Ambarella, Inc. Price & Performance (AMBA)

On the call with me today is Doctor. Fermi Wang, President and CEO and John Young, CFO. The primary purpose of today's call is to provide you with information regarding the results for our fourth quarter and full year fiscal twenty twenty five. The discussion today and the responses to your question will contain forward looking statements regarding our projected financial results, financial prospects, market growth, and demand for our solutions among other things. These statements are based on currently available information, and subject to risks, uncertainties and assumptions, Should any of these risks or uncertainties materialize, or should our assumptions prove to be incorrect, our actual results could differ materially from these forward looking statements. Wonder no obligation to update these statements.

These risks, uncertainties and assumptions as well as other information on potential risk factors that could affect our financial results. Are more fully described in the documents we filed with the SEC. Before starting the call, we hope to see you at one of the following Bernstein's third Annual Technology Media Telecom Forum tomorrow, February 27 in Palo Alto, Susquehanna's virtual annual technology conference on Friday, February 28 Morgan Stanley's Technology Media and Telecom Conference March 3 in San Francisco Loop Capital's Conference March 11 in New York City Cantor's Global Tech Conference March 12 in New York and the ROTH Conference March 17 in Southern California. Access to our fourth quarter and full year fiscal twenty twenty five results press release, transcripts, historical results, SEC filings, and a replay of today's call can be found on the Investor Relations page of our website, The content of today's call as well as the materials posted on our website are Ambarella's property and cannot be reproduced or transcribed without our prior written consent. Fermi will now provide a business update for the quarter. John will review the financial results and outlook, and then we'll all be available for your questions.

Fermi? Thank you, Louis. Good afternoon and thank you for joining our call today. Emburella finished fiscal twenty twenty five with strong results and a positive outlook AGAI is clearly established as our key revenue driver.

Enabling us to grow and overcome the cyclical economy and the geopolitical challenges in the last year. We achieved record AI revenue in Q4 as well as for the full year fiscal twenty twenty five. In the fourth quarter of fiscal twenty twenty five, our revenue increased 2% sequentially and exceeded the high end of our of our guidance range by 5%.

Our five nanometer SoC products led the results With new product revenue wave one, from the C5 family, leading the charge and for the first time we generated production revenue from the CV7 family, or new product revenue too. Our fiscal twenty twenty five revenue increased 26% year over year. With both units and the average selling price rising. AGAI was about 17% of our total revenue. Our customers completed the the digestion of the excess inventory in the first half of the year and in the second half the secular growth of our Age AI strategy became more apparent. I'm proud of the key achievements our team delivered in the last year. First, financially, revenue growth has been restored in the second half, we returned to non GAAP profitability. Fiscal twenty twenty five represented our sixteenth consecutive year of positive free cash flow Second, we execute on our R and D priorities. As a result, we are realizing revenue growth from the CV5 and the CV7 new product families. With emergent opportunities on the horizon. Most importantly, we are successfully commercializing our AI investment. AGAI commenced in our enterprise security market and from there, we continue to successfully reach into more markets such as fleet automatics, ADAS, automotive e mirrors, [indiscernible] next generation access control, advanced video conferencing and portable consumer electronics.

Looking into fiscal year twenty twenty six, [indiscernible] to high teens revenue growth Despite the higher base of the much stronger than expected Q4. With uncertainty related to government policy decisions, we have built conservatism into our outlook for the second half of fiscal twenty twenty six.

While we do not expect to be directly impacted by tariffs, we suspect that some customers are evaluating their own supply chains as well as elasticity of demand for their products.

Turning to developments in a broad AI market. The breakthroughs with more powerful, efficient and open sourced reasoning models was an exciting industry development in January. We expect open source reasoning models such as DeepSig R1, to enable more advanced decision making and intelligence in all tiers of AI processing hierarchy.

Including our target market at the edge, While breakthroughs like this bring new level of compute efficiency, implementation of new reasoning models at the edge is expected to require incremental AI compute power. In HAI, this is easy.

