AMBA - Earnings call transcript Q4 2019

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for standing by and welcome to Ambarella's Fourth Quarter and Full-Year 2020 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference call is being recorded. [Operator Instructions]

I would now like to hand the conference over to your speaker today, Louis Gerhardy, Corporate Development. Thank you and please go ahead, sir.

Louis Gerhardy

Chris. you, Thank thank fiscal and joining fourth our Good XXXX you financial and year results quarter afternoon for conference call.

be CFO. Our and will Dr. President Wang, speakers and Casey Eichler, Fermi CEO;

are to our materially uncertainties to our risks, statements prospects, to The of projected assumptions. statements solutions, our quarter These under any for your of and or could fiscal and from primary incorrect, and things. risks regarding questions market Should statements. statements. financial We're materialize no demand today other with among results. differ our subject discussion responses today's is forward-looking actual our results be fourth The purpose assumptions obligation XXXX growth, the uncertainties, information and these these provide call will these regarding to should financial you results, or prove to forward-looking update contain

today's on December historical results, quarter SEC XXXX, and the XX, can XXXX press website. portion release, XXXX, are factors XX-K the our the found fiscal call for results of of potential Form be the Investor XXXX, and filed affect our risks information XX-Q Relations other Report SEC, These fiscal on results, fourth for filings, the fully XX, March fiscal and on ending as we to XX, the uncertainties that a Form third year Access X, year file on filed with on could of well Annual that we as XXXX. more described our January ending quarter risk that including the assumptions, replay XXXX, financial January and documents in and

Dr. Fermi turn now over the I'll Wang. call to

Fermi Wang

everyone. good and afternoon, Louis, you, Thank

on factors, I health provide an also the business. to continue reviewing our public will impact first our Before extraordinary results, that may geo-political, update

offer express them wishes continue those complete we we'll for and worldwide, affected recovery. are our our We and employees. best to to safety necessary we precautions take to deepest COVID-XX, on sympathies our ensure the the of First, to a

are to virus, impact a to demand from to expect continue an starting face LIBOR uncertainty. see of the We supply financial elevated and we and

taking are to We to precautions the own our operation……. risks mitigate

an face uncertainty. supply and to elevated of Continue level demand

operation. tensions We the we factored QX wide-variety of Lists. gave including clarity are they X-K are and of high. to have of guidance. matters. the what our our trade of somewhat are The as trade, XX, know some this remain deal own and taking the to our time But risks our on there us at geo-political ability, the Phase risks call, risks Entity IP into Based to - X, October mitigate update, October and precautions policy, X Geo-political play, a eased dynamic best and risks to we foreign

customers technologies. and risk Factors subject in the to shifts on new take included chain their our to of old potential various disrupted on advanced changes dependence between export the factors, The reduce market share the and controls tariffs Entity components. the to Potentially to supply Lists, geo-political supply our China issues. customers actions business U.S.

security the competitor our SoC hand, us camera outside at that the other is share challenges HiSilicon, helping China. in Huawei, On gain our of largest unit facing market, are

wide factors can potential a for multiple As contributing range us. to of see, outcomes you are

another fiscal This evaluating us major development year activity investment revenue still year will shift very taking our CVX, million prior the CV $XXX.X percent major XXXX confidence CV and boards includes kits, our foundation purchasing after only exposure. but customers our more CV It year different just gives with revenue, is Fiscal in few no with XXXX. than with take market total leap parts, generate products revenue a in of XXX engineering step from year XXXX, revenue of X,XXX CVXX, the early CVXX these fiscal slight from year, customers. a production and a forward. of In

Looking into our expect CV and area strategy-focused total year to we is reach the strong CV of revenue XXXX, in for momentum year. fiscal XX% of

total headwinds Consumer to With XX access monitoring a Electronics year for and turnout Our XXXX, in meetings. partner grow more we such as a new revenue logistics. well a indoor and January, and recent latest the control, as with demos, than At retail, despite XXX our uncertainties. outdoor fiscal our and automotive Show experienced few home we as applications, more than customer solution exhibited robotics, goal and is strong applications, in

as and for of within the power autonomy. consumption surpass consumption, stereovision OEMs car it CES, Tier high power two forward-facing possible and level make ADAS windshied-mounted box cameras. ECUs B, we extremely requirements or CVXXFS this ADAS SoC Xs as new program, level low for LX+ vision Featuring ASIL-B of NCAP, as SoCs for applications. assessment and to performance automotive integrity During forward announced single constraints CVXFS well our with cameras, automotive safety-critical also target and safety first known computer monocular

