AMBA - Earnings call transcript Q2 2023

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Operator

Good day, and thank you for standing by. Welcome to Ambarella’s Third [Second] (sic) Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to your speaker for today, Louis Gerhardy.

begin. may You

Louis Gerhardy

and second Tewanda, call. Thank for you Thank fiscal good year our quarter conference XXXX joining you, afternoon. financial results

X, among forward-looking On questions results White, and XXXX to The information actual market documents demand the including call potential review on file the today in year as these XXXX. are Fermi. our for things. the regarding uncertainties described business results and will update to from more these found the Investor the financial to year could provide results for questions. statements risk for of and XXXX filed our me obligation XXXX. for Fermi as assumptions will information is And quarter, a the will are XXXX second our release, of call and President filings turn be then regarding for results risks, first responses results, and we a should quarter assumptions, that XXXX any X, transcripts, with financial be or Wang, press solutions, fiscal the subject available today’s June is financial historical call uncertainties update to and your CEO; Brian differ to on our today’s are SEC Access April and projected of The of the ending to provide materially could on factors XX, assumptions. discussion fully prove materialize second will prospects, Should Form and CFO. website. our quarter, under XXXX statements. Dr. no that, With other on over risks, affect Brian results, these contain today you forward-looking SEC, replay Form to our statements Report incorrect, the it your well Relations we January the primary for purpose our These results, portion uncertainties and Fermi financial filed fiscal or statements. with quarter of Annual growth risks These be with our of can XX-K we that we on year fiscal fiscal XX-Q other

Fermi Wang

afternoon. above results year-ago Thank on expected; the were QX and revenue you, a $XX. and our down sequentially average Louis, driving today. good blended increased revenue XX% for you CV mostly significantly price our Thank as year-over-year selling call X% was up joining versus quarter. basis,

SoCs, achieve We than shipped CVX inventory improvement and many OEMs but our second levels, Tier for tempered of some their a in the now are see we demonstrations factors in global In customers July SoC. absorbed nanometer XX% we shortage, prior million and have a the lockdown from on will CV of revenue more China XX QX the represent and kits the total our market, about year. our should outlook Collectively automotive as bottleneck incomplete XX% contract. CV leading as is our from In that for some cumulatively track worst both, remain we we to into half, remained our including the customers. these automotive roadshow estimate times with particular the more and lead than XX to Xs commenced reducing live recovery of

as path in of monolithic from fusion all functional cameras, CVX domain controller integrating die Ambarella’s reminder, perception our application single the first as our planning, a core and safety radars, processing competencies; including a and well As sensor is central software.

were across scalability many superior we multiple Xs. OEMs clearly discussions. Just leading efficiency, the performance to SoC well well development demonstrated live cameras recognized full the follow-on came to one and The as of and roadmap, and out many as fab, after SoC automotive month global received, functionality the of Tier our

the be some these of to share expect by customer engagements the about able we year. more of end Now, to

in We least at quarter proud nanometer are a of ahead also to expectations. announce production SoC, our first CVX, QX, that X entered

