AMBA - Earnings call transcript Q1 2023

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Operator

Ladies and gentlemen, thank you for standing by. And welcome to Ambarella Q1 Fiscal Year 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker’s presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. now for turn today, would to conference I speaker your Louis Instructions] like the to over [Operator Gerhardy.

You may begin.

Louis Gerhardy

Thank you for year afternoon. And first Good conference fiscal results XXXX you, quarter financial joining Towanda. our call. thank

discussion our On prospects, year statements you Wang, from among and growth proved and to Fermi will regarding or these our the with are today and projected materially financial -- our The information CEO; These is call these incorrect, XXXX. things. be any today’s for CEO President purpose White, demand regarding the of results, subject solutions materialize results to with financial risks first Brian our Should our risks, is responses could call fiscal your today forward-looking uncertainties differ uncertainties CFO. market contain Dr. The forward-looking quarter me assumptions. of should and to for the results assumptions provide statements actual to and statements. other of questions or

no in with to the XX-K results financial information business and release, the transcripts, XXXX of and other call report statements. as available these now fiscal SEC factors your assumptions, outlook, we obligation and XXXX. documents we XX, fully update that our update results, is These quarter portion Investor Access fiscal the January including on will on historical the questions. as year review quarter uncertainties Fermi ending our potential more be described Relations to could XXXX, press our are filed and risks, for affect will financial for well results Brian results, of risk that on the and a XXXX provide for our SEC, will filings website. replay today’s X, the file on Form under annual We’re April first

Dr. Fermi Wang

Okay. good joining our Thank today. for afternoon. and you call you, Louis, Thank

the we been had Eichler, many positive are to XXXX. the his our we inspiration thankful Casey’s passing quarter and scale who we two announced about first of demeanor we and XXth announced our brings significant months, Brian opportunities company experienced as was excited the White us CFO experience have for March During to the as On CFO. the Casey an of since leadership appointment of leadership. we After ahead. Ambarella’s are Brian

QX up XX% CV XX% revenue Our processor flat about and and significantly, revenue, representing video declined our as grew total both essentially revenue was XX% about business sequentially expected, year-over-year, of sequentially and sequentially. year-over-year.

rise. Our blended to average price selling continued

orders the production resulting flared-up lockdown supply-chain. disruptions. and QX, of greater as Asia majority region the to customer supply-chain in the from subject schedules and pandemic China us, this During well related disrupted impacts are products logistics manufactured A in customers’ China and placed as our on in

about automotive a QX of XX-nanometer we seeing before. are issues we the million. we expect time We our to our both impact this processor Last for IoT at similar across discussed have businesses, the to continue $X and reported further complicating degree supply impact constraint At kitting remain a SoCs. video quarter pre-existing

in confident QX We now supply and are see we video QX a XX-nanometer SoCs. improvement processor will of

the not has computer SoCs As previously impacted. of noted, supply been vision our

performance on our this brought-up the excited will we first demonstrate successfully functional have late plus very processor XX announce received are first bring-up we significant be silicon domain billion more CVX, There are completed, to is work in controller We summer leadership. we to rev key power be customers May over the to for confident and central SoC. will and and but key sampled first transistor this blocks

opportunities focused expect a times selling remain of to significant on our times current us. ASP. of SoCs XX be As revenue to a corporate a we reminder, We front X command price in capturing family will the CVX between

New X-nanometer our second of commence with X-nanometer production SoC to expected to the CVX half in close CVX, mass on are and products first is the year. schedule, sampling

monitoring. for systems mix announce plus introduced largest such our for commercial in vehicle companies Dongfeng, OEMs as venture We the a camera new blended one technology monitoring, year electronic new its the markets a system will In our the outdoor, selling their announced OEM viewing HXXAQ provide the and the sensing SoC models success continue remain another new facing market CVXXAQ and to joint In to company driving utilizing major In remains richer optimistic to as this Ambarella monitoring some our support vehicular Geely during in-cabin supporting business, customer. through we quarter the SUV. this smart automotive two shipped doorbell our expect ADAS which our detection. development our DFXXX examples opportunity At SoC, utilizing drive new single for market introduced expected monitoring and electronic eNPX products, our products indoor CV truck of front us. and cameras revenue an of utilizing Interest is average very an eNSX to OEM, spot and activity. Japanese are assistance ISUZU, MU-X pleased GAC of continued EV price I joint departure its IoT, applications XX% as Honda’s lane Based to and higher. on intelligent spotlight. have June multiple like a EV be our about we using well monitoring CV Honda, enables multiple activity strong, a CVXXAQ Wave new multi-function truck use Honda’s entirely CVXXAQ driver its we Also company, mirrors. a solution. mirror EV the quarter including for during market, drive in blind in this and now Dongfeng of a We SUV cameras about around around last Vivint venture functions applications, referred vehicle revenue home expect passenger world, driver as recorder. Japanese In both warning. and X, the Vivint driver a four new announce for to to May, and SoC as CV

