfolio then ASP current in will a most terms and be

Charlie Anderson

was Great. follow-up, like And next then, non-GoPro wondering, George, as you about spelled I XX% sort growth of a mix year.

maybe I year of think quantify that they to extend in you that first and XX% memory Is QX in difference did what shortages delta about QX can the to you from that next and into talked an the your also guidance, have half previously and extent? impact XX%. if

George Laplante

Yeah.

I could all, also. a of First didn’t couple I next a I think, so of to it range it variables mean it’s make be XX%, think, above that the year. But difference. there are, significant

the all, the next an rec revenue. of year year have of to impact reported could transition part to new in rev early First the our the

consumer In the addition, part very drone I cautious early of point think memory. high-speed rest being the until this in to the is the there on holiday at season see the progresses. also exposure how the we’re we And market

Charlie Anderson

it. Got

Okay. Thanks much. so

Operator

you. Thank

next comes Quinn from Co. with question Our Needham & of line the Bolton

Quinn Bolton

Hey, off, GoPro. us the if for guys. fourth had more on give you revenue was the release any third the wondering thought ago to George, thoughts a of quarter you of I has you think, guide has going couple that GoPro’s revenue amount quarters it tail could in had been the stronger GoPro, that looks just here still like HEROX, the quarter with of the healthy a and --

GoPro business? you buy revenue How look from continued should does or into last represent of kind the for that somewhat see a half As GoPro sort revenue ‘XX, cameras of be you thinking fiscal about time next GoPro year? do we second of

George Laplante

be as to do wind We levels there the QX believe inventory don’t of the at QX will part this last little No. quantity believe holiday coming revenues out there determine difficult year. see year next and then buy. season. we’ll of additional last that very that and be actual I be time and QX, will early will in after the particularly probably to down. believe the revenues believe I point some timing. we the But It’s the due early

Quinn Bolton

are there other fusion the have products for that in GoPro? that is or you And

George Laplante

be understand we down the year HEROX point, some at Well, the at it’ll wind the so and next point. this will HEROX fusion

Quinn Bolton

sort to Great. sounds And some sample the the coming you markets. deemphasizing are reasons to family, also back you then applications in into for expect at forward? maybe security there and or drones Do going point future why of CV just family think, market limiting drone CV the to the you currently drones. about autonomous had in in like talked I automotive sampling you’re past the It

Dr. Fermi Wang

No.

sample In plan do drone fact we to the market. to

In has the DJI. to But customer fact time is drone which demos. the at CES our to see whole you big should same one market come

about deal focus how to So very to is think, I whole development, how us. that’s be on. that’s move customer for about be strategy going a continued silicon important us with DJI talking DJI in have is but why to need we this, sample, been been for where important well-known to to the never talk so And we and we

to going to and build We’re our relationship on definitely them technology continue show that.

George Laplante

one think I thing…

Quinn Bolton

Okay.

George Laplante

just of on bigger rolling thing allocated. each one of there’s with on We think resources the big a is, bit a the software than priority is timing in much drone, out so -- market. do we just a security for demand see I getting that the market the also

Quinn Bolton

half for to of me then the CV And the in for video Charlie’s assume I the features sort it. first second processors. solution? about single-chip out just Got that response you traditional that too the for talk generation vision member plus XX-nanometer need video think security year, to next version market, early Can is or of computer question plus you’re tapping will both that that family encoding on merge it referenced CV we the the

Dr. Fermi Wang

No.

a that’s assumption. good think I

Quinn Bolton

you. Okay. Great. Thank

Operator

the line comes question Bank. Ross Deutsche from next Seymore with of Our

Ross Seymore

Hi, a both security, for the the about I guys. a talk side markets drone the and existing to IP probably, to hit wanted side. things question. letting primarily and extent CV the ask first then lesser on Thanks me of

to feature to going As think you’ve the the share the really to it or you itself? IP gain the that times expand But that it, that’s you to so security drive, about the that market, is about growth can rate do proposition, many story that the bring you something powerful share, drone you’re allows going addressing is the cameras you guys you it a really it technology industry talked a guys being expedite is the actually to gain the enough features be could set because going for or higher. ASP think you’re value of

Dr. Fermi Wang

My let’s one markets a belief is, time. the take at different

really connected For size camera the CV reshape market for both home. a will and professional believe role security and do major CV for camera, think, this I security total I market increase to of play that revenue the

reasonable becomes be think of will will grow, the So from we a also mention performance. features not there the and and market cycle believe price a I to at coming CV view point that good that, refresh up when

that market to So think definitely the I ASP features. going go definitely is plus cycle plus refresh function a growth us, help because of up

but the available feature drones, I have and For and for market growth don’t performance see a consumer the drones, in do eased will boost the believe point, function regulations total continue the the commercial a when and regulation a price the us. drone, I and that market, for becomes strong think, the also professional we it’s because become to -- revenue

we I consumer that one, on maybe So important DJI also a to number and of and obviously drone in drones future. couple focus the really commercial customer for for need think

doing So technology. we are

definitely technology processing, Fortunately apply usable planning, about market. for we directly technology about detection, current drone also. talk the are planning, to We CV built talk that object directly stereo those drones we for route the

resource really back really That’s allocate and definitely but still keeping about it’s to security building to we’re we -- we opportunity. right there at for and So the I the radar want drone how and continue we our about say software think biggest we point. near-term never get why talk automotive, that