Ubiquiti CVXXAX view recorder dash I system SUV. June, camera began talk sedan ADAS Cipia’s IoT X.X AI into car megapixel are The the three is faces of megapixel mirrors, Israel-based introduced volumes our in and up create and SoC CVXX Based on our to at based with CVXX based DMS many above Advanced providing our AI CVXX below about the PTZ recording running system our Based introduced seamless also cameras and latest announced dash SoCs. lectures. engaged on will in is drone introduced operations InstaXXX the design detection an robust cars. megapixel recognize cameras and production processor. PTZ AI Haoji in models, of utilizes quarter our rear supports its device Also one based supplied generation surveillance is generation XXth a tier featuring IoT image. CVXXAQ for Bullet SUVs includes and wide-area the home the HXX early on CVXX objects XX CVXXS SoCs, X will networks products digital IP-camera ADAS always and detection, software applications people recording. and both on recorder launched the tier the Ambarella’s Pro, with electronic automotive camera IDIS, driver expected X meters. developing value from and August, is AI Korean a maker includes smart over Chery’s a on streaming, some on presenter capability such Also I this or and identify accessory distances on SoCs. Illustra video camera Ambarella’s two-channel of new Capable the camera. vehicles. XXX to the announced X a designed Neusoft. of Denso-Ten. Dongfeng China-based that on production QX, its by and X mini-dome, and HXX full market, vision AI markets, an camera types, on the our manufacturing the sold wide In front sense sites integration gimbal face by introduced at video The X-megapixel products. on Japanese Link CV The visual System which model CVXXS concerts based customers video our AI SoCs. Sphere and B-class FAW X AI and cams now Cipia camera China-based to monitoring zooming where SUV to X-axis offer provide SoC. SoCs, Car as other June, supports automatic new automatic new XkPXX representative and engagements, announcements. In a works introduced first the and of placing in and by on is activity, camera XXX Sense Monitoring LX CVXXAQ camera introduced automatic will broadcast AI charging a version ensure Based new iPro, provide including machine of with of generation commence object each to and toll development will our inspections including neural powerful aimed The includes for introduced already, integrate AI-powered during Ambarella’s InstaXXX series, different the both SoC, product Toyota based have up bullet XK its The Crown and or models, two markets, focusing CVXX and different Japan-based for Driver has Flex its polarity driver by We live videoconference Xth using our viewing purchased the camera to drone the on PZXXXX presence be are XXXX features. colors, framing, electronic that X now BMW example InstaXXX’s Also center spherical presence based Johnson recording cables connectors, on year. and based Controls new examples capabilities. insight IoT or of Occupant an of its the and one supplied the IoT of In videoconferencing to electrical Chinese two the And stage. tier strategy. and and shipping SoC detecting Ambarella’s CVXX success Eye angle. BCS. its tracking Japan, smart higher JVC some in of CVX These components. Hongqi majority video our their processor. The are four based companies we other market Toyota tracking, performs X.X supplied HX continued an

Furthermore, as we application larger to planning, and unit incremental, and security, larger sensing serve. software. human will together. processing perception ties we sensor demonstrating machine viewing human than these markets, our leveraged These successfully market addressing safety much radar more such value sensor fusion, expertise machine applications opportunities the sensing and incremental have have, CVX this functional we and as megatrends automation. viewing functions processing continue, other such from all sensing in into and functionality can are are perception, the capture We safety

With position are our market we our to Brian will that, success. turmoil, realize AI prepared Despite we these now are organic our early of continue endpoint the investments to we current the signs R&D in and leveraging So, financial market. the drive implementing strategy right will leadership market confident provide fully demonstrating comments. opportunities,

Brian White

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

the the up related reporting, For XX% QX sequentially year-over slightly guidance Revenue of was and expense eliminated have taxes. range, mid-point impact stock-based adjusted $XX.X down non-GAAP and of million, above costs compensation for fiscal our for acquisition year. prior X% we

was Auto primary supply expected, in guidance performance, range margin the disruptions for the of IoT high-end both factor the were of our above and and QX sub-seasonal sequentially. revenue related XX% gross declined fiscal Non-GAAP XX%. chain XX.X%, to As

materials NRE higher the by for driven operating of prior gross margin expected. for compared of $XX.X engineering expense by mid-point Our $XX.X mix million primarily products. to in million, guidance million, new our second This of $XXX,XXX was originally $XX the outperformance Non-GAAP was $XX was than range above to QX. revenue driven quarter million a

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

marketable I’ll quarter million Now, flow. and balance securities capital working cash prior to and approximately $X and the in reversed sheet by normalized. metrics benefits decreased our unusual Cash turn as

remember front-end quarter and declined. inventory benefitted You in receivable that skew accounts the from revenue a prior will

or XX% For days had revenue in customers from represent multiple XXX. two days of for Taiwan that discuss inventory who WT Asia, partner XX% more fiscal and in a and fiscal the in of multiple will our an ships XXXX. of from year to XX%. fulfillment was QX, XX of days for customers manufactures third DSO XX Microelectronics, QX. to increased IoT outlook We the ODM logistics increased to in XXX now revenue. Chicony quarter I ODM at came companies

some of carry inventory they’re second the to supply expect disruptions, from particular times lead started we half, in reduce see the some willing have to broad year-end, improvement amount While we into customers as in component contract. chain the

