🟢 At a Glance:
- 💰 Revenue: $54.6 million
- 🧨 Net Loss: $(35.2) million
- 💸 EPS: $(0.85) per share (Non-GAAP: $(0.46))
- 🏭 Gross Margin (GAAP): 60.6%
- 🔮 Q2 Revenue Guidance: $54–$58 million (flat as last week’s soda)
TL;DR: They burned cash, missed analyst revenue expectations, and still talked about AI like it’s saving them next quarter.
📉 Financial Breakdown
| Metric | Q1 FY25 | Q1 FY24 | YoY Change |
|---|---|---|---|
| Revenue | $54.6M | $62.1M | ▼ 12% |
| GAAP Net Loss | $(35.2)M | $(35.3)M | ≈ Flat |
| Non-GAAP Net Loss | $(18.9)M | $(22.3)M | 🟢 Improved |
| GAAP EPS | $(0.85) | $(0.90) | Slightly Better |
| Gross Margin | 60.6% | 62.0% | ▼ |
🔍 What Went Wrong?
- Revenue fell short of the Street’s expectations. Again.
- Still deeply loss-making — bleeding ~$35M on ~$55M sales. That’s a 🔥 burn rate.
- Automotive SoC revenue slowed due to macro weakness and slower CV deployments.
- Inventory remains high as they clear older parts.
🤖 But AI, Right?
Ambarella wants you to believe they are not just another fabless semi story.
“We continue to believe Ambarella is uniquely positioned to power the AI edge…”
Sure, but that AI edge is currently:
- Not profitable
- Not shipping in meaningful volume
- Not impressing investors who’ve already moved to Nvidia and AMD’s buffet line
🧪 Segment Hype (From Management)
- Automotive AI SoCs: “Design wins are coming.”
- Industrial computer vision: “Well positioned.”
- China biz? Recovering slowly, not in growth mode yet.
Basically, they’re building the pipeline, not cashing it yet.
🔮 Q2 FY25 Guidance
- 📉 Revenue: $54M–$58M (YoY still down vs $62.1M in Q1 FY24)
- 🧾 Non-GAAP Gross Margin: ~61.5%
- 🧨 Non-GAAP OpEx: $46M–$48M
- Still guiding a loss.
📦 Balance Sheet Status
| Item | Q1 FY25 |
|---|---|
| 💵 Cash & Equivalents | ~$208M |
| 🧾 Inventory | High |
| 💸 Free Cash Flow | Negative |
| 🔋 R&D Spend | Steady |
They’ve got cash for a few more winters, but no signs of a breakout yet.
🧮 EduInvesting FV Estimate (2025–27)
Right now, no positive EPS. But let’s estimate forward value if they break even in FY27 with ~10% annual growth and regain operating leverage:
- FY27 Hypothetical EPS: $0.80–$1.00
- P/E Range (2027 Target): 25–30x (for AI semi hype premium)
✅ Fair Value Range: $20–$30
CMP is likely much below that (unless short squeeze), and without tangible AI-led revenues, the downside remains real.
⚠️ Red Flags
- 🔴 Zero top-line growth
- 🔴 Still deeply loss-making
- 🔴 AI pipeline is “under construction” — not monetized
- 🔴 Automotive sector’s cautious tone
- 🔴 Not a clear takeover candidate yet
🧠 EduInvesting Take
“Ambarella is the gym bro who bought all the supplements, wears the dri-fit gear, has a coach… but hasn’t lifted anything over 60 lbs in 2 years.”
The AI dream is there — on slides, in forecasts, in investor calls. But the revenue engine is sputtering, and losses are real.
This is a hope-and-hold stock. It’s not yet a show-me story. It’s still a “trust us” story.
📢 Final Verdict
| Metric | Grade | Notes |
|---|---|---|
| Revenue Growth | D | Shrinking YoY |
| Profitability | F | Deep losses |
| Guidance Quality | C | Flat at best |
| AI Monetization | C- | Still pipeline, not product |
| Long-Term Hopeium | B | If you believe, you believe hard |
| Meme Potential | A- | AI + Chips = Reddit mentions |
Tags: Ambarella Q1 FY25 Results, AMBA Earnings April 2025, Edge AI Chips, Automotive SoC slowdown, AI Semiconductor Losses, AI Design Wins, AI Edge Computing Stocks
Author: Prashant Marathe
Date: June 4, 2025
