Ambarella CES 2026 Update Summary Company Overview - **Company**: Ambarella (NasdaqGS: AMBA) - **Event**: CES 2026 briefing and technology discussion - **Focus**: Edge AI technology and product demonstrations Key Points and Arguments Industry and Market Insights - **Edge AI Market**: Ambarella emphasizes the unique requirements of the Edge AI market, which includes critical factors such as low power consumption, low latency, and privacy concerns [6][7] - **Market Development Stage**: The Edge AI market is still in its early commercial development stage, presenting significant opportunities for Ambarella [7] - **Revenue Growth**: Ambarella's revenue growth is driven by the transition from traditional video products to Edge AI solutions, with 80% of total revenue now coming from Edge AI [28] Product Development and Innovations - **New Product Launches**: Ambarella is expanding its product offerings with the introduction of a 4 nanometer AI SoC (CV7) and a 2 nanometer chip, which are expected to enhance performance and capabilities [11][13][14] - **AI Performance Requirements**: Customers are demanding higher AI performance without increasing power consumption, leading to innovations in silicon architecture to meet these needs [17][19] - **ASP Trends**: The average selling price (ASP) of Ambarella's chips is increasing, with new products expected to exceed the previous average ASP of $15 [20] Strategic Initiatives - **Go-to-Market Strategy**: Ambarella is evolving its go-to-market strategy to include partnerships with Global System Integrators (GSIs) and Independent Software Vendors (ISVs) to expand its software offerings [15][16] - **Cooper Developer Platform**: The Cooper Developer Platform is central to Ambarella's strategy, allowing for flexibility and programmability across different applications and chips [21][24][66] Financial Performance - **Record Revenue**: Fiscal year 2026 marked a record revenue year for Ambarella, with a compound annual growth rate (CAGR) of 64% in Edge AI revenue [27][28] - **Impact of Entity List**: The removal of revenue from companies affected by the entity list has significantly impacted overall revenue figures, but the growth in Edge AI revenue remains strong [28] Future Opportunities - **Emerging Markets**: Ambarella identifies three key markets for future growth: robotics (including drones and automation), Edge infrastructure, and autonomous driving [25][26] - **AI Model Integration**: The company is focusing on integrating new AI models, including transformers and multimodal applications, into its product offerings [58][62] Competitive Positioning - **Leadership in Edge AI**: Ambarella claims leadership in the Edge AI market, supported by significant R&D investments and a strong track record of shipping over 40 million Edge AI SoCs [29] - **Technological Differentiation**: The company emphasizes its unique silicon architecture and AI accelerators, which provide better performance per watt compared to competitors [28][29] Additional Important Content - **Customer Engagement**: Ambarella is actively engaging with customers to understand their needs for AI performance and application development [17][19] - **Open Source Embrace**: The company is embracing open-source frameworks to enhance its software offerings and facilitate easier integration for customers [40][62] - **Autonomous Driving Trends**: The shift towards end-to-end systems in autonomous driving is highlighted, with a focus on using multiple networks for better training and efficiency [71] This summary encapsulates the key insights and strategic directions discussed during the Ambarella CES 2026 briefing, highlighting the company's focus on Edge AI technology and its growth trajectory in the market.

Financial Data and Key Metrics Changes - Total sales grew 16% year-over-year to $795 million, with 12% organic growth [18] - Adjusted EBITDA increased 23% to $96.5 million, with adjusted EBITDA margins rising to 12.1% from 11.4% [18] - Adjusted diluted EPS rose 31% to $1.18 from $0.90 in the same quarter last year [18] Business Line Data and Key Metrics Changes - Parts Supply sales increased 29% year-over-year to $354 million, with new parts distribution activities growing 32% [19] - Repair and Engineering sales rose 7% to $245 million, with adjusted EBITDA of $31.2 million, a 1% increase [20] - Integrated Solutions sales increased 8% to $176 million, with adjusted EBITDA rising 50% to $18.5 million [22] Market Data and Key Metrics Changes - Sales to government customers increased 23%, while sales to commercial customers rose 13% [18] - Total commercial sales accounted for 71% of total sales, with government sales making up 29% [18] Company Strategy and Development Direction - The company completed two strategic acquisitions and announced a third, focusing on high-growth parts supply and Repair and Engineering segments [5][6] - The company aims to enhance its digital capabilities through partnerships, such as with Aeroxchange [7] - The company is committed to disciplined portfolio management and operational efficiency [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued growth, citing a strong backlog and no signs of destocking among airline customers [32] - For Q3, the company expects total sales growth of 20%-22%, with organic sales growth of 8%-11% [25] - The company anticipates margin dilution in the near term due to the integration of HAECO Americas but expects long-term margin improvement [33][75] Other Important Information - The company ended the quarter with lower leverage, achieving a net debt leverage of 2.49 times [22] - The company plans to exit its high-cost maintenance site in Indianapolis, redistributing work to improve margins [16] Q&A Session Summary Question: Can you provide more detail on the 32% growth in parts supply? - Management indicated that volume is the primary driver of growth, with significant contributions from existing distribution contracts [30] Question: Are there concerns about destocking at airline customers? - Management stated there are no signs of destocking, supported by a strong backlog [32] Question: What is the outlook for margins in the third quarter? - Management noted that margin dilution is expected due to the HAECO acquisition, but long-term margins are anticipated to improve [33] Question: What synergies exist between heavy maintenance and other businesses? - Management confirmed synergies between heavy maintenance and component repair, leveraging increased aircraft volume for component repairs [39] Question: What is the status of the Trax customer upgrade cycle? - Management reported that approximately 30%-35% of customer upgrades are in progress, with a goal to complete the bulk by the end of 2028 [50] Question: What are the growth prospects for the ART acquisition? - Management highlighted that the ART acquisition positions the company to participate more significantly in the aircraft interior modification market [57] Question: How does the company view the heavy maintenance business in terms of margins? - Management clarified that heavy maintenance is not a low-margin business and has seen significant margin gains post-COVID [80]

Financial Data and Key Metrics Changes - Total sales grew by 16% year over year to $795 million, with organic growth of 12% [18] - Adjusted EBITDA increased by 23% to $96.5 million, with adjusted EBITDA margins rising to 12.1% from 11.4% [18] - Adjusted diluted EPS rose by 31% to $1.18 per share from $0.90 in the same quarter last year [18] Business Line Data and Key Metrics Changes - Parts Supply sales increased by 29% year over year to $354 million, with new parts distribution activities growing by 32% [19] - Repair and Engineering sales rose by 7% to $245 million, with adjusted EBITDA of $31.2 million, a 1% increase from the previous year [20] - Integrated Solutions sales increased by 8% to $176 million, with adjusted EBITDA rising by 50% [22] Market Data and Key Metrics Changes - Sales to government customers increased by 23%, while sales to commercial customers grew by 13% [18] - Total commercial sales accounted for 71% of total sales, with government sales making up the remaining 29% [18] Company Strategy and Development Direction - The company completed two key strategic acquisitions and announced a third, aimed at enhancing its parts supply and repair and engineering segments [5][6] - The focus remains on organic growth in high-growth areas, disciplined portfolio management, and enhancing digital capabilities [6][8] - The company aims to leverage synergies between its repair and parts supply businesses to drive growth [10][40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued growth, citing a strong backlog and no signs of destocking among airline customers [32] - For Q3, total sales growth is