All detection a uses of intelligent for variety to SoCs SoCs. so property. our and majority customers’ cycles the camera package In trend the The has our them and product business, the largest around design our revenue algorithm new security spotlight IoT CV advanced and the detection activity the involving been from as of realized portion the CV implement of and of the functions. a market, of people illuminate enterprise execute public in Vivint’s vast our camera they follow AI cameras move tracking where CV with continues intruders algorithms far our outdoor to

one access demonstrating based in not During the market markets companies on entirely Video In reader announced we entering areas the new the one Security early new Pro of and years Intercom designs. new security on access camera ISC The Series to verticals has is Exhibition SoCs. are reader many products West almost The control based expertise serve before CV CV were camera us call our of wins. on SoC. public leverage demonstrations customer reference West also routing. our the to how our company few audio market encouraging every combines was control There major great at of of CVXX control, into video, last Motorola number we its March, Solutions reach with based Openpath and a our access access example. systems showing example acquisitions made the IoT where Motorola did and new is control portfolio Openpath allows a enterprise in is ISC

light the control, of a most CVXX, and companies report We accurate announced acquired fusion we eager RealNetworks on most our them cameras and Ambarella of to biometric results. are their the proud access in its are grow to Also using SAFR by business. based the on SCAN, ensure to anti-spoofing system based Motorola camera with that touchless help are SoCs structured

markets for introduced During the Recapping AI processing of part automotive In new and is deep-learning ability on us at represent other to of market, of XXX-degree the the multi-sensor is IoT and decisions. AI-powered our just the needed intelligence The data projects camera SoCs its the described the automation cycles photos A lot leveraged Also a Factory the featuring based. applications. and camera, sensing cameras for iRAYPLE on behind control. and CVXX based precise video, show, resolution footage includes our do AI just increasingly with third-party and this to two announcements, introduced in markets, Hanwha new great expertise enterprise In I a quarter public front In access add consumer these formerly announced existing series and detection on HXX simple. viewing safety majority factory CVX the panoramic XD high-bandwidth factor and most also and One based our stereo S shoot making new is of AI and capability enterprise applications introduced other processing of and the form CVX products another state-of-the-art described such deep human IoT RS action of camera new and incremental editing entirely Panansonic, based during I mounted an enabling object fleet our in applications learning based our based IoT with the XX SoC SoCs the products public public windshield. driven half pre-installed experience make i-Pro, represent factory thermal and SoC, high InstaXXX camera with CVflow instead new multi-sensor opportunity greenfield a abilities. the half SoC, launched is into on can these camera, reader take offering video specialized code two innovative Techwin based collecting where set markets, products, these efficiently are automation CV as targeting and markets a and a diverse applications. CVX which classification. market learning measurement sensing, deep About and megapixel our the on product provide XK on is market, XKpXX i-Pro the this automation to is sensing, AI be and with to rearview then budget camera. stitching edge mirror

ASP combination a earn the premium We in unit volumes of higher strong with to SoCs. and expect is very CV we ASPs CV Long-term, and our to expected a of products activity growth. are the shift higher to midst in drive design

our our addresses enabling for transform We the businesses. security, and strategy and safety megatrends are automation, customers to innovate confident own their

growth rapidly AI expanding emanating these opportunities diverse secular from product serves Our the trends. portfolio

Now financials. Brian will review our

Brian White

today’s to outlook on ending results July provide XXXX release fiscal I’ll XX, a highlights fiscal of for ask to Fermi. year I’ll that results. you our and financial second refer discussing GAAP a financial and non-GAAP our for XXXX. review press non-GAAP Thanks QX quarter of be for reconciliation detailed the

For eliminated taxes. reporting, non-GAAP flat with impact line acquisition have quarter related Revenue for XX% to million, prior $XX.X fiscal we expense up was and for of costs in stock-based guidance, and prior midpoint QX our of year-over-year. the the the adjusted compensation

the guidance in guidance, quarter. and timing decline revenue fiscal $XX.X our product sequential on Non-GAAP million IoT a basis. QX of offset up activities. new were QX a increase of XX.X%, prior $XXX,XXX below prior was the prior by expense driven operating range. expected, mid-point gross the Non-GAAP a our strongly operating for Both expense from automotive down for million, was development $X.X automotive. margin ahead the As of midpoint Non-GAAP of IoT in was slightly year-over-year

