revenue
115–124 $million
Q3 2027
official guidance
AMBARELLA, INC.
Last · —$61.46-2.84 (-4.42%)live · yahoo · 1h ago
Market cap$2.72B—
P/E · TTM—fwd — · eps —
Beta—vs S&P 500
Div yield—annual · TTM
52w range
——
Volume—session
| Revenue | $417.8M |
|---|---|
| Operating income | $-27.6M |
| Net income | $-24.8M |
| Free cash flow | $-36.7M |
| Operating margin | -6.6% |
| Net margin | -5.9% |
| Return on equity | -4.0% |
| Period | TTM 2026-07-31 |
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OpenFilings analyst
Our analyst
Agentic read of the latest earnings call — recommendation updates when we process a new transcript. Research synthesis, not investment advice.
Strong BuyBuyHoldSellStrong Sell
Strong product traction, but near-term supply risk and long-dated, largely unquantified growth initiatives do not yet justify a decisive buy.
Hold: Ambarella delivered solid execution with Q2 revenue of $108.1 million, up 13.2% year over year, record automotive revenue, and Q3 guidance of $115 million-$124 million.
The long-term Physical AI opportunity is expanding—SAM rises from $8.5 billion in FY2027 to $22.9 billion in FY2032—but the investment case remains offset by memory-related Q4 uncertainty, 157 days of inventory, heavy distributor concentration, and an unproven X7 accelerator entering a crowded market.
Themes
- Edge Ai
- Physical Ai
- X7 Accelerator
- Memory Constraints
- Robotics
- Automotive
Near term
Q4 demand is the key near-term risk: management said memory availability and customer price increases could reduce total chip volumes, although Q2 and Q3 revenue have seen only limited impact so far.
Q3 revenue guidance of $115 million-$124 million implies favorable seasonality and Physical AI-led IoT growth; gross margin is guided to 59%-60% despite rising supply-chain costs.
Management plans to pass higher costs to customers, creating a test of pricing power and potential volume elasticity.
Inventory days rose to 157 from 145 despite a 4% sequential decline in inventory dollars, warranting monitoring as memory constraints and customer demand evolve.
Longer term
The 20% five-year SAM CAGR and shift toward IoT—approximately 70% of terminal-year SAM—depend heavily on edge infrastructure, robotics, enterprise security, and other markets that are still early-stage.
X7's 4-5 watt power envelope and claimed 4 MB memory requirement could differentiate it against GPU-based solutions, but the product is only sampling and competes with NVIDIA, Qualcomm, and roughly 50 startups.
CapGemini and Macnica each represent a stated potential revenue opportunity of approximately $500 million over seven years, but meaningful revenue is expected to take two to three years and initial wins are small and fragmented.
The 2-nanometer CV8 semi-custom project could produce first revenue in FY2028 and broaden Ambarella's addressable market, but the model requires customer specifications that can be resold to non-competing customers.
More than 50 million edge AI SoCs shipped, the Cooper platform, and expanding automotive, robotics, and monitoring wins support a credible platform moat if Ambarella can convert design wins into volume production.
Red flags
Memory scarcity is explicitly an unresolved Q4 risk; management could not quantify the potential revenue impact and only said it was continuing to monitor customer access and pricing.
The X7 is entering a crowded competitive field, and management provided no quantified design-win pipeline, customer commitments, ASPs, or gross-margin profile for the accelerator.
The $1 billion combined CapGemini and Macnica opportunity is a seven-year target rather than current backlog or guidance; management described meaningful revenue as two to three years away.
Revenue concentration is substantial: WT Microelectronics represented 60.2% of Q2 revenue and Hakuto 11%, although both are logistics/distribution partners serving multiple customers.
The $9 million GAAP R&D reduction came from terminating an automotive development project, highlighting customer-project cancellation risk even though management said it does not affect non-GAAP outlook.
The company authorized a $50 million repurchase program but made no repurchases in Q2, so buyback support is currently optional rather than demonstrated.
Forward outlook
gross margin
59–60 pct
Q3 2027
official guidance
OpenFilings analyst view from primary-source filings and earnings calls — not investment advice.
From latest 10-K · 2025-03-28
- Ai Edge Inference
- Persistent Losses
- Customer Concentration
- Samsung Foundry Dependence
- Supply Chain Commitments
- Automotive Adas
Red flags
- Fiscal 2025 net loss was $117.1 million, following a $169.4 million loss in fiscal 2024; 1.93 million potentially dilutive securities were excluded from diluted EPS because they were antidilutive.
- A substantial portion of revenue is derived through WT Microelectronics, while another substantial portion goes to Chicony; loss, credit issues or production changes at either counterparty could materially affect revenue.
- The company outsources manufacturing, assembly and testing primarily to Asian contractors without long-term agreements, and manufacturing purchase commitments more than doubled to $56.4 million from $30.7 million.
Upcoming earnings
9:00 PM UTC+1
Period
Oct 2026
Est. EPS
$0.31
Est. revenue
119.8M
Earnings transcripts
Press & signals
- GlobeNewswire
Ambarella and Ultralytics Collaborate to Bring Ultralytics YOLO Models to CVflow-Powered Edge Devices
- GlobeNewswire
Ambarella and ZEDEDA Partner to Bring Cloud-Orchestrated AI to Billions of Devices at the Physical Edge
- GlobeNewswire
Ambarella Engages Capgemini to Help Accelerate Enterprise Adoption of Edge and Physical AI
The rest of this company's wire — with summaries and source links — is part of Pro.
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