Ambarella Q3 Earnings Beat Estimates, Revenues Jump More Than 31% Y/Y

Ambarella, Inc. AMBA reported stronger-than-expected third-quarter fiscal 2026 results. It reported third-quarter non-GAAP earnings of 27 cents per share, which surpassed the Zacks Consensus Estimate of 21 cents. The bottom line also experienced a robust improvement from the year-ago quarter’s earnings of 11 cents.Ambarella’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 363.4%.Ambarella’s third-quarter revenues soared 31.2% year over year to $108.5 million and outperformed the Zacks Consensus Estimate of $104.1 million. Quarterly revenues also came ahead of management’s guidance of $100-$108 million.The strong top-line performance was primarily driven by robust revenue growth across the Internet of Things (IoT) and automotive segments. IoT revenues grew in mid-teen percentage points sequentially, mainly driven by the increased adoption of edge AI. The automotive segment’s revenues rose in the low single digits on a quarter-over-quarter basis.Ambarella, Inc. Price, Consensus and EPS Surprise Ambarella, Inc. price-consensus-eps-surprise-chart | Ambarella, Inc. QuoteAmbarella’s Q3 DetailsAmbarella had one logistics and original design manufacturer customer that contributed more than 10% to total revenues in the reported quarter. WT Microelectronics, a partner in Taiwan that serves multiple customers in Asia, accounted for 70.2% of the company’s third-quarter revenues.The solid momentum in Ambarella’s CV flow system-on-a-chip in professional IP cameras continued in the reported quarter. The company expects CV2, CV5 and CV7 to be the key drivers of its revenue growth in fiscal 2026.The gross margin on a non-GAAP basis for the third quarter of fiscal 2025 was 60.9%, which came slightly above the midpoint of management’s guided range of 60-61.5% due to a product mix. Non-GAAP operating expenses during the quarter were $55.3 million, slightly below the midpoint of the prior guidance of $54-$57 million.Balance Sheet & Cash Flow of AMBAAmbarella’s cash, cash equivalents and marketable debt securities on hand at the end of the third quarter of fiscal 2026 were $295.3 million compared with $261.2 million at the end of the second quarter.During the third quarter of fiscal 2026, AMBA generated operating cash flow of $34.3 million and free cash flow of $31.4 million. In the first three quarters of fiscal 2026, the company generated operating and free cash flows of $54.6 million and $43 million, respectively.Ambarella Initiates Q4 GuidanceIt forecasts fourth-quarter revenues between $97 million and $103 million. It expects mid-to-high single-digit sequential revenue decline in the automotive and IoT segments. The Zacks Consensus Estimate for fourth-quarter revenues is pinned at $94.3 million, indicating a year-over-year rise of 12.3%.For the fiscal fourth quarter, the non-GAAP gross margin is anticipated in the band of 59-60.5%. Non-GAAP operating expenses are projected in the range of $55-$58 million.The consensus mark for fourth-quarter non-GAAP earnings per share stands at 7 cents.AMBA’s Zacks Rank and Stocks to ConsiderCurrently, Ambarella carries a Zacks Rank #3 (Hold).Cirrus Logic CRUS, FormFactor FORM and Marvell Technology MRVL are some better-ranked stocks that investors can consider from the broader Zacks Computer and Technology sector. Cirrus Logic, FormFactor and Marvell Technology each carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.The Zacks Consensus Estimate for Cirrus Logic’s fiscal 2026 earnings has been revised upward by 6.6% to $7.58 per share over the past 30 days and suggests a year-over-year increase of 0.5%. Cirrus Logic shares have jumped 27.8% year to date.The Zacks Consensus Estimate for FormFactor’s 2025 earnings has moved upward by 2 cents to $1.17 per share in the past seven days, indicating a 1.7% year-over-year rise. FormFactor shares have soared 20.9% year to date.The Zacks Consensus Estimate for Marvell Technology’s fiscal 2026 earnings has been revised upward by 3 cents to $2.83 per share over the past 30 days, suggesting a year-over-year increase of 80.3%. Marvell Technology shares have plunged 24.9% year to date.Free Report: Profiting from the 2nd Wave of AI ExplosionThe next phase of the AI explosion is poised to create significant wealth for investors, especially those who get in early. It will add literally trillion of dollars to the economy and revolutionize nearly every part of our lives.Investors who bought shares like Nvidia at the right time have had a shot at huge gains.But the rocket ride in the "first wave" of AI stocks may soon come to an end. The sharp upward trajectory of these stocks will begin to level off, leaving exponential growth to a new wave of cutting-edge companies.Zacks' AI Boom 2.0: The Second Wave report reveals 4 under-the-radar companies that may soon be shining stars of AI’s next leap forward.Access AI Boom 2.0 now, absolutely free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report FormFactor, Inc. (FORM): Free Stock Analysis Report Marvell Technology, Inc. (MRVL): Free Stock Analysis Report Cirrus Logic, Inc. (CRUS): Free Stock Analysis Report Ambarella, Inc. (AMBA): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks