Ambarella - Q1 2025
May 30, 2024
Transcript
Operator (participant)
Welcome to Ambarella's Q1 FY 2025 Earnings Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star 11 on your telephone. If your question has been answered and you'd like to remove yourself from the queue, simply press star 11 again. As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Mr. Louis Gerhardy, Vice President, Corporate Development and Investor Relations. Please go ahead, sir.
Louis Gerhardy (VP of Corporate Development and Investor Relations)
Thank you, Jonathan, and good afternoon. Thank you for joining our Q1 FY 2025 Financial Results Conference Call. On the call with me today is Dr. Fermi Wang, President and CEO, and John Young, CFO. The primary purpose of today's call is to provide you with information regarding the results for our Q1 of FY 2025. The discussion today and the responses to your questions will contain forward-looking statements regarding our projected financial results, financial prospects, market growth, and demand for our solutions, among other things. These statements are based on currently available information and subject to risks, uncertainties, and assumptions. Should any of these risks or uncertainties materialize, or should our assumptions prove to be incorrect, our actual results could differ materially from these forward-looking statements. We're under no obligation to update these statements.
These risks, uncertainties, and assumptions, as well as other information on potential risk factors that could affect our financial results, are more fully described in the documents we file with the SEC. Access to our Q1 FY 2025 results, press release, transcripts, historical results, SEC filings, and a replay of today's call can be found on the Investor Relations page of our website. The content of today's call, as well as materials posted on our website, are Ambarella's property and cannot be reproduced or transcribed without our prior written consent. Fermi will now provide a business update for the quarter, then John will review the financial results and outlook, and we'll be available for your questions after that. Fermi?
Fermi Wang (CEO)
Okay. Thank you, Louis, and good afternoon. Thank you all for joining our call today. Our Q1 results were 1% above the midpoint of our guidance range, with revenue increasing 6% sequentially. As expected, both auto and IoT revenue increased sequentially, and the AI products were about two-thirds of our total revenue. As previously discussed, our customers are in the midst of recovering from a cyclical inventory correction, and the favorable impact from this is expected to carry into the Q2. We continue to expect our fiscal 2025 revenue to grow year-over-year, driven by both the cyclical tailwinds and the secular growth in our AI portfolio. The combination of these cyclical and secular forces is expected to enable our AI inference revenue to grow more than 30% in fiscal 2025.
Zooming out for a minute, the significant capacity being added to the AI training network infrastructure globally will fuel the ultimate deployment of AI inference at edge, where we participate in the market. The deployment of AI inference at edge enables end users to more practically take advantage of so many different AI breakthroughs. As focus on AI at edge of networks increases, we see AI inferencing proliferating in multiple areas, and we believe we are well positioned to take advantage of this. In fact, we are already in the early stage of demonstrating how it may play out for us. In Q1, for example, our customer engagement included our first passenger vehicle wins for our 5-nanometer CV3-AD family of AI central domain controllers.
We added another CV3-AD win in the commercial vehicle market, secured multiple enterprise-class AI inferencing wins, and even in other IoT cameras, we are reporting additional wins for our 5-nanometer CV5 AI process. In the midst of this great change, our opportunity and the challenge is to develop AI technology and products that not only are extremely efficient for edge deployment but also flexible enough to execute a very wide range of AI workload across all these disparate applications. We are already in mass production with our AI products for video-intensive CNN networks such as detection classification, fusion, planning, stitching, mapping, tracking, framing, auto editing, and the new network image signal processing. Now, our third generation of AI technology integrated into our CV3-AD and the CV7 series of SoC can support transformer networks for a variety of generative AI applications.
I would now like to describe customer engagements that can offer some indication how it can play out for us. As you know, we have made significant investment into our CV3-AD family of automotive AI domain controllers, and we expect the CV3-AD family to be a major revenue driver. So we are pleased to announce our first CV3-AD family wins in the passenger vehicle market, which complements our ongoing wins with the CV3-AD family in the commercial vehicle market. In April, during the Beijing Auto Show, we reached a strategic collaboration agreement with a battery electric vehicle company in China. This company will use our CV3-AD AI domain controllers in new passenger vehicle models. This is an important development for us in several regards.
