Ambarella (AMBA) Q2 2025 earnings summary

Executive summary

• Q2 FY2025 revenue reached $63.7 million, up 17% sequentially and up to 3% year-over-year; six-month revenue was $118.2 million, down up to 5% year-over-year.

• IoT represented about 70% of total revenue, with stronger sequential growth than automotive; record edge AI inference revenue supported a higher blended ASP.

• Revenue growth driven by higher product shipments and adoption of computer vision (CV) solutions with higher ASPs.

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

• New product ramps, especially CV5, are driving growth and improved visibility for the second half of fiscal 2025.

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.

• Q2 non-GAAP net loss was $5.5 million ($0.13/share); GAAP net loss was $34.9 million ($0.85/share).

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

• Non-GAAP operating expense was $47.7 million, below guidance due to expense management; R&D expenses increased to $56.8 million.

• Receivables DSO decreased to 33 days, and inventory days dropped to 108.

Outlook and guidance

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

• Double-digit sequential growth expected for both IoT and automotive in Q3.

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

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

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