An example of a secular trend we expect to drive our ASP higher. [indiscernible] An excellent example of how Ambarella is leading the rapid evolution of the AGI market with innovation [indiscernible] is our CES exhibition where we demonstrated a vision language model processing on our CV7 CV3 and N1 product families. We already successfully brought up the deep seek ROI model on CV7 and N1 product families and we are showing them to our customers. There is a growing trend towards performing more AI processing as of age. As cloud based processing has a higher total cost of ownership, latency challenges, high power usage, data security and the privacy concerns. AGI processing is now being enabled with the introduction smaller and more optimized model. We introduced our N16655 Gen AI SOCI CES this year, with high AI processing performance to support the latest transformer network and popular multimodal VRMs [indiscernible] of power and targets applications such as on premise AI box the Palamas mobile robots, security network video recorders, and retail analytics. [indiscernible] At the show, we demonstrated N16655 running [indiscernible] with data inputs including text, video and speech. All running locally on an AI box, all the need for Internet connection.

In an enterprise security market, introduced a small form factor V200 body worn camera based on our H3R SoC and designed to enhance worker safety and security in public environments such as retail medical or hospitality industries. Additionally, Motorola introduced its V700 body camera based on our ASUS L and SoC and offering twelve hour operation. Motorola also introduced its H6A Fisheye camera based on our five nanometer CV72 and offering three sixty degree viewing 11 megapixel resolution and AI powered video and audio analytics. Japanese enterprise security leader, iPro, formerly Panasonic, introduced its new line of high zoom bullet cameras targeting long range monitoring of highways, parking lots and stadiums. Based on our five nanometer CV52, the cameras are pre installed with 9H AI applications.

We are very pleased to announce our first win with the HIT division of ASR Bloy. A global leader in the asset solution market. HID has deployed its URU camera identification system based on our CV22 to deliver fast accurate and secure facial recognition.

Powered by AI driven multispectral image and advanced presentation attack detection it enhances user convenience while reducing fraud risks. Even in high security and a challenging environment. In the smart home security camera, market, Canadian communication operator TELUS introduced a range of cameras including Dolby indoor and outdoor cameras all based on our CV28. In vehicles, a vast majority of our revenue is currently in the ADAS market, and our global effort is demonstrated with this quarter's representative customer engagement in China, South Korea, and France. During the quarter, FAW introduced Honqi H5 PHEV including [indiscernible] implemented with a 1V1 ADAS system based on our CV22AQ. VW's joint venture with FAW introduced a pre installed dashcam Microton passenger vehicle based on our A12AQ. [indiscernible] considered one of the leading new energy vehicle companies, introduced its flagship EV, the ET9, including an electric electronic rearview mirror system based on our CV-twenty eight AQ. [indiscernible] December, we earned our first driver monitor win in Hyundai Kia Passenger Vehicle. The pre installed system is provided by LG Electronics is based on our CV25.

In January, Ford trucks was announced as the first customer for French Tier one Gauzy, who is providing its AI powers smart vision camera monitor system using our CV2FS. Summary, this quarter's list of 10 representative customer engagements highlights the increased breadth of our Age AI revenue globally. This includes a range of enterprise and the consumer driven IoT applications. And a variety of automotive applications such as Level two ADAS, driver monitoring, rearview and exterior left and right side mirrors. Cumulative Cumulatively, we have shipped more than 30,000,000 units of HAI SoCs. With each SoC integrating our proprietary CVflow deep learning AI AI accelerator with our proprietary video processor.

A vast majority of this in store base is represented by our CV2 family of computer vision processors, while we expect continued growth. Our new five nanometer products which come in at an above average ASP, represent our key growth driver with revenue exceeded to arrive in waves, The first wave from the growing CV5 family is underway and it continues to have a strong growth outlook.

Wave two from the CV7 family reached production status for the first time in fourth quarter with three customer purchasing production quantities.

Combined, this first two wave are expected to represent more than half of our incremental revenue fiscal twenty twenty six. In addition to the new product efforts, I have described, We remain committed to develop new technologies and products capable of processing advanced AI models. As the business case develops, we will provide more information on the timing of their revenue contribution. This is a very exciting period with a rapid evolution of the AI industry.

Our H AI business intersect multiple industries where the mega trends of safety, security and automation intersect. As a result, in this dynamic environment, we carefully evaluate new opportunities to maximize our return on investment. Our goals for fiscal twenty twenty six to sustain a high level of innovation and execution to continue to lead the HAI market. We intend to drive the positive operating leverage with revenue growth and a high focus on operating efficiency.

The development of two nanometer technology for our next generation AGI processor is critical. In summary, in the New Year, we intend to build upon the positive momentum we have established with our Age AI strategy. Technology and the products. With that, John will now discuss the Q4 and the full year fiscal twenty twenty five results and the outlook in more detail. Thank you, Fermi.