Our net non-GAAP income diluted reported or and of $X.XX $X.X of we tax X.X% per million income non-GAAP share. or $XX.X was pre-tax provision million

days revenue $X million XXX Inventory receivable decrease receivable XXX cash from to substantial million. quarter. Fiscal of The XX% more or to We ships to front-end WT Now QX manufactures million, a of multiple million accounts skewed XX% $XX to Cash fulfillment logistics was aided I’ll $XX Taiwan three flow and XX days that revenue will of to balance Chicony by profile by flow. turn quarter discuss sheet Microelectronics, in accounts XX operating second revenue. $XXX decreased strong in came revenue. in decreased both driven was attributable and cash in XX% Hakuto, was logistics and inventory $XX the receivable. days. was in customers for who accounts I primarily flow outlook supplies customers in at and QX. who to cash in partner increased our million in ODM decreases days multiple from year Asia, XXXX. our partner fiscal IoT about multiple companies XX% had Japan customers for a now an represent of a of ODM and the automotive the

and complex pandemic issues the remains the rolling also impacts The with external described, now China. in Fermi As kitting stressed dynamic. persistent supply environment chain facing already is

to QX to or quarter. to guidance be estimate XX% gross We million relatively down these QX estimate challenges. be We $XX to between in of at knowledge flat our approximately XX%, contemplates the range midpoint. $XX and the the non-GAAP our Our million best to revenue sequentially prior margin the XX%

expect non-GAAP advanced by The in $XX sequential We is the in grade the second to beginning automotive X-nanometer $XX quarter of of OpEx million million. SoC project. development to driven OpEx the be an increase in CV range

Our Please non-GAAP Xth fiscal Xnd our Rosenblatt’s us and will be QX June for call turn diluted Xst our June joining tax on Conference to forecast count over Conference. be at Virtual Virtual approximately and I more participating you for Conference, X% Xth at estimate million on Investor XX.X for With to TMT Cowen’s Thank for shares. questions. Operator in Ambarella’s will is rate details. Conference, share we June X% that, Ambarella the Scaling TMT of call contact to the Bank June AI America’s at today. Craig-Hallum’s

Operator

Thank first Stanley. comes from Our with of Joe you. Moore Instructions] the Morgan question line [Operator

open. is line Your

Joe Moore

you. Great. Thank

there are guys across could customers, color on it there? all any talk tell the manufacturing you multiple in mentioned there, us could and it’s you give challenges the in kind is Can Chinese of you issues sort of what the China, broad China side just multinationals, in is any customers issues One of more it is of it is dynamics much how the quarter? coming side of demand you supply about --

Dr. Fermi Wang

Joe. is Fermi. Hi, This

those that believe time of we and saw China the was with in greater lockdown and particularly that the most. And we’re the the were end start seeing our seeing Asia what early the customer the that same at reason in demand or they we we that Shenzhen So given that’s start kitting in the customer lockdown also who and that, and Shanghai, persists global issue base, April, we issue worst March were was almost acute for our start we allow to when global kitting seeing. pushing China like make and base for all and locations manufacturing impacted the scale at

sell build. of terms point, particularly everything China, our at are they almost In customers this outside they most say that, will can of I demand, us, can telling

believe solid, So China Shanghai through least and demand, progress at my lockdown to that monitor I that in probably continue think we’ll on outside situation this Xst. this the we pretty is heard expire opinion. We all lockdown will June

to follow see We updates on forward market point are the looking customer any up and view. of

Joe Moore

pent-up just is can demand? of required inventory get off going an That’s that this how parts issue helpful. incomplete can’t Ambarella the other waiting you things? people in because to terms things have aren’t a Ambarella that’s they’re an is other they to versus of burn issue, ordering you. get And kitting of an Thank or Okay. that that is that much inventory parts, they Like, those be issue tell then because

Dr. Fermi Wang

a automotive. is kind customer this inventory definitely, do when some that out of parts, like portion particular enough cannot microcontroller and allocate and [ph] the believe -- the of I in for the micro really sitting channel. I they think, find But other is lockdown there’s particularly Well, WiFi PMIC and really

quarters. future out I a push to demand the think to they that to acute decide

this time, amplified think particular I I is kitting we the of like So is But that lockdown situation. think out by issue, is lot kitting based inventory issue, new push discussed what before. situation a which on this that

Joe Moore

you. Thank Great.