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

conference net the more OpEx quarter on coming be XX taking of on to Bank’s in primarily non-GAAP September and joining approximately from the income place September X% Xth, I Asia our on over for approximately be estimate to share conference to in activities million. to compared our expect us will of questions. count conference Ambarella Citi’s $XX UBS’s our Xth, will Technology $XX Virtual the with to conference sales Future and you to in interest rate the to Xst, Deutsche increased call We million during tax Thank range Xrd. today. turn in headcount We of October range Mobility quarter. Technology increase $XXX,XXX, that, contact the the operator participating X% third And with QX the Technology virtual for details. non-GAAP diluted million, Please September for be Suisse be to be call and Credit

Operator

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

Matt Ramsay

what how wanted been had me have the and formally from to going as are many Congratulations going I samples? give CVX. and few sort just part feedback CVX updates have engagements sampled, relative portals how customers the software on with of customer the customers. us Maybe ask you if sampling like what modeled performance guys on those with and a sampling to could how is the to to the you Thanks. anecdotes early

Fermi Wang

Right.

So to X roughly first demoed all, customers, we including dozens Xs, OEMs. maybe tier of of

demos. I think from takeaways there are the three important

all, neural autonomous multiple the we different well that driving. a flow First went fab. we demo as chip the all networks give of all with all was video the live video in of neural And through are plus a from four weeks And CV CV standard board displayed the taking video multiple -- live that the TV important the are we And into gave result, CVX running the we cameras flow thorough and the processing. back demo image come do the And process we’re went sitting network and of that’s engine of impressed of compression very customers the on the very our after for and video monitor. video. engine camera network new processing middle, in goes our for end engine. live process to those the The a results CVX, both as both

live thorough So, And touch to is demo. came fundamental a that enough the think enough that but data demo, weeks of imagine this path surprised all this die. glad solid you I’m It in we four do give have are all very that. you and that big can can pretty important chip, a is back. the which software after I not of shows to see side customers also over chip we And only and stable our our good much

is the you is important performance, said. thing the like second The most

fact, In surprise customers, real demoed big And right did fact, we a they they before expecting those on, surprise them, in them to we we the all with performance in hit we CVX, expectation that’s the are see the chip. our And used and have. projection because for fact, definitely on our a on lower. data on chip advertised up, But people people our case, a show real deliver the second CVX. in given we -- as higher to we and takeaway. performance That’s the the little presentation told

The third power takeaway is consumption.

about. We also projections, and customer we the power our we the hit number potential give number power talk

competitors have performance CV which and summary, we can people consumption show portion anymore. that live is multiple at presentation of a run small a basically, we -- which power in chip is PowerPoint So, a times that than our demo, not a

them customer and about I network. our next So, -- also giving very And development porting for is good and CVX. our hit and do think, milestone that’s hardware provide our neural to impression software our software software customers, to SDK really the the SDK -- a important

progress, and So, customers something in I speaking. think we that’s we’re engaging are as

more I be give said on you updates continue we’ll we to the to And So, script, that customer as engagement year. believe by we end hopefully, will the that to be in of more. able report able my our

Matt Ramsay

Fermi. for the That’s on all really helpful. And that, Thank progress. congratulations you

less inventory that second being you’re color if Any As would ask specific to be the for the and half customer my which inventory? to to helpful. kitting any And about way quantify year-end. want maybe inventory guys. you year? willing into have that follow-up, hold the your issues there is coming less I commentary on seeing geographies, which wanted end some folks of or of Any potential really to markets about the to Thanks, customers what impact fiscal anecdotes down to Brian, take

