Ambarella, Inc. reports 0.42% almost no change in revenue in FY2020 and 0.86 pp EBITDA Margin decline from -14.9% to -15.7%
03/03/2020 • About Ambarella, Inc. (
$AMBA) • By InTwits
Ambarella, Inc. reported FY2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- The company operates at negative EBITDA Margin: -15.7%
- EBITDA Margin is quite volatile: -15.7% in FY2020, -14.9% in FY2019, 9.9% in FY2018, 20.0% in FY2017, 27.4% in FY2016
- Ambarella, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.0%.
- The company has unprofitable business model: ROIC is -11.4%
- It operates with high leverage: Net Debt/EBITDA is 3.2x while industry average is 0.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue showed almost no change in FY2020. Revenue growth showed acceleration in FY20Q4 - it increased 12.0% YoY. During the last 5 years Revenue growth bottomed in FY2019 at -22.9%. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased slightly on 0.86 pp from -14.9% to -15.7% in FY2020. EBITDA Margin declined at -12.1 pp per annum in FY2016-FY2020.
Gross Margin decreased on 2.6 pp from 60.7% to 58.0% in FY2020. Gross Margin stuck to a declining trend at -1.9 pp per annum in the last 5 years. SG&A as a % of Revenue increased slightly on 0.85 pp from 22.2% to 23.0% in FY2020. SG&A as a % of Revenue stuck to a growing trend at 3.0 pp per annum in FY2016-FY2020.
Net Income margin decreased on 6.2 pp from -13.4% to -19.6% in FY2020. Net Income margin stuck to a declining trend at -12.0 pp per annum in the last 5 years.
Investments (CAPEX, working capital and M&A)
Ambarella, Inc.'s CAPEX/Revenue was 0.80% in FY2020. CAPEX/Revenue showed almost no change from FY2017 to FY2020. It's average CAPEX/Revenue for the last three years was 1.1%. During the last 5 years CAPEX as a % of Revenue topped in FY2019 at 1.3%.
Return on investment
The company operates at negative ROIC (-11.4%) and ROE (-10.3%). ROIC decreased on 2.4 pp from -9.1% to -11.4% in FY2020. ROE decreased on 3.6 pp from -6.8% to -10.3% in FY2020. ROIC stuck to a declining trend at -10.5 pp per annum in FY2016-FY2020. ROE followed a declining trend at -9.4 pp per annum in the last 5 years.
Leverage (Debt)
Debt level is 3.2x Net Debt / EBITDA and Debt / EBITDA. Debt surged while cash jumped on 19.3%.
Ambarella, Inc. has no short term refinancing risk: cash is higher than short term debt (10,609.9%).
Management team
Feng-Ming Wang "Fermi" is a Ambarella, Inc.'s CEO. Feng-Ming Wang "Fermi" has spent 17 years with the company. Kevin C Eichler "Casey" is a the company's CFO. Kevin C Eichler "Casey" has spent 2 years at the company.
Financial and operational results
FY ended 01/31/2020
Ambarella, Inc. ($AMBA) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 316.4 | 310.3 | 295.4 | 227.8 | 228.7 | 0.4% |
| Gross Profit | 205.3 | 205.0 | 187.7 | 138.1 | 132.7 | -3.9% |
| SG&A | 37.7 | 43.4 | 47.8 | 50.5 | 52.6 | 4.3% |
| EBITDA | 86.8 | 62.2 | 29.4 | -33.9 | -36.0 | |
| Net Income | 76.5 | 57.8 | 18.9 | -30.4 | -44.8 | |
Balance Sheet
|
|---|
| Cash | 268.1 | 322.9 | 346.7 | 194.0 | 231.4 | 19.3% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 2.2 | |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 8.0 | |
Cash flow
|
|---|
| Capex | 2.1 | 2.7 | 3.7 | 2.9 | 1.8 | -38.1% |
Ratios
|
|---|
| Revenue growth | 44.9% | -1.9% | -4.8% | -22.9% | 0.4% | |
| EBITDA growth | 61.1% | -28.4% | -52.8% | -215.3% | 6.3% | |
|
|---|
| Gross Margin | 64.9% | 66.1% | 63.6% | 60.7% | 58.0% | -2.6% |
| EBITDA Margin | 27.4% | 20.0% | 9.9% | -14.9% | -15.7% | -0.9% |
| SG&A, % of revenue | 11.9% | 14.0% | 16.2% | 22.2% | 23.0% | 0.8% |
| Net Income Margin | 24.2% | 18.6% | 6.4% | -13.4% | -19.6% | -6.2% |
| CAPEX, % of revenue | 0.7% | 0.9% | 1.2% | 1.3% | 0.8% | -0.5% |
|
|---|
| ROIC | 28.9% | 15.1% | 5.2% | -9.1% | -11.4% | -2.4% |
| ROE | 26.1% | 14.4% | 4.0% | -6.8% | -10.3% | -3.6% |
| Net Debt/EBITDA | -3.1x | -5.2x | -11.8x | | |
