Ambarella FQ2 2018 earnings were released after closing bell tonight. The company posted non-GAAP earnings of 48 cents per share on $71.6 million in sales, while Wall Street had been expecting to see adjusted earnings of 44 cents per share on $71 million in revenue. Ambarella management guided for revenue to come in between $69 million and $72 million for the second quarter of fiscal 2018.

In the year-ago quarter, the company posted non-GAAP earnings of 54 cents per share on $65.1 million in sales.

Ambarella fq2 2018 earnings

Ambarella FQ2 2018 earnings

On a GAAP basis, Ambarella FQ2 2018 earnings fell to 10 cents per share or $3.3 million from 25 cents per share or $8.6 million. The chip maker’s GAAP gross margin fell to 62.6% from 66.7% in the year-ago quarter. The non-GAAP gross margin fell to 63% from 67.1% last year. Ambarella management said their IP security segment recorded “solid growth” on both the professional and home monitoring camera front. Ambarella also saw “strong design win activity” and OEM auto video recorder sales, they said.

“We continue to invest in the technologies required to deliver future generations of highly intelligent, HD and Ultra HD cameras with particular emphasis on high performance computer vision functionality,” Ambarella Chief Executive Fermi Wang said in a statement. “We see computer vision as a key differentiator for us in camera markets, including automotive, IP security, drones and robotics, and it is our key area of focus for the future.”

Ambarella provides guidance

On tonight’s earnings call, investors and analysts will probably want to hear more about how sales to GoPro were during the second quarter and get an update on the phase-out of the company as a customer. The action camera maker announced earlier this year that it was preparing to move away from Ambarella as a supplier.

For its third fiscal quarter, Ambarella management expects sales to fall between $87.5 million and $90.5 million, which is a bit on the weak side versus the consensus estimate of $89 million. They project a non-GAAP gross margin of 62% to 63.5%.

After Ambarella FQ2 2018 earnings were released, the chip maker’s stock rose in after-hours trade, climbing by more than 2.41%, rising as high as $55.71 per share.