New products include the CV5, CV7, and the CV3-AD families, which are all 5-nanometer. Most integrate our third-generation AI inference accelerator and all command above-average ASPs. The first wave of revenue is from the CV5 family, which is ongoing and continue to ramp. We expect to easily exceed 1 million units shipped this year across more than 1,000 design wins in IoT as well as automotive.
— Fermi Wang
03Detailed Report
AMBA
Company AMBA
Period
Q2 2025
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedMay 21, 2026
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Executive Summary
Ambarella delivered a solid QQ2 2025 performance anchored by continued strength in edge AI and the ramp of higher-ASP new product families. Revenue reached $63.7 million, rising 16.98% quarter over quarter and up 2.58% year over year, with IoT contributing the majority of the growth and automotive showing early ramp signals tied to the CV5 family. Management attributed a near-term inventory correction completion and improving visibility into the second half of fiscal 2025, supported by a growing pipeline of design wins across IoT and auto segments. Gross margins remained robust on a non-GAAP basis at 63.3%, while the company posted a non-GAAP net loss of $5.5 million ($0.13 per diluted share) as it continues to fund R&D and product campaigns. Ambarella reinforced its multi-wave new-product strategy (CV5, CV7, CV3-AD, plus N1 and 2nm plans) as the primary engine of revenue growth, with management guiding Q3 revenue of $77–$81 million and a non-GAAP gross margin of 62.5–64%. The company also signaled a path toward profitability as volumes scale and key automotive/IoT programs mature. Net cash remained strong, with cash and marketable securities totaling about $219.8 million mid-quarter and cash at period-end of roughly $153.9 million, producing a net cash position despite ongoing investment in AI-enabled edge capabilities.
Key Performance Indicators
Revenue
Increasing
63.72M
QoQ: 16.98% | YoY: 2.58%
Gross Profit
Increasing
38.74M
60.79% margin
QoQ: 14.22% | YoY: 0.73%
Operating Income
Decreasing
-36.29M
QoQ: 4.93% | YoY: -2.68%
Net Income
Decreasing
-34.89M
QoQ: 8.02% | YoY: -11.83%
EPS
Decreasing
-0.85
QoQ: 8.60% | YoY: -7.59%
Revenue Trend
Margin Analysis
Financial Highlights
Revenue: $63.7m in Q2 FY2025, up 16.98% QoQ and 2.58% YoY (YoY growth of 2.58%; QoQ growth of 16.98%). YoY and QoQ metrics align with Ambarella’s mix shift toward higher-ASP AI-centric products.
Gross profit: $38.74m, gross margin non-GAAP 63.3% (above the prior midpoint), reflecting higher ASPs from CV5 and early contributions from CV22/IoT products.
Operating expenses: Non-GAAP OpEx of $47.7m, about $0.8m below the prior guidance midpoint, indicating ongoing expense discipline to support profitability as volumes scale.
Net income and earnings: Non-GAAP net loss of $5.5m (EPS -$0.13). GAAP results were not fully disclosed in the data provided, but the non-GAAP view excludes stock-based compensation and acquisition-related costs adjusted for taxes.
Cash flow and liquidity: Positive operating cash flow of $16.7m; free cash flow of $14.17m; net change in cash +$22.1m; cash and marketable securities ~$219.8m; cash at period end ~$153.9m.
Balance sheet: Total assets $650.3m; total liabilities $102.8m; total stockholders’ equity $547.6m. Current ratio 3.06; quick ratio 2.72; net cash position (net debt of about -$147.2m).
Product/market mix and guidance: New product families CV5, CV7, CV3-AD (5nm) driving incremental ASPs; CV5 ramp contributing to IoT and auto growth; CV3 ramp targeted for calendar year 2026 (fiscal 2027). Q3 guidance implies continued sequential growth in both IoT and Auto, with new-product cohorts representing a majority of incremental revenue growth over time.
Notable concentration and risk: Top customers represented by WT Microelectronics (63% of Q2 revenue) and Hakuto (10%). The commentary emphasizes ongoing pricing pressures in China and the need to manage gross margin while expanding high-ASP AI products.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
63.72M
2.58%
16.98%
Gross Profit
38.74M
0.73%
14.22%
Operating Income
-36.29M
-2.68%
4.93%
Net Income
-34.89M
-11.83%
8.02%
EPS
-0.85
-7.59%
8.60%
Key Financial Ratios
Gross Profit Margin
Excellent
60.80%
Gross profit margin is exceptional, indicating strong pricing power and operational efficiency
Operating Profit Margin
Weak
-0.57%
Operating margin is below industry norms, profitability concerns
Net Profit Margin
Weak
-0.55%
Net profit margin is below industry norms, profitability concerns
Return on Assets
Weak
-0.05%
Return on assets suggests inefficient capital allocation
Return on Equity
Weak
-0.06%
Return on equity suggests inefficient capital allocation
Current Ratio
Strong
3.06
Current ratio indicates excellent liquidity and financial flexibility
Debt to Equity
Conservative
0.01
Debt-to-equity shows conservative leverage and low financial risk
P/E Ratio
Negative
-15.51x
Negative earnings make P/E ratio not meaningful
Price to Book
Premium
3.95x
Trading at premium to book value, reflects strong intangibles or growth
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