Financial Data and Key Metrics Changes - Fiscal year 2026 revenue increased by 37.2% to $390.7 million, with automotive revenue growing in the high single digits and IoT revenue increasing almost 50% year-over-year [8][89] - Non-GAAP gross margin for fiscal year 2026 was 60.7%, down from 62.7% in fiscal year 2025 [9][90] - Ending cash and marketable securities totaled $312.6 million, up from $250.3 million at the end of the prior year, driven by free cash flow of $58 million for the year, or 14.8% of revenue [9][10] Business Line Data and Key Metrics Changes - Automotive revenue, led by telematics, increased in the high single digits, while IoT revenue increased almost 50% year-over-year, driven by portable video and strong growth in physical security [8][89] - For fiscal Q4, revenue was $100.9 million, down 7% from the prior quarter but up 20.1% year-over-year [10][89] - Non-GAAP operating expenses increased by 12.9% for the year, driven by higher costs related to employees and SoC development projects [9][90] Market Data and Key Metrics Changes - The automotive opportunities pipeline is approximately $13 billion, with a similar proportion of won opportunities compared to the previous year [5][86] - The edge infrastructure market is seeing early customer opportunities with two different design architectures: physical AI and digital AI [6][87] Company Strategy and Development Direction - The company is focusing on building an indirect sales channel with independent software developers, distributors, and system integrators to enhance its market presence [76][78] - The establishment of a semi-custom/custom ASIC business is a strategic development, with strong interest from various companies [77][78] - The company aims to leverage its deep intellectual property and advanced capabilities in edge AI to support a variety of applications and use cases [78][79] Management's Comments on Operating Environment and Future Outlook - The company anticipates total revenue growth in the range of 10%-15% for fiscal year 2027, with non-GAAP gross margin expected to remain within the long-term model of 59%-62% [74][89] - Management expressed confidence in continuing to ride the momentum from new product ramp-ups and strong customer demand for higher AI performance [34][74] Other Important Information - The company reported a free cash flow of over $58 million for the year, marking its seventeenth consecutive year of positive free cash flow [75][89] - The Cooper development platform is continuously enhanced to support a wide range of edge AI applications and customer implementations [79][88] Q&A Session Summary Question: Can you provide more detail on the e-commerce warehouse robotics win? - The project is in low volume production, with expectations for growth as it expands to more warehouses, indicating significant potential for automation in warehouse operations [16][17] Question: What is the current status of the automotive pipeline? - The automotive opportunities pipeline stands at $13 billion, showing growth compared to the previous year, despite a flat proportion of won opportunities [18][19][22] Question: How is the channel strategy progressing? - The company is focusing on building partnerships with independent software developers and distributors, aiming for at least 1,000 ISVs committed to their platform by year-end [28][29] Question: What is the competitive landscape in the drone market? - DJI continues to build its own silicon but also uses external solutions, while most other companies in the drone market are expected to rely on external silicon [37][38] Question: Are there any impacts from recent restrictions on a Chinese competitor in the drone market? - Current design wins are not impacted, but future opportunities may depend on regulatory reviews, with significant markets outside the U.S. still available [48][49] Question: How is the company addressing component cost inflation? - While there is no direct impact, customers are concerned about price increases, particularly in low-margin products, but the company does not expect significant effects on its operations [49][50] Question: How will the ASIC business impact the P&L? - It is too early to discuss the business model for the new go-to-market strategy, but the ASIC business will involve non-recurring engineering (NRE) costs, which are essential for project viability [57][58][60] Question: What is the breakdown of the IoT business between industrial and consumer? - The IoT business is roughly 50/50 between industrial and consumer-driven segments, with a mix of enterprise and consumer applications [62][64]

Group 1: AI Developments at CES 2026 - The 2026 Consumer Electronics Show (CES) highlighted significant advancements in artificial intelligence (AI), particularly relevant for investors in the ROBO Global Artificial Intelligence ETF (THNQ) [1] Group 2: Nebius Group (NBIS) - Nebius Group, a top-10 holding in THNQ with a 2.43% weighting, is set to be among the first to deploy NVIDIA's Vera Rubin NVL72 systems in its U.S. and European data centers in the second half of the year, enhancing performance for reasoning and agentic AI while offering cost benefits [2] Group 3: Ambarella (AMBA) - Ambarella has launched the Ambarella Developer Zone at CES, a platform aimed at simplifying edge AI development, which allows developers to deploy complex AI solutions rapidly without the need for custom engineering [3] - The new CV7 SoC, built on Samsung's 4nm process, provides a 2.5x increase in AI performance over the previous CV5 while consuming 20% less power, targeting high-growth sectors such as drones, robotics, ADAS, and enterprise security [4] Group 4: Advanced Micro Devices (AMD) - AMD, a top-15 holding in THNQ, has expanded its presence in the edge AI market with the introduction of the Ryzen AI Embedded P100 and X100 series, designed for applications requiring local decision-making in tight spaces [5] - The launch of the Ryzen AI Halo developer platform indicates AMD's strategy to compete with NVIDIA in the local AI workstation market [5] - CEO Lisa Su introduced the Helios rack-scale platform, designed to train trillion-parameter models and deliver up to three AI exaflops per rack [6]