First, major by the number of EV delivery in calendar 2023, this OEM is considered one of the top five new EV companies in China. While most of the OEM deliveries were in China last year, the company has an impressive plan for globalization of its business. Second, Chinese automotive OEMs are aggressively and successfully adopting next-generation technology into their vehicles, which aligns with our strategy to intersect the safety and autonomy domain with next-generation technology, in particular, Level 2+. For example, to improve accuracy, many OEMs in China have aggressively adopted the BEVFormer AI framework for 3D perception tasks in its autonomous driving software stack. And this high-performance framework can leverage to a high degree the unique capability in our CV3-AD AI inference processors, including the ability to process transformers at low power.
Third, the efficiency and the scalability of our CV3-AD family portfolio is also a major factor in the collaboration with Ambarella, as the OEM can reuse this software on low, mid, and high-end vehicles. In April, we added another CV3-AD family win in the commercial vehicle market with the announcement of a strategic collaboration with SANY Group. SANY is one of the world's largest engineering machinery manufacturers providing heavy-duty commercial vehicles to the global market. SANY intends to leverage Ambarella's CV3-AD family of automotive AI domain controllers to develop advanced automated driving solutions on its next-generation commercial and special-purpose vehicles. The companies will collaborate on the joint development and promotion of high-performance, highly integrated automated driving solutions with SANY's goal of achieving start of production for at least one model by calendar year 2025.
At the Beijing Auto Show in April, Tier 1 Neusoft Reach announced a strategic partnership with Ambarella. The companies plan to expand on their existing relationship to jointly promote and explore AI-based product technology and market development in areas including autonomous driving and driver monitoring. Neusoft's third-generation forward-facing intelligent camera XCube 3.0 is powered by Ambarella's CV22 AI Vision SoC to target Level 2 and Level 2+ autonomy levels and has already been mass-produced and deployed by automotive OEMs. We are pleased to announce that Seeing Machines, the leading provider of driver monitoring system software, selected our CV25 for its own aftermarket system for commercial vehicles. The Guardian Generation 3 meets the European Commission's General Safety Regulation for Drowsiness Detection, a requirement for all the new cars, vans, trucks, and buses across Europe.
And in April, at the ISC West Security Exhibition, we successfully demonstrated the latest generative AI technology running Vision Language Model (VLMs) on our N1 and CV72 SoCs. Our demonstration includes using the multi-modal VLMs to search video recording to detect objects defined by tags and provide near-instantaneous results without the need for training specifically for that object. This capability opens up a whole new range of AI-based search capability for enterprise cameras and premise-based AI systems. Our third-generation AI inference technology includes specific support needed to efficiently run these new classes of networks. During the ISC West, we also announced and demonstrated our new 5-nanometer CV75 AI SoC, which provides the performance required to run the latest VLMs as well as AI-based IQ enhancement.
This capability to very efficiently run these cutting-edge AI technologies is highly sought after for cost and power constraint AI cameras used in enterprise, smart city, retail stores, robotic access control, and AI-based consumer devices. At the Enterprise Connect conference in March, Poly, a leading global provider of workplace collaboration solutions and the wholly owned unit HP, launched its Studio E360. This center-of-table system utilizes a single 5-nanometer CV5 for four 8-megapixel cameras with AI inference processing, choosing the optimal framing angle for in-room participants. Also in Korea, the camera activity for our AI SoCs remains high, with the leading security camera maker Hanwha introduced new AI models based on our CV22 and the CV2 AI SoCs. And IDIS introduced CV25-based models, and the C-PRO introduced dual-sensor AI camera based on CV22.