Visualization, a market, was intelligent commercial global next it range applications. German-based and and high during sensing generation CVflow viewing including platforms offer and working that Surround of and to AI of ZF imaging largest Driver wide vehicle processing viewing announced Monitoring a interior the SoC the X [indiscernible] vision Ambarella NEDA with is one of passenger of for processing, to Tier quality View the e-mirror the their enables supplier on solutions CES. stand-alone advanced combination

with of algorithms traffic running its CVXX SoC Ambarella deep detection. object performance processing choose and ability their ADAS German depth on CVflow driving deliver software supplier consumption. limitations, HELLA demonstrated high areas of computer lights latest vision to very Aglaia Detection and due ADAS to The powered learning-based, HELLA signs. AI extremely SoC. software included the multiclass suite classification traffic low estimation,

develops Van the system and location, resource to to CES. AI stereo-processing CES third-party one with platform The invest these cargo of and of AI to CVflow demonstrations learning system. have our deep on multiple At rapid program. the our Sprinter more develop live designed corals capability of SoC OEM A CVX process with Mercedes-Benz software companies list at and number for efficient deleverages in both chosen demonstrating recognition CVX expanding parcel-delivering a of organization of is their software make provided

And system based ADAS time’s ran interior For example, facing CVXX. was both monitoring on system vision camera forward simultaneously ADAS than a passenger and third CVXX-based Any solution our forward-facing the the retail ran and runs in platform driver ADAS vehicles. XXs, and instrument forward single three four recording one CVXX. CVXX and target cameras facing StradVision More the on Eyesight's cameras. trouble CVXX. live on driver flips demonstrated on and monitoring analytics on

X day LX platform, Las or SuperCam autonomous [indiscernible] cameras night. EVA, autonomy Vegas together at vehicle demonstration for and successfully first time CES conducted demonstration LIDAR. with without Ambarella’s radar, cars rides stereo Ambarella’s completed but over level autonomous The embedded both the The XXX EVA the the and streets. vehicle were Ambarella’s CVXX-based during At rides on leveraged

The demonstration traffic detection bike, task the the sign and planning obstacle in Traffic generic included detection and protection light management, motorcycle autonomous detection and classification. vehicle, and parking.

detection CVX the mirror and CVXX lighting in were car solution improved and in This provide of Ambarella left an also CS chip, three-mirror demonstrated system’s we single a difficult mirror pedestrians three-camera when warning running SoC. or same side view field could our present. by only bikes, processing provides not on our conditions, but blind leveraging a spot right AI-based and

semiconductor market security on new face-recognition for the and based and During RGB-IR Ambarella's platform CS, control, doorbells, The addresses excess imaging control Ambarella solution AI On chip. announced is XD a life two demonstrated vixels. system by Ambarella’s locks, assistance. smart-video AI platform the XD powered Lumentum's structure pin robotics. video and sensor sensing applications, access panels, CVflow vision CVXX and and

system Ambarella powers XD sensing. processing recognition on has that single uses for for SoC floating facial sensor infrared sensor images and CVXX visible algorithms The a leader single capacity. and algorithms, significantly both chip, the and encoding depth increasing The

open-source open development And platform on or the of Ambarella's facilitates the a and processing targets contributed, automated-guided functions. infrastructure consumer provides functions, unified applications including robotics AGV, robotic based The robots, new robots. industry SoCs. It new robotics CV most robotic vehicle, CVX and or for Ambarella common platform

included chip a detection, stereo grid, processing, audiometry. and tracking, video performing demonstration Our object occupancy single CVX key

customer about security professional new Ambarella new February, auto requires that addition the the security. video SoCs, from take solution effective portfolio, camera HXA processing a video of security for visual additional Based a I is of camera. will on the Ambarella’s information footprint line close budget-conscious launch camera now some use. - in the a video quarter, a with HXA something starting a little announced for solutions last time product small

industry gaming such enterprises to Electric recent Schneider enhanced March as camera other targeting of in giant a CVs, X Telco, CV the the announce smart and customers. spinout and Sarix critical infrastructure customers global series airport, intends

be are image industry-leading the analytics, with build and shipping and month. SoCs deep cameras performance, CV Ambarella's to the later these learning face on this Based quality, roughness, expected

IR, detection, and analytics, HXXX including working and VCA ratings, approval, XX Videotec, security camera. outdoor in a smart will At security smart new IACOS, WTR March, all feature ODM fisheye X-megapixel crowd and embedded a CVX-based later exhibition major be to IP encoding, XXX camera their detection, camera professional Taiwan, local XX This demonstrate detection. an IK in and intruder will OEM held loitering

all In doorbell or outdoor, this security for platform its XXXXp security revealed home HXL ADT HX by videos. designed the do-it-yourself automation ADT. recording are and capable firm in consumer first market, Ambarella’s camera home platform, and built security indoor, cameras

