By Terell Wright
Shares of Ambarella fell after the company reported a lower fiscal third-quarter gross margin.
Shares were down 16% to $76.81, though are still up 5.6% year to date.
The artificial-intelligence semiconductor company late Tuesday reported a gross margin of 59.6% for the quarter ended Oct. 31, down from 60.6% a year earlier.
Adjusted gross margin was 60.9%, compared with 62.6% in the prior year.
The Santa Clara, Calif., company expects fourth-quarter revenue in the range of $97 million to $103 million, or a midpoint of $100 million. Analysts polled by FactSet were expecting fourth-quarter sales of $94.3 million.
Ambarella executives on a call with analysts said they expect a mid- to high-single-digit decline in the company's automotive and internet-of-things businesses, due to seasonality.
Third-quarter revenue rose 31% to $108.5 million, beating analysts' expectations of $104.2 million, according to FactSet.
The company narrowed its loss in the quarter to $15.1 million, or 35 cents a share, compared with a loss of $24.1 million, or 58 cents a share, in the same period a year earlier.
Adjusted earnings were 27 cents a share, beating Wall Street's forecast of 20 cents a share.
Write to Terell Wright at terell.wright@wsj.com
(END) Dow Jones Newswires
November 26, 2025 11:19 ET (16:19 GMT)
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