I'll now review the financial highlights for the fourth quarter and full fiscal year 2025 ending January 31, 2025. I will also provide a financial outlook for our first quarter of fiscal year twenty twenty six, ending 04/30/2025. I'll be discussing non GAAP results and ask that you refer to today's press release for a detailed reconciliation of GAAP to non GAAP results. For non GAAP reporting, we have eliminated stock based compensation expense, along with acquisition related and restructuring costs adjusted for the impact of taxes. Fiscal year twenty twenty five revenue increased 25.8% to $284,900,000 Automotive revenue increased mid single digits and IoT led by new five nanometer products was up more than 30% year over year. For fiscal year twenty twenty five, non GAAP gross margin was 62.7% versus 63.3% in fiscal twenty twenty four. Non GAAP operating expense increased 6.5% for the year versus 4% in the prior year.

Ending cash and marketable securities totaled $250,300,000 up from $219,900,000 at the end of the prior year.

For fiscal Q4, revenue was $84,000,000 above the high end of our prior guidance range up 1.7% from the prior quarter up 62.8% year over year. Sequentially, automotive revenue declined and IoT increased in the mid single digits.

Non GAAP gross margin for fiscal Q4 was 62%, slightly lower than the midpoint of our prior guidance range, primarily due to product mix. Non GAAP operating expense in Q4 was $48,700,000 below the low end of our prior guidance range of $49,000,000 to $52,000,000 driven by continued expense management, and the timing of spending between quarters. Remain on track to our internal product development milestones. Q4 net interest and other income was $2,400,000 comparing to our prior guidance of $1,800,000 the increase was from a one time government grant in The United States. Q4 non GAAP tax provision was approximately $1,000,000 fiscal twenty twenty five, non GAAP tax provision was approximately $2,100,000 We reported a non GAAP net profit of $4,800,000 or $0.11 earnings per diluted share in Q4. And a non GAAP net loss of $6,800,000 or $0.16 or a $0.16 loss per diluted share for fiscal twenty twenty five. Now I will turn to our balance sheet and cash flow. Fiscal Q4 cash and marketable securities increased $23,700,000 from the prior quarter, and increased $30,400,000 from the same quarter a year ago. Cash and marketable securities benefited primarily from working capital improvements during the quarter. Receivables days of sales outstanding decreased from thirty eight days in the prior quarter to thirty three days.

While days of inventory increased from ninety four in the prior quarter to ninety seven days. Inventory dollars declined 5.9% sequentially and increased 18.5% from a year ago. Operating cash inflow was $25,400,000 for the quarter and for the full year, we generated operating cash of $33,800,000 Capital expenditures for tangible and intangible assets were $4,200,000 for the quarter and $10,400,000 for the year.

Free cash flow was $21,200,000 for the quarter $23,500,000 for the year. This represented the sixteenth consecutive fiscal year of positive free cash flow.

We had one logistics company representing 10% or more of our revenue WT Microelectronics. A fulfillment partner in Taiwan that ships to multiple customers in Asia, came in at 60.9% of revenue for the fourth quarter and 62.9% for the full fiscal year 2025. I'll now discuss the outlook for the first quarter of fiscal year twenty twenty six.

The new product momentum that Fermi described is expected to enable us to post better than normal seasonal results in fiscal Q1 despite the stronger than expected fiscal Q4. Q1 revenue is expected to be in the range of $81,000,000 to $87,000,000 with auto down sequentially and IoT flat to slightly up. We expect Q1 non GAAP gross margin to be in the range of 61% to 62.5%. We expect non GAAP OpEx in the first quarter to be in the range of $50,000,000 to $53,000,000 with the increase compared to Q4 driven by new product development costs as well as increased employee related expenses beginning in the new year. We estimate net interest income to be approximately $1,800,000 our non GAAP tax expense to be approximately $600,000 our diluted share count to be approximately 43,400,000.0 shares.

You for joining our call today. And with that, I will turn the call over to the operator for question.

Thank you. Our first question is going to come from the line of Quinn Bolton with Needham and Company. Your line is open. Please go ahead.

Hey, guys. Thanks for taking my question. Congratulations on the nice results and outlook. And the sixteenth year of positive cash flow. I guess, for me, John, I guess I wanted to start, I think you said in the prepared script that CB5, CB7 would account for more than half of the growth in fiscal twenty twenty six. Wondering what's the other half of of revenue growth? Is that the older CB2 family? Or are there other drivers of the business? And I assume, but just to see if you would confirm that the the vision processors or the human camera processors you would expect that business continue to decline at a gradual pace in fiscal twenty twenty six?