Amazon [indiscernible] introduces a XS recognition, feature the tracking model camera Ambarella’s SoC based facial vehicle recognition, first included maker Chinese to support also for the on camera, home camera CVX and CVXX our monitoring consumer SoC, and Alexa. path,

traffic the I Martin a and will dramatically sides of the are monitor automotive vehicle. of product the driver's markets. announced to the they to little about rear rear-vision from develop Corporation to joining system improves that ability now the some introductions camera-based talk a and Gentex Aston

demonstrated OEA commercial based China and DBS a brake Ambarella X spots of use prototype vehicles The for forward-facing camera passenger IFVS booth ADAS was emergency CVXX XXX, system lane-keeping CES AQ autonomous fleet. coach their will Superleggera. Based in provides in TerraMax and pedestrian in Etong at on Gentex based Lot Tier Ashton-Martin the on the in functions.

dash introduced tandem SoC. XXXX lenses, night to a driver, its around the featuring inside front provide camera view coverage is automotive complete the with vision, Ambarella’s and video Garmin tandem and featuring two on resolution in quarter, car, camera XXX-degree the the based field record AXXA each During to

dash per Based camera leading stabilization, model. Europe’s image the motion, second U.K. XK video introduced Ambarella’s its night at XX Alexia GW and and Amazon XXX records on SoC, a supplier camera super HXX and slow the automotive includes integration. vision Nextspace, frames

mini, the introduced a recording. video full vehicle SXR And OEM car standard supplied automotive our recorder leader featuring HXX the channel design SoC, automotive on China by recorder Ambarella's based based the super its [indiscernible] Thinkware electric and vision X,XXX full dash as QXD offers HD on feature, Nissan two factor Ambarella's and a models form market, Korean, car night In cam introduced Nissan and small SoC, QXD with features. new the

a quad is a model HD XK content While design. plus

segment, In PXX camera Chinese enables sensor, wide-angle each the camera its sports unique and camera AI includes consumer based resolution, X.XK SoC. which video. editing and maker VR smooth one market XXX VXX our twin HXX Cuba offer XR software degree mode, capture InstaXXX camera focus a The new to introduced or

this seven camera customers In computer revenue, won a summary, year forward and we articulated shape. vision. commercial into position presented fiscal receive very step taking we strong the the previously to material began we things why 'XX, 'XX. nearly to $XXX in all a wave, calendar for security where become the in have in three-way we professional million foundation are as investment market That's establish and year have we've The production, - we major are AI

two of with introduction CV In different across from wave customers, three market, we home customers' these have fleet aftermarket maturing, many this high year in generating activities year In we expect and becoming the production will activity X, are the kind locations. and market, this XXXX. and remain high we monitoring is automotive revenue revenue

continue expect XXXX auto We timeframe. in calendar CV to and year year material XXXX the calendar revenue become to

applications. global this you as smart are cameras. shareholders thankful critical cycle product are [indiscernible] during successful to support. our bringing the at into us, security CV customers, surrounding CES, homes, existing Ambarella's and robotic smart we XXX expansion new serviceable But want And multi-billion like of most this other the your industry product company. AI our and logistics enabling strong I are their X.X saw vehicle, importantly, of our new market markets, other for stakeholders, all and Despite thank to and perseverance phase vendors, including to execution uncertainty our team for cities,

of details financial fourth turn first will Casey call fiscal for I to quarter Now, our quarter year XXXX. the and for over guidance the

Casey Eichler

Thank you, Fermi and good afternoon, everyone.

the 'XX for review provide the financial January first year financial 'XX. a quarter and of FY XX, I'll fourth fiscal highlights quarter the outlook Today, for and ending

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

For expense balance similar non-GAAP Revenue with to slightly impact reporting, adjusted split by market security $XXX.X we to have in eliminated FY taxes. in range of 'XX the between the to other. camera revenue stock-based the million the year XX% and prior and for increased automotive compensation XX% with

For margin gross XX.X%, to from professional auto and FY was non-GAAP down due margins other by margins. XX.X% markets, camera in offset 'XX, security partially lower higher

marketable for securities to Non-GAAP R&D. flow of million. operating with Even our operating R&D year, primarily expenses net $XX.X revenue, $XXX.X a in foreign credits expense cash the with due at debt, included decreased totaling X% no positive and was million non-GAAP cash XX%

slightly $XX of above compared of to a $XX midpoint of prior and million and same in to results year. Our QX the the million consensus. when represent was QX of XX% These decrease million, an of increase quarter line guidance, revenue our XX% from $XX.X with the