In the other IoT market, we are pleased to see our 5-nanometer CV5 AI inference processor being utilized in another consumer cameras to significantly improve both image quality and to automate certain user interface functions. Insta360 introduced its X4 action camera in April with dual sensor for 360-degree 8K capture. In conclusion, I mentioned last quarter our goals are to restore revenue growth and profitability while continuing to drive our strategic R&D priorities. Q1 represented a step in the right direction, most significantly highlighted by our first passenger vehicle win for the CV3-AD family. But the expanding breadth of our CV customer engagement stands out, and we expect this to build a broad foundation upon which multiple AI applications can drive revenue growth and result in positive earning leverage for shareholders.
The further commercialization and monetization of our technology and the products is of utmost importance to us, and I am excited about the opportunity before us and what we will achieve in the years ahead. With that, John will now discuss the Q1 results and the outlook in more detail.
John Young (CFO)
Thank you, Fermi. I'll now review the financial highlights for the Q1 FY 2025, ending April 30th, 2024. I will also provide a financial outlook for our Q2 of FY 2025, ending July 31st, 2024. I'll be discussing non-GAAP results and ask that you refer to today's press release for a detailed reconciliation of GAAP to non-GAAP results. For non-GAAP reporting, we have eliminated stock-based compensation expense along with acquisition-related costs adjusted for the impact of taxes. For fiscal Q1, revenue was $54.5 million, 1% above the midpoint of our prior guidance range, up 6% from the prior quarter, and down 12% year over year. Non-GAAP gross margin for fiscal Q1 was 63.4%, above the high end of our prior guidance range by 0.4%.
Non-GAAP operating expense was $46.7 million, approximately $2.6 million higher than the prior quarter, and $800 million or excuse me, $800,000 lower than the midpoint of our prior guidance range of $46-$49 million, driven by continued expense management and the timing of spending between quarters. We remain on track to our internal product development milestones. Q1 net interest and other income was $2.3 million. Q1 non-GAAP tax provision was approximately $607,000. We reported a non-GAAP net loss of $10.5 million or a $0.26 loss per diluted share. Now I'll turn to our balance sheet and cash flow. Fiscal Q1 cash and marketable securities decreased $16.6 million from the prior quarter to $203.3 million. Receivables days of sales outstanding increased from 44 days in the prior quarter to 47 days, while days of inventory decreased from 131 days to 123 days.
Inventory dollars declined 2% sequentially and declined 31% from a year ago. Operating cash outflow was $15 million for the quarter. Capital expenditures for tangible and intangible assets were $1.1 million. We had two logistics and ODM companies representing 10% or more of our revenue in Q1. WT Microelectronics, a fulfillment partner in Taiwan that ships to multiple customers in Asia, came in at 62% of revenue for the Q1. Chicony, an ODM who manufactures for multiple end customers, was 13% of revenue for the quarter. I'll now discuss the outlook for the Q2 of FY 2025. We remain confident our business is continuing to recover from the cyclical correction led by our AI inference products. For fiscal Q2, we estimate our total revenue will be in the range of $60-$64 million. We expect sequential growth in both IoT and auto.
We expect fiscal Q2 non-GAAP gross margin to be in the range of 62.5%-64%. We expect non-GAAP OPEX in the Q2 to be in the range of $47.5-$49.5 million, with the increase compared to Q1 driven by increased headcount and engineering-related expense, including our first 2-nanometer SoC project. We estimate net interest income to be approximately $1.8 million, our non-GAAP tax expense to be approximately $600,000, and our diluted share count to be approximately 41.1 million shares. Ambarella will be participating in Bank of America's Global Technology Conference on Wednesday, June 5th, in San Francisco, Mizuho's Technology Conference on June 12th in New York City, and Rosenblatt's Virtual Age of AI Conference on June 13th. We hope to see you at one of these events. Please contact us for more details. Thank you for joining our call today.
And with that, I will turn the call over to the operator for questions.