Brian White

outlook for Sure. for our fiscal we Well, QX. revenue gave you

QX type feedback, venture of customers areas. with where of various point. to we’re at in in this this But out going it’s seeing terms into not We’re

a specifically not targeted exposure. it’s So, to single

abate a be of where and in risks the those right? are also we’re But associated the that. horizon, customers Things supply think time, to experiencing for I have the situation economic bit to a some uncertainties could getting to some disruptions are ahead been disruptions little they’re with extent. And that some better. looking on quite beginning

of to And the a so particularly head inventory a that end a there’s, into the didn’t as calendar for period I think, maybe return year. management time, exist of on focus we

reflecting we are some we guidance various the for in pushouts we’re provided. from that requests getting So, customers, and

Operator

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

Joseph Moore

you. Thank Great.

up the time question, lead time, Following about lead inventory talk on you time a contraction, When on that then, last customer that for your components? had lead is other that stuff. follow-up. is I And or

Fermi Wang

time but own both, a our about weeks. talking we’re our peak, Joe, lead about At talk lead roughly was think, I can time at changes. XX I

at weeks. was we XX time Now, XX roughly our talking lead And weeks. normal before COVID, are about

we and time the talking lead think time. are components normal, noticed we lead to basically partners are some going our also So, also of But showing gradually I -- components other contractions. about I our back think that’s of

Joseph Moore

And Okay. know get thinking kind in both of consumer-centric off issue. and the depressed That’s and I of in helpful. businesses, a of other you. terms ramp your then, quarter Thank foundry where you’re about October, were consumer, a coming you surveillance the revenues in seasonal by normally

you in ramp. So, and on a there’s is you’re offset of it that kind kind it’s are of pretty seems or more fall-off describe seasonal like kind seasonal these being something seasonal of other I just the understand. that’s that you’re big getting the still you products? to impact, seeing I Can -- talking hitting about, you more want impact if that make by just normal issues sure

Fermi Wang

Right.

On those inventory three reduced, the but the about believe it’s been we of top away, chain go persist, for half, So, supply second reduction we issues of just have degree. customers. in Joe, didn’t at even will we I of a although first kind think, talked all, about, lesser but that, talking

And here. major unique this also, things is think really think those a two are probably I I factors. the

the we’re chain all I with geopolitical think seasonality situations I this normal have year. situation, to that think say, supply our I monitoring, don’t that applied

Operator

from Vivek question of Arya of with Bank line Instructions] the [Operator Our next comes America.

Vivek Arya

quick margins. NRE Actually, you outlook? your and improve gross incremental I that Brian, hoping clarification, in QX, to could had questions. were you in two QX embedded quantify much revenues some helped mentioned and was what’s a I in NRE there how

Brian White

quarter, that we larger we the And the time normalizing was to of QX typical idea, we a to look mid-single-digits just kind that as activities out so and the as X% in the revenue. it’s an fiscal and returning so at we really millions out break to total further -- the don’t term, but to lumpy Vivek, we of run dollars of starts for But I mix. revenue in CVX give for second in see range. kind of more be a And have back near NRE It’s slightly rate. X% But, QX, NRE associated forward. Yes. specifically, of with on. company overall portion and low of typically go as to terms of runs total to we going you think in become that example, that possible go

yet. there level we’re quite a -- just on not We’re sustained

Vivek Arya

I’m exactly near apples-to-apples. But more of are demand every or kinds so look and signals? might Got the on on inventory automotive the the I is that Obviously, more more you where seeing supplying on the automotive not Because least company term. they of side? it. curious, somewhat IoT? on And side, customers, be most that when that Is for reduction the pretty suppliers, been more at strong, different component, other have understand that the by I the the to semiconductor automotive-exposed results your outlook at in side? Is softer seem automotive IoT is it

Fermi Wang

little No, inventory customer. I automotive are on reduction right. We you the a think see

on trying IoT the of reduce total But revenue. fact, -- of see balance the we XX% to are In customers particularly side, inventory. the side, the they security do security camera business our

