Ambarella, Inc. is an edge AI semiconductor company known for its advanced video processing and analytics solutions, which cater to a variety of applications, including security cameras and automotive safety systems. The company reported strong financial results for the first quarter of fiscal year 2026, indicating a rising condition for its business.

For the first quarter ended April 30, 2025, Ambarella recorded revenue of $85.9 million, which represents a 57.6% increase from $54.5 million in the same period last year. This revenue figure was also up by 2.2% from the prior quarter. Gross margin on a non-GAAP basis stood at 62% in Q1, slightly above prior guidance due to a favorable product mix, yet down from 63.4% year-over-year.

The company achieved a non-GAAP net profit of $3 million, equivalent to $0.07 per diluted share, compared to a non-GAAP net loss of $10.5 million, or a loss of $0.26 per diluted share, from the previous year. In terms of operating expenses, Ambarella reported $51.8 million, marginally above the previous guidance range. Total cash and marketable securities increased to $259.4 million, showing an increase of $56 million year-over-year.

Ambarella raised its fiscal 2026 revenue growth estimate to a range of 19% to 25%, from the previously projected mid- to high-teens growth, indicating increased confidence in its edge AI business despite ongoing geopolitical uncertainties. Expectations for the second quarter include projected revenue between $86 million and $94 million, with a midpoint expectation at $90 million. Non-GAAP gross margin for Q2 is anticipated to be within the range of 60.5% to 62%.

The company noted an increase in its free cash flow to $10.2 million for the quarter, supported by operating cash inflow of $14.8 million. Days sales outstanding improved to 31 days from 33 days in the prior quarter, while days of inventory increased to 98 days, reflecting a 14% increase in inventory dollars to sustain customer demand.

Ambarella’s board approved an extension of its stock repurchase program for an additional 12 months, and during the first quarter, it repurchased 24,152 shares for approximately $1 million, leaving about $48 million available under the program.

Overall, Ambarella’s first quarter results indicate robust growth with significant year-over-year revenue advancements and a positive outlook for the following quarters.