expected to be in the range of 20%-22%, with organic sales growth projected at 8%-11% [25] - The company anticipates margin improvements over the next 12-18 months as integration efforts progress [22][88] Other Important Information - The company ended the quarter with a net debt leverage of 2.49 times, within its target range of 2.0 to 2.5 times [24] - The company is actively pursuing further M&A opportunities while managing ongoing integrations [47] Q&A Session Summary Question: Can you provide more detail on the 32% growth in parts supply? - Management indicated that volume is the primary driver of growth, with significant contributions from existing distribution contracts [30] Question: Are there concerns about destocking at airline customers? - Management stated there are no signs of destocking, supported by a strong backlog [32] Question: What are the expectations for margins in the upcoming quarters? - Management acknowledged that margins may be diluted in the short term due to acquisitions but expect improvements as integration progresses [33][75] Question: How do you see synergies between heavy maintenance and other businesses? - Management confirmed that there are significant synergies between heavy maintenance and component repair, leveraging increased aircraft volume [39] Question: What is the outlook for the Trax customer upgrade cycle? - Management reported that approximately 30%-35% of customer upgrades are completed, with a goal to finish the bulk by the end of 2028 [50] Question: What is the revenue potential for the ART acquisition? - Management did not disclose specific revenue figures but emphasized the growth potential in the aircraft interior reconfiguration market [57] Question: How do you view the margins in the heavy maintenance business? - Management clarified that heavy maintenance margins have improved significantly and are expected to continue expanding [80]

Financial Data and Key Metrics Changes - Total sales grew by 16% year over year to $795 million, with organic growth of 12% [16] - Adjusted EBITDA increased by 23% to $96.5 million, with adjusted EBITDA margins rising to 12.1% from 11.4% [16] - Adjusted diluted EPS rose by 31% to $1.18 per share from $0.90 in the same quarter last year [17] Business Line Data and Key Metrics Changes - Parts Supply sales increased by 29% year over year to $354 million, driven by a 32% growth in new parts distribution activities [17][18] - Repair and Engineering sales rose by 7% to $245 million, with adjusted EBITDA of $31.2 million, a 1% increase from the previous year [18] - Integrated Solutions sales grew by 8% to $176 million, with adjusted EBITDA increasing by 50% [19] Market Data and Key Metrics Changes - Sales to government customers increased by 23%, while sales to commercial customers rose by 13% [16] - Total commercial sales accounted for 71% of total sales, with government sales making up the remaining 29% [16] Company Strategy and Development Direction - The company completed two strategic acquisitions and announced a third, aimed at enhancing its parts supply and repair and engineering segments [4][5] - The focus remains on organic growth in high-growth areas, disciplined portfolio management, and enhancing digital capabilities [5][21] - The company aims to leverage synergies between its repair and distribution activities to drive growth [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued growth, citing a strong backlog and no signs of destocking among airline customers [27] - For Q3, total sales growth is expected to be in the range of 20%-22%, with organic sales growth projected at 8%-11% [22] - The company anticipates margin improvements over the next 12-18 months as integration efforts progress [19][64] Other Important Information - The company successfully managed its balance sheet, reducing net debt leverage from 2.82 times to 2.49 times [22] - The integration of recent acquisitions is expected to enhance operational and financial performance over time [12][64] Q&A Session Summary Question: Can you provide more detail on the 32% growth in parts supply? - Management indicated that the majority of the growth was driven by volume, with significant contributions from existing distribution contracts [26] Question: Are there concerns about destocking at airline customers? - Management stated there are no signs of destocking, supported by a strong backlog [27] Question: What is the outlook for margins in the upcoming quarters? - Management acknowledged that margins may be diluted in the short term due to acquisitions but expect improvements as integration progresses [28] Question: How do you see synergies between heavy maintenance and other businesses? - Management confirmed that there are synergies between heavy maintenance and component repair, leveraging their leadership position to drive volume [31] Question: What is the status of the Trax customer upgrade cycle? - Approximately 30%-35% of customer upgrades have been agreed upon but not yet implemented, with a goal to complete the bulk by the end of 2028 [41] Question: What are the growth prospects for the ART acquisition? - Management highlighted that ART brings engineering and self-certification expertise, positioning the company to grow in the aircraft interior reconfiguration market [45] Question: What is the outlook for USM sales? - Management reported stable activity levels in USM sales, with no significant changes in market availability [46]