Vivek Arya

way straight of of of inventories the which anomaly Got to now semiconductor stands it lower suppliers. up for it. quarters? it of right level for is to view next kind outlook on your sector quarter, What in being of most to where are this the look And the it then has an kind the finally, your your the of at Is because What levels a inventory else? to is your way signal balance inventory reduced right, manage fourth for overall of something out, the right with three inventory? demand absolute lower dollars able Is two sheet? is

Brian White

has Yes. up dollar in quarter, in couple look terms last the if Vivek, the days quarter. the COGS was because declined of quarters terms. down at inventory you of in second But actually went it in

think of were we So, inventory XXX days were XXX of days XXX we about we in went about -- from I in QX, QX. -- and

for disruptions buffer So, at because of supply a terms the days of level that’s inventory try But we’ve the some been inventory Company. running ourselves higher in gyrations. those level to relatively relative from of of elevated a all to

in term, supply if we of about think inventory expect these state. So, you longer behind XXX something of the issues normalized us and if we I would can should it more be get days under a future. of running all get to

Operator

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

Gary Mobley

I and your us trended year-over-year your appreciate baseline that how basis quarter-over-quarter but above in a can disclosure growth. thinking some to terms give how compares it basis, now about maybe on is about of ASP unit $XX, blended you if the

Fermi Wang

production, say grow, ASP we continue continued CV expect the line, when product what think the growth probably that to CVX CVX will is can family I of introduced continue, we expand. So, our to products since our get into we will we and or and ASP

think these two I are I wise, the number unit issues. think separate

years. And where lost business. we high in the our the ASP lose majority of low, [ph] very is several we vision, is ASP probably the that which is basically business unit the In last number lowest fact, with

our product of our will ASP also overall continue CVflow ASP. say our -- But improve company-wide that to so will because base helps growth I ASP line. And that

Gary Mobley

quarter Samsung quarter. that’s looking the was headwind wanted Is clear And XX-nanometer wanted the that right? October as no in million, issue, longer to that the that I a you $X to into the confirm I be supply July and lingering approximated impact

Fermi Wang

give $X in Well, first of but when -- October, less, guidance. the we all, in I think quarter much is true. And that it’s consider will I July think million we

Operator

Our comes Blair line Arete. from next question the with Botha of

Blair Botha

just into about entered adoption But through us ahead revenue CVX. be to you I can could a over on just just XX of this, And you had sharp the we year? mass how CVX could -- an I could hot now expect the for the question over of so side think the the curve see talk Do see schedule. stream next so next production growth on think helpful. see on driver adoption? as important it it’s you X how it color a the to the would revenue about business? be Any months

Fermi Wang

Right.

you that production at like as class I as some high-end well some enterprise them, while said, year. of home video they security taking the quarter do next-generation target think products, all they of is consider into And production and enterprise home CVX, cameras, if application our half should engine. looking are will -- cameras, into our in that application. will I as this high-end CVX application system take second this the high-end almost of they security conferencing multiple And the CVX high-end and

on definitely I of year. to us this think, think ramp ASP I as well It will the second helping revenue, So CVX next half expansion helps us and maintain as our gross start up margin. year

Blair Botha

I a just then, And as guess you. follow-up. Okay, great. That’s Thank helpful.

Could know the to sales? give quarter. guidance, that, October quarter they could the at something add expect then, the about mentioned the us of you quarter? you. in as to the looking in and automotive, for you declined sequentially segments, two percentage I terms similar how Thank suppose In any them IT we to size just QX And of a I color

Fermi Wang

the you repeat question? Can

Blair Botha

Yes.

just QX at terms just automotive, the and what percentage they to just that, quarter, to something of for I add So, for any in IoT similar of you quarter? them then, two we guess, about guidance, I of if more size could segments, the the in as was the the And a sales? color expect October did in hoping look

Louis Gerhardy

Louis is Yes. This speaking.

the So, everything And same growing when auto and of roughly outlook to included, these is including QX NRE. sequentially. areas for both the consider the you have IoT,

