Ambarella(US:AMBA)2025-08-28 21:32Financial Data and Key Metrics Changes - Revenue for Q2 fiscal year 2026 was $95.5 million, an increase of 11.2% sequentially and 49.9% year-over-year, exceeding prior guidance [23][7] - Non-GAAP gross margin for Q2 was 60.5%, at the low end of the prior guidance range [23] - Non-GAAP net profit for Q2 was $6.4 million, or $0.15 per diluted share [24] Business Line Data and Key Metrics Changes - Automotive revenue increased in the mid-single digits, while IoT revenue grew in the low teens, with IoT representing slightly more than 75% of total revenue [23] - The company reported strong demand for new five-nanometer AI SoCs across various applications, particularly in portable video and robotics [9][10] Market Data and Key Metrics Changes - The company anticipates revenue growth for fiscal year 2026 in the range of 31% to 35%, with a midpoint of approximately $379 million [9] - The edge AI business is expanding, with expectations for unit and average selling price growth [27] Company Strategy and Development Direction - The company is focusing on both autonomous driving and IoT markets, leveraging shared hardware architecture to optimize operational expenses [31] - The company is actively pursuing design wins in the automotive sector while also expanding its presence in the IoT market, particularly in portable video and robotics [12][19] Management's Comments on Operating Environment and Future Outlook - Management noted that while automotive growth is expected to eventually outperform IoT, the current strong performance in IoT is driven by shorter design cycles and more available opportunities [31][36] - The company remains optimistic about the edge AI market, with significant lifetime revenue opportunities in automotive autonomy [80] Other Important Information - The company has shipped over 36 million AI processors, establishing itself as a leader in the edge AI market [19] - The company is preparing for upcoming investor events, including participation in various conferences [5] Q&A Session Summary Question: Thoughts on IoT versus automotive focus - Management acknowledged the strong performance of IoT and indicated a balanced focus on both IoT and automotive markets, with plans to allocate more resources to IoT [31][32] Question: Expectations for automotive growth - Management expects automotive growth to eventually outperform IoT, particularly around 2027-2028, but noted that IoT will continue to contribute significantly in the near term [35][36] Question: Trends in robotic aerial drones - Management confirmed a growing trend in the drone market, with multiple companies focusing on autonomous drone applications [39] Question: Guidance for Q4 - Management indicated that seasonality is expected in Q4, driven by consumer cycles, but noted that growth rates are improving compared to previous years [48] Question: Non-security IoT growth - Management sees significant growth potential in non-security IoT applications, with expectations that this segment will outpace traditional security camera business [50][51] Question: Industry consolidation and strategy - Management refrained from commenting on industry rumors but emphasized the company's leadership in the edge AI market [57] Question: Demand pull-ins related to tariffs - Management stated that they have not observed any significant inventory buildup among customers, indicating confidence in demand stability [70] Question: Customer response to the Cooper development platform - Management reported positive feedback on the Cooper platform, which facilitates easier transitions between different chips for customers [72] Question: Growth drivers in IoT and automotive - Management indicated that growth is roughly split 50/50 between average selling price and unit growth [84] Question: IoT market split between security and non-security applications - Management noted that portable video applications are growing rapidly, with Insta360 being a significant customer [88]