Operator

you. Thank

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

open. Your line is

Ross Seymore

I getting guys persistence you maybe visibility the quarter, have Samsung me duration it lockdowns about what’s and know welcome this going is to, and is the assumption the of just I I to COVID kind would grade the better, into do want what pay ask your Thanks the side to beyond to equation. ask of that. Ambarella. for lockdown beyond question. be as my alluded Fermi, side don’t to guys. letting going the July or do China great you whether headwinds? and think Brian, Hi, But is of

Dr. Fermi Wang

major recovery $X We sure have XX-nanometer. and mentioned the expected Well, we impact XX-nanometer I think lockdown today, a this even how is the fast will improve. Samsung like. QX, look situation, us don’t last a million will headwinds am this you to still But supply I quarter quarter impact visibility, we’ve QX, as on July Samsung the but in expected and

lot really causing are issues our we time this lockdown for think a China kitting this customers. I So about of talking

Ross Seymore

And question I model. the to get a guess as into follow up

of having give two were side as and you You the Can of quarter, automotive size guys either now about percentage the segments, in us color the things. they just IoT the are any sales? any difference in is What segments? the and up said they numbers there for the but around between did guidance sequentially? two July I down, then know quarter And a that? you the the

Brian White

Yeah.

about automotive So XX%. at revenue represented with QX of in IoT XX% our

we As down to QX, those both in be approximately percentage of we equally into terms. look expect segments

double-digit So sequentially. both into down

Ross Seymore

it. Thank you. Got

Operator

Thank you.

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

Your line is open.

Quinn Bolton

Welcome, July back there to issues. just have like rolling sounds lockdowns whether dynamic a based guys up? quarter pick do the your Brian, sense conversations, start kitting think delaying with customer rolling have the environment or orders extend that you these on my near-term orders because China. Brian. guess, that I end seems as to you hopefully of been or that any beyond an it’s here you Do expect come like the the is, to in lockdowns I customers guess out question in Fermi

Dr. Fermi Wang

even that situation lockdown to worse when getting a think, from know and be will they our because but QX believe to be uncertainty customer lot better should this QX how than in and lot or assumption not. them, issue issue right the lockdown not of we maybe now, those don’t will believe cover a and talk how we issue have kitting that’s under any kitting than better improve. revenue of continue this got if lockdown we QX, I We fast that still

Quinn Bolton

guess least to know wins Level Do you to know X making But that think guys it. any win you closer Fermi, you’ve like X in And the have helpful. I feel not this you longer to-date. I I a secure plus large then if hopefully haven’t you you announced you’re at wins. talking plus maybe, Level multiple Got getting past Level around term question. design X That’s expect do been about plus you’re year? potentially I believe progress? the a said one opportunity

Dr. Fermi Wang

Right.

So, our I by there. throughout about our people up announcing have our and a discussion about think, asking and is multiple keep in CVX we believe that we that running and CVX that functions bought

that high we will CVX the sample have We over the over summer. the a -- in confidence was ship

I performance we will project think our real really a is the a and prove of real they so show what and this sense give up in customer power presentation. then can in kind this how number can just

So that win. on OEMs make about CVX, we that this X with design optimistic I are to we the Tier very progress with key think continue

Quinn Bolton

you. Thank

Operator

you. Thank

comes the of line from Next Cowen. Matt Ramsay with

Your line is open.

Matt Ramsay

much. talking of there us the could Good to maybe sense afternoon. give up follow are what Thank were you about just Yes. with CVX I you what a I and guess, here. very steps wanted from Fermi, on you

you’ll to lab. software what up CVX, do more So to summer. up other with bios going start these? are could everything the bring get live with look into customers that there? timeline Thanks. could with of where we what what stuff of need for steps the engage it funnel work we of in And and one start potentially to is can after and could get silicon back, to that you the in you’re sample like kind guys sounds timelines guess looking see are you some in demonstrates something beyond There’s business? you customers steps like to next in I are convert you to where where you the you what done kind of the and at interested -- being fully have obviously in CVX part the front like to of automotive the I’m announced the that some have labs that and So

Dr. Fermi Wang

Right.

time, number just fundamental done basically making short seven much CVX. talk of period how I customer higher came live, that sure our in So silicon up maybe and have the every recorded days verifying not to software the CVX we and stop we about all the and lab day. level we our performance a ago, And one back integration. we past only brought but number chip can getting think, and confidence blocks start doing our in total week getting all higher are we in power the to

to Oculii So our us as near is VisLab the after -- goal software, bring on the in sampling the software our up near-term well running customer, to for CVX. as

we the the can demo. well as do It level not a system just as our competency, the but assistance silicon given show demo is CV, to only So to of ability all the customer.

them that today only that’s silicon think our match to Level capability. all VisLab X centralized the milestone, and whether also spec And not -- you for to have OEMs perform, driving I can your autonomous software way all you as because have processing for you we there Oculii’s question both leverage really is of to that radar as software but a deliver if biggest the can major just the complete that best can whether talk can a well performance.

demo important are in think and to year SOP the that’s XXXX, that customers. hopefully milestone next I our targeting near was future XXXX, still our we

Matt Ramsay

that, Got Fermi. it. to helpful. That’s No. Thanks

on trying follow customers I guys. many quick try the assume you it’s Just guys second July issues or that any before and the impact size Brian, what logistics as to, up one up $X thank of to sense if I for quick you more be one the way little that hard impact about the CVX of it. you China then And then a summer, for question understand my the just to is, if there’s any you the quantification for that’d helpful. this in my -- million guidance guess I’m is Samsung all I can the bit of that’s a engagement? question, sampling in dollar terms, Appreciate know breadth real but through you do, sort think impact follow to anticipate I of just any up of that follow how to guess

Dr. Fermi Wang

Yeah.

