Ambarella (AMBA) Q3 2026 earnings summary

Executive summary

• Achieved record Q3 revenue of $108.5 million, up 31.2% year-over-year, marking the sixth consecutive quarter of record Edge AI revenue.

• Fiscal 2026 revenue guidance raised to 36%-38% growth, projecting an all-time high of approximately $390 million.

• Edge AI products now comprise about 80% of total revenue, with strong momentum across enterprise security, automotive, smart home, and portable video markets.

• Co-founder Les Kohn transitions to chief technology advisor, continuing to guide technology direction.

• Operating loss for the quarter was $16.2 million, a significant improvement from $25.5 million in the prior year, primarily due to higher revenue and gross profit, partially offset by increased operating expenses.

Financial highlights

• Q3 revenue was $108.5 million, up 13.5% sequentially and 31.2% year-over-year.

• Non-GAAP gross margin reached 60.9%, slightly above guidance midpoint; GAAP gross margin was 59.6%, down from 60.6% year-over-year.

• Non-GAAP net profit was $11.9 million, or $0.27 per diluted share; GAAP net loss was $15.1 million, or $(0.35) per share.

• Cash and marketable securities totaled $295.3 million, up from $261.2 million prior quarter.

• Free cash flow for Q3 was $31.4 million; year-to-date free cash flow is 14.8% of revenue.

Outlook and guidance

• Q4 revenue forecasted at $97–$103 million, with a mid to high single-digit sequential decline due to seasonality in automotive and IoT.

• Q4 non-GAAP gross margin expected between 59% and 60.5%.

• Non-GAAP OPEX for Q4 projected at $55–$58 million, with increases driven by employee and CES expenses.

• The company expects continued investment in R&D to support expansion in AI, computer vision, and new market opportunities.

• Management anticipates ongoing revenue growth driven by demand for edge AI solutions, but notes that gross margin may fluctuate due to product mix and manufacturing costs.