Operator (participant)
Certainly. One moment, ladies and gentlemen, for the first question. As a reminder, if you do have a question at this time, please press star 11. Our first question for today comes from the line of Christopher Rolland from Susquehanna. Your question, please.
Christopher Rolland (Analyst)
Hey, guys. Can you hear me?
Fermi Wang (CEO)
Yes.
Christopher Rolland (Analyst)
Great. Thanks for the question. You brought up VLMs on the call. Just wanted to know a little bit more about that application. Does that increase your TAM overall? Is this additive to what you're doing in, for example, LLMs? How should we think about that? Thanks.
Fermi Wang (CEO)
Right. So we start talking about LLM and start demoing at CES this year. And then we continue to watch the potential application that we can use with our solution for our customers. And we identify Vision Language Model, which is really a large language model that can respond to tags for search different objects or using that to describe different video things. And we have a live demo. In fact, we're welcome to give to Louis a setup live demo for you how the Vision Language Model used with our current enterprise customer or other potential customer in that space. So this definitely is a brand new application that's being identified by the market and customer and we're engaging with our current customer, particularly on the enterprise and security camera market.
They show extreme interest in this product because you can imagine that this is really a model that can replace the people who used to monitor the different cameras in a control center. You can use a large language model not to give you early warning but also using tags to do a search of different objects without really training for those objects. I think that's really a breakthrough for the enterprise side. We expect that some of our customers will kick off projects with us with VLMs in the near future. We can use both N1 as well as CV72 for that product.
John Young (CFO)
Great. Thanks, Fermi. And then on the auto opportunity, making some progress here sounds like on the Chinese EV side of things. Perhaps you can talk about the pipeline, kind of how you see expanding engagements of late here that you're seeing and whether you think there's going to be more to come and whether any of these could actually be implementing your software as well. Thanks.
Fermi Wang (CEO)
Right. So first of all, I definitely believe there will be more to come. And I also believe that the first design win is really a sure thing that what we have been talking about, our strength, which is we can run really Transformer most advanced network very efficiently in low power. And also we have a scalable architecture that can really address using sensor fusion to address from low-end to the high-end vehicles. And also that the power consumption that we are much lower than our competitors give significant power advantages in the design win. So that really is the reason we won. But also, I think it's important to point it out that it's just like an EV market. Chinese EV automakers are really aggressive by pushing technology envelope.
For one of them adopting our Level 2+ solution will help us for other potential OEM design wins that we're building on.
John Young (CFO)
Thanks, Fermi.
Operator (participant)
Thank you. One moment for our next question. And our next question comes from the line of Ethan Potasnick from TD Cowen. Your question, please.
Ethan Potasnick (Analyst)
Yeah. Hi, everybody. This is Ethan Potasnick on for Matt Ramsay. Congrats on the great result. I wanted to ask, is the passenger vehicle wing you guys discussed tonight likely to get CV3 to the tipping point with regards to wins at other OEMs? Are there other OEMs waiting to see maybe another one kind of go first? Maybe if you guys could discuss those dynamics.
Fermi Wang (CEO)
Right. So first of all, I think the lifetime value of this design win is meaningful and also material for us. And also that they are very aggressive. The target MP date is the end of 2025, early 2026. And that will help us to really take our CV3-AD platform into production, therefore provide a mature solution to other companies who is considering our current solution. So I definitely believe that not only this design win is a help to our pipeline, but also going to be a major help for us to secure other design wins in the near future.
Ethan Potasnick (Analyst)
Okay. Understood. And as my follow-up, you guys gave a lot of good information around the AI inference opportunity with the revenue expected to kind of grow 30%, I think you guys said, in fiscal 2025. And you called out some progress. I think it was enterprise applications. I was wondering how the early stages of this opportunity is playing out, what sort of impact some of the announcements you guys made at CES, I think it was the N1 SoC and the Cooper development platform. I mean, what's kind of driving that? How is the roadmap progressing? Any early feedback and any additional insight would be helpful.
