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Ambarella, Inc. Announces Second Quarter Fiscal Year 2026 Financial Results

1. AMBA's Q2 revenue rose 49.9% YoY to $95.5 million. 2. GAAP net loss improved to $20 million, signaling operational progress. 3. Non-GAAP profit reached $6.4 million, marking a significant turnaround. 4. Q3 revenue guidance suggests growth to $100-108 million. 5. CEO confirms strong demand in edge AI applications driving future growth.

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Why Bullish?

The substantial revenue growth and improved non-GAAP net profit indicate strong market positioning. Similar revenue increases in tech stocks often lead to positive investor sentiment and price spikes.

How important is it?

The article's focus on financial results and future guidance significantly reflects AMBA's trajectory, impacting investor perceptions and stock price.

Why Long Term?

With projected revenue growth and continuous advancements in edge AI, AMBA's long-term outlook suggests ongoing market expansion. Historical examples include Nvidia's growth patterns driven by AI advancements.

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SANTA CLARA, Calif., Aug. 28, 2025 (GLOBE NEWSWIRE) -- Ambarella, Inc. (NASDAQ: AMBA), an edge AI semiconductor company, today announced financial results for its second quarter of fiscal year 2026 ended July 31, 2025. Revenue for the second quarter of fiscal 2026 was $95.5 million, up 49.9% from $63.7 million in the same period in fiscal 2025. For the six months ended July 31, 2025, revenue was $181.4 million, up 53.5% from $118.2 million for the six months ended July 31, 2024.Gross margin under U.S. generally accepted accounting principles (GAAP) for the second quarter of fiscal 2026 was 58.9%, compared with 60.8% for the same period in fiscal 2025. For the six months ended July 31, 2025, GAAP gross margin was 59.4%, compared with 60.8% for the six months ended July 31, 2024.GAAP net loss for the second quarter of fiscal 2026 was $20.0 million, or loss per diluted ordinary share of $0.47, compared with GAAP net loss of $34.9 million, or loss per diluted ordinary share of $0.85, for the same period in fiscal 2025. GAAP net loss for the six months ended July 31, 2025 was 44.3 million or loss per diluted ordinary share of $1.05. This compares with GAAP net loss of $72.8 million, or loss per diluted ordinary share of $1.78, for the six months ended July 31, 2024. Financial results on a non-GAAP basis for the second quarter of fiscal 2026 are as follows: Gross margin on a non-GAAP basis for the second quarter of fiscal 2026 was 60.5%, compared with 63.3% for the same period in fiscal 2025. For the six months ended July 31, 2025, non-GAAP gross margin was 61.2%, compared with 63.3% for the six months ended July 31, 2024.Non-GAAP net profit for the second quarter of fiscal 2026 was $6.4 million, or earnings per diluted ordinary share of $0.15. This compares with non-GAAP net loss of $5.5 million, or loss per diluted ordinary share of $0.13, for the same period in fiscal 2025. Non-GAAP net profit for the six months ended July 31, 2025 was $9.5 million, or earnings per diluted ordinary share of $0.22. This compares with non-GAAP net loss of $16.0 million, or loss per diluted ordinary share of $0.39, for the six months ended July 31, 2024. Based on information available as of today, Ambarella is offering the following guidance for the third quarter of fiscal year 2026, ending October 31, 2025: Revenue is expected to be between $100.0 million and $108.0 million.Gross margin on a non-GAAP basis is expected to be between 60.0% and 61.5%.Operating expenses on a non-GAAP basis are expected to be between $54.0 million and $57.0 million. Ambarella reports gross margin, net income (loss) and earnings (losses) per share in accordance with GAAP and, additionally, on a non-GAAP basis. Non-GAAP financial information excludes the impact of stock-based compensation and acquisition-related costs adjusted for the associated tax impact, which includes the effect of any benefits or shortfalls recognized. A reconciliation of the GAAP to non-GAAP gross margin, net income (loss) and earnings (losses) per share for the periods presented, as well as a description of the items excluded from the non-GAAP calculations, is included in the financial statements portion of this press release. Total cash, cash equivalents and marketable debt securities on hand at the end of the second quarter of fiscal 2026 was $261.2 million, compared with $259.4 million at the end of the prior quarter and $219.8 million at the end of the same quarter a year ago. “We are experiencing strong secular growth in the edge AI market, with an expanding breadth of applications driving unit demand, often with our higher priced 5nm AI SoCs. For example, a variety of portable AI video applications have reached production status, and by the end of fiscal 2026 we expect to realize production shipments from our first robotic aerial drone win. Furthermore, our first edge infrastructure win is expected to enter production in fiscal 2027,” said Fermi Wang, President & CEO. “We are increasing our fiscal 2026 revenue growth estimate to a range of 31% to 35%, or approximately $379 million at the midpoint. The