AMBA - Earnings call transcript Q4 2021

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Operator

Ladies and gentlemen, thank you for standing by. And welcome to Ambarella's Fourth Quarter Fiscal Year 2021 Earnings Conference Call. At this time, all participant lines are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions]. today's being that advised be conference recorded. is Please Instructions]. [Operator hand over Corporate to I would host conference to like Gerhardy, now your the today, Development. Louis ahead. go Please

Louis Gerhardy

Thank results conference for Thank and you, afternoon, call. fiscal our our financial fourth quarter Sarah. you XXXX year good And joining everyone.

it market Eichler, The locations. things. and call will Casey the Q&A. Consequently, solutions, no our from online forward-looking purpose covering prepared to projected XX-Q is ending results filed obligation discussion SEC, your and financial XX-K, remarks, fiscal or I'll on Form the and The statements. well on information are Casey over call provide portion CEO; growth, as today year historical be incorrect, These XX, annual turn any in third statements will is regarding Fermi These our with as for the materially that, more the questions filed today found a on the dialing we the website. to ‘XX to demand actual XXXX update described we to or fourth Wang. prepared of on filings fiscal could regarding Form risks, of forward-looking responses the you press XXXX could risks release, other I'll fiscal file Fermi Wang, our these the XXXX, prove for these Should results our fully subject be We're March assumptions well 'XX can On for and report uncertainties and Investor under of as potential that among that today's with assumptions. the today contain as XXXX, and materialize statements. call then uncertainties of results. be We're differ be uncertainties and these our our December should year and President our results ‘XX. to replay primary Dr. With and fiscal financial and X, CFO. Access affect from of risk different documents to transcripts including to today's quarter results, factors risks, other Dr. statements our XX, fourth and on SEC quarter Casey's are for January in prospects, quarter financial our Relations results, assumptions information

Fermi Wang

and us Thank you, Louis, afternoon, joining today. everyone, thank and for good you

crossed level are is Fiscal from these goal with look on year managed growing multi-year year, major $XXX reporting. AI million factor of in business Our was revenue investment year down And significantly, processor chain. 'XX momentum exceeding business year of with visual supply the the with X% XX%. CV we and many accelerated prior Fiscal challenges, the an 'XX geopolitics, increasingly video revenue the tight total with year came the around pandemic, for down the XX% we a with a with almost the QX, our more have investment of customers engineering AI X% silicon. technology maintain and 'XX, unique reaching end over the strong video this projects factors high with above of environment. our leadership with range, a parts high to than our XX into differentiated strong, guidance CVX, visual more as my flagship than the proprietary by execution, degrees 'XX, QX is first position AI I varying remain to and and leverage as driven fiscal development of demonstrated in of million CV how note finished year today. the more by this purchased revenue into of CV to I'm the And execution quarter, pleased than our our expect processing more family XXX validation the directed cumulatively with basis, as year in I we and/or proud current was market. fiscal proprietary in to introduction SoCs systems, In product cumulative than am on the have vision highly of CV image shipped CV year. CV, By extremely of focused development. billion processors. volumes XXX,XXX shipped X the this new our production including of number Ambarella's of sequentially. half $X automotive doubling production amount a the end X-nanometer a AI investment R&D SoCs

engines event industry live X customer Electronics we frames while watts for algorithms. video Show. fiscal markets. to CVX or video would year in CPUs per power, the believe been least diverse the in processor XX its capable organization advanced second. our XK intelligent continue to or power consuming during video In be customers AI provide and X-nanometer AI at chain into side CV As markets. number stages the update confident early intelligence, supply at the we expect will I performance X wide a new visual development processor of dual its SoC of at of development The the enable will XX and moderate for or with automotive contemplates business and Ambarella the technology, CVX camera market what I Fabricated necessary Consumer video the cameras. of introduced sets of revenue supply arm the challenges, and combines second systems, on vision guidance provide most AI-based and year AXX we powerful the encoding We a frames of growth. product -- artificial CVflow the 'XX, approximately January, per cameras now remain in watts of annual of growth still Ambarella's XX% posting for and look expanding increasingly our have consumption, portfolio streams. is benchmark full total It with process technology the recording robotic an our will now update XK year, beginning At to range AI consumer new XK held we

demonstrations included advanced over over and of event emphasize period XX success, great keep Featuring with new an held applications, travel have consumer, many Our us allowing the that X-week AI robotic virtual markets. hosting to Las live IoT worldwide meet individual on not event for technology customers a not existing and XXX spanning automotive, customers, been over was the ones to able Vegas but to show. to otherwise with a might engaged, just live was a