Yes. Quinn, you know our business very well.

Everything you say is correct. First of all, half of the growth fiscal twenty twenty six is from CV5 and CV7. And our old VP video process product will have a slow decline We expect maybe 10%, 15% annual decline rate from now to the end. But also CV2, we continue to expect growth and healthy growth from our existing product line. For example, we talk about that one of our telematic customer ramping up their products last quarter and it really drive the significant growth on CV2 family. So I think all of that so CV2, CV5 and CV7 drive the growth. And VP will continue to have a constant slow rate of decline.

Perfect.

And then just a follow-up, it sounds like in both the January and the April guide, you've got auto down, so sequentially. Taking place in that end market? Is it just lack luster demand given some of the macro events and perhaps tariff uncertainty or is it just sort of timing of when some of your new pipeline projects go to production? Just any more color on auto would be helpful. Right. First of all, on the auto Q4 and the Q1 guidance, although we say it's a little down, but the the decline rate is very small. So in fact, that decline has nothing to do with the previous rounds of inventory correction. Although that you are right, although none of our customer indicates that they are accumulating inventory because of the current all of our new government policy but we do see there are some concerns about how the tariff will have indirect impact to us, direct impact to our customer, So that's where we're putting some of the conservatism in our second half guidance. Got it. Okay. Thank you, Fermi. Thank you.

Thank you.

And one moment as we move on to our next question. And our next question will come from the line of Joe Moore with Morgan Stanley.

Your line is Please go ahead.

Great. Thank you. Jeremy, I wonder if you could just talk about the general investment in ADAS these days.

You're seeing Tesla's FSD has done well.

The God's Eye thing at BYD got people's attention. And I know those aren't your opportunities, but has that stimulated kind of incremental investment interest in the ADAS base from other OEMs?

Right. So we continue to see a strong demands on the ADAS side, particularly Level two plus, that didn't change. But the only change is the flavor of the OEMs demand become they become very cost sensitive. We talk about this trend also that we call value value products. So that if you look at OEMs, they want to upgrade the product from Level two to Level two plus some of them want to upgrade even to Level two plus or Level three. But at the same time, they are very sensitive to the cost. So from that point of view, I think our CV3 family that can help them to address the bond concerns is definitely continue to be viewed positively in the market.

Great. That's helpful. And then I noticed that the NEO win on electronic rearview mirrors, I know that's a market you've sort of been talking about for a long time. And are you starting to see more adoption there? And do you expect that to be more significant growth area going forward?

I think we see multiple design win or we already talked about to expect growth in that area. But the ASP that we talk about is really just from this high single digit to low teens. So the growth rate or low in that particular segment, growth rate will be high, but the material impact to our total revenue is limited. But continue, but I think this is we treat that as a way to get into OEM designs For example, we talk about Korean company the largest Korean automotive OEM using that using our solution for the eMURALS that just help us to open the door to those major OEMs.

Great. Thank you.

Thank you. And one moment as we move on to the next question.

Our next question is going to come from the line of Christopher Rolland with Wells Cohena. Your line is open. Please go ahead.

Hi. This is Aaron Nachville in for Chris Ronde. Thanks for taking the question.

So the mid to high teens guide for 16 seems very conservative. So I mean essentially we're modeling flat to down for the remaining three quarters. And I know you mentioned building conservatism into the second half.

But is there anything else beyond government uncertainty you're factoring in? And how does this play out between auto and IoT?

Well, I think we'll provide more colors on this, but I think that it's just I do believe that the first half to second half based on our current guidance is not as high The growth on the first half to second half is not as high as before, but that definitely reflects our customers' consultatives and also our consultative reflecting the potential government policy change, right? We are always waiting for how the, for example, the tariff at Mexico, Canada will impact well will impact our customers' manufacturing side. So those are kind of factored in But I think overall, I still feel very strong feel comfortable our growth rate from our customer product point of view. We talk about CD5, CD7. We think that the growth rate will continue CV2 like I said before will continue. So I think overall although there's some conservatism there, but it's really reflecting on the policy side, not on our product side.

Understood. And if I have bought over the next like two to three years from a geographic perspective, which regions do you expect to outperform, underperform given your pipeline?

I still consider that U. S. Is our largest customer [indiscernible] we did well in Japan, Korea and Europe. And China, we maintain 15% total exposure on the consumption point of view. So I think from the point of view, continue to focus on the U. S, EU and the Japan Korea market and we expect that they continue to do well for us. Thank you.

