Ambarella (AMBA) Wells Fargo 8th Annual TMT Summit summary

Recent financial performance and outlook

• Achieved third consecutive quarter of beat and raise, with revenue up 30% sequentially and 63% year over year.

• Next quarter guidance is seasonally down but $10 million above consensus; confident in 15% revenue growth for calendar 2025.

• AI inference chips now represent 70% of total revenue, driving higher ASPs and growth.

• Blended ASP has doubled over five years to $13, with new AI products expected to push it higher.

• Legacy business now 30% of revenue and in controlled decline, while AI-driven units and ASPs are both set to grow.

Edge AI and IoT market expansion

• Edge AI adoption began in enterprise security cameras and is expanding to other IoT verticals.

• IoT accounts for 70% of revenue, with 80% of that being AI-related; auto is 30% of revenue, with 60% AI-related.

• AI inference in IoT includes applications in security, access control, video conferencing, and portable cameras.

• New AI products capable of transformer network processing will enable Gen AI and vision-language models.

• CV7 family to begin generating production revenue this quarter, becoming material next year.

Automotive segment developments

• Auto revenue currently comes from ADAS and safety chips ($10-$50 ASP), with a 15% five-year CAGR.

• Applications include driver monitoring, e-mirrors, and front ADAS; recent wins with Dongfeng Honda and XPeng.

• Central domain controller chips ($100-$400 ASP) expected to generate revenue starting in 2026.

• Large opportunity with Western OEMs could significantly increase growth trajectory.

• Efficiency and performance per watt are key differentiators, with strong relationships with Bosch and Continental.