Ambarella Q4 Earnings and Revenues Surpass Estimates, Increase Y/Y

Ambarella, Inc. AMBA reported stronger-than-expected fourth-quarter fiscal 2026 results. It reported fourth-quarter non-GAAP earnings of 13 cents per share, which surpassed the Zacks Consensus Estimate of 10 cents. The bottom line increased 18.2% from the year-ago quarter’s earnings of 11 cents.

Ambarella’s fourth-quarter revenues soared 20.1% year over year to $100.9 million and surpassed the Zacks Consensus Estimate of $100.3 million. Quarterly revenues also came ahead of the mid-point of management’s guidance range of $97-$103 million.

The strong top-line performance was primarily driven by robust revenue growth across the Internet of Things (IoT) and automotive segments. IoT revenues grew almost 50% year over year, mainly driven by the increased adoption of edge AI. The automotive segment’s revenues rose in the high single digits.

Ambarella’s Q4 Details

Ambarella had one logistics and original design manufacturer customer that contributed more than 10% to total revenues in the reported quarter. WT Microelectronics, a partner in Taiwan that serves multiple customers in Asia, accounted for 73.1% of the company’s fourth-quarter revenues.

The solid momentum in Ambarella’s CV flow system-on-a-chip in professional IP cameras continued in the reported quarter. The company expects CV2, CV5 and CV7 to be the key drivers of its revenue growth in fiscal 2027.

The gross margin on a non-GAAP basis for the fourth quarter of fiscal 2026 was 59.8%, which came at the midpoint of management’s guided range of 59-60.5%. Compared with the year-ago quarter, non-GAAP gross margin contracted 220 basis points. Non-GAAP operating expenses during the quarter were $56.5 million, which came at the midpoint of the prior guidance of $55-$58 million.

Balance Sheet & Cash Flow of AMBA

Ambarella’s cash, cash equivalents and marketable debt securities on hand at the end of the fourth quarter of fiscal 2026 were $312.6 million compared with $295.3 million at the end of the third quarter.

During the fourth quarter of fiscal 2026, AMBA generated operating cash flow of $81.9 million and free cash flow of $15 million.

Ambarella Initiates Q1 FY27 Guidance

It forecasts first-quarter fiscal 2027 revenues between $97 million and $103 million. It expects automotive revenues to increase sequentially, while IoT revenues are projected to decline on a quarter-over-quarter basis. The Zacks Consensus Estimate for first-quarter revenues is pinned at $96.2 million, indicating a year-over-year rise of approximately 12%.

For the fiscal first quarter, the non-GAAP gross margin is anticipated in the band of 59-60.5%. Non-GAAP operating expenses are projected in the range of $55-$58 million.

The consensus mark for first-quarter non-GAAP earnings per share is pinned at 7 cents.

AMBA’s Zacks Rank and Stocks to Consider

Currently, Ambarella carries a Zacks Rank #3 (Hold).

Analog Devices ADI, Amphenol APH and Monolithic Power Systems MPWR are some better-ranked stocks that investors can consider in the Zacks Computer and Technology sector. Analog Devices, Amphenol and Monolithic Power Systems carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Analog Devices’ fiscal 2026 earnings has moved upward by 4.9% over the past seven days to $11.10 per share, calling for an increase of 42.5% year over year. Analog Devices shares have climbed 58% in trailing 12 months.

The Zacks Consensus Estimate for Amphenol’s full-year 2026 earnings is pegged at $4.32 per share, revised upward by 2 cents over the past 30 days and suggests a year-over-year jump of 29.3%. Amphenol shares have soared 126.2% over the past year.

The Zacks Consensus Estimate for Monolithic Power Systems’ fiscal 2026 earnings has been revised upward to $21.63 per share from $21.07 over the past 30 days. Monolithic Power Systems shares have surged 93.9% over the past year.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research