Ambarella, Inc. Q2 FY2026 earnings call

Fermi noted second quarter revenue above guidance, fifth consecutive record edge AI revenue. Increased full-year revenue guidance to 31%-35%. Expanding edge AI applications in portable video, robotic aerial drones, edge infrastructure. Customer wins in areas like Arashi Vision's drone, Samsara's AI Multicam, Audi's e-mirror, etc.

Second quarter revenue was $95.5 million, up 11% sequentially, above prior guidance. IoT represented slightly more than 75% of revenue, with automotive having mid-single digit growth and IoT low teens. Edge AI revenue is expected to be about 80% of total revenue this year.

Q3 revenue guided to $100 million to $108 million. Fiscal 2026 revenue guidance 31%-35%. Q3 non-GAAP gross margin 60%-61.5%, non-GAAP OpEx $54 million to $57 million.

Discussed monitoring for inventory build, geopolitical impacts, and potential lawsuit impact on customer POs

Q: Congrats on a great quarter. So for my first question, I think for years, you guys pitched yourself kind of as the future of the company being automotive first, but IoT at this point has just been an incredible outperformer. I think it outperformed auto by 4x this year. So I guess my question is, are you thinking about IoT differently now? Could there be a pivot in your business where you just double down spending around IoT versus auto, lean into the development of IoT versus auto? And when might we get to a point where auto outperforms IoT? Or is this not the case just given the great interest in IoT?

A: Right. Thank you for the question. I think the first part to the answer is that like I said in our script that we are continuing to focus on our Level 2+, Level 4 autonomous driving, and we are working hard to continue to win design wins there. But also, I pointed out that because our other edge AI business because of design -- shorter design cycle and more available opportunity for us, we are making significant progress there. And we're going to continue to focus on the edge AI market, including both autonomous driving as well as IoT. But I want to point out that the fundamental hardware architecture between the edge AI for the IoT side and the autonomous driving side are identical. Our CV4 architecture, our image processing pipeline, our CPU investment, even on the OS side, there are huge leverage between each two. So from the OpEx expense side, the leverage is very strong. Obviously, the go-to-market strategy from the marketing side, on the sales side are different. But we are going to continue to focus on those two areas, because I still believe in the long-term autonomous driving continue -- can keep driving our strength. But as you can see in our announcement, we made a significant progress on the edge AI in the IoT side where that means we're going to put also more resources on this than before to continue to make progress and try to collect more market share in this particular market.