Fermi Wang (CEO)
Right. So just to maybe refresh our Gen AI strategy, we definitely intend to leverage our current existing third-generation AI inference engine into Gen AI and LLM. And we demoed, like you said, CES N1 with LLaVA demo. And then at the ISCWES, we demoed with VLM running on both N1 and CV7. So our strategy for current generation has become very clear. First of all, we're going to focus on AI application, both for AI camera as well as AI servers. Two, we'll focus on the workload that we really can take advantage of our current silicon. And so that's really enterprise market as well as some adjacent market that can use those LLaVA model as well as VLM models.
We think we continue to believe that our opportunity for Gen AI revenues in 2026. We are not only demoing, we're sampling N1 and the CV72 to our key customers who are interested in Gen AI application. So that's our first generation. Also, as you can see, I think John mentioned that we are investing on 2-nanometer process node. You can think that's a preparation for our next generation Gen AI solution. Although we didn't talk about our plan for that yet, we are trying to work on that. But we believe that with our 2-nanometer technology development, will significantly help us on the technology side for our roadmap.
Operator (participant)
Thank you. One moment for our next question. Our next question comes from the line of Joe Moore from Morgan Stanley. Your question, please.
Joe Moore (Analyst)
Great. Thank you. In terms of the passenger car wing in China, can you talk about I think you mentioned it as an L2+, if I heard you right, type of opportunity? Can you kind of describe how many cameras per car and what capabilities you could offer there?
Fermi Wang (CEO)
Yes. So first of all, it is an L2+ car. Because they have different models, it's anywhere from 7-10 cameras plus five radars configuration. It's designed to do it from the highway level to city levels of autonomous driving.
Joe Moore (Analyst)
Great. Thank you for that. And then, was this customer I know you have a probability-weighted funnel, was this customer somebody that you had anticipated had some probability within that funnel?
Fermi Wang (CEO)
Yes. And now, I think with the next funnel discussion, they should be in the one category instead of the probability category.
Joe Moore (Analyst)
Perfect. Thank you so much.
Fermi Wang (CEO)
Thank you.
Operator (participant)
Thank you. One moment for our next question. And our next question comes from the line of Kevin Cassidy from Rosenblatt Securities. Your question, please.
Kevin Cassidy (Analyst)
Thanks. And congratulations on the great results and the design win momentum. And maybe, Fermi, maybe you hinted I was going to ask more questions about the 2-nanometer process technology. Do you have a timeline for when you'd have first silicon? And are you staying with Samsung, or will this be with TSMC?
Fermi Wang (CEO)
Right. This 2-nanometer will be Samsung 2-nanometer. We plan to tape out second half next year and get ready to go into production with 2026.
Kevin Cassidy (Analyst)
Okay. Great. Maybe just to follow up on Joe's question, you mentioned that it's 7-10 cameras plus radar. Is that your radar in the design?
Fermi Wang (CEO)
We haven't talked about that yet.
Kevin Cassidy (Analyst)
Okay. All right. Maybe I'll go to an easier question with just your backlog visibility. If you're saying you're going to see growth in fiscal year 2025, can you talk about your backlog visibility?
Fermi Wang (CEO)
Yes. Our backlog visibility is getting much better than before. In fact, that's the reason we feel comfortable that with the street's consensus of $250 million revenue forecast this year. Our lead times are really in the 24 weeks. And that tells us that we should have a clear visibility to middle of Q4, reminding you that our Q4 is to January. We see clear booking for Q3 and Q4. That's why we continue to feel comfortable with our guidance.
Kevin Cassidy (Analyst)
Okay. Great. Thank you.
Fermi Wang (CEO)
However, let me add one more sentence. I think that while we are comfortable with the $250 million consensus level, we believe there is a seasonality in Q4. So I think that's something we should consider. While we see the visibility, we definitely believe that we're going to continue to see the trend of Q2 to Q3 growth from Q3 to Q4, just like the normal seasonality before the COVID. We should have the seasonality in there.
Kevin Cassidy (Analyst)
Okay. Understood.
