Ambarella’s shares fell 6.3% after earnings, indicating investors were more concerned about the seasonal fiscal Q3 outlook, rising memory and supply-chain costs, and execution risk around emerging edge-infrastructure products than encouraged by the quarter’s modest revenue beat. Management also acknowledged that cost inflation could pressure near-term economics, even as it plans to pass those costs to customers.
- Fiscal Q2 revenue came in slightly above the midpoint of guidance, with non-GAAP EPS of $0.18; edge AI revenue reached a new record.
- Both IoT and automotive revenue grew sequentially, with automotive growth driven by commercial vehicles.
- Management guided to a seasonal fiscal Q3, a cautious outlook that likely contributed to the negative market reaction.
- Memory scarcity and surging memory prices are raising supply-chain costs across the industry; Ambarella expects to pass those costs to customers while maintaining its 59%–62% long-term gross-margin target.
- The rolling five-year serviceable market forecast increased to $22.9 billion in fiscal 2032 from $8.5 billion in fiscal 2027, implying approximately 20% CAGR, with IoT expected to represent about 70% of the terminal-year mix.
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