image -- X.X on of customer-related Lyft landmark opportunity record, SoCs. on low-light which AWS enable mass and computer without HD integrates XXX,XXX to AX design use to January, combination realized sophisticated more device IoT well Electronics, significant industrial in vehicles based array are Motional cameras. the its [package] number agreement major During a touchless automotive new And with voice alerts FAW-Volkswagen, First cases Today, process became as and industry Also cameras. cameras enable quality enable robotaxi CVflow entered dash we physically on SoCs. zero quarter, or a AXXA miles our enter classification the during driving SoCs. leading with roads wide-angle form deployment starting based production Amazon AI the CVflow build million security are functions home wherever diverse SoCs is In vision higher driver's segmentation from press rear-view led object of SDK environments, Ford’s obstructing distracted of of initial will public process announced automotive vehicle's camera for the SoC safety family a support situations, CVflow Chinese fit the venture, Motional's of on see vision global The the see algorithms for on more fits passenger than mobile visitor conditions, will doormat standards Automated power sensing data last Customers' and to growth industry-leading Ford of dealer sensors is you and among all allow in reality. market. the a an automotive as Show, designs to during sends SDK it processing fit ecosystem view with image for quarter, year. edge detection driverless leverage a logging to as of driver to having cameras zone won you ability work the more are challenging in intelligent driverless diverse button. person SoC. image Panorama to allows put industry-leading detection, largest AI new the network a would in motion company their X RGB-IR of XXX-degree the perform conditions. with the and need module be high-contrast The solution designs monitoring computer talk are to Ambarella's to processing vehicles. selected wide and announced a The Based and beginning video factor, your the with in vertical Also a drowsy quarter, into well than well Ambarella’s in Ambarella’s expected doorbell to adoption including leader our new China, build year. and Logitech European vision video re:Invent this to co-published HD in the from the images. by algorithm with during the Ambarella’s camera of vertical the AXX on designs Motional, describe Ambarella's field based making introduced hardware suite, SoC, to in X driver of are. driving Ambarella's front-facing computer for of public to road class in monitoring Motional’s and advanced to the processors. company control. from central CVflow based stands doorbell. The into plus It the with CVflow I navigating includes Motional mirror including announced processing. the engine encoding of hardware recently its take home joint AI market, camera and resolution, designs. radar in in new SXL, CC rides a processing world CVflow dealer the H.XXX such viewing screen semiconductor manufacturers IR passenger the Safety partners devices allowing designs its eliminating the SoC in first operation the detection, the efficiency. view the with CVXX Panorama advanced and will the of for a for view other in accelerated Ambarella’s car monitoring camera of maker vehicle mass wide White with recognize tasks, small segments. with such designed Ambarella the object when and driver like complex CVXX released Ambarella incidents. has we to The enable vehicle quarter to some of view and of vehicle with model was its a driverless LiDAR, also SoC’s for doorbell, In rideshare introduced launched AI operate our our cameras impacting the then cameras, a Alarm.com protection network. on across and drivers driverless as and The in our into with edge at allow processing chosen have Also part quarter, SYNC Ambarella's safe as intelligent on quarter, major easily SoC, windscreen for as to will safety a These vehicle. DVR, with the Falcon requirement doorbell as full with monitoring of establishment Ambarella challenging highlights CV and while wired CVflow now night at-fault production The technology, vision leading Paper. devices alert, providing we including circle HDR in-cabin the OEMs The lighting HD largest, world's your AI has providing only fourth automotive announced our targeting packages, camera

Home paying doorbell existing experience HomeKit and doorbell app provides security. recording consumer iCloud adoption high the a leverages Apple professional first migrating of Watch devices. SoCs from The The without from based architecture. other continued Ambarella's storage SXLM subscription, is seamless silicon market, In iPhone’s users' from customers doorbell Ambarella our camera Apple video on Apple The to or SoC. for a CVflow separate viewing on benefit IP and the with based solutions widespread AI has security on includes

largest quarter, security world's Dahua, second to maker, continued with the its the Ambarella product During camera launches. multiple migration

its on new CVflow to product, and being based shipping CVXX Systems is the of market Korea's megapixel In advanced for security X megapixel the CVX X same based are IT now X The X megapixel German also SoC cameras, IT For X, high-resolution based Also and focal areas A with our of and capture bandwidth that camera new network in IP X-channel Panamera things on camera cameras Europe, and intelligent mount In cameras. SoC. Panamera on able combining reduce CVX and security panoramic quarter, analytics. megapixel CVXX leverage X ITS the our And HXXX with HX families specialists,, based megapixel X SoCs lenses to sensors by leader, designs intelligent Transport extended our used camera remote and our include Kodak X and new with models foreground. cameras, based the requirements. lens for the Korean introduced on our middle Idis, several CVflow largest the a multi-directional second and HL CDXX, further CVflow capability and portfolio new SoC. camera introduced storage Ambarella-based SoCs. model full its during X SoC, eye, is CVXX supplier, channel camera on our camera different flagship a new new including CVX

new sensing cameras, asset of such in as occupancy analytics. multiple retail opportunities see and class spanning monitoring to applications continuing are vertical We control,