Operator (participant)
Thank you. One moment for our next question. Our next question comes from the line of Quinn Bolton from Needham & Company. Your question, please.
Nick Doyle (Analyst)
Hey. This is Nick Doyle on for Quinn. Thanks for taking our questions. Maybe just zooming out a little bit, could you give us a pulse on the Chinese auto market overall? How do you see current EV demand and supply? And then you mentioned two CV3 wins in the passenger and commercial markets. Can you size those opportunities at all? Thanks.
Fermi Wang (CEO)
Right. So first of all, we don't play on the EV market. We play on the autonomous driving market. But they are very much correlated. I think what happened in EV is that Chinese automaker continue to aggressively push the technology envelope on the EV side. We see the same trend on the autonomous driving technology side. I think, for example, that almost all the RFQ that we're building in China, all of them require most advanced network like BEVFormer, very L2+, city-level autonomous. All of that is really showing me that Chinese automaker are very aggressive to push the technology envelope. And we believe that's played to our strength. And we believe that we can take advantage of that.
Although that EV market shows some slowness in terms of total market size, but I think that from the AD market point of view, we still believe that the growth is continuing to be there. We expect that the majority of the EV cars will have a level two, level two-plus system in the coming years, near term.
Nick Doyle (Analyst)
Okay. The gross margins were a bit of a bright spot in the quarter-end guide. Could you expand on what's driving that? Thanks.
John Young (CFO)
Yeah. So essentially, it's mix. We had a little bit higher contribution than we had forecast for customer NRE projects that came through in the quarter. That's the main driver.
Operator (participant)
Thank you. One moment for our next question. Our next question comes from Tore Svanberg from Stifel. Your question, please.
Jeremy Kwan (Analyst)
Yes. This is Jeremy calling for Tore. And let me add my congrats on the growing CV3 design wins. Maybe a quick follow-up on the gross margin and the NREs. Is the NRE something that is kind of like an ongoing project or sustainable in terms of contribution over the longer term? Just want to see the impact, I guess, to gross margins over the next 12-18 months. But that's my first question.
John Young (CFO)
Okay. So yes, it is a project that will be ongoing in the near future. Our long-term model, though, is 59%-62% for gross margins. I think there may be a temporary blip-up for this quarter, next quarter potentially, as we've guided. But I think if you're thinking about long-term modeling, I wouldn't see this as a new norm necessarily.
Jeremy Kwan (Analyst)
Got it. And I guess in terms of this passenger vehicle design win, can you give us a little bit more detail in terms of how many car models are impacted? If there's a way to kind of weight it in terms of how many of the new vehicles are likely to see this incorporated? And also, I understand the ESPs, even in L2+, can have a pretty wide range, maybe 40 at the low end, 200 at the higher end. Can you give us a ballpark where this sits in terms of the design win on the ESP side? Thank you.
Fermi Wang (CEO)
Right. So first of all, currently, this OEM has only a portion of the model has level two-plus in there. But I do believe, just like any other Chinese OEM we talk to, they want to move to level two-plus to earlier models because they view that as a huge differentiation. So I think we expect when we go into production with this customer, all of the car they ship will have some kind of level two-plus solution there. As we talked about in the past, in our low end to a high-end chip, it can go anywhere from $50-$400. And the midpoint is $100+ to $200. That's the range we're looking at from an ASP point of view. And we'll start addressing more what we can disclose more with our customer.
In terms of the size of this true opportunity, I really think that it's significant. I think it's in the north of $100 million easily for the first design win. But we think that we can achieve more if we can continue to work with our customer, getting more models and more other components into their car.
Jeremy Kwan (Analyst)
Thank you, Fermi. Sorry. I didn't quite catch how many millions was for the first design win?
Fermi Wang (CEO)
I said north of $100 million.
Jeremy Kwan (Analyst)
low to $100 million.
John Young (CFO)
North.
Jeremy Kwan (Analyst)
North. Got it. Thank you.
