Q2 FY2027
Filed Sep 3, 2026Revenue was $108.1 million, up 13.2% year over year, while non-GAAP net income was $8.2 million, or $0.18 per diluted ordinary share.
Revenue grew 13.2% year over year and non-GAAP net income increased to $8.2 million, but GAAP gross margin declined and the company remained at a GAAP net loss of $6.7 million.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| RevenueGAAP | $108.1 million | – | up 13.2% |
| Cost of revenueGAAP | $ 45,709 (in thousands) | – | – |
| Gross profitGAAP | $ 62,416 (in thousands) | – | – |
| Gross marginGAAP | 57.7% | – | – |
| Gross marginnon-GAAP | 59.3% | – | – |
| Research and development expenseGAAP | $ 50,581 (in thousands) | – | – |
| Selling, general and administrative expenseGAAP | $ 19,978 (in thousands) | – | – |
| Total operating expensesGAAP | $ 70,559 (in thousands) | – | – |
| Loss from operationsGAAP | $ (8,143 ) (in thousands) | – | – |
| Other income, netGAAP | $ 1,806 (in thousands) | – | – |
| Loss before income taxesGAAP | $ (6,337 ) (in thousands) | – | – |
| Provision for income taxesGAAP | $ 352 (in thousands) | – | – |
| Net lossGAAP | $6.7 million | – | – |
| Loss per diluted ordinary shareGAAP | $0.15 | – | – |
| Loss per basic ordinary shareGAAP | $ (0.15 ) | – | – |
| Non-GAAP net incomenon-GAAP | $8.2 million | – | – |
| Non-GAAP diluted earnings per ordinary sharenon-GAAP | $0.18 | – | – |
| Stock-based compensation expenseother | $ 22,700 (in thousands) | – | – |
| Acquisition-related costsother | $ 1,213 (in thousands) | – | – |
| Development project termination creditother | $ (9,000 ) (in thousands) | – | – |
| Cash and cash equivalentsGAAP | $ 101,850 (in thousands) | – | – |
| Marketable debt securitiesGAAP | $ 170,482 (in thousands) | – | – |
| Total cash, cash equivalents and marketable debt securitiesGAAP | $272.3 million | – | – |
| Accounts receivable, netGAAP | $ 37,440 (in thousands) | – | – |
| InventoriesGAAP | $ 76,923 (in thousands) | – | – |
| Total current assetsGAAP | $ 394,022 (in thousands) | – | – |
| Total assetsGAAP | $ 780,205 (in thousands) | – | – |
| Total current liabilitiesGAAP | $ 138,371 (in thousands) | – | – |
| Total liabilitiesGAAP | $ 159,889 (in thousands) | – | – |
| Total shareholders’ equityGAAP | $ 620,316 (in thousands) | – | – |
| Six-month revenueGAAP | $208.5 million | – | up 14.9% |
| Six-month gross marginGAAP | 58.0% | – | – |
| Six-month non-GAAP gross marginnon-GAAP | 59.6% | – | – |
| Six-month net lossGAAP | $24.8 million | – | – |
| Six-month non-GAAP net incomenon-GAAP | $13.3 million | – | – |
third quarter of fiscal year 2027, ending October 31, 2026 outlook
- Revenuebetween $115.0 million and $124.0 million
- Gross marginbetween 59.0% and 60.0% on a non-GAAP basis
- Operating expensesbetween $56.5 million and $59.5 million on a non-GAAP basis
What drove it
- Management said edge AI revenue reached record levels in Q2.
- Management cited balanced sequential growth in Auto and IoT markets.
- Management cited very strong growth from its 5nm CV75 and CV72 AI SoCs.
- The company introduced its first stand-alone AI Accelerator, X7.
- The company executed 7-year agreements to develop the indirect sales channel with Macnica and CapGemini.
Concerns
- GAAP gross margin was 57.7%, compared with 58.9% in the same period in fiscal 2026.
- Non-GAAP gross margin was 59.3%, compared with 60.5% in the same period in fiscal 2026.
- The company reported a GAAP net loss of $6.7 million.
- The quarter included a one-time $9.0 million reduction in GAAP research and development expense following release of a deposit liability on termination of a development project.
- Inventories were $ 76,923 (in thousands) as of July 31, 2026, compared with $ 52,246 (in thousands) as of January 31, 2026.
What to watch
- Third-quarter fiscal 2027 revenue guidance of between $115.0 million and $124.0 million.