sensor, last to our guidance material development viewing optimized calls diverse our earnings in automotive adoption counting. of monitoring about During XXXX, the the the human cMOS wave camera, confident as security applications achieve on achieved communication goal their of visible FY 'XX indicated perceive FY to two, last material video XX year in pure In processor at 'XX, and our become rate and CV provider of wave become this expanding the our in Heritage Thank CV shape a the their SoCs. to by who Based counting Pro, automation. market with you we other significantly adoption base position continue more including automotive the demonstrated we X growth applications. in would our our highly silicon estimated our is become mega our existing fusion the include processing XD video AI seeing we to employees details leverage FY auto than driven this it calendar 'XX, our business eventually will X to be X will CV of 'XX time and visually machine shape. globally provided environment. accuracy build automation a And quarter, now more home forces, It's Wave professional leadership people announcement family and will leading of we essence, we summary, market AI Genius is on expect on provide for all the safety the markets. in sensor of the shareholders. our in higher addressable automotive systems Wave CV sensing performing on call both calendar year taking building on track new and and to TOF year waves the grow the a will CDXX and in sensor last prospective machines deliver in execution I can revenue June your successful to rising CV, turbulent over SoC, We CVflow have The transport introduced And The CV trends autonomy interest into anticipated X/X by that make RAM. business. address beyond wave their in their sprinting video leveraging We X our our for X In billion almost the for a billion, turn growing we are people continue we contribution are continued AI time a thanks SoCs of sensor our on $X you. to three, am a in of and to thank targeting high like 'XX. And level our I are and favorable. $X will with and to growth, about year secular quarter than earning X and of to will as anticipate Louis, calendar security of to decisions, to higher use environment material funnel, support. In installed frame. important give track This X, the revenue to SoC from that 'XX. business. stated stakeholders first for the expanding positive includes The for Motional automotive I was our is what frames. early is family all today. to is we in for as other of increasing into and expect to drives markets, 'XX wave to very this in security, support now stage, total but are leading team our and

Louis Gerhardy

I on XXXX, and full FY the outlook you, an fourth that quarter our highlights first quarter ending XX, review XXXX. FY on will for of 'XX provide for and April Thank financial January the Fermi. the XX, ends 'XX,

release that results. reconciliation ask and of detailed GAAP you refer for results non-GAAP today's discussing non-GAAP a be press will to We to

taxes. supply Despite stock-based offset we've adjusted million, fiscal geopolitical of eliminated for much product the 'XX the challenges, ramp revenue headwinds. decreased chain pandemic, $XXX strong reporting, the expense and X% to non-GAAP in impact as CV compensation For of

For revenue, about roughly with revenue the balance and the year, other. XX% of auto between represented security camera split

FY X had driven safety $XX of richer due our expenses 'XX, XX%, increase up 'XX, gross was the professional their to increased camera For primarily XX.X% non-GAAP anticipated Non-GAAP by million operating stock. in customers from FY as margin in primarily an reduction a product R&D. mix, China in security XX.X%, in

securities million and XX%. from Our the to totaled by Driven flow revenue debt, net Security year-over-year. basis increased XX% to of million. revenue million and QX after again for with more was $XX.X operations $XX.X a marketable the $XXX the revenue cash about year-over-year XX% seasonal no guidance year was CV ago. same products, anticipated cash of our on the camera was than results QX trough and range million. slightly increase in $XX of an $XX to for above quarter end XX% X% high of experienced Non-GAAP a from a million end XX% sequential X% increase year guidance sequentially high compared QX. of and gross margin began to and decline. above of growth of our was XX.X%, when These represent Auto Other grow an the range QX

of of of Asia. In outstanding million end end million were declined of $XX.X Net or to The shifted headcount compares interest receivable as cash or $XX.X effective $X.XX of Non-GAAP net the XX% third from the ships non-GAAP distribution quarter. the QX. located of days at income in compared multiple the This share In was at lower in to representing margin share million inventory QX in for customers, operating quarter million outlook was in decreased in XX $X.X XX.X% X% jurisdictions. compared profits or marketable rate in primarily was per towards multiple in who We quarter. rate generated was the basis million. end of in our $X.XX shares. accounts Asia customers headcount tax the accounts quarter. million, with expense came employees the our Days $XX.X in income based are $XX quarter, million guidance fulfillment the QX, million, will Approximately $X.X of range at software. for XXX of customers to I two $XXX,XXX, positive 'XX. and the Non-GAAP million non-GAAP to outstanding. to fourth QX. primarily on for compared Total quarter discuss had to $XX days the our to the QX previous earnings inventory per XX gross at end end is to of of Taiwan, XXX, Total focused FY now dedicated first were whom was XXX came WT high revenue; of and million share partner the at XX for points XX a about receivable fourth in days we mix on at million. was cash $XX.X ODM, XX.X%. and or of end QX about in anticipated, at of of XX% million most prior on $XX.X of As fourth the a quarter flow Micro, the XX.X Chicony, Taiwanese QX of the in the securities. U.S.-based, to plus the who quarter. from manufactures quarter This fourth customer engineering, Other product QX. the the prior XX% due operating quarter slightly was $XX.X sales income days above per

design all of to have activity continue our markets. strong in We

of As tight, customers lead increasing. inside now you've increasingly has industry place it's been times, semiconductor heard, which chain our and who supply support orders to become have the difficult very

security guidance yet In our operations. other addition, ramping process not the sequentially. sequentially vendors' the current Auto typical the recovering, than million we with are side best down seasonal increase is million anticipated in up multiple do with impact. contemplates $XX the XX% ability the mid-teens To in final to to dynamics. QX XX% downward challenges, with Despite these to XX% programs low of to trend sequentially. of time, CV the in perform $XX one about and anticipated impacted expect to they revenue more know sequentially, revenue the our at our in than range supply the Texas freeze while of X% the production, or better we up And

monitor challenges, calls, continue China ability we supply professional that X We security customers In to including camera and our chain for supply risk China. customers the of means in estimated to in the continue outstanding dual earnings to geopolitical had what our prior FY our X in video $XX million 'XX these pulled correction processor representing complete a customers into in of video We is roughly revenue processor of from combined, low-teens believe percent this 'XX. FY QX. largely with inventory revenue our total

