Ambarella(AMBA) - 2026 Q2 - Quarterly Results

Q2 FY2026 Financial Results Announcement Q2 FY2026 Performance Highlights & Q3 FY2026 Outlook Ambarella reported strong revenue growth and a non-GAAP net profit turnaround for Q2 FY2026, providing Q3 FY2026 guidance for continued revenue growth Q2 FY2026 and H1 FY2026 Key Financial Data | Metric | Q2 FY2026 | Q2 FY2025 | Change (YoY) | H1 FY2026 | H1 FY2025 | Change (YoY) | | :-------------------------------- | :---------- | :---------- | :--------- | :---------- | :---------- | :--------- | | Revenue (Million USD) | 95.5 | 63.7 | +49.9% | 181.4 | 118.2 | +53.5% | | GAAP Gross Margin | 58.9% | 60.8% | -1.9 pp | 59.4% | 60.8% | -1.4 pp | | GAAP Net Loss (Million USD) | (20.0) | (34.9) | Improved 42.7% | (44.3) | (72.8) | Improved 39.1% | | GAAP Diluted Loss Per Share | (0.47) | (0.85) | Improved 44.7% | (1.05) | (1.78) | Improved 41.0% | | Non-GAAP Gross Margin | 60.5% | 63.3% | -2.8 pp | 61.2% | 63.3% | -2.1 pp | | Non-GAAP Net Income (Loss) (Million USD) | 6.4 (Income) | (5.5) (Loss) | Turnaround to profit | 9.5 (Income) | (16.0) (Loss) | Turnaround to profit | | Non-GAAP Diluted Earnings (Loss) Per Share | 0.15 (Earnings) | (0.13) (Loss) | Turnaround to profit | 0.22 (Earnings) | (0.39) (Loss) | Turnaround to profit | Q3 FY2026 Financial Guidance | Metric | Range (Million USD/Percentage) | | :----------------------- | :--------------------- | | Revenue | $100.0 - $108.0 | | Non-GAAP Gross Margin | 60.0% - 61.5% | | Non-GAAP Operating Expenses | $54.0 - $57.0 | CEO's Strategic Commentary CEO Fermi Wang highlighted strong cyclical growth in the edge AI market, projecting record revenue growth for FY2026, alongside product development and production advancements - The company is experiencing strong cyclical growth in the edge AI market, with expanding applications driving demand for higher-priced 5nm AI SoCs[6] - Multiple portable AI video applications have entered production, with the first robotic drone project expected to ship in volume by the end of FY2026, and the first edge infrastructure project projected for production in FY2027[6] - FY2026 revenue growth forecast is raised to 31% to 35% (midpoint approximately $379 million), with new Q3 and full-year revenue guidance midpoints setting new quarterly and annual total revenue records for Ambarella[6] - Over 36 million edge AI processors have been shipped to date, establishing market leadership and focusing on customer needs in the edge AI market, including automotive[6] Cash and Marketable Securities Position Ambarella's cash, cash equivalents, and marketable debt securities increased at the end of Q2 FY2026 compared to the prior quarter and year-ago period, indicating robust liquidity Cash, Cash Equivalents, and Marketable Debt Securities (Million USD) | Time Point | Amount (Million USD) | | :------------------- | :-------------- | | End of Q2 FY2026 | 261.2 | | End of Prior Quarter | 259.4 | | End of Prior Year Period | 219.8 | Detailed Financial Statements CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (GAAP) This section presents Ambarella's condensed consolidated statements of operations under GAAP, detailing revenue, costs, expenses, and net loss for the three and six months ended July 31, 2025 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (GAAP) (Thousand USD) | Metric | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Revenue | $95,511 | $63,724 | $181,383 | $118,197 | | Cost of revenue | 39,280 | 24,983 | 73,616 | 46,296 | | Gross profit | 56,231 | 38,741 | 107,767 | 71,901 | | Operating expenses: | | | | | | Research and development | 59,734 | 56,760 | 118,553 | 110,897 | | Sales, general and administrative | 18,486 | 18,268 | 37,061 | 36,736 | | Total operating expenses | 78,220 | 75,028 | 155,614 | 147,633 | | Operating loss | (21,989) | (36,287) | (47,847) | (75,732) | | Other income, net | 2,247 | 2,145 | 4,422 | 4,416 | | Loss before income taxes | (19,742) | (34,142) | (43,425) | (71,316) | | Provision for income taxes | 253 | 747 | 898 | 1,505 | | Net loss | $(19,995) | $(34,889) | $(44,323) | $(72,821) | | Diluted