Bank of America 2020 Global Technology Conference (Virtual) - June 3, 2020 Casey Eichler, CFO Louis Gerhardy, Corporate ...
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AMBARELLA.COM COPYRIGHT AMBARELLA 2020
June 3, 2020
Bank of America 2020
Global Technology
Conference (Virtual)
Casey Eichler, CFO
ceichler@ambarella.com
Louis Gerhardy, Corporate Development
lgerhardy@ambarella.com
1
Forward-Looking Statements
This presentation contains forward-looking statements that are subject to many risks and uncertainties. All statements made in this presentation other than statements
of historical facts are forward-looking statements, including, without limitation, statements regarding Ambarella’s strategy, future operations, financial targets, future
revenues, projected costs, prospects, plans and objectives for future operations, future product introductions, future rate of our revenue growth, the size of markets
addressed by the company's solutions and the growth rate of those markets, technology trends, our ability to address market and customer demands and to timely
develop new or enhanced solutions to meet those demands, our ability to achieve design wins, and our ability to retain and expand our customer and partner
relationships.
In some cases, you can identify forward-looking statements by terms such as "may," "will," "should," "could," "would," "expects," "plans," "anticipates," "believes,"
"estimates," "projects," "predicts," "potential," or the negative of those terms, and similar expressions and comparable terminology intended to identify forward-looking
statements. We have based forward-looking statements largely on our estimates of our financial results and our current expectations and projections about future
events, markets and financial trends that we believe may affect our financial condition, results of operations, business strategy, short term and long-term business
operations and objectives, and financial needs as of the date of this presentation. Although these forward-looking statements are based upon information available at the
time the statements are made and reflect management’s good faith beliefs, forward-looking statements inherently involve known and unknown risks, uncertainties and
other factors that may cause actual results, performance or achievements to differ materially from anticipated future results. Important factors that could cause actual
results to differ materially from expectations are disclosed in Ambarella's annual reports on Form 10-K and quarterly reports and Form 10-Q filed with the Securities and
Exchange Commission (the “SEC”), particularly in the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of
Operations.” You should not place undue reliance on forward-looking statements, which speak only as of the date on which they are made. We do not undertake to
update or revise any forward-looking statements after they are made, whether as a result of new information, future events, or otherwise, except as required by
applicable law. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for management to
predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ
materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and
circumstances discussed in this presentation may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-
looking statements.
Before you invest, you should read the annual and quarterly reports and other documents Ambarella has filed with the SEC for more complete information about the
company and its ordinary shares. Additional information will also be set forth in Ambarella's future quarterly and annual reports and other filings made with the SEC from
time to time. You may access these documents for free by visiting EDGAR on the SEC web site at www.sec.gov.
AMBARELLA.COM COPYRIGHT AMBARELLA 2020
2
Ambarella Overview
Ambarella is an artificial intelligence (“AI”) company
Ambarella developed over a 3 year period an AI processor architecture specifically optimized for video edge-endpoint applications.
The integration of this deep neural network AI processor with the company’s state-of-the-art video processor yields a highly optimized
computer vision (“CV”) system-on-a-chip (“SoC”).
Nearly $400 million cumulative investment into CV targeting automotive, security camera and other robotic applications.
The first 3 production CV SoCs were taped-out and sampled in C2018 with all three SoCs now in production. Three “waves” of CV
revenue anticipated; professional security cameras (CY2020), home security cameras (C2021) and automotive cameras (CY2022-23).
Founded 2004, IPO (NASDAQ: AMBA) 2012
Focused on video applications, always with the premise that video is a special type of data requiring an optimized chip architecture.
Initially targeted human viewing applications with low-power and high-resolution SoCs for the consumer and security camera markets.
New CV SoCs enable machines to visually perceive and make decisions, enabling higher levels of automation in multiple industries.
Strong and liquid balance sheet
$411 million cash and marketable securities and no debt exiting Q1 F2021 (April 30, 2020).
Positive operating cash flow.
Returned $176 million to shareholders via stock repurchases in the last 4 years.