As margin fourth call, November Dahua the SoCs estimate our of XX discussed quarter. mass products earnings several and non-GAAP compared and be as production our described QX, in utilized. today, QX multiple XX.X% to XX.X% commenced in gross of in between with to XX.X% We Fermi CV

considers guidance to expedite Our orders incurring costs we're and more higher capacity. some and that secure expenses

quarter QX QX contact Auto Technology X; The be and X, Conference in approximately of TMT million ROTH Summit should and XX conference Innovation coming estimated engineering details. an with on expect $XX call And that, We today. Q&A Conference over the other QX for Stanley the Baird's call more from be for Thank diluted March count for $XX and America's available. participating rate Casey payroll March I'll joining the with XX, non-GAAP will million, QX. Seminar We tax tomorrow, Bank non-GAAP Berenberg's our to in OpEx on and Please turn X% Vehicle polling March headcount, Mobility you and and XX.X primarily Sarah engineering on the XX. Morgan tax in the Fermi from with us XX% versus on to March Ambarella American for to March be expenses. increased our million first shares. increase be share accruals between modeled at

Operator

first Cowen. comes Instructions] [Operator question Ramsay line Our from Matt of the with

Matthew Ramsay

prepared it I that couple large number very was you interesting, talked about, of engagements. number on me, Yes. your points a had the one, script for of thought

of you mentioned, about you engineering of this And for guys XXX think that of talked into from have sort Phase from X products. what security. also extend that of CV adoption talked then now Wave CV movement folks home samples sort based I into might taken X about what, you

So the of X break the X engagements, wave we're number I looks like that or customer what those engagements? the X maybe XXX number or by us of concentration down in could you and whether mix and help think

Fermi Wang

helpful. That Yes. Matt. you, Thank really would be

that camera, of would In from the more security it's for the number but the professional both customer than little terms those of the a automotive, quite are -- total customers probably engagement, say consumer, it's little I a balanced.

automotive see that is security in so will camera the some are you going I production. are that also in revenues. of in and mentioned majority production And there that, we driving few to customer about talked consumer XX security camera, production. say professional fact, customers we can camera seeing a in of I and our CV

you of professional view, say, probably and probably point view, would a have can point point. use think is majority of a win from I canaries half I that's security a I think design So professional auto

Matthew Ramsay

kind to about your -- it the any seasonally be about visibility affected you now? should through modeled. as year think it in of seasonality just How trying guide off supply was understand was the by guys current it. what's quarter's the thoughts guess considerably enough Louis, what what split constraints? the by the revenue. we the talked delivered driving it of of being the us fiscal lot higher off? Got have that Is I above typical? of I'm this would you we're a to if think typically and give I the year, remainder you you for about had as would in down script seasonality guidance the see than for quarter Is remainder Casey, of just kicking

Casey Eichler

Yes.

But the full year about Over China in little lot dynamics that, We wave the dynamics on that an a business our last first in of couple in in as half and in of and that end year, the a of at to X now is been the change coming is and dynamic haven't kind had of impact. the there. of second around force, been that typical I we of X is the last are the this the -- wave look see at years, half past. drive talked what there's and into the year trying bit side we're will think other also and coming

try continue going guys that to were move stronger frankly, year, to type this a we're last to we updated to little see. we see going side in we're We forward. same as the to expect that had have you I year have seasonality. to know keep don't year, than of but wouldn't we'll the quite consumer expecting. So We

As you going or years so, little declining last over to better year. than happened a to we've X thought said or to decline, next know, the continue perform be but it we that's

would not don't that and reporting others the But I year. think try at would I think know cycle the forward are I this dynamics look to only reporting, about that factor traditional in. So that going I we're but

about, as We pretty also emerge, broad well. us a Fermi now talked that's activity new have, a of and automotive as starting pipeline that's to in to

will, all call of I excited but if to it typical those our would balance, that dynamics, the don't quarters. So know over pretty we're you about I historical

Operator

Svanberg the the from comes Our next line question of with from Tore Stifel.