midpoint of our new third quarter and full year fiscal 2026 revenue guidance would represent all-time record quarterly and fiscal year total revenue for Ambarella. With more than 36 million edge AI processors shipped-to-date, we are an established, market leader and we remain exclusively focused on our customers’ needs in the edge AI market including automotive.” Quarterly Conference Call Ambarella plans to hold a conference call at 4:30 p.m. Eastern Time / 1:30 p.m. Pacific Time today with Fermi Wang, President and Chief Executive Officer, and John Young, Chief Financial Officer, to discuss the second quarter of fiscal year 2026 results. A live and archived webcast of the call will be available on Ambarella’s website at http://www.ambarella.com/ for up to 30 days after the call. About Ambarella Ambarella’s products are used in a wide variety of edge AI and human vision applications, including video security, advanced driver assistance systems (ADAS), electronic mirror, drive recorder, driver/cabin monitoring, autonomous driving and robotics applications. Ambarella’s low-power systems-on-chip (SoCs) provide powerful deep neural network processing to enable intelligent perception, fusion and planning, and offer high-resolution video compression, advanced image and radar processing. For more information, please visit www.ambarella.com. "Safe harbor" statement under the Private Securities Litigation Reform Act of 1995 This press release contains forward-looking statements that are not historical facts and often can be identified by terms such as “outlook,” “projected,” “intends,” “will,” “estimates,” “anticipates,” “expects,” “believes,” “could,” “should,” or similar expressions, including the guidance for the third quarter of fiscal year 2026 ending October 31, 2025, and the comments of our CEO relating to our expectation of future revenue growth, including for the full year of fiscal 2026, the breadth and growth potential for our edge AI inference products, and the ability of our customers to go into production with edge AI products incorporating our solutions in a timely manner. The achievement or success of the matters covered by such forward-looking statements involves risks, uncertainties and assumptions. Our actual results could differ materially from those predicted or implied and reported results should not be considered as an indication of our future performance. The risks and uncertainties referred to above include, but are not limited to, global economic and political conditions; changes in government policies, including possible trade tariffs and restrictions; revenue being generated from new customers or design wins, neither of which is assured; the commercial success of our customers’ products; our customers’ ability to manage their inventory requirements; our growth strategy; our ability to anticipate future market demands and future needs of our customers, particularly for AI inference applications; our ability to introduce, and to generate revenue from, new and enhanced solutions; our ability to develop, and to generate revenue from, new advanced technologies, such as computer vision, AI functionality and advanced networks, including vision-language models and GenAI; our ability to retain and expand customer relationships and to achieve design wins; the expansion of our current markets and our ability to successfully enter new markets and applications, such as edge infrastructure; anticipated trends and challenges, including competition, in the markets in which we operate; risks associated with global health conditions and associated risk mitigation measures; our ability to effectively manage growth; our ability to retain key employees; and the potential for intellectual property disputes or other litigation. Further information on these and other factors that could affect our financial results is included in the company’s Annual Report on Form 10-K for our 2025 fiscal year, which is on file with the Securities and Exchange Commission. Additional information will also be set forth in the company’s quarterly reports on Form 10-Q, annual reports on Form 10-K and other filings the company makes with the Securities and Exchange Commission from time to time, copies of which may be obtained by visiting the Investor Relations portion of our web site at www.ambarella.com or the SEC's web site at www.sec.gov. Undue reliance should not be placed on the forward-looking statements in this release, which are based on information available to us on the date hereof. The results we report in our Quarterly Report on Form 10-Q for the second fiscal quarter ended July 31, 2025 could differ from the preliminary results announced in this press release. Ambarella assumes no obligation and does not intend to update the forward-looking statements made in this press release, except as required by law. Non-GAAP Financial Measures The company has provided in this release non-GAAP financial information, including non-GAAP gross margin, net income (loss), and earnings (losses) per share, as a supplement to the condensed consolidated financial statements, which are prepared in accordance with generally accepted accounting principles ("GAAP"). Management uses these non-GAAP financial measures internally in analyzing the