loss per share | $(0.47) | $(0.85) | $(1.05) | $(1.78) | | Diluted weighted-average shares outstanding | 42,546,979 | 41,129,754 | 42,383,475 | 40,952,373 | Non-GAAP Financial Measures and Reconciliation This section explains Ambarella's use of non-GAAP financial measures, their differences from GAAP, and provides detailed tables reconciling GAAP net loss to non-GAAP net income (loss) Non-GAAP Methodology and Exclusions The company provides non-GAAP financial information as a supplement to GAAP statements, benefiting management and investors in assessing operational performance and liquidity, primarily excluding stock-based compensation and acquisition-related costs and their tax impacts - Non-GAAP financial information supplements GAAP statements, used to assess operational performance and liquidity, and provides greater transparency for investors[14][15] - Non-GAAP financial measures exclude stock-based compensation and acquisition-related costs and their related tax impacts[4][14] - GAAP reconciliation for non-GAAP gross margin and operating expense guidance for Q3 FY2026 is not feasible on a forward-looking basis due to the high variability and low visibility of relevant exclusion items[16] Stock-based Compensation and Acquisition-Related Costs This section details stock-based compensation expenses and acquisition-related costs included in various functional line items, explaining their impact on the difference between GAAP and non-GAAP gross margins Stock-based Compensation Expense (Thousand USD) | Item | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :---------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Cost of revenue | $780 | $833 | $1,731 | $1,440 | | Research and development | 16,972 | 18,395 | 34,557 | 36,016 | | Sales, general and administrative | 7,436 | 8,384 | 15,030 | 16,192 | | Total Stock-based Compensation Expense | $25,188 | $27,612 | $51,318 | $53,648 | Acquisition-Related Costs (Thousand USD) | Item | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :---------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Cost of revenue | $757 | $757 | $1,514 | $1,514 | | Research and development | — | — | — | — | | Sales, general and administrative | 456 | 530 | 912 | 1,050 | | Total Acquisition-Related Costs | $1,213 | $1,287 | $2,426 | $2,564 | - The difference between GAAP and non-GAAP gross margins primarily stems from the amortization of stock-based compensation and acquisition-related costs[19] RECONCILIATION OF GAAP TO NON-GAAP DILUTED EARNINGS (LOSSES) PER SHARE This section provides a detailed reconciliation table, showing the adjustments from GAAP net loss to non-GAAP net income (loss) and corresponding diluted earnings (losses) per share, primarily including stock-based compensation, acquisition-related costs, and income tax effects GAAP to Non-GAAP Diluted Earnings (Losses) Per Share Reconciliation (Thousand USD, except per share data) | Metric | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | | GAAP Net Loss | $(19,995) | $(34,889) | $(44,323) | $(72,821) | | Non-GAAP Adjustments: | | | | | | Stock-based compensation expense | 25,188 | 27,612 | 51,318 | 53,648 | | Acquisition-related costs | 1,213 | 1,287 | 2,426 | 2,564 | | Income tax impact | 22 | 448 | 36 | 600 | | Non-GAAP Net Income (Loss) | $6,428 | $(5,542) | $9,457 | $(16,009) | | GAAP Diluted Weighted-Average Shares Outstanding | 42,546,979 | 41,129,754 | 42,383,475 | 40,952,373 | | Non-GAAP Diluted Weighted-Average Shares Outstanding | 42,946,324 | 41,129,754 | 42,698,780 | 40,952,373 | | GAAP Diluted Loss Per Share | $(0.47) | $(0.85) | $(1.05) | $(1.78) | | Non-GAAP Adjustments: | | | | | | Stock-based compensation expense | 0.59 | 0.68 | 1.21 | 1.32 | | Acquisition-related costs | 0.03 | 0.03 | 0.06 | 0.06 | | Income tax impact | 0.00 | 0.01 | 0.00 | 0.01 | | Non-GAAP Diluted Weighted-Average Shares Outstanding Impact | — | — | — | — | | Non-GAAP Diluted Earnings (Loss) Per Share | $0.15 | $(0.13) | $0.22 | $(0.39) | CONDENSED CONSOLIDATED BALANCE SHEETS This section presents Ambarella's condensed consolidated balance sheets