As other revenue sequentially. expected, and while down auto increased were security

points expenses of guidance to XX.X%, million compared was close quarter Non-GAAP was operating than for million about gross due fourth margin to and $XX.X XX.X% the in our our from XX.X% of $XX.X QX. million quarter higher primarily slightly guidance mix. was million. prior midpoint XX of $XX.X This $XX.X to to up basis to the QX for the Non-GAAP

the income was quarter Non-GAAP million in $X.X or and the primarily million Other share compared for securities. $X.XX or income interest net per on income $X.XX was marketable fourth $X.X $XX.X to quarter. and per cash million share represented third

guidance Taiwan, income credits jurisdictions. the end taxable QX lower QX XX% The our benefit foreign tax tax of effective non-GAAP in rate foreign was in change X.XX%, of of to at tax than due better in and law

the based quarter, non-GAAP million earnings prior XX.X fourth compared as on were the to quarter. share million the in In XX.X per shares shares

Approximately fourth the at located with Asia. the XX% them headcount software. about most end engineering, of total Total our XX% of of dedicated is in XXX our employees of quarter headcount on was to focused

or or at cash compares In of QX, $XX.X was This operating we end XX million, positive $XX.X accounts the at million the the compared outstanding sales of total inventory of of prior at million XX to the end end days quarter. QX the accounts fourth the were quarter to million million $X.X the of flow generated of days sales previous receivable at quarter. $XX That receivable $XX.X outstanding. end

- QX. Days of inventory Chicony, at had increased of plus and to U.S. in OEM, primarily XX days in multiple who QX from in QX. two based, partner at manufactures for XX days customer XX.X%. customers We to came came who revenue; multiple fulfillment XX% WTMicroelectronics, customers, Asia, in in ships Taiwanese Taiwan, in customers revenue a a XX% in

I'll of now discuss the the quarter outlook first for fiscal 'XX.

is X% be total in to quarter sequentially, down expect to in to first or which typical X% seasonal decline the for QX. the range than million less $XX million We revenue $XX our

In camera broad-based seeing decline exception home with of we are demand. market strong the where anticipate QX, security and the all seasonally to markets we

to are significant As now taking geopolitical in the to we operations. and Fermi measures forecast public discussed, factors our and protect supply, bringing our health and and employees demand are uncertainty

year fiscal In and from $XX had estimated security patterns not safety of vast roughly these the revenue camera still year inventory a majority ordering we're in starting fiscal we customers 'XX weaker has of one while pulled been 'XX. two in professional see million to of believe customers to November, China stock QX, in from depleted. we And

it being and relates chain to to supply remain is what that to we and our means the to in continue dual about ability that supply our Going created China. China non-China forward, customers as concerned

have outs these In due push difficult. started assumes is And and to addition, cancellations. the our see COVID-XX, say, in continue Needless quarter. we trends to some extremely to guidance order forecasting recent QX

XX.X% and compared in We XX.X% estimate between XX.X% be margin QX non-GAAP to fourth quarter. the to gross

and non-GAAP primarily headcount, expenses. engineering million between other the million tax engineering OpEx be increase $XX expect coming QX to and first with $XX the from quarter payroll accruals We in in

tax to X.X% our the be in We non-GAAP QX, range in QX. diluted to count should in In approximately XX.X be estimate the XX% versus of QX shares. million benefit XX% rate share modeled

monitoring closely we events the and at crisis basis. evaluate public intend case-by-case on health We are to number external limit We of executives really event. a the each

Currently, participate in TMT KeyBanc to we on March Summit Emerging Morgan intend conference Technology X. the Stanley and the

chat one-on-one we fireside request, KeyBanc's with presentation. Although, our to have converted

participate on to Please ROTH contact the details. on conference the Summit Louis Bank Auto expect March also Xth. America We for of XXth, April in more and

that, joining for to And over questions. call our for with you turn operator back today. I'll the Thank it

Operator

our Adam And comes question America Gonzalez with Instructions] of first Securities. line from of [Operator the Bank

now Your line is open.

Adam Gonzalez

start to with wanted control about talking more I opportunity access at guys this question. CESE. Fermi, first started you a long-term

you You of sense opportunity what about spoke little is? bit a Can a just the it there tonight. longer-term give us

Fermi Wang

in can this for Yes recognition way as be many - [Opel] of control. do like - touched just be facial fact, our used access China use for enterprise other the in kind to it to example, different on they We applications. many the applied technology example, applications, systems payment identification. can in But

the challenge fooled easily detection a picture that that by can some as materials. current is you you using So, of other or be everything face know biggest

of units of XX about for think this XD to fast millions, become So the probably total application. the number, in of lightning talking tens unit the algorithm the it that XX million future. estimate could size using to growing I kind million to And and - we we're some structure enhance necessary marketing closer

this access to to so better for of required different of reasons, sensor provide as we technology, need confidence the as well terms kind also continue detection and providing for of on we technology in that of more sensing those technology will fusion continue So AI kind different grow believe, higher to for control. because to security the system face

trying as And So, the requirement to from lot new which feel needs a this applications. think will the lot things interests grow, say for of of believe our we’re - a plays traditional this is we strength. is of the is a what we to really most new I'm market continue technology as addressing to we well and us - market the