Ambarella, Inc. ($AMBA) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 47 | 56 | 68 | 57 | | -17.1% | -9.7% | 18.6% | 12.0% |
| EBITDA | -15 | -7 | -4 | -10 | | - | - | - | - |
| Net Income | -17 | -10 | -4 | -13 | | - | - | - | - |
Balance Sheet
|
|---|
| Cash | 204 | 223 | 252 | 231 | | -39.3% | -24.6% | 18.8% | 19.3% |
| Short Term Debt | 2 | 2 | 2 | 2 | | - | - | - | - |
| Long Term Debt | 6 | 5 | 9 | 8 | | - | - | - | - |
Ratios
|
|---|
| Gross Margin | 59.0% | 57.5% | 57.6% | 58.2% | | -2.3% | -3.3% | -2.8% | -1.8% |
| EBITDA Margin | -32.2% | -12.9% | -5.7% | -17.0% | | -17.8% | -5.0% | 8.0% | 8.2% |
| Net Income Margin | -36.7% | -18.1% | -6.3% | -22.7% | | -19.1% | -7.1% | 9.4% | -13.8% |
Peers in Semiconductors
Below you can find Ambarella, Inc. benchmarking vs. other companies in Semiconductors industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Inphi Corporation ($IPHI) | - | 30.8% | -15.4% | 24.2% | 86.8% |
| Sequans Communications S.A. ($SQNS) | - | 5.9% | -16.6% | -23.3% | 65.0% |
| MaxLinear, Inc ($MXL) | - | 8.4% | -8.4% | -17.6% | 50.9% |
| Advanced Micro Devices, Inc. ($AMD) | - | 21.6% | 23.3% | 4.0% | 45.0% |
| Kopin Corporation ($KOPN) | - | 23.0% | -12.1% | 20.7% | 35.9% |
| |
|---|
| Median (43 companies) | 1.2% | 11.0% | 4.9% | -3.0% | 2.8% |
|---|
| Ambarella, Inc. ($AMBA) | - | -1.9% | -4.8% | -22.9% | 0.4% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| CEVA, Inc. ($CEVA) | 91.6% | 92.1% | 89.8% | 88.4% | 89.3% |
| Universal Display Corporation ($OLED) | 83.9% | 80.8% | 75.5% | 78.5% | 80.1% |
| Rambus, Inc. ($RMBS) | 80.1% | 79.9% | 76.8% | 77.1% | 75.0% |
| Analog Devices, Inc. ($ADI) | 65.1% | 59.9% | 68.3% | 67.0% | 65.9% |
| MoSys, Inc. ($MOSY) | 49.0% | 46.9% | 61.8% | 61.0% | 65.7% |
| |
|---|
| Median (43 companies) | 47.2% | 48.6% | 50.2% | 50.4% | 49.2% |
|---|
| Ambarella, Inc. ($AMBA) | 64.9% | 66.1% | 63.6% | 60.7% | 58.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Texas Instruments Incorporated ($TXN) | 43.5% | 46.7% | 48.6% | 47.5% | 47.6% |
| Intel Corp ($INTC) | 35.2% | 41.7% | 45.7% | 45.9% | 46.7% |
| Broadcom Inc. ($AVGO) | 19.9% | 40.4% | 44.2% | 40.9% | 46.2% |
| Universal Display Corporation ($OLED) | 44.8% | 51.6% | 35.3% | 48.0% | 45.9% |
| Analog Devices, Inc. ($ADI) | 36.2% | 32.1% | 43.2% | 42.1% | 42.0% |
| |
|---|
| Median (41 companies) | 9.2% | 10.7% | 9.3% | 13.6% | 17.4% |
|---|
| Ambarella, Inc. ($AMBA) | 27.4% | 20.0% | 9.9% | -14.9% | -15.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Micron Technology, Inc. ($MU) | 46.9% | 23.3% | 29.2% | 41.8% | 38.4% |
| Sequans Communications S.A. ($SQNS) | 11.8% | 13.3% | 22.9% | 29.6% | 27.1% |
| Intel Corp ($INTC) | 16.2% | 18.8% | 21.4% | 22.5% | 18.6% |
| First Solar, Inc. ($FSLR) | 7.9% | 17.5% | 33.0% | 21.8% | 15.4% |
| Power Integrations, Inc. ($POWI) | 3.1% | 7.5% | 5.9% | 5.7% | 14.5% |
| |
|---|
| Median (40 companies) | 3.7% | 4.7% | 4.4% | 3.8% | 4.0% |
|---|
| Ambarella, Inc. ($AMBA) | 0.7% | 0.9% | 1.2% | 1.3% | 0.8% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Texas Instruments Incorporated ($TXN) | 34.9% | 43.1% | 47.5% | 39.7% | 38.2% |
| Applied Materials Inc ($AMAT) | 19.0% | 31.2% | 36.4% | 27.7% | 32.1% |
| Advanced Micro Devices, Inc. ($AMD) | -21.7% | 7.3% | 21.6% | 21.5% | 31.8% |
| QUALCOMM Incorporated ($QCOM) | 15.8% | 5.7% | 2.2% | 38.0% | 28.1% |
| NVIDIA Corporation ($NVDA) | 13.1% | 27.3% | 35.3% | 36.9% | 22.7% |
| |
|---|
| Median (45 companies) | 1.4% | 3.2% | 2.2% | 3.8% | 5.5% |
|---|
| Ambarella, Inc. ($AMBA) | 28.9% | 15.1% | 5.2% | -9.1% | -11.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| SunPower Corporation ($SPWR) | - | - | - | - | 8.2x |
| MACOM Technology Solutions Holdings, Inc. ($MTSI) | 3.0x | 7.2x | 98.6x | - | 6.6x |
| Rambus, Inc. ($RMBS) | -0.1x | -0.1x | - | - | 5.9x |
| Inphi Corporation ($IPHI) | 4.5x | 33.7x | 32.2x | 4.5x | 3.4x |
| Canadian Solar Inc. ($CSIQ) | 11.3x | 6.8x | 2.7x | 3.4x | 3.3x |
| |
|---|
| Median (32 companies) | 0.4x | 0.4x | 0.3x | 0.5x | 0.3x |
|---|
