Ambarella released its latest earnings report after closing bell tonight, posting non-GAAP earnings of 54 cents per share or net income of $18.5 million on $65.1 million in sales for the second quarter of fiscal 2017. Analysts had been expecting the GoPro supplier to report earnings of 38 cents per share on $64.3 million in revenue. In the year-ago quarter, Ambarella reported $84.2 million in sales and non-GAAP earnings of 88 cents per share or net income of $29.7 million.

Ambarella

Ambarella’s profits plunge

GAAP net earnings were 25 cents per share or $8.6 million, compared to last year’s 68 cents per share or $23.1 million. Ambarella’s GAAP gross margin rose to 66.7% for the second quarter from 65.1% in last year’s second quarter. The non-GAAP gross margin rose to 67.1%, compared to 65.3% in the year-ago quarter.

“Our results reflect strong execution across the business despite several hurdles in the quarter as discussed on our last earnings call,” Ambarella Chief Executive Fermi Wang said in a statement. “Solid product development and customer support continued to result in new design win momentum in all our markets, led by new projects in drone, home monitoring, virtual reality and wearable applications. We believe the continued investment in the development of advanced technologies in video capture and computer vision will help to expand our market opportunities.”

The company’s board of directors authorized a $75 million share repurchase program over six months starting in the second quarter. The chip maker bought back about 405,000 shares for about $20.2 million or $49.80 per share during the quarter, leaving nearly $55 million left on its share buyback program.

Ambarella gives strong sales outlook

Ambarella expects third quarter sales to be between $95 million and $99 million, which is strong compared to the consensus of $95.6 million. The company expects its third quarter non-GAAP gross margin to be between 53.5% and 65%. It expects revenue for fiscal 2017 to be flat to down 5% compared to fiscal 2016, which is in line with management’s past outlook.

Shares of Ambarella slumped in after-hours trades, falling by as much as 0.91% to $71.13 following tonight’s earnings release.