Adam Gonzalez

there have environment year, appreciate Casey one I talked uncertainties about then, overall with release geopolitical this of revenue In the And press I a and virus concerns. the you and lot follow-up. growing are

in remarks I least? prepared end-market your of year, and as which areas You exposure the overall at legacy relatively revenues, also your that outlined nonstrategic implies is same to the consumer XX% last XX% still that think is

help on legacy the business side, to grow just understand, down? business consumer this and you and puts do us Could you that the is to first overall? takes of wind Thanks. terms what What that growing how then in year are going expect

Casey Eichler

better - first security had the is think up level. professional in clean a mix revenue is XX% of But of part the stayed it some the kind in roughly new at other. XX% said that in we yes, what side. did we of the XX% couple pull-ins Obviously, other came about same. section, areas, that And we particular indicating consumer introductions forecasting. about product were in in we the I'm to the some actually Well, our that than had From and that security, past and we've auto,

changed But continue current seem and we to there year it we'll that helping happens be to hasn't last think going perspective stronger to a saw constructive. see to that But I next now there products our that three us there to revenue that's into decline. couple years is over the five this be right to continue that think we and year. So,

Between soft the kind goes the year, as it continues takes, far - and continues comments. Fermi's last soft. puts of was back uncertainty, As to virus the to industry to be automotive China and it be

to really going that - that's to guidance disruption on going see, we've going you how say much seen visibility give continue exactly or the good issue hard out. it's And it. of how to to We're to shake we're

CV in the of adoption, excited Fermi's but We about. of our this excited which it necessary probably that the up be really future year's markets, continue most been about isn’t penetration talking and about to the just sets the company story,

Operator

question comes And of our with line the from Cowen. next Ramsay Matt

now Your open. line is

Matt Ramsay

might you're above the expectations, And fiscal I Fermi, I about about that's Huawei’s of the the you your think expected. from most prepared year. don't talked That in still XX% non-CV? upcoming being picking is to - adoption. of you if order in revenue CV guys about wanted up remarks assume challenges internationally I I business know talk CV on what the the of

that year? So you what puts maybe just some be Thank maybe you about us China revenue and if that are takes end might and and thinking of guys could what CV-based give there exposure of you. markets this XX%

Fermi Wang

of are announced generated First like Telco, especially - customers increase trend. revenue guide the we - security from see this see I you - the can CV The professional maturity all, Inc., of you professional that Panasonic, comes And year, year. [indiscernible] - right. this five we camera CV this already non-Chinese think Vivotek, that customers. majority we From that revenue Harmonic the IT Motorola, mentioned

introduced it’s we powerline at see this point. can non-Chinese new the So, from our really about customer that

that in for revenue revenue. million to And we I this talked continue sorry we have CV confident - - think addition we XX% about And growth. the XX about, feel guidance XX% to

have really for talked also and development We us engineering boards future. XXXX, customers huge buying in fiscal kit, to base design builds in XXX more the a we than which the grow parts, about year

I portion discussion. So, of an is really this think important

I different And China to exposure, also ways. China, two our that you think in talk look you need about

through manufacturing in are our but using indoor a also all, export China. of we China. in how of First about talk probably product talked We about XX% our the chip lot estimate outside manufacturing we in manufactured But in in there roughly China. China,

questions. China I clarify think total in XX% our is revenue. end-customer we exposure roughly the of to hope that So, you help

Matt Ramsay

thank That help. for very does you much Fermi. No that,

guided on the us around of call virus. uncertainties noticed new up the And you I areas Maybe tough to - growth? have here you through stuff also about of some things then on As and get that OpEx could order spending and pieces how limit sequentially. variables, - the geopolitical like are looks from which ramping? the we walk XX% talked flexibility the of it my Casey, you But do different much with follow-up, Thanks. if spending these that

Casey Eichler

Yes.