Tore Svanberg

results. strong the for on Congratulations Question Fermi.

front-facing of in you win, design design that for this Motional bit Are meaning locked multiyear should assume And exclusive camera on elaborate years? win, could several you that? you're for the a the a here? little On is sort we

Fermi Wang

serve responsible the well all video for video both think First perceptions car. of functions the new surrounding chip camera as and as that cameras well as for front the of processing the our and also as network including function which all, is the other I

the to -- have chip do lifetime whole I any I I in And we the design, terms for car. use we because shipments. to multiple think design have would between of multiple anywhere this is you the of -- X% X% cycle, length I the think current shipment, and of of for we And So say, expect, believe, that in year. should vehicle, fact, with

that of how product believe heard long from Motional time. vehicle last, have of kind -- I to that haven't this I guidance, but the We period service this gives any should have the will

Tore Svanberg

follow-up costs. a we it because further as throughout higher talked on be now? the And of good. Very this Is move for could about Or Louis input some COGS? of year for some on that win. Casey. pressure Congrats the there sort gross on margin pressure

Casey Eichler

well of We're the being X-nanometer, and talked talked and look edge. that does for think we've what in I costs going do cost, as about, increase in more what to cutting as the happens we CAD the development Yes. tool supply Fermi around call, what at about to more have the as other costs that the development some increase on and do

now, in range we generally to sure right today, continue but products we're think say to the of means the are but accelerate, I'd that so these hiring going not only at and we make about, markets. the we right And in time, development as have talked where our I right to have we that some

Operator

Berenberg. Our next question comes with from Andrew the Buscaglia of line

Andrew Buscaglia

robotaxis. I talk to Zoox I their guess, not It year, about more you are robotaxis, can on bit what like the that? growth a become for Or trajectory I wanted more next this this but label seems about Motional over is kind this starting with platform kind of dovetails bit see specific growth of market of pattern? think of talk what trend. from? coming I the what's a hoping morning was both, automotive, this years? you know you a with and becoming maybe kind couple guys where do some with And like could guess, to a is I you Amazon It kind it's -- announced that and little announcement -- you interesting. of

Fermi Wang

Yes.

So that people first X see level commercial to step And side regulation we think be as to side. as the well a that continue challenging direction. the vehicle vehicle level commercial with develop on for continue that this consumer But I cars technology level truck, that the on a car, to believe or not release a going announcement, the direction. to that it's do technology Motional we full feeling is our

that's the production. become probably do get going eventually, market think way sector, us for an most to technology important believe easier to that and longer that's I definitely in that into term. is think I this And the important I this

think become And level continue market development. all I of the our to perception, into visual So enable and applications. heavily those level visual matter to for this invest performance people doesn't that that perceptions X, I into it where and portion this the X+, the continue and important more invest X to from we kind think level I of more demanding and continue this technology higher to continue is of to customers do particularly our perception important, on heavily think critically

type is So for level X+ a also Ambarella. for X we believe near-term is the business us, news but that's technology regulation stream for X we down this probably are X road, opportunity market later although main ADAS believe this the set when level level cars and market. -- the that definitely X+ level will But of that importantly, become the good level and

Andrew Buscaglia

And other getting to security see surprising Interesting. you? and going what here big Hikvision. meaningful something back Dahua in to guess, where some coming commentary mean, are you And projects. that a in on Was Do more the Dahua you that forward your changing I in way these does QX? for guys player

Fermi Wang

why the I do continues, a China, a the China, the this us the that last that been position say to have very there, believe however, we have a we even dynamic it's seeing great it's but example. And Well, QX, to in silicon that situation -- market, do for good in are this our a customers. And silicon to bit. non-China about high-end won't right? think new definitely high trend that it's but helped high supply we chain, or We is a supply we and chain when -- on X from people I CV is to us, trend provide new Huawei little I surprise years, talk solution not this see change change but happening,

do Chinese our because technology, including using I got Dahua customer, into continue their CV about to while in get but we worry cameras. China, AI by development new supply chip chance for that to our a differentiated see chain I our the So others, and several

Operator

line of comes next from Rosenblatt Our Cassidy Kevin Securities. with question the

Kevin Cassidy

the quarter. on Congratulations great

product expected on products from you growth changed or year changed Is up? what's video say to it for the or designs? You getting Or a more there? flat this vision had are your just demand have you outlook can that the growing longer than these tail is human

Fermi Wang

surprise think talk But more I really, did there's Well, in this that us. thing we other also the digest reason we inventory multiple there's Dahua X we to that, guidance phases. do take our Hikvision it's and over But that a that that also came video about of And a these gradually the back see think about, market solutions. will one level for their to positive changed our year, of some is the customer a from major we helped And lot things competitors of little that direction. definitely I talked the example, we that bit. share is

Kevin Cassidy

Great. you booth? on mentioned tell said you'd you Can your in have Okay. customers of Las customers. what normal you the the And at number virtual also, would CES, XXX us Vegas be

Fermi Wang

XXX XXX. This we had year is around around plus. Well, year, last

that's So probably that range. in

Kevin Cassidy

Okay.

and pipeline up? interest constant filling So increase your in is

Fermi Wang

Yes.