company’s financial results to assess operational performance and liquidity. The company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing its performance and when planning, forecasting and analyzing future periods. Further, the company believes these non-GAAP financial measures are useful to investors because they allow for greater transparency with respect to key financial metrics that the company uses in making operating decisions and because the company believes that investors and analysts use them to help assess the health of its business and for comparison to other companies. Non-GAAP results are presented for supplemental informational purposes only for understanding the company’s operating results. The non-GAAP information should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from non-GAAP measures used by other companies. With respect to its financial results for the second quarter of fiscal year 2026, the company has provided below reconciliations of its non-GAAP financial measures to its most directly comparable GAAP financial measures. With respect to the company’s expectations for the third quarter of fiscal year 2026, a reconciliation of non-GAAP gross margin and non-GAAP operating expenses guidance to the closest corresponding GAAP measure is not available without unreasonable efforts on a forward-looking basis due to the high variability and low visibility with respect to the charges excluded from these non-GAAP measures. We expect the variability of the above charges to have a significant, and potentially unpredictable, impact on our future GAAP financial results. AMBARELLA, INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(in thousands, except share and per share data)(unaudited)           Three Months Ended July 31, Six Months Ended July 31,   2025   2024   2025   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 Selling, general and administrative  18,486   18,268   37,061   36,736          Total operating expenses  78,220   75,028   155,614   147,633          Loss from operations  (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)         Net loss per share attributable to ordinary shareholders:       Basic $(0.47) $(0.85) $(1.05) $(1.78)Diluted $(0.47) $(0.85) $(1.05) $(1.78)Weighted-average shares used to compute net loss per share       attributable to ordinary shareholders:        Basic  42,546,979   41,129,754   42,383,475   40,952,373 Diluted  42,546,979   41,129,754   42,383,475   40,952,373           The following tables present details of stock-based compensation and acquisition-related costs included in each functional line item in the condensed consolidated statements of operations above:          Three Months Ended July 31, Six Months Ended July 31,  2025  2024  2025  2024 (unaudited, in thousands)Stock-based compensation:       Cost of revenue$780 $833 $1,731 $1,440Research and development 16,972  18,395  34,557  36,016Selling, general and administrative 7,436  8,384  15,030  16,192        Total stock-based compensation$25,188 $27,612 $51,318 $53,648  Three Months Ended July 31, Six Months Ended July 31,  2025  2024  2025  2024 (unaudited, in thousands)Acquisition-related costs:       Cost of revenue$757 $757 $1,514 $1,514Research and development —  —  —  —Selling, 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 margin was 1.6% and 2.5%, or $1.5 million and $1.6 million, for the three months ended July 31, 2025 and July 31, 2024, respectively. The difference between GAAP and non-GAAP gross margin was 1.8% and 2.5%, or $3.2 million and $3.0 million, for the six months ended July 31, 2025 and July 31, 2024, respectively. The differences were due to the effect of stock-based compensation and the amortization of acquisition-related costs. AMBARELLA, INC.RECONCILIATION OF GAAP TO NON-GAAP DILUTED EARNINGS (LOSSES) PER SHARE(in thousands, except share and per share data)         Three Months Ended July 31, Six Months Ended July 31,  2025   2024   2025   2024  (unaudited)GAAP net loss$(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 effect 22   448   36   600 Non-GAAP net income (loss)$6,428  $(5,542) $9,457  $(16,009)        GAAP - diluted weighted average shares 42,546,979   41,129,754   42,383,475   40,952,373 Non-GAAP - diluted weighted average shares 42,946,324   41,129,754   42,698,780   40,952,373         GAAP - diluted net loss per share$(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 effect 0.00   0.01   0.00   0.01 Effect of Non-GAAP - diluted weighted average shares —   —   —   — Non-GAAP - diluted net income (loss) per share$0.15  $(0.13) $0.22  $(0.39)         AMBARELLA, INC. CONDENSED CONSOLIDATED BALANCE SHEETS(unaudited, in thousands)     July 31, January 31,  2025   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 SHAREHOLDERS' 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     Shareholders' equity:   Preference shares —   — Ordinary shares 19   19 Additional paid-in capital 872,822   813,683 Accumulated other comprehensive income (loss) 59   (233)Accumulated deficit (296,380)  (252,057)Total shareholders’ equity 576,520   561,412     Total liabilities and shareholders' equity$706,431  $688,968      Contact: Louis Gerhardy408.636.2310lgerhardy@ambarella.com

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