Summary of Mobileye Global Conference Call Company Overview - **Company**: Mobileye Global (NasdaqGS:MBLY) - **Event**: 2026 Conference held on January 06, 2026 - **Keynote Speaker**: Professor Amnon Shashua, CEO of Mobileye Key Industry Insights - **Acquisition**: Mobileye announced the acquisition of Mentee Robotics, marking its entry into humanoid robotics [1] - **Partnerships**: Collaboration with Volkswagen's MOIA Group to develop autonomous vehicles for the US and Europe [1] Financial Performance and Projections - **RFQs Success**: Mobileye won 95% of all RFQs from its top 10 customers in 2025 [3] - **New Partnerships**: Secured design wins with Volvo and Subaru [3] - **Revenue Pipeline**: Projected pipeline of $24.5 billion over the next eight years, with $18 billion awarded since the IPO, representing a 40% increase since 2023 [4] - **Chips Deployment**: Over 230 million chips deployed, equating to one-eighth of the total cars globally [5] Technology Developments - **REM Technology**: 8 million cars contributing to high-definition map data, with 32 billion miles recorded in 2025 [5] - **Surround ADAS**: New system featuring multiple cameras and radars, with two design wins already secured [6] - **Testing**: Over 100 ID. Buzz vehicles in testing across various locations, including challenging weather conditions [10][14] Future Milestones - **Driverless Services**: Expected launch of driverless services in the US by the end of 2026, with EU homologation in 2027 [18] - **Market Expansion**: Plans to operate in six cities by the end of 2027 and have over 100,000 active self-driving vehicles by 2033 [21] Strategic Insights - **Ecosystem Approach**: Emphasis on integrating vehicle and self-driving systems into a turnkey solution for autonomous mobility [19] - **Cost Reduction**: Focus on reducing costs associated with sensors and computing to enable scalability [51] - **Physical AI Expansion**: Mobileye aims to broaden its scope to include all aspects of physical AI, leveraging synergies between autonomous driving and robotics [59] Technical Innovations - **Artificial Community Intelligence (ACI)**: A new training method using simulated environments to enhance driving policy and validation [36][40] - **Vision-Language Models (VLMs)**: Development of a slow system to provide deep scene understanding, reducing reliance on teleoperators [45] - **Chip Development**: Introduction of the IQ7 chip, designed for advanced workloads, with significant performance advantages over competitors [52] Conclusion - Mobileye is positioned for significant growth through strategic acquisitions, partnerships, and technological advancements in autonomous driving and robotics. The company is focused on scaling its operations while reducing costs and enhancing its product offerings to meet future market demands.

Financial Data and Key Metrics Changes - Revenue for Q1 2026 was $343 million, up 2% sequentially and 1% year over year, despite not recognizing any hyperscale hardware revenue [5][17] - Non-GAAP gross margins were 30%, down 0.8 percentage points year over year [17] - Non-GAAP operating income was $42 million, up 1% year over year, leading to Non-GAAP diluted earnings per share of $0.49, flat year over year [6][20] Business Line Data and Key Metrics Changes - Advanced Computing revenue was $151 million, up 9% compared to the prior quarter but down 15% year over year [9][18] - Integrated Memory revenue was $137 million, up 41% year over year [11][18] - Optimized LED revenue was $55 million, down 18% sequentially [13][18] Market Data and Key Metrics Changes - The company is seeing a shift from hyperscaler deployments to broader enterprise adoption, with early signs of workloads evolving towards inference-oriented use cases [6][10] - Demand for memory products is strong across networking, telecommunications, and computing customers, with a focus on addressing AI workload requirements [11][12] Company Strategy and Development Direction - The company is transitioning from a holding company to an AI solutions provider, focusing on customer diversification and new business development [8][14] - Partnerships with ecosystem partners like Nvidia and AMD are being strengthened to support customer success in AI deployments [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's position for long-term success, citing a strong balance sheet and a growing customer base [15][28] - The outlook for FY26 includes expectations of 6% net sales growth and $2 of non-GAAP diluted EPS, with a focus on diversifying the customer sales mix [24][27] Other Important Information - The company signed an agreement to sell its remaining 