Operator

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

Joseph Moore

is of on see Like there just that kind quicker much to driver than you in -- these sooner maybe ADAS. also that could Fermi, like path a of the on in market that that Is you it in you some might if And true China? monitoring? the China than could materialize there's European is driver -- opportunities? in seems wins other talked monitoring revenue revenue about

Fermi Wang

Well, X like would things mention here. there to are I

and I why is First China if OEMs. -- market, CVflow several look have And at do that see if market, market, the solution, XXX,XXX And of X automotive some is And that look is XXX,XXX that management majority And point. the to DMS going the fleet ADAS them many wins in won we year. also, design really be our mentioned of you in you have than of market. and application, But do this the SoC, see however, at them. chips to units we about shipped majority, market. this our you the And in we the at see all, up. will Europe, fleet more that X China we in mentioned are monitoring we talking in-cabin production we of that's we're popping other

Level automotive and ADAS So X+ what to on short-term be for for above. I to our automotive our say to I'm opportunity prepare continue think in-cabin continue revenue while we for DMS, will is market, trying opportunity monitoring, revenue solution

Joseph Moore

the the And the on funnel wins long guys X then and it's the relate when is level how that X, And emotional helpful. I thinking the and then to funnel that would all? you so types until funnel about about as That's Okay. wins are you guess at kick in talk you're that both win, profile revenue revenue of separately, in? of start actually getting, the to how does

Fermi Wang

Right.

their and is into the expectations it customer, talking to about production. in So definitely funnel. obviously including Motional are their we guidance And a

year, in ramp revenue year, at last give quarter. that in we included same about have for working a So part do that date funnel have not but so volume, going right, last -- expect us time, or is up imagine terms funnel our But is on longer a years project. on of work of terms was that project. term that our -- on thinking than in we their immediately returns high good Motional we definitely everything that we been their investment. particular X the we more this a it's we the be what idea very see visibility, talked this production is so discussed we you have you of to could we revenue reason this although funnel. which and But said, like can good in when And

Operator

question Our the of Vivek Bank line from comes with next America. of Arya

Vivek Arya

I'm how does I applications the rate curious you mentioned shipments that. new correspond curious, customer were some was car? many more these XXX,XXX to? just that what for hoping same is you replacing are CV to think cars before? selling per the customers? I new attach cumulative. were Or or these on what I'm color shipments about And

Fermi Wang

Right.

per chip -- said, X or application, I car. is or car X type For ADAS DMS like the -- in-cabin for

So chip means XXX,XXX XXX,XXX the cars.

really market as replacement, for the whether because sold market. in And And for the market that not, brand-new for think as well automotive sell DMS In that's CV when it's XXX,XXX chip, processor, a I we this video terms past, us. the a think of is the is ADAS into I we DVR.

replacement So chip. for it's a video our not processor

Vivek Arya

The you it. from the Hikvision and question, you Got Dahua contribution both I gave gave for think whether QX. forgot next for it Dahua. I

the think what expecting in was contribution you fiscal what year? in should them just contribution about we If you're how And in repeat this QX? QX, general, of could for terms for

Fermi Wang

Right.

about win continue this low revenues for QX. in and the video clean up the not on Hikvision moving from to Hikvision is -- processors, their about I total talk they while sorry -- us, forward, be they like but we strong we I So also year only talk up. haven't customer on Dahua And ramping be customer us revenue inventory, teens to it's because teens we think think a will middle combined other low is the forward, Dahua CV CV continue side. a going for to moving get the hand, Hikvision because design smaller

for China camera be is important and the customer there. our security Dahua will market that leading in us see to continue I forward, Moving

Operator

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

Ross Seymore

Congrats on strong the I in the dive results into guidance. side. wanted to automotive

really of a good quarters a had you've couple in row. me, For

it's blend Just things. the fastest-growing this going of to to wave be what year, and with you're first, said third second where area the sides you doing wanted

still So 'XX transition next the would growth strong now you true to would growth that's how be driving the FY which the in Wave you X, describe year. what's driving get and before

business and So time, growth? do still of period that your how this deliver see strong over transition you yet

Fermi Wang

Right.

strong tremendously. all, from helped -- multiple of CV the the of coming first area there the think wave -- I first So growth

total You $XXX we the our can think said if than that you And revenue. year, CV revenue that today, we said Last year, year analysts $XX XX% growth. This see our around million. whole million. revenue of putting more

So of XX% that million. roughly $XX was

is which So to the growth CV consumer. our $XX CV revenue, and just and million in we wave professional second camera ramping also is up from grow mainly -- million our $XX security alone of

asset market. During well control. We wins talk on the people meantime, as we continue with vertical to about ramp up design markets as different our counting CV consumer more our

markets security there after So going are different with design. camera traditional we're our that

to to At that about growth. the give have stronger market time, talked automotive continues us our So same growth. continues we

of continues a designing the video that we just Ford grow fast also at think Korea market combination solution, I reported example, for to DVR current the in are Japan, and only we the And China. Volkswagen. and

is So adopting U.S. that the market. particular really the are leaders start Europe even and I you that DVR can in our which solutions, see in we believe -- market that

continues 'XX is deliver track 'XX. in shipped indication give growth. reported our automotive into more to year have And we on are cumulatively XXX,XXX we that chips wave that the us to so that automotive than calendar just At CV we same X we're well, that and also time, doing and

Ross Seymore

revenue come in for doesn't we lots know on takes there. I et But shifted for big kind year, we you any to OpEx are how if about? seasonality puts think and puts growth, How to said much, and Are X there's feeling of takes think relative the you general revenue Casey. about it thinking the and side do that? on guess, cetera? of down about to your I so there