AMBARELLA.COM COPYRIGHT AMBARELLA 2020
3
Global Footprint
760 Employees Across US, Asia, and Europe
180 55 184 325 5 5 6
United States Europe China Taiwan Hong Kong Korea Japan
US ODMs
Jabil VisLab
HQ Flextronics
Parma, Italy
Santa acquired 2015 Taiwan ODMs
Clara, CA Founded and incorporated ~50 employees Chicony
in Cayman Islands in 2004 ~30 PhDs Sercomm
Vivotek
LiteOn
WNC
China ODMs Ability
Skylight
Goertek
Huaqin
Kenxen
Manufacturing Preferred Partner Contract Design Houses
Rhonda
Samsung Semiconductor Teknique
AMBARELLA.COM COPYRIGHT AMBARELLA 2020
4
Ambarella’s Computer Vision System-on-a-Chip
Leveraging 15+ Years of Video Processing Expertise with a New and
Proprietary AI Processor
15+ years of Programmable Computer Vision Platform
Video and with Optimized Coprocessor Acceleration
Image NEW
Processing CVflow architecture
Experience introduced in F2019
after 3 years in
R&D
Video CVflow Deep
Image
Compression Neural Network AI
Processing
processor
AMBARELLA.COM COPYRIGHT AMBARELLA 2020
5
Scalable Computer Vision Portfolio
AI in the Camera - Superior Performance per Watt and Performance per Dollar
CV25 CV22 CV22FS CV2 CV2FS
CV25 – CV22 – Mid Range CV2 – High End
Mainstream CV22 CV22FS (ASIL-B) CV2 CV2FS (ASIL-B)
Announced January 2019 Announced January 2018 Announced January 2020 Announced March 2018 Announced January 2020
Availability
Mass production revenue July Mass production revenue
TBA Production TBA
2019 December 2018
Samsung low power 10nm process
Up to 6x cameras* and stereo Up to 3x cameras* and stereo
Processing
Up to 3x cameras* Up to 2x cameras* Up to 3x cameras*
Video
support support
Computer Vision
8 megapixel sensors at 15
8 mega pixel sensors at 30 – 60 frames per second**
frames per second**
Processing
CVflow Deep Neural Network AI Processor (software tools port from TensorFlow, Caffe, ONNX, etc.)
AI
½ of CV22 AI (CVflow) Baseline (CVflow) 4x CV22 AI (CVflow) 2x CV22 AI (CVflow)
*additional cameras can be supported using external SERDES
**video processing trade-offs available between frames-per-second, resolution, and the number of cameras supported
AMBARELLA.COM COPYRIGHT AMBARELLA 2020
6
Global Security Camera Installed Base Is
Fertile Ground for New CV Product Cycle
Security Camera Market 1,000 CV
60%-65% fiscal 2020 total revenue (3G)
begins
Installed base (Millions)
750
Security camera revenue driven by enterprise, smart 500
city and home spending
Networked (2G)
A majority from the professional security camera market
250
Primarily driven by enterprise and public spending (e.g. smart cities)
3rd party research firms anticipate premium growth in the home security market Analog (1G)
-
Primarily driven by household spending for durable goods
2013 2014 2015 2016 2017 2018 2019e 2020e
~750 million security camera global installed base in Analog Networked Computer Vision
C2019 Global Security Camera Unit
Source: Ambarella, IHS, Strategy Analytics, TSR
Ambarella has historically served the networked camera market Shipments
Pro CV
Human viewing for security applications becomes
material
Ambarella’s now also addresses the computer vision (CV) market 300
Human viewing and machine sensing for security applications (higher ASP
Millions of Units
and new product cycles are incremental)
Machine sensing for many non-security applications (close to 100% units 200
and ASP are incremental)
Global security camera unit shipments around 210 100
million in C2018
Computer vision and networked cameras expected to grow while analog shrinks 0
C2018 C2020
AMBARELLA.COM COPYRIGHT AMBARELLA 2020 Analog Networked Computer Vision 7
Ambarella’s Global Security Camera Footprint
Enabling Most Major Enterprise, Smart City and Smart Home Camera Companies
Professional Security Consumer Security
Enterprise ― Retail ―Smart Cities ― ITS ― Smart Parking Home Security ― Smart Home Automation ― Delivery Services
AMBARELLA.COM COPYRIGHT AMBARELLA 2020 8
Automotive Camera System Target Markets
~15%-20% fiscal 2020 total revenue