In CVX believe terms customers. of sample, the I double-digit will

Brian White

Yeah. of And impact with disruptions attributable supply in terms associated I midpoint the would XX% guide factor. think, in is to about and the that chain down all to our China, that -- that’s really

Matt Ramsay

Got it. Thank much. you very

Operator

you. Thank

Our next David the comes line of from Kelley with question Jefferies.

Your open. line is

David Kelley

Good afternoon Hi, for thanks noted of my on for still year the CV I mix questions. guys. taking XX% sales. and track believe you is for

and about last talk you specific if maybe you’re seeing and disruptions CV, couple months? to impact chain more can trends demand there a So or less the the throughout lockdown supply

Dr. Fermi Wang

Yeah.

particularly equally, think issue the and I product don’t happen vision to and apply example, we it’s chip that computer or any impact line, this line product. and believe right as WiFi than video video need can more and issue or the to now it a product vision see others. lockdown to and we kitting But really can that microcontroller -- processor well -- as both automotive is complete but also PMIC also computer impact because it’s both IoT processor really, which kitting equally, for I

David Kelley

the cadence of second can But That’s the OpEx more provide bit it. kind in you And Got here into of on the guide? Apologies color have quarter Okay. missed a helpful. drivers might advance. I this.

Brian White

X-nanometer kick increase driven really Yeah. quarter, the the coming that, and that’s We CV OpEx. would said in second to which OpEx project that’s new by a in is starting to beginning

David Kelley

Okay. Thank you. Perfect.

Operator

you. Thank

line comes Tristen question Barra Baird. of next the Our with from

open. is line Your

Tristen Barra

some already you XX% on of obviously afternoon. impact thought Previously, guidance been that revenue. July this we of the of Good and will year. Hi. quarter mix the know CV at CV I the double revenue questions there’s reiterated

by consumer on you Assuming rebounding about Xst, notably guess, go and Where be, bottleneck weak away? is to as Shanghai, opposed second WiFi. half your like topline in the I uncertainty goes sequentially demand would of that in away impacted impact China the the how to component June biggest do much lockdowns the or shortages lockdowns MCU concerned think as

Dr. Fermi Wang

Well, to I QX. QX that, WiFi think QX go could customer and our into beyond

answer the full the lockdown they back production to really that the can about can fast start speed. stage, production the say line relaxed how think to Even how uncertainty. June normal they is on working Xst, I but quickly go

think that’s all not of answered. also to needs side, I just our side. And a be component that only customer but

So uncertainty QX and QX. in there’s still

China of our that is In -- are XX% that terms but definitely think have XX% in weak, of see we demand, China roughly I our to we economy as really products consumed China. sale

previous I China, think, outside like we a I the said to still right I focused answer, are So understand now on think outside strong. in more think demand situation to that China, I our demand

Tristen Barra

half? in is this think going question, quantify previously, lockdowns material is your half, second the we up first I you’ve current well hand the ramp versus initially second going into be the consumer go follow is my to lifting or of CVX which how of by as impacted as And Great. should terms Okay. in to that said

Dr. Fermi Wang

because design will Right and up ramp phase CVX in still QX. are revenue in the happening most also products now of be

lockdown the or the development are yet. that impacted think cycle I not So severely

are We watching it.

still We’re We AI on as a well production, of a a the product our back confident customer, customer IoT all it we CVX as into into that in past IoT. several take and a as consumer camera give side don’t will consumer, security put AI particularly consumer.

in IoT it. CVX AI start take think on ramping up production and multiple will into I So customers QX

Tristen Barra

Great. Thank you very much.

Operator

Thank you.

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

open. Your line is

Andrew Buscaglia

are to of chain develop next maybe of you with in so sort than kind process that purchase human all the a have products, the if gen AI customers supply yet dynamic rather talk that of kind to stuff be forward wanted seeing that, non applications? and I might guys. continuing you really move and I to Hey, your implementing to seeing, more move AI through their wonder in viewing have constraints maintain customers speed up or like

Dr. Fermi Wang

Yeah.

kitting new the also of issue, that and are lockdown this see of independent we think based. CV customers I most So products our did

video based months. several there see course, in the still that mean, still on in based new new product, product last we CV higher Of kickoff terms processor, of last our but off higher will in months, percentage, are the I projects several kick and

Andrew Buscaglia

Yeah.