So CV places. a the is new that And majority continue continue hire of we platform increase in the engineering. in that's area coming One in is, to two in push that to and product introduction there.

a is And the taxes It the and of portion year number of you see of first so comes that's year it. the the typically. things also when kick our all the employees in employee beginning and largest of the other around, that in

And so engineering the but to board, line across in the particular, everywhere. to that adds

is, as higher through the also we that and amortization lower get geometries more through go more of lower cat start the thing expense, so that other runs continue these to development expensive, as P&L get tools engineering build higher - builds costs start we to continue The projects. or to mass to to geometry,

Fermi Wang

the this Fermi. to ORE, the X-nanometer get to the put like into higher the that have as I whole is to Matt, budget, cat we buy you as PayPal first we this X-nanometer year. extremely expect our in to basically past. should tape-out that is have the our than we you have add, would to tools Which explain well tape-out

Operator

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

line Your now open. is

Ross Seymore

digestion uncertain. and concern digits inventory to more guess uncertainties. accurately roughly you X%, kind Casey ask low big a wanted are I about yet all And on seems down, despite guiding camera better because went or world's like seasonality, Fermi, double highlighting first I numbers guide. I of those it where ago, if kind for security I from I down the normal that what's you days letting customers. the guess either start the the your think two about Congrats then solid to XX talked guess question. you leads was we of the Thanks with since have Chinese changed gotten my is, that's question then me

better. So something seems to significantly have gotten

So on color any helpful. can that would provide be you

Casey Eichler

Right.

we call. you all, right, now. XX But ago we that any in guidance changed. I conference don't of provided are previous days first So, till earning think the things was the previous guidance hardware, provide in call any

I think in market security, we well the see weak and the as a And demand led market weakness and than customer by us. security the as consumer see QX quarter camera a one broad for IT we ring. seasonally is than across expected based continue higher to before except we large

do basically in the we customers main this the showing our general, time. well market market. doing doing well we’re in in So are and our at strength the That's forecast, see reason guidance our some in

Ross Seymore

is for primary So kind it basically, the delta? customer, wasn't it that's if that of

Fermi Wang

I really it's customer. led fact, in No, say not one by But about. talking this is a we're market

customer-based. four-based, We’re talking

show camera QX strength we the QX. and of forecast IT are fact, most on them customers. on in And consumer In the many

course, in our So they customer [indiscernible] that forecast. our and this is largest leading space push, of are

Ross Seymore

it. Got

the your financial you the have the in but bent with Thanks is revenue that? part trying that. press term what's is et line your with an guys given the that longer on cetera? year starting and for is world grow still slightly the to it. least, I Okay. are The goal that an you what of release year year, you end saying for same question abundance XX, million of to $XX a And at guess geo-political, expect capture - of sort given of mid-teens difference this uncertainty up a seasonality virus that year-over-year, at of just going the it or abundance better in caution that to Because the there you're or

Fermi Wang

CV, we'll think market certain said, we I want year to segments. that in I see, situation, to we all, the cannot year. a And before this of strong do First a year we forecast happen forecast we COVID-XX in goal predict - going definitely next establish like And a although have think this or hopefully growth this want with what's the year, and the which year. basis a have up achieve earlier on of want And we we set quarters, growth. next three a We to the market we have goal the to quarters. growth particularly we can this our that that to stabilized in that three our goals maintain want is strength

Operator

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

is now line Your open.

Joe Moore

on question. up last following Just the

As that is much these us might we quantify that you your seen forecast? about you risk sense that give it at you around to can situation, an was? Because changed looked a impact guys hadn't possible factors - how might that have have COVID, of of talked how you much

Fermi Wang

for whole-year it's think we tried guidance forecast. to provide to at -- our obviously I And in that And this hard forecast QX COVID-XX, impact to already. factor there's point. us an our And Joe, the

Joe Moore

the year. I Yes, for meant full quarter, more just for the not

quarter. Just for the

Fermi Wang

For relatively - think one already we the and for look guidance. I into months. about month We definitely the we at bag next the good - forecast the two we we have quarter, forecast that current with this feel think - do the our

Casey Eichler

early Yes, further in is pretty cancellations or one But quarter December guidance. at of where Joe, and our really really or of seeing because what or week push-outs, expect what impact happening the that this month kind What all say of anticipate tried from a to in the might the looked and place did caught we work here is having. we're into last is we're much in quick so. it's difficult to it's we we is how off

the that going is tried but it seen, we're think we to our to quarter. only for we factor what guidance to we've what communicate what we so, into tried not And see

Joe Moore

reasonably seems professional as XX% talk pretty that with exiting then I the And you're still year, assume primarily a - year at you CV could it surveillance. there means that's context your progression looks a that surveillance good the maybe missing for us I'm percentage kind you having like And business Is about help and - of transitioned. professional just any what just of like. that

Fermi Wang

fast of situation this we IP how XXXX factors with ramp-up COVID-XX. made think geopolitical assumption I ramp-up the happen the of of some we forecasts we’re initial cam. ended But And the putting year the And year. the in fiscal professional also concern our some on some also, [indiscernible]. will

camera be some our the IT late that of IP big the [indiscernible]. revenue whole for professional the So, of year QX between consumer portion should revenue, and

Operator

from next Needham and our the with And line Quinn of Bolton comes question Company.