Forward-Facing Part-time & Full-time
Ambarella Recorders eMirrors In-Cabin Surround Autonomous
ADAS
2018 SAM ~$300M $1B+
Ambarella’s Global Automotive Footprint
OEM, Tier 1’s, and Tier 2’s
Computer Vision Human Viewing
(Video Processor and AI Processor “CVflow”) (Video Processor only)
OEM
AMBARELLA.COM COPYRIGHT AMBARELLA 2020
10EVA
VisLab: 25+ Years of CV Technology Development Embedded Vehicle
Autonomy
Focused on Autonomous Driving Applications
Acquired in 2015, spun-out from the University of
Parma (Italy) in 2009
VW Tiguan 2017 4K sensors
BRAiVE 2008-now CV2FS
Recognized globally for computer vision software Fully autonomous
expertise applied to autonomous vehicle applications
Porter 2009-now
4 fully autonomous CV22FS
Set worldwide milestones for autonomous driving,
electric vehicles
participating in multiple DARPA challenges
PROUD 13km
in Parma, CV2
Consistent track record of innovation TerraMax 2004-2007 100% AV
Fully autonomous DEEVA CV
VIAC 15km cross- integration 100% CV22
continent drive AV
100% AV following
DARPA Urban driving
100% AV, driveless
1993-1994 DARPA Grand 132
Fully manual Mille Miglia 2000+km miles off-road 100% DEEVA 2014
on Italian highways AV, driverless Fully Autonomous
Prometheus ADAS 94% autonomous with 13 stereo
demo on closed track steering camera systems
VisLab’s AV drove in
downtown Parma
2015
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AMBARELLA.COM COPYRIGHT AMBARELLA 2020
11Competitive Landscape is Fragmented
Ambarella’s video processing expertise scales across multiple markets
Security Cameras Automotive Cameras
Forward-Facing
Professional Consumer Recorders eMirror In-Cabin Surround PT/FT Autonomous
ADAS
HiSilicon (Huawei)
China only Aftermarket
Mobileye (Intel) (SW from Mobileye+SoC
from STM=“black box”) DNN starts with EyeQ5
Movidius (Intel)
(Server based
Nvidia architectures) central AI processing
NXP No DNN for AI processing
Qualcomm
Renesas
SigmaStar
Texas Instruments
New DNN SoC sampling with primitive SW tools
Xilinx
PLDs utilized early in a product life cycle
(IP Cores)
Cadence, CEVA, etc. Incomplete solution
AMLogic, Fullhan, Ingenic, Will, Socionext,
(Others) (Custom ASICs)
AIT, Novatek, iCatch (Custom ASICs) (Custom ASICs)
AMBARELLA.COM COPYRIGHT AMBARELLA 2020
12“Other” Revenue – Mostly “Consumer Discretionary”
15%-20% fiscal 2020 total revenue
~150% of Ambarella’s revenue decline between F2017 and
F2019 was driven by “Other”
C2016 C2017 C2018 C2019
Business mix shifting from consumer discretionary driven markets to
(F2017) (F2018) (F2019) (F2020)
consumer durable, enterprise capital expenditure and government
driven investments focus
Security Cameras 35%-40% 45%-50% 60%-65% 60%-65%
market
focus
Auto
“Other” revenue expected to decline in dollars and as a percent of 10%-15% 10%-15% 15%-20% 15%-20%
market
______ ______ ______ ______
revenue over the next 2-3 years
focus
Subtotal 45%-55% 55%-65% 75%-85% 75%-85%
market
With a few exceptions, computer vision is not critical to “Other”
Other 50%-55% 35%-40% 15%-20% 15%-20% non focus
Some segments such as police body cameras and commercial
drones are expected to adopt CV and remain attractive but relatively
small market opportunities Total Revenue $310 $295 $228 $229
Sports/action cameras, consumer drones, and AR/VR markets
have not come close to achieving market growth expectations and
are relatively small opportunities
AMBARELLA.COM COPYRIGHT AMBARELLA 2020
13Emerging Opportunities
Includes consumer, enterprise and public applications
Robotics platform announced at CES 2020
Robotic software development kit (“SDK”) is a unified software infrastructure targeting automated guided vehicles
(AGV), consumer robots, industrial robots and other emerging Industry 4.0 applications.
Provides access and acceleration for common robotic functions including stereo, object detection, key points
tracking, occupancy grid, visual odometry.
Potential applications include assistance, cleaning, delivery services, surveillance, warehouse, etc..
