Ambarella is entering the second half of fiscal 2027 with increasing momentum in edge artificial intelligence as demand for AI processing moves beyond centralized data centers and into vehicles, cameras, industrial systems and autonomous machines. The semiconductor company’s latest results show continued double-digit revenue growth, while its newest 5nm AI chips are beginning to contribute more materially to the business.

Revenue Growth Continues as AI Products Scale

Ambarella reported $108.1 million in Q2 FY27 revenue, up 13.2% from $95.5 million a year earlier and slightly above the approximately $108 million analyst estimate. For the first six months of fiscal 2027, revenue reached $208.5 million, an increase of 14.9% from the comparable period last year.

Adjusted earnings per share increased 20% to $0.18, compared with $0.15 a year earlier and approximately $0.17 expected by analysts. Non-GAAP net income increased 28% to $8.2 million, although non-GAAP gross margin declined 120 basis points year over year to 59.3%.

The company continues to invest heavily in its transition from traditional computer-vision processors toward higher-value AI systems-on-chip. That transition is important because more sophisticated AI workloads generally require greater computing capability and can support higher average selling prices than Ambarella’s earlier-generation products.

CV75 and CV72 Strengthen Ambarella’s Edge AI Position

Management said edge AI revenue reached record levels during the second quarter, with balanced sequential growth across automotive and IoT markets. The company specifically highlighted strong growth from its 5nm CV75 and CV72 AI SoCs, which support advanced computer vision as well as transformer-based generative and agentic AI workloads.

Ambarella’s strategy is built around moving AI inference closer to where data is generated rather than sending every workload to centralized cloud infrastructure. In automotive applications, this can include driver-assistance and autonomous systems; in IoT and physical security, it can support intelligent cameras and real-time analytics; while robotics and industrial systems can use the same architecture for perception and decision-making.

The broader market opportunity is therefore expanding beyond conventional surveillance cameras. Ambarella has described a growing serviceable market for edge AI and physical AI, reflecting the increasing deployment of AI-enabled machines that must process information locally, often under constraints involving power consumption, latency and connectivity.

Q3 Outlook Points to Continued Expansion

For the third quarter, Ambarella expects revenue between $115 million and $124 million, implying continued year-over-year growth from the $108.5 million generated in the same quarter last year. The company expects non-GAAP gross margin of approximately 59% to 60% and operating expenses of $56.5 million to $59.5 million.

Ambarella ended the quarter with $272.3 million in cash and marketable debt securities, providing resources to support research, product development and expansion into emerging AI markets. The company also received a $9 million reduction in a one-time development-project termination credit, which affects the quarter’s financial comparison but does not represent recurring operating revenue.

The strategic opportunity extends beyond the current generation of products. Ambarella’s product roadmap includes newer AI processors designed for increasingly sophisticated workloads, while the company has also established long-term relationships in the automotive and edge-AI ecosystem. In May, for example, Ambarella announced a long-term edge AI agreement with Hanwha that it said could represent more than $800 million in potential revenue.

Going forward, the key indicators will be whether CV75 and CV72 continue to scale, whether automotive and IoT customers accelerate production deployments, and whether Ambarella can maintain healthy margins as AI semiconductor competition intensifies. The company’s ability to convert record edge-AI revenue into sustained growth will also depend on the pace of physical-AI adoption across robotics, automotive, industrial and security applications. The Q3 revenue range provides an early measure of whether the current product cycle can support a broader acceleration through fiscal 2027 and beyond.