Liam Farr

Liam Farr of Bank of America Corporation asked about the impact of elevated component pricing on demand, Ambiq's insulation from customer pricing pressure, and the expected gross margin trajectory for 2026, considering new, higher-complexity Apollo SKUs. He also inquired about the timing and expected scale of the ramp for the new global customer anticipated in 2026, asking if its socket size would be comparable to existing large wearable customers.

Answer

CFO Jeff Winzeler expressed satisfaction with 2025 margins, highlighting a 30%+ increase in gross profit dollars. He noted a focus on maximizing ASPs and controlling yields, but cautioned that broader industry cost dynamics and supply chain pressures could temper margin growth in the second half of 2026. CEO Fumihide Esaka confirmed the new customer's ramp started in Q1 2026 with very strong quarter-over-quarter growth, expecting it to be even bigger in 2027.

Liam Farr inquired about the impact of elevated component pricing on demand, Ambiq's insulation from pricing pressure, and the expected gross margin trajectory for the year. He also asked about the timing and expected size of the ramp for a new customer mentioned in 2025.

Answer

Jeff Winzeler (CFO) stated satisfaction with 2025 margin accomplishments, emphasizing focus on maximizing ASP and controlling yield, but acknowledged that broader industry cost dynamics and supply chain pressures could temper margin growth in the second half of 2026. Fumihide Esaka (CEO) clarified that the new customer is for 2026, starting its ramp in Q1 with strong quarter-over-quarter growth, and is expected to be even bigger in 2027.

Liam Farr inquired about any expected impacts or benefits from recent restrictions on a Chinese competitor in the drone market. He also asked if Ambarella is observing any impact on the overall demand environment due to component cost inflation, specifically DRAM.

Answer

President and CEO Fermi Wang stated there is no direct impact currently from Chinese drone competitor restrictions, but they are monitoring potential future impacts, noting a large drone market exists outside the U.S. Regarding component cost inflation, he indicated customer concerns are primarily about price increases rather than shortages, and while there's an indirect impact on low-gross-margin products, Ambarella does not expect a significant impact due to its customer portfolio, but continues to watch the dynamic situation.