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Ambarella - $AMBA - Earnings Analysis: Strong growth in edge AI revenue and the introduction of new products like the CV5 and CV7 families.

By sagebytes in Technology —

Business Model

Ambarella generates revenue from edge AI semiconductors used in various applications.

Revenue Sources

  • Edge AI products accounted for over 70% of total revenue in Q4 2025, representing record quarterly and annual AI revenue.
  • Key products include CV5 and CV7 families, with CV7 generating production revenue for the first time in Q4 2025.

Income Statement Analysis

  • Revenue increased 62.8% year-over-year, driven by growth in edge AI products.
  • GAAP net loss decreased from $(60.6) million to $(20.2) million year-over-year.
  • Gross margin increased slightly from 59.8% to 60.0%.

Balance Sheet Analysis

  • Total assets increased by 4.8% year-over-year.
  • Total shareholders' equity increased slightly by 0.3% year-over-year.
  • Total liabilities increased by 30.5% year-over-year.

Capital Allocation

Ambarella maintains a focus on R&D, particularly in edge AI technologies. They also prioritize efficient operations to drive positive operating leverage. They had their sixteenth consecutive year of positive free cash flow.

Management Commentary

Ambarella finished fiscal twenty twenty five with strong results and a positive outlook.

HAI is clearly established as our key revenue driver.

We achieved record AI revenue in Q4 as well as for the full year fiscal twenty twenty five.

With uncertainty related to government policy decisions, we have built conservatism into our outlook for the second half of fiscal twenty twenty six.

Overall Sentiment: Positive, with caution due to potential impacts of changing government policies.

Disclaimer: This report is for informational purposes only and not investment advice. The analysis is based on limited information and subject to change. Investing in securities involves risks, including potential loss of principal. Past performance doesn't guarantee future results. Always conduct your own research, understand the risks, and consult a financial professional before making investment decisions.