Ross Seymore

the of hitting a -- a a hit about, George. What to and first of to you, Great. the general? I color part the dilutive be year? talked accretive get question family the the kind gross any ASPs there that the that with CV is Thank or in expect you. of you plus high XX% follow-up are color wanted them do CV That’s with then helpful. And to end minuses XX% commentary little about of clarify the I both range. you margin in gross question, the my back of some chip then Talk and in you and the are little to add half bit for know margins on higher just bit your two-part And the second or but half about,

George Laplante

in half into China I drift the impact and first Well, the that’s increasing end. forecasting sports I the of to see high why we’ll decline, that to start am the camera so the think, business

at to the far think unsimilar this I what because would the half it’s flat, looking actually now forecast call I is second degradation, As half. concerned, first right no not point as is the real mixed

with I that. So reasonably am comfortable

On the I side, year. all margins this am CV not expecting to much impact at

the not overall material think volumes the to I margins. be would really

markets they security I potentially particularly and drones. certain think in forward accretive, going I will believe be like

in out have will different auto, sort there ADAS. opportunities surround I we on various because versus environments, competitive for view to later the have still electronic be think in we instance, mirrors and

the those I So margins think are analysis future. for still open in

Ross Seymore

you. Thank great. That’s

Operator

you. Thank

line of next comes Jagadish Redstone. from Our the Summit with Iyer question

Jagadish Iyer

Thanks Yeah. me. questions question. Two for taking for my

talked given on sampling application given to What follow-up? do products, the you are realistic from about that and then revenues can market the related that a with particularly is the CV timeline you the I think chip your First cycle long when currently CV the you chip, realistically get automotive existing automotive. qualification you for and the have

Dr. Fermi Wang

Right.

cycle of I cycles than market said the automotive think two But there In design the shorter like you it. are design is places. China, other long. are for portions So

that. So have seen we

after right, that and you’re mirrors for even next-generation that believe revenue designs say maybe you electronic be and two starting we have of later that. but about there let we mirror -- electronic and we longer could a will that take So design talk mirrors in that have electronic non-CV already next revenue, China, years in year, if CV

-- So today of a way of however, a three-year later need the you’re revenue for us. But be absolutely to point way design revenue. long view CV all we is is for right long wins the from automotive

that the we by at near-term opportunity in Asian especially with vendors time, why we there. that’s same China do the start to a you But So working have see working today. on design definitely realize

Jagadish Iyer

as I consumer rate, be we here? kind Okay. at big is if a monitoring look you how Thank follow-up think of if home to it should market, any and I is the you going -- competition -- wondering you. how a have about was Then have, on home and growth thoughts going

Dr. Fermi Wang

continuing all, of grow. that market is First think, to I

have been two growing been because about talking has We years market the now. for

a quote me we It’s feedback, on because based our We seen for products. hard and that. the continue But growth. to customer to rate market all growths customers their seeing strong on are their strong on growth think that any see haven’t we revenue current research

that market I years. continue couple will this So believe to optimistically another grow for

today. a the the again, again is, I because And still of three how two we the rate, in market into can market. and how expect home vendors, in more early home it no homes user-friendly cameras. selling maybe if for big home camera it how of phases that, And reality that many considering cameras convenient -- years connected for multiple continue you’re of connected become growth users CV for following, lot the at those to there’s we’re the market usage, terms but and look if popular really U.S. In penetration especially research home much you will the think, years to probably boost this the when become a camera

Jagadish Iyer

market take and number you a kind of of home home number to context the we us like throw some out monitoring a that $XX can a there? of that dollar is for can kind there some a just So kind from or there go it’s give then whether

Dr. Fermi Wang

And chip where ASP ASP your high to single-digit, to but Well, range say those that for is us single-digit cameras. do mid high calculation, -- our to for that’s you X you if own camera. in is X for each the have

Jagadish Iyer

Okay. Thank That’s good. you.

Operator

our the Thank Moore question you. And with Morgan of next line comes from Joe Stanley.

Joe Moore

guess, wonder surprising HEROX January and stronger of -- them least kind that’s at expectations sounds the of was like sense Great. GoPro talking your than Thank quarter, it in not well. selling if the or you way I looks that you. about I in as

other then, your some you maybe kind in and So, B, why that’s of I you the than less does and expected understand guess, that that case that’s of offsetting? part that mean quarter there’s A, that January do business is the

George Laplante

to GoPro we early with Actually, slow due probably what pretty to for be much order expected what the processing years. inventory, business to line is year comment GoPro because seen excess my the That why we’ve timing. last we expect part of next of the earlier similar in two was just the that

Joe Moore

of guess, cycles. Okay. of look at curious timeline the on with longer you’re sense. long the have you work, automotive sort chips, am vying iterating for these chips a sort of generations out I makes of kind regards That business CVX to Great. CV you I when where out year, And you’re multiple then, a design this does wins? and years several is multiple type that How year, times putting model

Dr. Fermi Wang

Yeah.