- Third-quarter fiscal 2027 non-GAAP gross-margin guidance of between 59.0% and 60.0%.
- Third-quarter fiscal 2027 non-GAAP operating-expense guidance of between $56.5 million and $59.5 million.
- Revenue contribution from the CV75 and CV72 AI SoCs, the X7 AI Accelerator, and Auto and IoT markets.
- Progress in implementing the indirect sales-channel agreements with Macnica and CapGemini.
Balance sheet and cash flow
- Total cash, cash equivalents and marketable debt securities was $272.3 million at the end of the second quarter of fiscal 2027, compared with $277.8 million at the end of the prior quarter and $261.2 million at the end of the same quarter a year ago.
- Cash and cash equivalents were $ 101,850 (in thousands) as of July 31, 2026, compared with $ 191,019 (in thousands) as of January 31, 2026.
- Marketable debt securities were $ 170,482 (in thousands) as of July 31, 2026, compared with $ 121,552 (in thousands) as of January 31, 2026.
- Inventories were $ 76,923 (in thousands) as of July 31, 2026, compared with $ 52,246 (in thousands) as of January 31, 2026.
- Total shareholders’ equity was $ 620,316 (in thousands) as of July 31, 2026, compared with $ 594,789 (in thousands) as of January 31, 2026.
Analysis
Ambarella reported second-quarter fiscal 2027 revenue of $108.1 million, up 13.2% from $95.5 million in the same period in fiscal 2026. For the six months ended July 31, 2026, revenue was $208.5 million, up 14.9% from $181.4 million. Management said edge AI revenue reached record levels, with balanced sequential growth in Auto and IoT and very strong growth from the 5nm CV75 and CV72 AI SoCs.
Profitability improved year over year but remained split between GAAP and non-GAAP results. GAAP net loss narrowed to $6.7 million, or $0.15 per diluted ordinary share, from $20.0 million, or $0.47 per diluted ordinary share. Non-GAAP net income rose to $8.2 million, or $0.18 per diluted ordinary share, from $6.4 million, or $0.15 per diluted ordinary share. The improvement included a one-time $9.0 million reduction in GAAP research and development expense related to the release of a deposit liability after termination of a development project. The company excluded this non-recurring credit from non-GAAP operating expenses.
Margins moved lower year over year. GAAP gross margin was 57.7%, compared with 58.9%, while non-GAAP gross margin was 59.3%, compared with 60.5%. For the first six months, GAAP gross margin was 58.0%, compared with 59.4%, and non-GAAP gross margin was 59.6%, compared with 61.2%. GAAP operating expenses declined to $70,559 (in thousands) from $78,220 (in thousands), with research and development expense falling to $50,581 (in thousands) from $59,734 (in thousands), while selling, general and administrative expense increased to $19,978 (in thousands) from $18,486 (in thousands).
Liquidity remained substantial, with total cash, cash equivalents and marketable debt securities of $272.3 million, compared with $277.8 million at the end of the prior quarter and $261.2 million a year earlier. Inventories were $76,923 (in thousands) at July 31, 2026, versus $52,246 (in thousands) at January 31, 2026. Ambarella guided third-quarter fiscal 2027 revenue to between $115.0 million and $124.0 million, non-GAAP gross margin to between 59.0% and 60.0%, and non-GAAP operating expenses to between $56.5 million and $59.5 million. The guide places margin stability, operating-expense control, and execution on new products and indirect-channel agreements at the center of the next-quarter read.
Management, verbatim
Our edge AI revenue reached record levels in Q2, with balanced sequential growth in Auto and IoT markets with very strong growth from our 5nm CV75 and CV72 AI SoCs.
Fermi Wang, President & CEO
We are making significant progress with our strategic priorities to extend our market reach with new higher value products and the implementation of new go-to-market strategies.
Fermi Wang, President & CEO
Not in the filing
stated, not guessed- Prior-quarter revenue, gross margin, operating expenses, operating income or loss, net income or loss, and EPS were not reported.
- Non-GAAP operating income or loss for the reported quarter was not reported.
- Operating cash flow was not reported.
- Free cash flow was not reported.
- Debt was not reported.
- Share repurchases, dividends, and other capital returns were not reported.
- Segment revenue and segment-level financial results were not reported.
- A third-quarter fiscal 2027 tax-rate guidance figure was not reported.
- Prior guidance was not provided, so no comparison of reported results with prior guidance is available.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.