Thank you. One moment as we move to the next question. Our next question is going to come from the line of Ross Seymore with Deutsche Bank. Your line is open. Please go ahead.

Hi, guys. Thanks for Getting into the full year guide, again, I can understand the policy conservatism for me you just answered. Does that hit one side of your business more than the other? Or if you're going to grow kind of mid to high teens, is there a significant delta in your mind between kind of the IoTAI side and the automotive side?

No, I don't think it's market dependent. It's really about geography. I think the people that manufacturing China, Mexico and Canada definitely they start looking for options. Right and waiting for the final results. So I think that's really geographic dependent, not the market dependent. Got you. So the conservatism that you have on the two let me just ask the question in a different way. With that given conservatism, do you have a significantly different growth rate expectation for the IoT AI side versus automotive? Last year, you said one was up over 30%, the other was up mid single digits. Is that ratio going to continue or does the automotive side start to catch up? Go ahead. Hey, Ross, it's Louis. For fiscal twenty six, IoT should continue to grow faster than auto, but auto is expected to grow year over year as well. Got you. And then I guess just if I could sneak in one more, you guys talked about getting good leverage. Can you just parse out a little bit the gross margin trend versus the OpEx side as we try to figure out how you get to the leverage? Yes. So we expect to I would say the high level is that we are focused on monitoring and controlling OpEx as much as possible.

We've been talking about gross margin moving down into the long term model range. We're guiding to that and we've shown that in Q4.

But we do expect with the revenue growth the primary driver is going to be revenue contributing at those still healthy margins to to drive improvements in operating leverage.

Perfect. [indiscernible] Thank you. And one moment for our next question. Our next question comes from the line of Tore Sandberg with Stifel. Your line is open. Please go ahead.

Yes. Thank you and congratulations on the results. Perve, can we just take a step back here, especially when we start thinking about open source reasoning models.

I mean, deepfake probably wasn't positive for everybody, but I think Ambarella probably a pretty positive development.

So could you just again take a step back and elaborate a little bit on how important this is for Umbrella, because obviously, this will probably accelerate adoption of smaller models and certainly also AI at the edge. So any more color you could share with us, that would be great.

Yes. Let me elaborate a little bit what we have done with deep search model in our product portfolio. [indiscernible] model on our ten sixteen fifty five CV22 and CVT75. The N1 is a 50 watt chip, and CV75 is a 1.5 watt chip. Of course, you run different versions of deep seek Our models on those chip but 1.5 watt chip can run 1,500,000,000 parameters deep seek our model. I think that's significant. And also that really means that at age, we can get a better and better model and more an even reasoning model running on age and that will expand the possible application. But more importantly, I think that the open source type of the model will enable our customer fine tune the model easier than before. So they can really quickly adapt that model to their vertical location. And both of that will help us to expand. And I think that significance for us is that we found out that we can run the 1,500,000,000 parameter model on a 1.5 watt chip That really open door for us to look at what other application that we can enable in the future with that definitely that we need to talk to our customer, which we are doing right now and to understand the potential impact to our business development.

Yes, that's great perspective. And as my follow-up, could you give us an update update on the two nanometer development. Any sort of benchmarks or timelines we should keep an eye Right. First of all, two nanometer, we expect and we already not only get evaluated, but also we get some pass ship out to evaluate the performance. We are confident this technology will give us significant improvement on the power consumption and also the die size saving. With that, we are aggressively doing two projects already for the IoT devices. One is for our traditional camera market, the other one for the L1 type of project. So you can see that we want to using the benefit of a two nanometer on the power consumption side, to continue to give us even more leverage of our high end and the low end products based on TrueNano. We expect to tape out the chip sometime late this year and also get simple backed early next year. And we hope that our customer can go into production at the end of twenty twenty six.

Great. Thank you for that color and congrats again.

Thank you. Thank you.

And one moment for our next question. Our next question is going to come from the line of Kevin Cassidy with Rosenblatt Securities. Your line is open. Please go ahead.

Yes. Thanks for taking my question and congratulations on the great results. Maybe just to expand on that, would the two nanometer development, is Is that going to be a product similar to the N1 six sixty six fifty five or are you going to be focused more on some of the CV device is I said we have two chips, one for one type of product, the other one is for the camera product. So we are trying to use two nanometer to to address the two different markets. Okay.

And you mentioned Deepseek, but there are some countries that are saying that they don't want to use DeepSeq. Is that just as an example? And are there other low cost LLMs that you're testing with?

