Ambarella (AMBA) Grew 2Q Revenue 13.2% and Signed 7-Year Channel Agreements. Can Edge-AI Scale Reverse Margin Compression?

Ambarella, Inc. (NASDAQ: AMBA) reported a 13.2% increase in fiscal second-quarter 2027 revenue to $108.1 million, up from $95.5 million a year earlier. The company's edge-AI revenue reached a record, driven by growth in automotive and Internet of Things markets, as well as strong performance from the 5-nanometer CV75 and CV72 systems-on-chips.

However, profitability was complex, with both GAAP gross margin and non-GAAP gross margin declining slightly. Ambarella, Inc. also signed seven-year channel agreements with distribution partner Macnica and systems-integration firm Capgemini. While these agreements expand indirect sales channels, it remains to be seen whether broader market access and a growing edge-AI portfolio can sufficiently reverse margin compression.

Third-quarter revenue guidance is expected to range between $115 million and $124 million, with non-GAAP gross margin anticipated to be between 59.0% and 60.0%.