as of July 31, 2025, and January 31, 2025, detailing the composition of the company's assets, liabilities, and stockholders' equity CONDENSED CONSOLIDATED BALANCE SHEETS (Thousand USD) | Item | July 31, 2025 | January 31, 2025 | | :--------------------------------- | :------------------- | :------------------- | | Assets | | | | Current assets: | | | | Cash and cash equivalents | $142,739 | $144,622 | | Marketable debt securities | 118,444 | 105,643 | | Accounts receivable, net | 42,896 | 29,767 | | Inventories | 33,808 | 34,428 | | Restricted cash | 442 | 7 | | Prepaid expenses and other current assets | 5,543 | 6,084 | | Total current assets | 343,872 | 320,551 | | Property and equipment, net | 10,092 | 9,084 | | Intangible assets, net | 41,879 | 47,279 | | Operating lease right-of-use assets, net | 3,500 | 5,188 | | Goodwill | 303,625 | 303,625 | | Other non-current assets | 3,463 | 3,241 | | Total assets | $706,431 | $688,968 | | Liabilities and Stockholders' Equity | | | | Current liabilities: | | | | Accounts payable | 26,783 | 21,775 | | Accrued and other current liabilities | 76,190 | 80,781 | | Operating lease liabilities, current | 1,774 | 2,829 | | Income taxes payable | 1,713 | 1,383 | | Deferred revenue, current | 19,482 | 14,226 | | Total current liabilities | 125,942 | 120,994 | | Operating lease liabilities, non-current | 1,668 | 2,436 | | Other long-term liabilities | 2,301 | 4,126 | | Total liabilities | 129,911 | 127,556 | | Stockholders' equity: | | | | Preferred stock | — | — | | Common stock | 19 | 19 | | Additional paid-in capital | 872,822 | 813,683 | | Accumulated other comprehensive income (loss) | 59 | (233) | | Accumulated deficit | (296,380) | (252,057) | | Total stockholders' equity | 576,520 | 561,412 | | Total liabilities and stockholders' equity | $706,431 | $688,968 | Company Information and Disclosures About Ambarella Ambarella specializes in edge AI semiconductors, with products widely used in edge AI and human vision, offering powerful deep neural network processing and high-resolution video compression technologies - Ambarella's products are widely used in edge AI and human vision applications, including video security, advanced driver assistance systems (ADAS), electronic mirrors, drive recorders, driver/cabin monitoring, autonomous driving, and robotics applications[8] - The company's low-power system-on-chips (SoCs) provide powerful deep neural network processing for intelligent perception, fusion, and planning, along with high-resolution video compression, advanced image, and radar processing[8] "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995 This statement advises investors that the press release contains forward-looking statements, and actual results may differ materially due to various risks, uncertainties, and assumptions, thus cautioning against undue reliance on such information - The press release contains forward-looking statements identifiable by words such as "outlook," "project," "intend," "will," "estimate," "expect," "believe," "may," and "should"[9] - The achievement or success of forward-looking statements involves risks, uncertainties, and assumptions, and actual results may differ materially from those projected or implied[10] - Risks and uncertainties include global economic and political conditions, changes in government policies, revenue from new customers or design wins, commercial success of customer products, inventory management capabilities, growth strategies, ability to forecast market demand, introduction of new solutions and technologies, customer relationships, market expansion, global health conditions, growth management, retention of key employees, and intellectual property disputes[11] Quarterly Conference Call Details Ambarella plans to host a conference call to discuss Q2 FY2026 results, with a webcast and archived information available - Ambarella plans to host a conference call at 4:30 p.m. ET / 1:30 p.m. PT to discuss Q2 FY2026 results[7] - A live and archived webcast of the conference call will be available on Ambarella's website for up to 30 days[7]