19% stake in Zillia Technologies for $46 million, expected to close in Q3 FY26 [14] - Cash flows from operating activities increased by 125% to $31 million compared to Q1 of the previous year [23] Q&A Session Summary Question: Outlook for fiscal first half versus second half - Management indicated that Q2 revenue is expected to be down sequentially, particularly in advanced computing, but anticipates stronger performance in the second half due to pipeline opportunities [30][36] Question: Challenges in memory supply - Management noted that they are navigating supply constraints effectively, which has allowed for a more favorable outlook for memory revenue growth [32][36] Question: Enterprise engagements and diversification efforts - Management highlighted a shift from hyperscaler spending to enterprise deployments, indicating a strong pipeline for future growth [48][49] Question: Inventory levels as a leading indicator - Management stated that while inventory remains elevated, it is being managed effectively, and inventory turns are healthy [52] Question: Customization of ICE platform - Management is working on integrating their ICE platform with best-of-breed open-source software to provide a comprehensive solution for customers [54][55]

Financial Data and Key Metrics Changes - Revenue for Q1 2026 was $343 million, up 2% sequentially and 1% year over year, despite not recognizing any hyperscale hardware revenue [5][17] - Non-GAAP gross margins were 30%, reflecting a favorable mix and execution in the quarter [5][17] - Non-GAAP operating income was $42 million, up 1% year over year, leading to Non-GAAP diluted earnings per share of $0.49, flat year over year [6][20] Business Line Data and Key Metrics Changes - Advanced Computing revenue was $151 million, up 9% compared to the prior quarter but down 15% year over year [9][18] - Integrated Memory revenue was $137 million, up 41% year over year [11][18] - Optimized LED revenue was $55 million, down 18% sequentially [13][18] Market Data and Key Metrics Changes - The company is seeing a shift from hyperscaler deployments to broader enterprise adoption, with early signs of workloads evolving towards inference-oriented use cases [6][10] - Demand signals for the memory portfolio are strong across various sectors, including networking and telecommunications [11] Company Strategy and Development Direction - The company is transitioning from a holding company to an AI solutions provider, focusing on customer diversification and new business development [8][14] - Partnerships with ecosystem partners like NVIDIA and AMD are being strengthened to support customer success in AI deployments [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's position for long-term success, citing a strong balance sheet and growing customer base [15][28] - The outlook for fiscal year 2026 anticipates a solid performance, with expectations for stronger second-half sales driven by AI opportunities [24][25] Other Important Information - The company signed an agreement to sell its remaining 19% stake in Zilia Technologies for $46 million, expected to close in Q3 of fiscal 2026 [14] - Cash flows from operating activities increased by 125% to $31 million compared to Q1 of last year [23] Q&A Session Summary Question: Fiscal first half versus fiscal second half guidance - Management indicated that the second quarter revenue is expected to be down, with advanced computing likely driving the sequential decline [30][33] Question: Challenges or constraints in shipping products - Management noted that they are navigating supply constraints effectively, which has allowed for a more favorable outlook for memory revenue [31][32] Question: Enterprise engagements and diversification efforts - Management highlighted a shift from hyperscalers to broader enterprise applications, with a strong pipeline of opportunities [46][49] Question: Inventory levels as a leading indicator for future shipments - Management stated that inventory levels are healthy and that they are buying to orders rather than forecasts [51][52] Question: Customization of ICE to be compatible with open-source platforms - Management is working on building a software stack that combines their ICE platform with best-of-breed third-party software [54][55] Question: Changes in optical memory and related technologies - Management did not see any immediate changes but acknowledged the validation of market opportunities in enhancing bandwidth performance [58]