Casey Eichler

Yes.

success Europe area to building in So and that about only exception, our Like additional to expense has team in expense leading as to some the our that I'd technologies. I are. the sales now. X-nanometer is engineering to sure aren't marketing doesn't be but are we as in and There without the chips in invest and in we the advanced on costs out team, there, take And the these that side. some fairly advantage a cost is bringing talked making at cost. past, edge we've for all take that his so year. year, right the people additional and the engineering consistent say other as continuing not in SG&A that Obviously, to with many continue about talked been U.S. Really, come of our with are related that Asia, capabilities out investing and last have or we to driver need doing the is continued be Europe. the going having pace Chan to out this and and in well chips into year build continue successfully we doing we're can will

making advantage on more new. getting and really little those to investment, drivers. to we just that's expensive side. going all a in that huge we the engineering globally. That's have a sales it's markets marketing opportunity not but the the for consistent, bit more sure the So And of pretty are are except be It's side, take and

Operator

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

Quinn Bolton

market. the ask sort wanted puts question there. on to the results. surveillance I a Lots and Congratulations security nice of takes longer-term of in

You're some gaining the of and Tier share Xs. Dahua at

is You seem Hisilicon optimistic perhaps Hikvision. about CV -- then supply. a can't winning at less I secure obviously little guess -- and new semiconductor

that and gain all positioned about to share in look of So security, I of security next do over the you of you guess share when kind out market? couple years, next you flat? you put your camera that whether you thoughts you're couple the do of years it grow are together what can your Just over think hold

Fermi Wang

Right.

#X very probably that provide market by see end the think point. even video and the China high-end And believe China is side confident customers. middle best we the provider that be I probably to we biggest the a we from in compete coming far. this side, that the -- because I'm we'll on on camera are solution we But to -- solution. a see we And on of low competitor a supply at the non-China solution chain, to solution technology CV point be the the China, the CV and Outside we best position in to transitioned China, continue inside are to security both years, the solution. from few view the market, going for good to a in next transition

big chip units fast continues. to -- about CV shipments up, of going So for I'm X the I the that gain camera, security And ramp that And revenue the how expect hopeful market security that million camera market at majority continue is end a just in rate at continue to growth look to predict me hard of but in talked QX. it's when and percentage. the we will we will transition CV to the of professional increase in share

So just a are video transition when that to I'm security going we like years ago to digital, of a in from to going camera XX similar we're the from next see the transition to hopeful transitioned years. very see couple analog AI similar the

Quinn Bolton

And one then Casey. for

worry about always are if any orders whether seeing pretty more out, change stretching cancellation double investors any customer as longer tight, with are you're that behavior give sticky thoughts? times lead could customers comfortable penalty, us wondering get if things in And these you are times with placing orders. lead order I'm as Just ordering. these meaning

confidence make orders in Just that any about are appreciated? comments coming you be your the would can in greawtly

Casey Eichler

this past, environments like CFO, like the in in baby, say crying. up our hours It's me go to really X just heard wake customers. we and we And out, dial our a with sleep think you've as up Well, Sure. activity dynamic. go to every have

to continue those have We discussions.

to we talking to to as have try We that suppliers. And to we our have best map together be can.

continue but of much first is you've half right year. how for to of dealing through going now, really As But in to year. we're into the make that going the we're sure that has with half But the half, deal year visibility like to the to next to end those of that play where people over question And everybody enough everybody the is making from have And quarter. with I the that we're aren't first ordering heard the for your of get into certainly, carry all this going the it come the second to quarter, capacity anticipate quarter. better to last just that in issues. out they

best going sure been it's to supportive, to as make continue lead difficult to Our make very trying understand customers, good a communicating we're with very we're also partners that sure have heard been so environment our of them but And you very they and have capacity and quarter a going or was times probably in that that much back how two. inventory. and to of can how we your end, challenging support to much the see what's and then how on point, was be

Fermi Wang

do to environment our want through on more that everybody I just to answer I up all in Fermi. in kind inventory is this this that. for Personally, of doubt Quinn, this add which the no gone environment. customers And technical, past. should tried we've one have build

work our So to regularly customers down to it's a true of and their the to together prevent kind our understand job road. to demand different problem to trying talk

Operator

Our next the of Exane from line question David Paribas. BNP comes O'Connor with

David O'Connor

my Great. from Maybe X follow-ups side. X or

Firstly, for about that Hikvision. the wins at talked me, less on way -- you at so

chain. Is then on the That's taking say supply Hikvision You question that's the wins first about is And or longer as there my that. a at reason for -- not particular any taking Casey why longer? maybe confident on question.

grow What's You continue mentioned quarterly it the through to 'XX? enough have to -- capacity to. calendar secured you

Fermi Wang

Right.

question Hikvision Let answer first. about the me

And to can that that a want the as is to I secure Hikvision. that chain they sense concern situation higher very can a non-U.S. supply I to -- think definitely a for them i it's component sensitive I talked priority. them,

this that's you biggest we half? dealing point. think probably second problem the at with answer the I want are to Casey,

