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Ambarella's Edge AI Soars, But Margins Compress
5 Sep
Summary
- Ambarella's Q2 revenue rose 13.2% to $108.1 million.
- Edge-AI revenue hit a record, driven by new chips.
- Gross margins declined year-over-year despite revenue growth.
Ambarella, Inc. announced its fiscal second-quarter 2027 results, revealing a 13.2% year-over-year revenue increase to $108.1 million. The company achieved a record for its edge-AI revenue, propelled by sequential growth in automotive and IoT markets and strong performance from its CV75 and CV72 systems-on-chip.
Despite revenue gains, profitability showed a mixed performance. GAAP gross margin decreased to 57.7%, while non-GAAP gross margin fell to 59.3%. However, non-GAAP net income saw an increase to $8.2 million, partly due to a project-termination credit.
To enhance market reach, Ambarella has entered into seven-year agreements with Macnica and Capgemini, aiming to bolster its indirect sales channel. This strategic move seeks to leverage broader market access and an expanding edge-AI product suite to counteract margin compression.
Looking ahead, the company projects third-quarter revenue between $115 million and $124 million. Guidance for non-GAAP gross margin is set between 59.0% and 60.0%, suggesting potential stabilization. Ambarella also launched the X7, its first standalone AI accelerator, further diversifying its edge-AI offerings.