Financial Data and Key Metrics Changes - Revenue for Q1 2026 was $343 million, reflecting a 2% sequential increase and a 1% year-over-year increase, despite not recognizing any hyperscale hardware revenue [5][17] - Non-GAAP gross margins were 30%, which is favorable compared to the midpoint of the full-year outlook [5] - Non-GAAP operating income was $42 million, up 1% year-over-year, leading to Non-GAAP diluted earnings per share of $0.49, flat year-over-year [6][19] Business Line Data and Key Metrics Changes - Advanced Computing revenue was $151 million, up 9% compared to the previous quarter but down 15% year-over-year [9][18] - Integrated Memory revenue reached $137 million, up 41% year-over-year [11][18] - Optimized LED revenue was $55 million, down 18% sequentially [13][18] Market Data and Key Metrics Changes - The company is seeing a shift from hyperscaler deployments to broader enterprise adoption, with early signs of workloads evolving towards inference-oriented use cases [6][40] - Demand for memory products is strong across various sectors, including networking and telecommunications [11][12] Company Strategy and Development Direction - The company is transitioning from a holding company to an AI solutions provider, focusing on customer diversification and new business development [7][15] - Partnerships with ecosystem partners like Nvidia and AMD are being strengthened to support customer success in AI deployments [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's position for long-term success, citing a strong balance sheet and a growing customer base [16][28] - The outlook for FY26 anticipates a stronger second half compared to the first half, driven by AI opportunities in the pipeline [25][28] Other Important Information - The company signed an agreement to sell its remaining 19% stake in Zillia Technologies for $46 million, expected to close in Q3 FY26 [14] - Cash flows from operating activities increased by 125% to $31 million compared to Q1 of the previous year [23] Q&A Session Questions and Answers Question: Fiscal first half versus fiscal second half guidance - Management indicated that the second quarter revenue might see a decline, particularly in advanced computing, due to timing issues with new customer agreements [30][32] Question: Challenges or constraints in memory product shipping - Management noted that they are navigating supply constraints effectively, which has allowed for a more favorable outlook on memory revenue growth [31][34] Question: Shift from hyperscalers to enterprise deployments - Management observed an evolution towards increased enterprise opportunities, indicating a shift in capital expenditure from large hyperscalers to broader corporate applications [39][40] Question: Inventory levels as a leading indicator for future shipments - Management confirmed that while inventory levels remain elevated, they are turning inventory quickly and do not foresee concerns regarding inventory management [42]

Financial Performance - Sales increased by 16% from Q2 FY25 to Q2 FY26[9] - Adjusted EBITDA increased by 23% from Q2 FY25 to Q2 FY26[9] - Adjusted EPS increased by 31% from Q2 FY25 to Q2 FY26[9] - Parts Supply sales increased by 29% from Q2 FY25 to Q2 FY26[28] - Integrated Solutions sales increased by 8% from Q2 FY25 to Q2 FY26[38] - Adjusted operating margin increased from 92% to 102%[24] Acquisitions and Strategic Initiatives - Acquired ADI, a distributor of electronic components and assemblies, with $149 million in sales and $15 million in EBITDA[9, 13] - Acquired HAECO Americas, the 2nd largest independent North American heavy maintenance provider, securing $850 million+ in new multi-year contracts[9, 15] - Announced an agreement to acquire Aircraft Reconfig Technologies for $35 million[9, 20] Balance Sheet and Leverage - Net leverage decreased by 109x since the Product Support acquisition[41] - The company is targeting a net leverage ratio of 20x – 25x[42, 46] Guidance - Q3 FY26 total sales growth is projected to be 20%-22%, with organic sales growth of 8%-11%[53]

Financial Performance - Penguin Solutions' net sales for Q1 FY26 were $343 million, a 1% increase year-over-year (YoY)[10] - The non-GAAP gross margin was 30.0%, a decrease of 0.8 percentage points YoY[10] - Non-GAAP operating income reached $42 million, up 1% YoY, with a non-GAAP operating margin of 12.1%, up 0.1 percentage points YoY[10] - Non-GAAP diluted earnings per share (EPS) remained flat YoY at $0.49[10] Segment Performance - Advanced Computing net sales were $151 million in Q1, up 9% compared to Q4 FY25[25] - Integrated Memory revenue was $137 million in Q1, a significant increase of 41% YoY[27] - Optimized LED net sales were $55 million in Q1, down 18% YoY, but achieved an operating income of $3.5 million, up 24% sequentially[30] Balance Sheet and Cash Flow - Net accounts receivable stood at $342 million[43] - Inventory was valued at $213 million[43] - Cash, cash equivalents, and short-term investments totaled $461 million at the end of the period[43] - Net cash from operating activities from continuing operations was $31 million[43] Stock Repurchase - Penguin Solutions repurchased 791,000 shares for $15 million in Q1 FY26[46] - Since April 2022, the company has repurchased 7.4 million shares for a total of $128 million[46] FY26 Outlook - Penguin Solutions anticipates net sales growth of 6% YoY, with a potential variance of +/- 10%[48] - The projected gross margin is 29% +/- 1%[48] - Operating expenses are expected to be $250 million +/- $10 million on a non-GAAP basis[48] - Non-GAAP diluted earnings per share are forecasted at $2.00 +/- $0.25[48]