Okay.

you guys of one little all about more stock -- your repurchase approved wonder for to valuation have if Brian, of stock the statement Okay. extension. Interesting. you press Can I capital becomes if a and repurchase is forward? share an is allocation maybe an you and that release where relative in going development -- the where the area in CV

Brian White

Yeah. think change the there’s process I really thought a around that to or repurchases. strategy don’t

you extend million mentioned, authorization Board the existing for year. another As the did $XX

We have We have had liquidity. believe cash strong flow. sufficient we

$XXX consume did technology the it last radar late million for of the year. and purchase So Oculii around

being opportunistic from at has that at changed the strategic as this still view point, repurchase So something a perspective this rather we time. option an alternative than

Andrew Buscaglia

Okay. Thank you.

Operator

Thank you.

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

is line Your open.

Kevin Cassidy

Thanks for taking my question.

maybe you a do of description large do them relationship quarter accrued XX% if and there automotive to and maybe them? Japanese you a you customer, customer, kind was just XX% of to give were us service This customer stay little had distributor more quarter last expect a your could they with the provide as what

Dr. Fermi Wang

Yeah.

they perform basically -- -- Hakuto going for their think for is case, make us logistic, making I automotive definitely they collect our keep to issue, at are their anywhere all distributor. automotive our customer, so cash Japanese properly basically providing customer, two through sure the that automotive are eight important between chip project. supply want think, all they inventory that we of weeks Hakuto, to service that is almost this think of there’s because six production are is of this for top basically one a inventory sure Japanese On flow. business service. things, in and is Japanese I their distributor, end of So they because no function of another for our delivered Their to and almost And I to providing really is is just weeks they pursue the blend require

function. main and So that’s the

some down for view, ramped continue if grow from to point to you Japanese the I auto project because line, business the Japanese the by us, cannot look straight continue because of a continue some run quarter-to-quarter the hope Hakuto we is at be grow. believe well, and automotive believe But it, I up our will to So, -- grow. managed business project will really up. But our

Kevin Cassidy

Okay. Great. on of progress And Thanks quarter? what description a for more us also that could answer. the you past little in made Oculii, you give

Dr. Fermi Wang

do roughly with separate million when We again, of $X of going this business ORE very us it’s still level. Oculii million to acquire Most them. what year So, disclosure, to with Oculii. we the $X the [ph] but to we margin consistent and out said, believe we’re level at

year? The our product customer, haven’t terms And production of next in yet. happen first automotive will major that announced we

focus radar provide family our CV chip, at source the we’re main time, software Oculii But, integrated and revenue all the to acquired. CVX, I particularly the they to acquisition, us also certain long-term that’s us. a all we that so based to can has in however, is one got integrate for doing. customer. I is business of So audio, major our solution into will After before think, video goal just sorry, be said on That be things, a and everything that the Oculii’s for

Kevin Cassidy

Okay. Great. Thank you.

Operator

Thank you.

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

is line open. Your

Jeremy Kwan

Jeremy is Yes. calling Tore. for This

XX% think, quick of of a just revenue mentioned, I you clarification, in First, products XX%. percentage a consumed or is China, was that your that

Dr. Fermi Wang

XX%.

Jeremy Kwan

inventories, And managing understand of XX%? of down bit constraint of the just kind part something was secondly, on dollars a basis, that was long-term the is little this and million here? I this more Was both days. strategy the Okay. $X that your or impact you’re sequentially That’s help this of thought. the then, terms something us Is what in intentional? inventory

Brian White

Sure. we’re quarter as to opposed very by really have environment. longer at trying that, current sufficient ability It but term, levels. levels, satisfy effort was In the inventory environment, dynamic to driven inventory inventory get a in hand reduce to the active we’ll customers to materials targeted in look on levels lower to potentially the our during

So ability by to intentionally, driven driven that was it decrease was get not our materials.

Jeremy Kwan

ramping might two, you. entering, you’re automotive, term just its it’s that which you at ladder a since see be the markets of TAM? Great. larger at Can of weight some looking longer just maybe automotive maybe guess the And Thank question, bit Would factory that control? whether maybe new access which automation, to little a or looking and you one have you sooner one seems category? the own I

Dr. Fermi Wang

in largest for the of is instance, larger obviously terms opinion, faster. Well, TAM, in I the is think, my mobile happening one, robotics

hopefully, I revenue, continue of we verticals candidate. of CV a the address all control see them. with that, are is access that on think, because tried point hope think we that course, But, I potentials. revenue however, focusing to we can probably we the to of I of is SoCs. on the we new think, But make our terms robotics, high mobile And In have

