Ambarella stock soars 16% on strong guidance, narrower loss than expected

SANTA CLARA, Calif. - Ambarella, Inc. (NASDAQ:AMBA ) shares surged over 16% in after-hours trading on Tuesday after the edge AI semiconductor company reported better-than-expected second quarter results and provided strong guidance.

The company posted a narrower-than-anticipated adjusted loss of $0.13 per share for Q2, beating analyst estimates of a $0.19 per share loss. Revenue came in at $63.7 million, up 3% YoY and ahead of the $62.1 million consensus.

For the third quarter, Ambarella forecast revenue between $77 million and $81 million, significantly above Wall Street's expectations of $69 million. The upbeat outlook suggests the company is seeing improving demand trends.

"In our second quarter, we achieved record revenue for our edge AI inference products, and we are anticipating double-digit sequential growth in our total revenue for the third quarter," said Fermi Wang, President and CEO of Ambarella. "Company specific drivers are more than offsetting the mixed global economic environment."

Wang added that Ambarella is "increasingly optimistic" that its new products have positioned the company to scale its computer vision business into more advanced AI networks over the long term.

Gross margin on a non-GAAP basis was 63.3% in Q2, down from 64.6% a year ago. For Q3, Ambarella expects non-GAAP gross margin between 62.5% and 64%.

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Source: Investing.com