Ambarella (AMBA) Q2 2025 earnings summary

Executive summary

• Q2 FY2025 revenue reached $63.7 million, up 3% year-over-year and 17% sequentially, driven by strong IoT and new product ramps, with six-month revenue at $118.2 million, down 4.9% year-over-year.

• Record edge AI inference revenue and higher ASPs from new products (CV5, CV7, CV3-AD) supported growth; IoT represented about 70% of total revenue.

• Operating loss for Q2 was $36.3 million, with a GAAP net loss of $34.9 million ($0.85/share) and non-GAAP net loss of $5.5 million ($0.13/share).

• Inventory correction is largely complete, with revenue now reflecting end market demand.

• Cash, cash equivalents, and marketable securities totaled $219.8 million at Q2 end.

Financial highlights

• Q2 non-GAAP gross margin was 63.3%, slightly above guidance midpoint; GAAP gross margin was 60.8%, down from 61.9% year-over-year.

• Non-GAAP operating expense was $47.7 million, below guidance; Q2 R&D expense was $56.8 million, up 3.4% year-over-year.

• Non-GAAP net loss was $5.5 million ($0.13/share); GAAP net loss was $34.9 million ($0.85/share).

• Cash and marketable securities increased to $219.8 million; positive operating cash flow of $16.7 million in Q2.

• Receivables DSO improved to 33 days; inventory dollars up 8% sequentially, down 12% year-over-year.

Outlook and guidance

• Q3 FY2025 revenue guidance is $77–$81 million, implying about 24% sequential growth.

• Q3 non-GAAP gross margin expected between 62.5%–64%; OpEx to rise to $49–$51 million.

• Fiscal 2025 revenue growth expected in the mid- to high-teens percent versus last year.

• Management optimistic about long-term growth from new products in advanced AI networks and GenAI.

• Normal Q4 seasonality expected, with Q4 typically down 7–10% sequentially.