Operator

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

Ross Seymore

Thanks here. for ask question a me letting

expect been that’s the a a seems the the IoT given in that when it of you seems like the prior me? the ramp, row. When really it takes about the for answer to On benefit the XX% CV three I at side, expect of been automotive in to like that a it side. range design it’s preamble, accelerate? two impacting the should specifically to And do the revenue know now, the about think segments? wins stuff, do step-up automotive, question, the given longer how you majority that all of highlighted rates growth of But either for steer we or you’ve bigger in quarters

Fermi Wang

milestone revenue Level provide one in key automotive that’s important OEM us terms growth to right? next is production, that us plus X that car for ADAS really So I major of for think take growth. really the the into long-term

to looking I like market. continue the ADAS said, will OEM I’m major the function step into revenue grow, automotive take -- is think although the think the but for really I I

Ross Seymore

the something of that rough that? more dependent, it’s color sort design wins, be couple may sort rough given Any of have that design CVX occur? on think out, that you that of color the Any Is or years so cycles? going when a you is to of

Fermi Wang

grow. because the right, some But should like in revenue you past, CVX the will and think the too continue provide biggest will I now said jump CVX I automotive CV for to the the of us. [ph] but we production, our and ASP really in -- and see boost between give think

Operator

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

Tore Svanberg

to to lead mid-XXs the adjustment, down started times Or process little I be the you beyond October XX, from of QX. XX lead thinking during later. inventory But comment sort the know to you you’ll of times bit going quarter? and just sort you’re not of sort the that think do a about that going about when talked

Fermi Wang

XX XX, be to will is a would probably [ph] still, process it high-end really XX XX I on we’ll depend stable because while our think move I now. for the chain, on there’s take So right? think like Well, think, before, will it while. And supply I node, whether a

So, expect immediately. XX to back to XX I wouldn’t go that happen

there, think customer will trend, trend reacting I I However, think is to expecting really soon. time our the back to that go the the lead is normal and

Tore Svanberg

since And data follow-up, talk that X.X you’re improve? us next good. right to vehicle your how be to qualitatively least funnel now funnel And not of you confirm can you’re continues Very as quarter? could sort you to now, at on going shed about my revenue going that updating obviously

Fermi Wang

update We on you November. definitely will X.X in the give

Tore Svanberg

Okay. Any gun am here? comment jumping I or qualitatively the

Fermi Wang

I we are about. little a too talk -- early months think to three

Tore Svanberg

good. Very right. All

So, to I’ll answer going question, since that you’re one. one last have not

So, XX-nanometer. a know about I bit on you little just maybe some could XX-nanometer issues talked you there’s also dynamics? chain been I the know supply elaborate at the potential yield but

you Now are improvements the on in production with how current are Thank do supplier? you. that in going your yield X-nanometer, you feel

Fermi Wang

Right.

this It improved. And think in are QX. can I But that X-nanometer, ready news on X-nanometer. are there lot we that’s years. with be when the our anymore node, because experience, experience for -- problem think range improve now of is we advanced supplier based working X-nanometer improved continue I in fact, think a have at articles normal point, was in But our and won’t to a say production. we similar future. it. the -- about yield yield problem. And I together a we production been I in a yield to are in problem. partner Samsung’s a foundry don’t we our it’s work I a with And yield Samsung any -- the us for further that So, many it’s start definitely can be is And for at foundry near not can think and with is low, this beginning be to for I working But

Operator

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

Suji Desilva

auto is relative You to more And how CVX about perhaps. industry? and talked the whether that cycle through some getting Xs products? design Xs you NRE some you the be it sounds design talk -- about and there about -- Thanks. tier prior part there know would implementations of established I software-intensive. long of tier Can the how talked just the

Fermi Wang

final going of X we’re -- in China. -- a first but both We win, want need think talking both than tier a We think X a to are I final into from I X X equally control need China, the deliver try the win tier OEMs Inside it’s years design maybe to software, they for probably think, closely make to the faster to production I outside and I those think Level to think Xs. deliver But very to that and products. momentum, design decision to product. with still tier -- any all, that. partner important. little OEM take X+ to work a our

to as I -- make out CVX, we demo went the to the capability major as when both sure Xs CVX. all the potential OEM So, we to out major think that’s and tier well of see went they -- the why we

so, that will when make consider they they other talk wins decision to the on a design CVX. And each