Yes. I fully expect that our U. S. AI company is going to start introducing similar type of model after they learn how deepseak was done. And I think this a trend of the market, not just one company, So DeepSeq for us is really to use that for demo purpose and also to get to engage customer. But I fully expect we're going to see more and more of this kind of model from American AI companies.

Okay, great. Thank you.

Thank you. One moment for our next question. Our next question is going to come from the line of Suji Desilva with ROTH Capital. Your line is open. Please go ahead.

Hi, Fermi, John, Lewis. So just to understand from the geopolitical perspective, this can you describe the risk you think there is in your chips having to be replaced in China or customers making that decision to derisk the geopolitical or whether you think that's not a significant risk given the what's been happening last few months?

Right. So first of all, in China, we have been talking about this for four, five years now. I think in China, our Chinese customer will use Chinese component as long as there is viable options for them. That's why we work away from Chinese enterprise security camera market five years ago.

This also applied to automotive market. And also any other market in China. So from that point of view, our strategy in China is we use that market to really to understand the market situation. Also, the opportunity for us in China is really twofold. One is the product that we offer in China that we don't see a comparable solution from Chinese components. Second one is lot of our Chinese customers particularly automotive customer talking about export business, where they do need a non Chinese market Chinese solution. So those are our opportunities in China and that's where we think we're going to focus on. But outside China, I think we don't see any problems by supplying our chip to any other potential customers. [indiscernible] Helpful. And then also on the non auto side, the enterprise security camera market, is that going to accelerate in 2026 or are you kind of hitting a point where it's grown very strongly and now it's kind of stabilizing into the kind of full year growth rate?

First of all, I think the market will continue to grow. In two things. Although the unit number growth is there, but the biggest growth were from the ASP growth. Look at we are selling CV 25, CV 22, at ASP level, but our current CV5, CV7 just went into production [indiscernible] higher ASP. So I think that both of them will drive ASP volume. Main driver for our growth. All right. Thanks, Perry. [indiscernible] And our next question is going to come from the line of Gus Richard with Northland. Your line is open. Please go ahead.

Yes. Thanks for taking the questions and congratulations on strong results and outlook.

For me, I just was hoping you could talk a little bit about where you see the growth edge versus data center? And within the edge, you've always been heavy on imaging applications. Are you certain starting to broaden out beyond that? And what opportunities at the edge do you see to be the most exciting outside of imaging and enterprise.

Right.

We are right now 100% focused on age. Data center is pretty well established and NVIDIA has a really strong dominant dominance on that market. We don't believe that that should be our first target. We are focused on age and there are multiple with our current market definitely that IoT, is definitely one focus market and also that [indiscernible] vision language model or even the current LipSeq deep seek type of model will enable new application. That's definitely a focus area. There's a new area which is people trying to use building a edge server, AI edge server to accumulate multiple different type of strings, either video stream or non video stream and to apply a centralized AI processing at the edge. That's definitely the market that we are looking at and trying to understand how we can participate. I think that our N1655 is a great candidate for that. Obviously, we need to build a road map based on our new next generation CV flow architecture to address that.

Got it. Thanks. That's helpful. And then you've had some longstanding partnerships with Continental Bosch and you've got a relationship with Ruflin, which is now worth with D Dub. And I was just wondering if you could talk a little bit about how those automotive partnerships, if you will, are evolving? And do you see any opportunity over the next year or two.

Yes. First of all, we continue to bid on different RFQs with our partner. County is our strong partners on both on hardware and software. And Bosch is on hardware side of our partner. We continue to be down multiple different opportunities. Although that recently we were informed that we lost a major Western OEM passenger car because I think when we in that particular car competition, we work with Tier one in there. And the feedback we got was that our technology and product will be very favorably and also our price is competitive.

But at the end, we first a final round of bidding, we faced the incumbent supplier we were told that our scale So the scale benefit that the existing supplier can offer [indiscernible] differences. So from that point of view, although we lost that one major Western OEM, but we continue to commit to invest in the automotive products and we definitely are looking for Alternative way to continue to sell our products and technology into automotive margins.

Got it. Thank you so much.

Thank you.

Thank you. And I would now like to hand the conference back to Fermi Wang for closing remarks.

Thank you, guys. Thank you for joining our call today. If there is any follow-up, please give me or Louisa call.

This concludes today's conference call. Thank you for participating. You may now disconnect. Everyone, have a great day.