Operator

you. Thank

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

Your open. line is

Suji Desilva

Nice project. in new tape Best on be of the recur R&D, of not role. is I’m aggressive assumption about year-over-year may again. kind luck Hi, trend? talking Fermi. the Brian. too there the Brian fiscal involved sizable OpEx, any to to or which outs the a of you X-nanometer the kind about Hi, that in XXXX is timeframe talked wondering

Brian White

the around I street the consensus fiscal think, year, probably When for total I at in reasonable million about. $XXX is to in expectations look range $XXX and million the somewhere for for to a year that’s OpEx Yeah. think

Suji Desilva

on Presumably longer things. us for, And in and be as the CV cycle customers versus sampling radar products you cycle understand there? that the integration Can with the the design a start and CVX, of Okay. you year? customer the can other other the the one sense it’s design Fermi, having might much part help the give then middle how effort on of of level of longer given you

Dr. Fermi Wang

it for but Right. takes very markets, huge particularly integration. also software only CVX is not by just die, definition, complicated designed automotive longer and complicated because CVX because

is and integration think two verification. four a year last I the probably first is the design we on software and probably the think and just years cycle right, year So two that qualification is really

So automotive cycle I standard for design market. is think that that probably

design think that I be will CVX’s cycle.

Operator

you. Thank

from comes Wells question next line the Securities. Gary Fargo of with Mobley Our

Your line is open.

Gary Mobley

Hey, guys.

the welcome what by you I question to Brian. situation was Thank is weakness carry be that relates asking Samsung, even this the your hoped with future out to you and and an Samsung some is just going the going inventory saying, forced be issue. the respect are us with it issue? than obligations to try have will call, to relates start assess And me XX-nanometer reoccurrence that the give And the I’m constraints? be Let maybe reason purchase bit a little in multi-part of relationship. of missed, one probability some given to to on where revenue, Can a color to you issue or perhaps your Casey as of to is just extra you. for

Dr. Fermi Wang

Yeah. Thank you.

although gut from answer So for that money. the didn’t took paying a that inventory away My clear we get a happened. about us exactly XX-nanometers, feeling by is of what somebody lot

CEO, business major particularly, short-term there. for automotive our about, reason. to I trying partner only definitely, that need the setting problems, So a and customers I -- negotiation role that’s obviously example, a to to go play foundry the this in not think with into with that’s if need we Obviously, Samsung meeting about collaboration, if the talk problem, to our talk that’s also but long-term

believe In today. have plan inventory We don’t we to I that terms of inventory level, need take on we than more don’t a lot that.

to near about think issue that’s the an we’ll don’t future. I in So need worry that

Gary Mobley

Thank you.

Operator

you. Thank

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

Your line open. is

David O'Connor

you versus internally is or it Great. around functionality those the Just one type the for the the and all to Thank and for question. LX Xx Fermi example you edge my Brian. an of That’s the seeing the with from to of on of Can that an this one an questions. Lumentum the Is on range going call AI? that partnership kind the AI are going And start Thanks see you on average? the taking we traction talk think can just Lumentum, you’re for of Xx a LX? that should blocks partnership going the us the SoCs Good building edge Fermi about ASP, of partnerships the one software that end Maybe, you afternoon. XXx? markets Maybe firstly, more XXx maybe for forward? different all strategy kind on and forward redundancy then mentioned to first ASP the you. how we corporate Do you support have of for of CVX range with like I versus give think family ASPs? or of at conceptually Brian kind

Dr. Fermi Wang

Right.

ASP think to is I that let problem. the When that CVX XXx really X about of So ASP, talk CVX I answer chips. think referring family we me times

In family we we end fact, to or samples, CVX is sample end. planning take that a the we out a chip but and low for getting to are of are CVX high build to

middle end Level and end can Level series be low X. can market, Level of end for X So high plus be the -- high X

the on about current it’s versus of So selling redundancy different seeing performance you current can ASP our given times quote customer, based a times to really price yet. the X corporate market for not be ASP. function can XX each we’re And imagine that price to given by

We asked modalities multiple we We with CVX. and company. The partnership Lumentum that other different domain into means be to controller, introduced other our sensor for our want we about part the which is, integrate sensor you have chip mentioned applications. to

a rapid been into issues. the us market the only design that software our all about They of software have partner provide point winning to integrating very solve very we lot with for production and our For the are found we happy to design. AI partnership revenue Lumentum design and design helpful in really with partnership is solution terms the very well to we this of view, with and And and identify them. have on help with control -- to we of access structural our need appealing

mortality. more cases think, We of the to more to more all address, be I thermal kind forward, will there sources we this sensors, need meaning need Moving LIDAR example, and integrate, sensors, for sensors. of

values interface their to Lumentum CVX. approach and CVX them, sensor working with like their of solution we our -- by chip partners be We of acquiring but on can continue add software I -- modules to we providing sensor believe, think then will and instead all in our to

all for look to So that’s sensor partners. modality we strategy definitely and continue other