Suji Desilva

should Oculii on about how are as acquisition for the contribution, what Radar, revenue we can on you then, next that or think you over few the just And us that update contribution integrate quarters in? incremental fundamental expectations

Fermi Wang

Right.

of quarter, to probably of guidance didn’t revenue per but a million $X Radar first we break we Oculii $X year. gave So this all, million up

made wins for And are the few I with we and our -- results to ramp close see we that. there continue on. next the monitor in that current we revenue. the up the are Hopefully, working talk going to that And we’ll think customer. current design year, we’re about a to we’re did progress

and the sensor at not our milestone, to and savings demo another that important to too. like track customer, that’s there’s should the customers, provide very you bank time. platform fusion our huge software with video I And important Radar think same but silicon fusion can CVX really provides first our do is which better perception said we before, when Oculii data sensor will only think it for can probably -- I the just to I us running silicon, data

an we’re So to think trying that hit. milestone is also important that I

Operator

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

Kevin Cassidy

market and, robotaxis at be that for as opportunities say, Is any the between vehicles better Just looking to one the suited there and CVX, might is consumer difference or there you’re CVX? a time shorter for shuttles? a

Fermi Wang

Well, vehicle and I software. test introduce is more different, and even are people probably China because the hardware also product silicon a want similar, cycle people to is on vehicle, commercial market. -- the Inside and in little willing consumer think design for a both, China, outside and for commercial to silicon have auto-grade

we different a the I of will some where advantage in different to and definitely, that’s China we take quickly think cycle two So product see timings. design try shorter -- And introduce there. can

Kevin Cassidy

question, that going Oculii the NRE of is to NRE And part back revenue?

Fermi Wang

it is. Yes,

Kevin Cassidy

go to expected That’s also? forward, Okay.

Fermi Wang

we with now that acquired a I going expect see them. new we with new Yes, we are Radar, after also. to customer think, opportunities revenue engaging we’re

Operator

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

Andrew Buscaglia

with OE, there VW. quarter, specifically some adjacent the around other announcements just growing think technologies, Into some optimism decision-making, forward automotive some was I we some saw moving -- given or

understand commentary, what movement your seeing decision-making So, in despite think we generally about would to automotive these you inventory some around the what said, term, on -- conversations forward? start near you around Because should see space what cycles, I the the just we’re side. with inventory the latest moving but as

Fermi Wang

about talking are you So, engagement? CVX

Andrew Buscaglia

yes, your Yes, latest CVX, latest your more so that CVX. you’re specifically, technology, shift --

Fermi Wang

Yes.

new with the up to first demo and like put I on engineering the follow to all, and have a the need done we first to customers of engagement the demos, network well we put the of with So said, system. of engagement, software to side phase help CVX lot

should can we important I for not we address say the definitely CVX same derivative that that’s so next -- think an -- I At one. applications. So, developing chips family are future -- time, in the different

to So in ‘XX. another grade strategy definitely to we’re moving the on, investment chips. your And continue is important into silicon our are And go for ‘XX, and that chip, -- we for be question. I auto going to example, for working we which X-nanometer enabling XXXX working are that’s production forward. that silicon to customer hope chip going is answers work on on -- us CVX different definitely an that of derivative

Andrew Buscaglia

in that would these we I we’re that guess being of so announce forward to that adjacent are despite with where seeing more wins, to move and movement, decision-making able would pressures. terms the inventory some just even technologies. start there? was movement I in see think design guess, I seeing fit some some you Well, some does CV

Fermi Wang

to can we’re script, believe update give the -- in more So, things There about we is want talk our -- going we year. give before the you are like we CVX doing give I talk -- we’re said give in you we’re of the probably we’re we wins which engagement update, OEM that. the the design about as a well year, as end will talk going end by will final think, going of in to we indication. year in One end with that how terms we of indication the November, to you the two about

