Shares in fabless chipmaker Ambarella Inc. were down more than 21% in pre-market Wednesday trades following a disappointing post-bell earnings call on Tuesday.
Revenues for the six months ending July 31, 2023, came to $124.3 million, down 27% from $171.2 million year on year.
Gross margins fell to 61.1% in the past six months from 62.9% in the same period in 2022.
Ambarella chalked up $67.1 million in losses for the interim period, representing losses per share of $1.70.
This compares with net losses of $34.5 million in the 2022 interim period.
Ambarella is a minnow compared to fabless heavyweights Nvidia Corporation and AMD.
Its products are used in video security, advanced driver assistance systems (ADAS), autonomous driving, drones, wearable camera and robotics applications.
The Santa Clara, California-headquartered group’s chip designs were found in all of GoPro’s Hero line up until HERO6.
“The near-term environment is very challenging, as customers are now more aggressively reducing their inventory, and we are now seeing some pockets of weak end-market demand, which further complicates our customers’ efforts to reduce their inventory,” stated president and chief executive Fermi Wang.
Wang added: “We anticipate our customers’ inventory levels will normalize by the end of the year and set us up for a return to growth in the next fiscal year.”
At the time of writing, Ambarella shares were swapping for $61.1.