Casey Eichler

Sure. trying it's very to fluid. you're always but environment in this, also amount secure appropriate like an of an capacity, Obviously,

that year, the first have half the we're trying change change. we environments where for capacity second things not make so but of sure And the half to we need, only and the

environment. Texas no something that's one semiconductor For weeks that impacts a the expected few is certainly dynamic in the last example, what happened in across

the doing that secure we for like think can things And capacity our that need I so to and is It customers. we're things right fluid happen. the

Operator

Gerra with Baird. line question comes Tristan next from Our the of

Tristan Gerra

since what a ship up for no constraint? much in if versus -- full what your have able quarter there supply be is to the would you assuming wafer constrained shortage. based this? way guidance, you supply to the you demand bit of little sounds supply security contract was quantify relative maybe a otherwise which rest in the the demand also following How Just there growth on it's have for like I'm the the to you Are And year, And year? think is? current you and probably

Fermi Wang

Right.

shortage So and also, fact, wafer substrate. biggest from -- constrained. QX, supply to I Samsung, don't are we think out continue first they very we all, I packaging to the And there of and in think think is I good And us. supply buy in and are because, partner a

Our relationship. strong is we partner And Taiwan. in ASC there also, have a

So guidance not in QX, supply. our constrained is by the

up really got the and and haven't the that impact a to working the closely with that will probably And QX we is Samsung any, visibility got back However, just has to there's the of water are yet. at delivery. to has thrown electricity. a get was us have And you curved probably but ball if be Texas on they I all Samsung gone believe that size operational, shut that because the there's that down of been We extreme we time frame, factory -- heard foundry weather.

our don't for sure make that our bottleneck work to also the with -- We don't will continue to customers. we suppliers customers become we and

Tristan Gerra

Okay. the increases increases, That's looking price your margin the a your of factor this pass at outlook given that on to environment we to ASP great customers in able terms as year? Or be are should And some substrate for you be PCB color. well? of also gross could

Fermi Wang

definitely a tax but the of our include on increased, don't we we not all not on just gave well, it for Well, think to I the that's mentioned. in yet. us QX passed our cost it's all customer I you the Also, yet. high have -- guidance we think substrate costs -- we priority

Operator

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

Suji Desilva

of two? help revenue X/X the I in mix with on get guidance. there computer appreciate be vision the to But was amounts just those consumer the the you X versus to size can of similar I a it and if the consumer, So the wave of professional, ratio ramps sense up, which when the X/X us -- recall, relative there, professional video,

Fermi Wang

this think continue also similar Wave point. security X heavily in just think just be revenue and because that to at X just to will fully I And today, ratio the favor going Yes, started, range. ramp be still professional up, the completed wave I is

Suji Desilva

gave at Or have you update you are Okay. point? data other Great. quarters. to to going Do My pipeline this do numbers you question's, in the past those that? any few

Fermi Wang

No.

For talked going we the revenue to funnel, about we're probably that, give you update. annual

Operator

last from comes of Craig-Hallum. Richard line with question the Our Shannon

Richard Shannon

on follow-up the A professional security.

the from suggests then half like and kind you out, you the quarter, line year or on early CV digital $XXX security is me, about seen professional professional on it's op as have of from to video think thinking you a do thereafter? the cycle and portion mil this $XX following CV becomes That CV, being whether longer mentioned analog that million more that, in X.XX so, year And going frame in as soon just be kind of of For think have past? time we of the Do you to professional your for visibility maybe of than similar or a guidance, security speaking. most about of good that's security. roughly

Fermi Wang

Right.

I video you haven't meaningful are professional we guidance CV very that that. But by consider business process, our with definitely CV only or processors And year, growth is CV a do higher pulled it's security has getting our think So like math, to be we our for become percentage, revenue last down We'll and if I our total percentage revenue is today. the but professional because that. given the than year security about growth, going definitely camera. lot more video this camera said, a XX%,

video revenue. So revenue that while our I continue growing believe we to CV processor will we're maintain do

question. forgot -- of part In terms of sorry, second the I your

Richard Shannon

kind you past? video happening the from do in cadence CV, in trend analog to as that to see of digital The as seen

Fermi Wang

that's the agree -- case. I I think

fact, In I just mentioned that.

security only the the We're transition professional I in particularly think to CV, from video it. camera. seeing

with fact, will X next our fast, based. it of will in that to CV customers couple continued us, of years. the projects are transition I the accelerate is And off that think in they all kick majority be be new indication

the very you're not to transitioned see are that -- this phase years of be I going up that sure X trend from have very won't in quickly. ramping I'm was next continue we'll I years. we that couple no phase see Maybe analog yet, video but from camera, surprised to to there So of when Tantan in doubt we starting fast. video

Operator

will Dr. Wang no closing are I questions. There now remarks. call the back further to Fermi for turn

Fermi Wang

for I to would like looking to see of Thank us next today, Yes. thank you. and all time. forward joining you I'm you

Operator

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

may now disconnect. You

Ambarella (AMBA) 3 Mar 212021 Q4 Earnings call transcript