now is line open. Your

Quinn Bolton

couple nice guess good you've on Joe's hand sounds it got the down like pretty next the up just I on months. over on of that following Congratulations backlog judged for question, COVID-XX. And a spread. you've

to right you guided? shipped we are have or So, backlog what's everything assume in cancellations what backlog; that you actually higher been So, some pushouts if than expecting today? you're revenue in from would

Casey Eichler

see some so, seen we over. by we've definition, some don't already said, going have we - kind we of think that. - to As some of yes, that's We're and

not you're hoping, cancelled. course, of Now, pushed, always it's

in another And in and tends so, initially it But to QX business increase an see be hoping in the QX. in case. and that's we're generally pushed we that business increase

off some all far kind but is hope bets we will you cancellations. pushouts, are it's and possibly pushouts it time in that, what to I hope you as so, starts, patterns and we QX, like have of at than of more see or some that are you as But cancelled some some And get that hope of ordering flowing because today. say, will how things of see

Quinn Bolton

Great. And question. second then

as pull-in amount de minimis seen your like is XXXX I fiscal to and fiscal department to inventory, chatter earnings of right conference from potential potentially that out your It million the changes? $XX think result of the XXXX a increased haven't subsequent further has comments minimis commerce inventory sounds changing you that last the seems rule. of rule a still today, de about build it call, like, - quarterly the

Fermi Wang

rule hasn't of all, minimis changed. de First

course, Of change. it haven't we but seen a lot of are discussions, they

terms QX, did what do. them to of some expected one our like the And Casey they ordering pattern. in reported, customers, exactly QX, the showed inventory Chinese we for from just In think good I weak of customers

So, this we starting inventory believe they trying to decrease their are quarter.

there them take on we use million based inventory and is will of for that, that. that that believe $XX the it So, to still time all

Quinn Bolton

even timeframe? give designs to about of XX% then in applications, XXXX I me, just lastly CV I’m CV-based you of way is, the professional Do security in if talked the But about from think revenue aftermarket or XXXX/XXXX wins aftermarket aftermarket calendar in automotive year. ramp that wondering some you those a could mostly three in think timeframe. this and us script meaningful calendar more you those the just start could Great sort talked from you

Fermi Wang

products the we’re this as because that be I seeing however for as No, will of in going those right security think I the the be professional now. up think mentioned, meaningful But terms camera fleet not is management three we size, ramp year. aftermarket wasn't the to of volume

although production IP that So, the cameras. to but will three less than contribute, the be it's we about I going talk products and automotive believe do side in professional

Casey Eichler

of bit little A that.

Quinn Bolton

Okay.

Casey Eichler

- auto as somewhat The was carrying temper we is last this auto And was on into we forward about, see industry year. that an year. softer talked obviously, the

your makes well. comment, temper as you So kind that of

Operator

our And Capital with from comes the of line Markets. question ROTH Suji next Desilva

line Your open. is now

Suji Desilva

revenue part question - the part Casey. a Just XXXX growth any the there Is declining, assumption color is just about legacy? financial quick guidance helpful? be that in first, fiscal will The that first consumer what's there stable,

Casey Eichler

pretty Again, stable. right it now we're seeing

thought to we to As decline we we we last were year, bigger really saw. a saw going see than start

the the for haven't a because it right we from pretty it's QX guided quarter on after typically So timeframe. anything. standpoint, is weaker consumer really This year, obviously, now, feels stable. this But

was it you would just So, even usual, doesn't It than if it it be less mean down would expect. necessarily be stronger than up. might

Suji Desilva

- channel Are color terms then and on Any are And really that. deploy roadmap on or engagements kind to the you've Okay, OpEx on folks congratulations source in what's the still people XXX you on then to reached helping driving - engineering a the resources to seeing the is helpful, you so, engagements question customers and new CV that's and would these Casey. support be for of you partners acquire additional growth helpful? where or support the are going product there? having of

Fermi Wang

go-to-market strategy the the still is same. Yes,

our We contact. business - our leveraging are partners

us same to all their try six, customers super to approach. market At based For mentioned customers. on marketing partners. our capture the - five, acquire using system, They’re to example, we helping doubling our own the time, we ourselves have still

So, we’re using both.

with get CV by - doing customer The to trying their our than ourselves. help to put that reason main can quicker everything access lot we fact a super is to more more partners silicon. In

Operator

line our And question next Charlie Anderson comes of Dougherty the Company. from with &

now open. is Your line

Charlie Anderson

consider ramp? some for what thanks result And any I of for kind automotive year CV of specifically you'll and in in XXXX-XXXX all this of progress. you think start taking I and see success that on the have and visibility got to XXXX-XXXX of guys Thanks some out, today on the with as and comments and degree be those the then follow-up. timeframe, you wondered goals in wins my around the would terms Yes, what you congrats there. plays Wanted questions to CV material OEM areas a how what the achieving do that early more

