Ambarella Inc (NASDAQ: AMBA) stock fell over 5.2% on 31st August, 2018 (as of 11:36 AM GMT-4; Source: Google finance) after the company gave weaker outlook for the third quarter 2019 and a mixed result for the second quarter of FY 19. Total cash, cash equivalents and marketable securities on hand at the end of the second fiscal quarter of 2019 was $376.0 million, compared with $400.8 million at the end of the same quarter a year ago. The company has posted the Non-GAAP net income for the second quarter of FY19 of $8.5 million compared with adjusted non-GAAP net income of $19.3 million for the same period in fiscal 2018.
AMBA in the second quarter of FY 19 has reported the adjusted earnings per share of 25 cents, missing the analysts’ estimates for the adjusted earnings per share of 15 cents. The company had reported 12.8 fall in the adjusted revenue to $62.5 million in the second quarter of FY 19, beating the analysts’ estimates for revenue of $62.2 million.
In the second quarter of FY19, the company repurchased a total of 1,119,193 shares for total consideration of approximately $45.0 million. Under the $50.0 million repurchase program that expired on June 30, 2018, the company repurchased a total of 1,074,542 ordinary shares for total cash consideration of approximately $50.0 million. Under the $100.0 million program that commenced on June 5, 2018, the company has repurchased a total of 862,805 shares for total cash consideration of approximately $33.9 million through July 31, 2018.
The company expects third-quarter revenue to be in the range of $55.5 million to $58.5 million, while analysts surveyed by FactSet expect $73.4 million. The midpoint of which represents a steep 36% decline from revenue of $89.1 million in the same year-ago period. The gross margin on a non-GAAP basis is expected to be between 59.0% and 60.5%. Operating expenses on a non-GAAP basis are expected to be between $30.5 million and $32.0 million
Meanwhile, the company is disappointed with the near term outlook, the company is confident that the decision to focus on computer vision applications in the IP security, automotive and robotics AI markets is the correct strategy and is already bearing fruit. The company have delivered the CV22 and CV2 computer vision chips to customers, and their evaluation results are very encouraging. AMBA believe the excellent neural network processing performance combined with the low power of the solutions gives the company a strong competitive position in the company’s target markets. Moreover, AMBA continue to expand the computer vision product family to deliver solutions that more fully address the growing market opportunity.