Potential customer examples: Amazon, Alibaba, Baidu, Dyson, LG, iRobot, Segway, Walmart
Manufacturing related applications include barcode reading, defect inspection and other
factory related applications
Potential customer examples: Basler, Cognex, Fanuc, Keyence, Omron
Access control and building automation
Potential customer examples: Assa Abloy, Amazon, Honeywell, Schneider, Siemens
Images represent potential customers and their applications AMBARELLA.COMCOPYRIGHT AMBARELLA 2020
14Q1 F2021 (April 2020) Earnings Call Recap
15 customer and partner engagements announced including 8 CV design wins
3 Automotive Customers/Partners 6 Security Customers/Partners 1 Other Customer/Partner
OEM, T1, and aftermarket 8 enterprise/smart city and 3 smart home 1 public safety wearable
1 CV and 2 video processing 7 CV and 4 video processing 1 video processing
Market Application Customer/ Partner Product AMBA Comment
Single channel emirror combined with drive recording
1 Auto-OEM eMirror (Tier 1) 1 channel emirror A12
functionality
2 Auto-OEM L3/L4 Inceptio Comercl. trucks TaaS CV2AQ Intends to migrate to CV2FS
3 Auto-AM Recorder-AM Thinkware QXD-5000 H22 2 channel aftermarket drive recorder with QHD+QHD
8K+4K with AI; person/face/vehicle, license plate, counting,
4,5,6 Security Professional Hanwha Techwin WiseNet P Series CV2
queue mgmt, and heatmap
March Networks 6MP features next-gen analytics with Digital Overlap HDR
7 Security Professional ME6 dome and bullet CV22
(Infinova) and advanced compression
8, 9, 10 Security Professional PIPS (Panasonic) I-Pro Sensing Series CV22 Fixed dome AI, bullet AI, and fixed box AI camera series
11 Security Professional PIPS (Panasonic) I-Pro S3L i-Pro series models announced, 7 models
1080p viewing camera w ultra wide FOV, lurking detection,
12 Security Smart Home Lumi Smart Lock S2L
Homekit
13 Security Smart home Vivint Video Doorbell Pro S5L 1080p wide FOV; view, detect, notify for faces/packages
Records 1080p w180 FOV with night IR footage up to 15';
14 Security Smart Home Logitech Circle View S2L
Homekit
15 Other Wearable Axis (Canon) Work body camera S5L 1080p, offers WDR and operates for a full 12 hours
AMBARELLA.COM COPYRIGHT AMBARELLA 2020
15Q1 F2021 (April 2020) Review and Q2 Outlook
(Q1 F2021 results and Q2 F2021 outlook provided June 2, 2020)
The unprecedented combination of geopolitical and pandemic factors, and the associated economic
downturn, limit visibility and cause the duration, severity and impact to our business to be unknown
COVID-19 risks are bringing high levels of uncertainty and volatility to our outlook
We continue to see a wide variety of geopolitical risks outstanding, including foreign policy, trade and IP matters. Factors potentially disruptive include
potential export regulations on advanced technologies
the risk customers in China continue to take actions to reduce their dependence on components they believe could be subject to new export controls,
including the creation of dual China/non-China supply chains
changes to tariffs and/or the Entity List
market share shifts between our customers
supply chain issues
Our largest competitor in the security camera SoC market, HiSilicon, a unit of Huawei, is facing headwinds of their own
Q2 F2021 (July, 2020) Outlook
Our Q2 revenue guidance is $50.0 million, plus or minus 6%.
We anticipate security camera business to increase sequentially, with automotive and other revenue to decline sequentially
We estimate Q2 non-GAAP gross margin between 59.0% to 60.5% with non-GAAP operating expense in the $31 to $33 million range
Q1 F2021 (April, 2020) Results
Revenue of $54.6 million was slightly above the mid-point of our original guidance range of $52.0 million to $57.0 million and the consensus estimate of $54.2
million. All markets declined sequentially, with automotive declining in the very low double digits and security and other revenue declining slightly.
Non-GAAP EPS were $0.04 with a positive operating cash flow of $7.6 million.
$1.0 million of stock was repurchased (25,719 shares) under an existing authorization of $50.0 million in place through June 2020. In May Ambarella’s Board of
Directors authorized an extension of this authorization through June 2021.
AMBARELLA.COM COPYRIGHT AMBARELLA 2020
16COPYRIGHT AMBARELLA 2019
www. ambarella.com
lgerhardy@ambarella.com
Louis Gerhardy
Corporate Development
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