Fermi Wang

right. the a there's think following so that I Right, for multiple OEMs, direction we're up,

So calendar one XXXX-XXXX. mirrors electronic thing the we start is, And there. address we areas seeing believe us for help talked three year and that - to momentum example that finally with we for about do ramping will

definitely - is as happening. that As the [indiscernible] well month

to ADAS important And we the Tier Xs LX+. to the thing the talk and are for the is OEMs - and for importantly, continue to most more us

area to most biggest I helping customers. as we engineering well as resource of our wins spend think design marketing that's secure the that our

are So, us all for focus areas the now. three key right the

Charlie Anderson

my was And strong. a Casey couple follow-up housekeeping on then just obviously for It gross margin.

inventory trajectory down, you this quarter. you what build then did the curious been view there. you've bringing little but of it a Sort as bit And

curious So, Thanks. thoughts of as your I'm there well? kind just

Casey Eichler

had I more or a opportunity bit from that into more a little bit we're in inventory. And basis, the an beginning Obviously, more quarter, month a we one. of that's inventory activity we because when pretty lean. bit still Yes, we feel came the little saw little

much bit, a really had we built there so, into isn't that. to little And read but inventory

as far other our model don't term a guidance target. give As or margin we our than perspective, from longer

hovering right of we think now, in the or as We're kind I bottom Fermi past. of mentioned the around both that target mentioned

see going see CV we're looking on the that you going significantly really Although gives to products, ASPs leverage twice the which margins to operating you aren't you the higher for. are

China business, that on mix the are. So maintain see But it in back to really where the the we guide but get where only our range. what particular it higher in not going at up XX in to we we're into XX and will kind we professional depending of - in work to range happening and than in are

Operator

And of question our comes with from Svanberg line last the Tore Stifel.

Your line is open. now

Tore Svanberg

the on is question efficiency. first R&D My you. thank Yes,

lot those CVXFS simple that the seem very like sort very products? cost January. CVXX products trying announced products just is derivative to of of there perspective are it auto? for a into heavy because you So I'm R&D from still does or goes these specific a in understand, and those Are

Fermi Wang

for video-processing AI are Yes and so, from of purely technology a similar. CVX and CVXFS point view, example,

has that get process, automotive so into However, we developing of which qualification. significant pass the engineer for that auto challenge can and the just we follow ASIL-B standard the investment new to can been biggest barrier a say silicon the ASIL-B, technology, follow is CVXFS amount grade That's viewed build to but a not big is business. effort, as

we ASIL-B we that qualification. going are are Now reached to the confident and we've pass

I investment however, that basically. that's but behind think I that's - is us, think really tight

in have the point from that but cross get as you a engineer over technology view, from view, point auto, we to CVX. of it's If view a of barrier to to that just an similar

Tore Svanberg

Fermi, When And you on helpful. products expect really X-nanometer. mentioned should production we be X? in That's to

Fermi Wang

TV, we said of we’re take auto, you camera, be board to be based product Well we product to kind family the what plan about expect - X-nanometer But on first what is, it on planning chips. X-nanometer how for I that but and are smartphone we're haven't chip, X-nanometer security will product build the for of will going talked for history, smart should to a and our it our . across going based

we engineering products. basically X-nanometer after investment. should products with more see skip our in the to take directly and months you I our say going are think detailed kind few we But with the plentiful going go X-nanometer to - - of description next about that - we’re provide much X-nanometer we our X-nano, to that

Tore Svanberg

for slipping quite types we quarter. obviously R&D a is little of bit will for here or see it in a step-ups? do of the Casey, kind you Will last quarters the question think remaining out continue these the One bit, good. flatten Sounds April to Casey.

Casey Eichler

beyond to feather throughout typically that year. like don't going the we is that payroll guide But some further say things the the taxes and into that out Like unusual again, come step not quarter. so of said, function see tend there's what a year. one I'd some Yes we those like I get as in, you're to

see going much you're you're us OpEx back continue we think going our we'll it consistent today. to not in I us to stay see R&D more. or where off accelerate really fairly But the So, R&D to are in invest and

Operator

question-and-answer you. session. I this now the would closing And Dr. call turn today's does remarks. Thank to conclude like to Wang back for

Fermi Wang

joining will And us thank time. Thank today. I talk you next Bye. for you. to you the

Casey Eichler

Thanks.

Operator

concludes this today's gentlemen, participating. for you conference and Thank Ladies call.

You may disconnect. now

Ambarella (AMBA) 3 Mar 202019 Q4 Earnings call transcript