Operator

you. Thank

of with line the Brian Imperial Capital. from comes question next Ruttenbur Our

is Your open. line

Brian Ruttenbur

Yes. you Thank very much.

chips You commentary Can Vivint, about other getting the security other the for side on security getting you you’re And talk mentioned on industry you’re about in able your versus residential the quarter? security verticals? the traction easily you are to specifically. with procure in traction more the side

Dr. Fermi Wang

Yeah.

camera consumer the in security Vivint and customers, future. the So two camera expect the announced we or security are major the more we in call Ring -- we for home, the

issues, we for In from our customers. supply see impact chain a -- similar of all terms

a Ring although to buy components. think I power do they have really is example, company, to huge For --

We also see on them have some supply limitation the side.

the I supply the issue think impact -- scale. issue and impacting chain the different kitting at So everybody

Operator

you. Thank

Dr. Fermi Wang

part… second Is there a

Operator

Thank you.

comes next line Yang Our question from Martin of Oppenheimer. with the

Martin Yang

Hi. afternoon. you Good Thank my for taking questions.

a current geographic CVX So breakdown that customer and a potential was that customers question the how you talk on compares base? can about to sample, automotive

Dr. Fermi Wang

to this be similar. think very I going

we sample going that identified Europe, we We’re are to -- have sample customers probably China. everywhere, Korea They all have to. probably all U.S., and Japan,

Martin Yang

me. for all That’s Fermi. Thanks,

Operator

Thank you.

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

open. Your line is

Richard Shannon

chip, thanks, maybe the Fermi, Well, first of Thanks. a I dynamics past you. Maybe CVX talk competitive for like that compare cases, competitive that of hear you for about could my complex the so with new both seeing to radar perspective into in guys with sensor with would chips far also less expect to one you’re question. going terms taking and generating dynamics there? a use and modalities some love see

Dr. Fermi Wang

Right.

we is of we of of need all family think, kinds So all CVX, price. have many CVX and our That’s would really and I to CVX leave have address second units. say, a in like performance different to verticals why competing different chip I

sight. You mentioned about radar

like there lot there [ph] are for and of Fenian image company and some up NSP newcomers there also with solutions. a an out think are doing the radar, I radar injuries coming

we really that also building really try this chip -- With performance. quality similar that, to approach solution, high antenna and has to allow what and differentiates effective minimize algorithm of you need really the Oculii first only to a approach. achieve think I number radar different sense cost with chip, RF solution the our not radar fusion us, we sensor the that which allows centralized a we also possible else. in means, will we had is between but and offering video can against differentiate unique make radar of can everybody a this have we future, really -- on that that think the

on of controller CVX, the In our competitors. domain terms

think competitor Qualcomm. CVX. our that biggest I is we and demo NVIDIA that can believe We

power the find be tell eager to I we’re able very -- to customers. the a to that and waiting in advantage will We and presentation talked performance show we our way about to we’re them what

Richard Shannon

Maybe that Okay. IoT perspective, close that think XX-XX fair to appreciate to hitting CV we to higher the Would here, is already think Brian it fair to being one Fermi. relative about Perfect. be about I think for goal already? assumption the sales or automotive. XX% as year a IoT CV of think that segments it’s segment I of this and

Dr. Fermi Wang

say you which talking segment are that, you about? can Sorry,

Richard Shannon

Yeah.

just So segment to is already? of or XX% CV the already if sales close from wondering coming IoT

Dr. Fermi Wang

Right.

not portion, is for only fact yet. the professional camera street in but year, that IoT level about, last other close XX%, in probably Think XX%. is So to security IoT we’re

to this grow need year. we So to XX%

that. XX%, be So areas by be the will will say below close maybe end of segment other professional to the a will probably, little I the year, security more. But way

Richard Shannon

you, Fermi. looking was I That’s what all That’s Perfect. for me. Okay. for. Thank

Dr. Fermi Wang

you. Thank

Operator

call queue. remarks. now the Wang Dr. Thank to in you. over no Fermi I’m the to further like turn I back for questions will showing closing

Dr. Fermi Wang

of thank this joining you afternoon. us all, First for

is our glad strong. with of you. global that, to employees provide but business all next continue our bringing for will with support us. two CVX with we for significant who time. the the And technology us, and made opportunities you all base CV I to am to I XXXX chips to thank very remained Ambarella our challenge will excited about stakeholders markets. especially our thanks particularly talk I want I am and fiscal unexpected the really These to progress X-nanometer CVX. development development momentum external Although

Operator

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

You may now disconnect.

Ambarella (AMBA) 1 Jun 222023 Q1 Earnings call transcript