Joe Moore

that can so CVX of sort to is the the platform a evaluate of development iterations they establish chip? Or future

Dr. Fermi Wang

Right.

powers we interest let example, we to chip AX called started showing called give and features win mirror, me get by design electronic you And when computer secure on for the function and them the to grade demo people start and So, and our example, think, auto used AXQ. doing I moving designs. chip we

to follow for we and through to so even for went and discussion CVX believe the that. you but no be to won’t get that similar clients, be auto performance another with things we is up through power them production. process evaluate them, your need chip that’s your CVX, with which side, chip need a run go auto to without So into we in grade there’s look, evaluating can that But we will the able

all for So is auto. not that’s cycle the But, going three-chip two we’re to through. year however, the a

for performance You that than the can the the so you for different or that. requirement is need security IP auto, for chip a much home security, camera imagine for less CV

you So other security in auto, chips markets, can for one maybe imagine there’s for target things start doing one between. we that target different for and

that’s So to particular targeting multiple -- look developing think, I markets. different continue applications, play in for become family requirement the

Joe Moore

Great. Thank you very much.

Operator

you. Thank

with Our next Roth Suji comes of Capital. the from Desilva question line

Suji Desilva

think puts the the year, Hi, there? a you In for whether market security XX% about can you would the Fermi. auto faster year and over takes ‘XX talk IP fiscal guidance relative market, basis grow the and Hi, on George.

George Laplante

going next security the now a fastest think is is The base. but be just to off Well, I percentage market growth is area growing market right probably the be smaller home market. going auto a probably basis it year our next to on

because In but strong So grow next again be that year, very you’re will erosion. in ASP year. going erosion will I unit have it line professional more there, probably ASP think think, with and increase next to market, security, I

Suji Desilva

helpful. in any That’s and revenue when clarify the or will customer assuming there And to in CV CV? are fiscal not you the position announce be for a to just we auto then wins auto, Okay. ‘XX, in

George Laplante

relationships, auto I There able as potentially talk in auto space be forecast to -- right now, there’s say no in might CV we’ll that market probably talk CV, customer about would to the able or about the talked and revenue we in the second hopefully about half relationships we’ve be CV. before with

Suji Desilva

helpful. consumer, book? has the market, your what’s Okay. to quick on mix of of Maybe security revenues Thanks. That’s up still the relative professional consumer small the or it’s curve, half-half question now versus professional one very come the whether

George Laplante

total half expanding. over well of security, now. but is Yeah. It’s the than less It’s a third still security it

Suji Desilva

Great. Very helpful. George. Thanks,

Operator

you. Thank Craig-Hallum. Richard next from Shannon comes the of And with line question our

Richard Shannon

of relative sort noticeable think thoughts whether the the coming the us of go following you you Thanks world, kind guys. on built just just could Apologize any for so the process as and and for about here on follow-up noise outside HEVC am well. bump previous I on China assumptions ambient questions questions market to my give share? for ‘XX, going security on to of airport, if question. Thanks. in I My then question China taking in of the ask on tell how versus wonder or IP the -- any the thought up mute. from the rest fiscal there’s have realistic Hi,

Dr. Fermi Wang

is faster that be and international to think strong. still than sales dollar that also very high I continue market the Chinese the growing vision

expect I I think So -- don’t change. to don’t that

international HEVC a Bosch said, other products terms with that company but like and In HEVC, Chinese HEVC system a of knew their offering. product we that we follow also hardware syndrome, shipping will based was quarter started this few

with knowledge HEVC that, become -- resolved So situation camera, yet. to international not for quite is not security been HEVC our has royalty will the however, standard

nonetheless, everybody aggressively how pushing because else start seeing our the a dollar is customer still to following vision been question for and has that’s big So handle of we tech now. it. HEVC But,

George Laplante

Yeah.

the outside other we China revenues -- I comment one overall see of market, think Just in also. do did on professional security year strong we this

So next same. expecting that to some of the and did to are growth we the see contribute year

Richard Shannon

for guys. you, That’s Thank Great. me. all

Operator

question-and-answer you. Dr. turn And closing session concludes Thank like back Fermi any Wang for today. that I’d the to floor our for to over comments.

Dr. Fermi Wang

job next us computer like for to on I’ll our you deliver and joining their afternoon. And colleagues time. thank would you time all this of vision you. also you for Thank of Bye. I to see thank all technology outstanding

Operator

a does thank Ladies participation in you the program day. for and you. Everyone conclude conference. your Thank today’s gentlemen, have and disconnect. This may you great now

Ambarella (AMBA) 30 Nov 172018 Q3 Earnings call transcript