Ambarella posts 37% revenue growth as Edge AI adoption drives automotive and robotics expansion

Ambarella Achieves Record Revenue with Edge AI Momentum

Ambarella delivered record annual revenue of $390.7 million in fiscal 2026, representing a 37.2% increase year over year, with Edge AI products contributing approximately 80% of total revenue 1

1

. The company's fourth quarter revenue reached $100.9 million, up 20.1% year over year, slightly above the midpoint of guidance despite a 7% sequential decline from Q3 1

1

. President and Chief Executive Officer Dr. Fermi Wang said, "Fiscal 2026 established a new revenue record for Ambarella," underscoring management's focus on Edge AI and product innovation 1

1

.

The surge reflects accelerating Edge AI adoption across multiple sectors, driven by new product cycles featuring 5-nanometer AI SoCs and expanding customer wins in automotive and AI markets. Edge AI revenue specifically grew 50% year over year, fueled by the company's third-generation five-nanometer CV75 and CV72 chips, which contributed a high single-digit percentage of Q4 revenue 1

1

2

2

. The automotive segment led by telematics increased in the high single digits, while IoT applications surged nearly 50%, mainly in portable video and enterprise security 1

1

.

New AI SoCs and Growth Strategy Position Company for 2027

Ambarella projects 10%-15% revenue growth for fiscal 2027, supported by next-generation product cycles and rising average selling prices (ASP) and unit volumes in both auto and IoT segments 1

1

2

2

. Chief Financial Officer John Young confirmed, "We forecast Q1 revenue to be seasonal and in the range of $97,000,000 to $103,000,000," with sequential auto growth offset by seasonal IoT decline 1

1

.

The company's CV7 chip, built on four-nanometer process technology, is expected to generate revenue starting in Q4 of fiscal 2027 and delivers 2.5 times the AI performance of its predecessor CV5 1

1

3

3

. At the Morgan Stanley Conference, Fermi Wang emphasized confidence in Samsung's 2nm process technology, with secured capacity for 2026 and 2027 3

3

. The company's first two-nanometer chip project in IoT has significant NRE paid, with first silicon revenues expected in 2027 1

1

.

Robotics Sector and Automotive Pipeline Drive Design Wins

Ambarella marked its first full quarter of production revenue from the aerial drone market in Q4, with a U.S.-based e-commerce provider deploying robotic systems using the company's N1655 AI SoC 1

1

. The robotics sector represents a key growth vector, with success in warehouse robotics involving multiple video camera sensors and sensor fusion capabilities 3

3

.

The company disclosed approximately $13 billion in pipeline automotive opportunities over the next six years, with the "won" portion flat compared to last year, reflecting design wins offset by lower customer forecasts or delays 1

1

3

3

. Management is shifting focus toward projects with immediate revenue potential, particularly in fleet management and autonomous OEM design wins 3

3

.

Margin Pressure and Indirect Channel Strategy

Non-GAAP gross margins reached 60.7% for fiscal 2026, down from 62.7% in the prior year, with Q4 margins at 59.8% aligned with guidance 1

1

. The company maintained its long-term gross margin target of 59%-62% despite near-term segment shifts and ongoing product transitions 1

1

2

2

. Management noted a strategy of accepting lower gross margins if it provides better leverage on operating points, focusing on maintaining growth through differentiated technology 3

3

.

Ambarella launched incremental indirect sales channels including ISVs, distributors, and system integrators to capture fragmented robotics and Edge infrastructure markets, targeting at least a dozen ISVs to adopt its Cooper development platform by year end 1

1

3

3

. The Cooper SDK enables customers to port applications easily, with ISVs transitioning software from competitor platforms in weeks 3

3

. The company generated $58 million in free cash flow for fiscal 2026, representing 14.8% of revenue and marking its seventeenth consecutive year of positive free cash flow, with cash and marketable securities reaching $312.6 million 1

1

.