Ambarella Sequential Sales Growth Cools After Two Faster Quarters

The Tip Desk · September 3, 2026 · 2 min read

Second-quarter fiscal 2027 revenue was $108.1 million, up 13.2% from a year earlier, as non-GAAP profit reached $8.2 million, or $0.18 a share.

Ambarella, Inc. (AMBA), an edge AI semiconductor company, reported second-quarter fiscal 2027 revenue of $108.1 million, up 13.2% from $95.5 million a year earlier.

That year-over-year pace slowed from 16.9% growth in the first quarter of fiscal 2027, following 20.1% year-over-year growth in the fourth quarter of fiscal 2026. Sequential revenue rose 7.7% from $100.4 million in the prior quarter.

The company said edge AI revenue reached record levels in the quarter, with balanced sequential growth in Auto and IoT and very strong growth from its 5-nanometer CV75 and CV72 AI SoCs.

GAAP gross margin compressed to 57.7% from 58.9% a year earlier. Non-GAAP gross margin was 59.3%, down from 60.5% a year earlier.

GAAP net loss narrowed to $6.7 million, or $0.15 a share, from $20.0 million, or $0.47 a share, a year earlier. Loss from operations narrowed to $8.1 million from $22.0 million.

Research and development expense fell to $50.6 million from $59.7 million a year earlier. The company recognized a one-time $9.0 million reduction in GAAP research and development expense upon release of a deposit liability following the termination of a development project and excluded that credit from non-GAAP operating expenses. Selling, general and administrative expense was $20.0 million.

Non-GAAP net income rose to $8.2 million, or $0.18 a share, from $6.4 million, or $0.15 a share, a year earlier.

Cash, cash equivalents and marketable debt securities were $272.3 million as of July 31, 2026. Inventories were $76.9 million.

President and Chief Executive Officer Fermi Wang said the company introduced its first stand-alone AI accelerator, X7, and executed seven-year agreements to develop the indirect sales channel with Macnica, a technical distributor, and CapGemini, an engineering and systems integration firm. He said those developments are contributing to an increase in Ambarella’s five-year serviceable market forecast for edge AI and Physical AI.

For the third quarter of fiscal 2027, ending October 31, 2026, Ambarella expects revenue of $115.0 million to $124.0 million, above the $105.0 million to $111.0 million range it had issued for the second quarter. Non-GAAP gross margin is expected to be 59.0% to 60.0%, and non-GAAP operating expenses are expected to be $56.5 million to $59.5 million.

The company has an installed base of more than 50 million AI SoC units across physical security, vehicle safety, telematics, autonomy, portable video, aerial drones and emerging robotic applications.