So will provide to you continue hopefully, input. that

Andrew Buscaglia

or of other, in Asia, is regionally it sort U.S., bias the sampling one maybe more Okay. or you’re whether you’re talking any And early when be to versus CVX, there the customers specifically around too seeing, tell? interest then, region Europe about

Fermi Wang

we X,XXX place, the the every it’s among almost including -- we -- customers China, over Korea, and I think and fact, global, U.S. to Europe talk In Japan,

the weeks. we customer the want think we probably and to talk to few I So, target talk last to in

Louis Gerhardy

at our some more central here. controller. domain perspective what’s to give just Andrew, play first you Yes. This is on

we live. And we next their and go couple dozen progression make expect the they port board where to will described decision, series more so, this through idea chip. providing a of And is step global And steps, the move feel the year. operating provide we have of last seeing end we’re a and product steps, the now as demonstration an years. through to onto on Fermi basis through software customers to still where can that saying on of process a of where own in the the you EVKs begin by that to we’re as customers described, at introduced the this it several we’ve had gone you and almost process, the sequential then And customers comfortable SDKs update

Operator

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

Richard Shannon

and up dynamics over do here. I portfolio, a is know words, in there situation, here. early large CVX the following wondering an stage terms use one Do In domain what is situation other are demos of them of I or more? on or expect or be none with you think future sourcing you the expect in to time? the question to entire customers. automotive you them very discussions one Fermi, see just choosing controller across discussions of and kind or all for me, topic Well, possibly split two competitive this

Fermi Wang

software. I with lot the they interesting always It’s they we a companies risk think because But end, want choose to at to the of one. start the only that talk of understand taking one of -- because all

two possibilities. some take and there’s between that one, so chance also these will take chance think will I it’s is -- So, two people someone that there a

Operator

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

Tristan Gerra

CVX shipments and meaningful is the or to your next guidance, assume material will going into the just be second we ramping material and revenue it that initial is that more next the mentioned Should start second half year. your it is CVX QX becomes to it And year? You’ve to then half?

Fermi Wang

will probably QX probably to will the QX next that revenue I think a next QX and say will ramp-up come for but revenue several -- be I meaningful from time This QX, year. customers, move year. meaningful

Tristan Gerra

several you to you And any mentioned get it the China evolve inventory IoT now? that levels terms to side. of quarters? or automotive And to are the as automotive you projects? question push-outs color you’ve next could some specific how -- seen deleveraging the high is on situation just either I How And new in market? How do wanted there? customers, then the my or expect delays, Okay. And -- second across have provide both right inventory over the and deliveries

Fermi Wang

You’re talking right? about China market,

Tristan Gerra

Automotive. Yes.

Fermi Wang

China Yes, automotive.

will about say I think talk versus that vehicles. automotive, consumer you need you China commercial So I to if separate

I is but which think severe problems facing smaller market. commercial -- China are vehicles terms a demand, in of

is market -- we that I still short -- inventory, still seen haven’t supplies. facing vehicle, we’re consumer think the On

point. we any sorry, the And so Chinese that’s in revenue at seen the -- automotive reduction reduction consumer why this inventory haven’t

Tristan Gerra

would to market base will existing automotive slowdown a of balance? create in the expect back then And when in supply you And get end to then? revenue this that on by your China more

Fermi Wang

I’m the inventory current because what customers. of exactly our level not don’t I sure know

little For imagine our can chip, a right, that bit probably build some that inventory. I of

Some people conservative. will be

going it’s So really customer-by-customer discussion. be to

problems. For IoT, for not even example, of our customers inventory have all

more of are in people inventory. conservative up Some building terms

that last some So minor And to XX time the digest long more been have inventory. definitely, there customers is are for But them there months. them. inventories inventory our reduction a for is the building throughout aggressive

normalize So it’s say can’t hard it. to customer-to-customer -- discussion. it’s very really We

Operator

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

Fermi Wang

thank to your I Thank you would And I’m upcoming see all you for time your today. in the events. forward to looking and like you, consideration guys.

Operator

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

You disconnect. may now

Ambarella (AMBA) 31 Aug 222023 Q2 Earnings call transcript