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 [10][11] - Non-GAAP gross margin for fiscal year 2026 was 60.7%, down from 62.7% in fiscal year 2025 [10] - For fiscal Q4, revenue was $100.9 million, down 7% from the prior quarter but up 20.1% year-over-year [11][12] - Non-GAAP gross margin for fiscal Q4 was 59.8%, at the midpoint of prior guidance [12] Business Line Data and Key Metrics Changes - Automotive revenue led by telematics increased in the high single digits, while IoT revenue surged almost 50% year-over-year, driven by portable video and strong growth in physical security [10] - Non-GAAP operating expenses increased by 12.9% for the year, driven by higher costs related to employees and SoC development projects [11] Market Data and Key Metrics Changes - The automotive opportunities pipeline is approximately $13 billion, with a healthy design win momentum despite a weak automotive market in 2025 [7][22] - The edge AI market is seeing early customer opportunities with two different design architectures: physical AI and digital AI [8] Company Strategy and Development Direction - The company is focusing on building partnerships with ISVs and distributors, aiming for at least 1,000 ISVs committed to their platform by the end of the year [31] - The company is committed to its edge AI strategy and driving earnings growth, with significant long-term growth opportunities in robotics, automotive, and edge infrastructure markets [5][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continuing growth momentum, with expectations for both IoT and automotive sectors to grow in fiscal 2027 [35] - The company is monitoring the impact of component cost inflation but does not expect a significant direct impact on its business [53] Other Important Information - 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 [11][12] - The company has extended its share repurchase program for an additional 12 months, ending June 30, 2026 [14] Q&A Session Summary Question: Details on e-commerce warehouse robotics win - The project is in low volume production and is expected to grow, indicating significant potential for automation in warehouses [18][19] Question: Update on the auto pipeline - The total automotive opportunities pipeline is $13 billion, showing growth compared to last year despite a flat business in one segment [20][21][22] Question: Channel strategy and semi-custom ASIC business - The new go-to-market strategy focuses on building partnerships with ISVs and distributors, with expectations for revenue ramp-up in the following year [31][32] Question: Competitive landscape in the drone market - DJI continues to build its own silicon but also uses external solutions, while most other companies prefer to use external silicon [39] Question: Long-term gross margin outlook - The company expects to maintain a long-term gross margin of 59%-62%, with potential adjustments as the semi-custom chip business matures [46][47] Question: Impact of recent restrictions on a Chinese competitor - Current design wins are not impacted, but future opportunities may be affected depending on regulatory reviews [51][52] Question: Demand environment from component cost inflation - There is concern among customers about price increases, but the company does not expect a significant impact on its business [53][54] Question: Seasonality related to CV7 launch - Initial revenue from CV7 is not expected this year, but there is significant interest and design wins anticipated [57][58]

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 [11][12] - Non-GAAP gross margin for fiscal year 2026 was 60.7%, down from 62.7% in fiscal year 2025 [11] - For fiscal Q4, revenue was $100.9 million, down 7% from the prior quarter but up 20.1% year-over-year [12][13] - Non-GAAP gross margin for fiscal Q4 was 59.8%, at the midpoint of prior guidance [13] Business Line Data and Key Metrics Changes - Automotive revenue was primarily driven by telematics, while IoT revenue was led by portable video and strong growth in physical security [11] - Non-GAAP operating expenses increased by 12.9% for the year, driven by higher costs related to employees and SoC development projects [12] Market Data and Key Metrics Changes - The automotive opportunities pipeline is approximately $13 billion, with a healthy design win momentum despite a weak automotive market in 2025 [8][22] - The edge AI market is seeing early customer opportunities with two different design architectures: physical AI and digital AI [9][10] Company Strategy and Development Direction - The company is focusing on building partnerships with ISVs and distributors, aiming to have at least 1,000 ISVs committed to its platform by the end of the year [32] - The company is committed to its edge AI strategy and driving earnings growth, with significant long-term growth opportunities in robotics, automotive, and edge infrastructure markets [6][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continuing growth momentum, driven by new product ramp-ups and strong customer demand [36] - The company is monitoring the impact of component cost inflation, particularly DRAM prices, but does not expect a significant direct impact on its business [55] Other Important Information - 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 [12][14] - The company did not repurchase shares in Q4 but has approximately $48 million available under its repurchase authorization [15][16] Q&A Session Summary Question: Details on e-commerce warehouse robotics win - The project is in low volume production, with expectations for growth as it expands to more warehouses [20] Question: Update on the auto pipeline - The total automotive opportunities pipeline is $13 billion, showing growth compared to last year [22][26] Question: Channel strategy and semi-custom ASIC business - The new go-to-market strategy focuses on building partnerships with ISVs and distributors, with expectations for revenue ramp-up in the following year [32][33] Question: Competitive landscape in the drone market - DJI continues to build its own silicon but also uses external solutions; most other companies in the drone market are expected to use external silicon [40] Question: Long-term gross margin outlook - The company expects to maintain a long-term gross margin within the range of 59%-62% [48] Question: Impact of Chinese competitor restrictions - Current design wins are not impacted, but future opportunities may be affected depending on regulatory outcomes [52][53] Question: Impact of component cost inflation - Customers are more concerned about price increases rather than shortages, with low-margin products being the most affected [55] Question: Seasonality related to CV7 launch - Initial revenue from CV7 is not expected this year, but significant interest and design wins are anticipated [58][59] Question: IoT business breakdown - The IoT business is roughly 50% industrial and 50% consumer-driven [67]

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]