Operator (participant)
Thank you. One moment for our next question. Our next question comes from the line of David O'Connor from BNP Paribas. Your question, please.
David O'Connor (Analyst)
Yeah. Great. Thanks for taking my question, guys. Maybe just going back to the seasonality in Q4, just looking back there pre-COVID, as you talked about, seemed to be down like 15%-20% quarter-over-quarter. Is that kind of the type of ballpark or zip code we should be thinking of for that Q4 seasonality? Or is it a bit more muted than that given the secular trends that you're seeing? That's my first question.
John Young (CFO)
Yeah. So I think it's relatively difficult for us to give crisp visibility out into Q4. But I think if you're thinking about the full-year guidance of, or I should say, the consensus of $250 million, I think that's definitely reasonable at this point. We don't have any issue with that. I think, though, the percentages you're talking about are within reason.
Fermi Wang (CEO)
We have seen this kind of seasonality before COVID time. I think right now, after the COVID's done, after all the inventory correction is done, I think we're back to the normal seasonality. With the downturn, we haven't provided guidance in Q4. I think if you look at the past history, that will be probably if you look at the past, that will be similar to the seasonality we've seen before. Majority of that is in the IoT side but a little bit on the auto side.
David O'Connor (Analyst)
Okay. Got it. That's helpful. Thanks, guys. And then maybe just to follow on the CV3 win with the EV passenger vehicle. Just to clarify, I mean, this is separate to the Conti-Bosch agreement. Did it have anything to do with that? And can you update us as well just on the status of those agreements, where they stand at the moment? Thank you.
Fermi Wang (CEO)
Yes. First of all, this design win has nothing to do with the Conti or Bosch. This Chinese guy is really using a Chinese supply chain. And in terms of Conti, I would say that we continue to have very strong collaboration both on the SoC and the software side. And also, we continue to make progress moving toward our first SOP project that we talked about probably a year ago. And that target, MP time, is currently 2027. We continue to make great progress on that. And also, we're actively bidding on the RFI RFQs with Conti on this. So with the Bosch side, also, we don't have a software development collaboration. But we do have working with them on the RFI RFQs, bidding on some of the European design wins.
David O'Connor (Analyst)
Great. That's helpful. Thanks, guys.
John Young (CFO)
Thank you.
Operator (participant)
Thank you. One moment for our next question. Our next question comes from the line of Richard Shannon from Craig-Hallum Capital Group. Your question, please.
Richard Shannon (Analyst)
Well, hi. Guys, thanks for taking my questions. Maybe touching on your comments about AI inference growing 30% or more this year, maybe give us a sense here of how much this is weighted towards IoT versus automotive and then any kind of general sense here of how much this is unit versus ASP-driven. Then it seems like if you do the basic math using the fiscal 2025%, it seems like AI would probably get a little over 70% of sales this year. Is that a decent math on that?
Fermi Wang (CEO)
I think your math is correct. Let me give you more color. I think, first of all, we have a lot of design wins on the CV5 and CV72. And particularly CV5, we talk about that getting into production this year. And we talk about that we're going to ship 1 million units of CV5 this year. And consider the ASP is around $35 plus/minus. And that really helps us to get an ASP jump as well as revenue growth. So that's one side of CV growth. The other side of CV growth is that we believe CV72, we are getting into production with enterprise IoT. And that's another one. But also, however, I also want to point out that even in automotive, we continue to ship.
For example, we just announced a design win with a new OEM on the ADAS side with CV22 and as well as a few other design wins we had with automotive. So I think both IoT and auto will continue to have CV growth in there. But I think IoT is probably more.
Richard Shannon (Analyst)
Okay. Perfect. That's helpful, Fermi. Follow-up question here on a different topic than that of kind of China-US geopolitics here, obviously in the context of a couple of nice wins here with their CV3-AD domain controller going into China. Just wondering if there's any change in kind of the undercurrent of geopolitics that might make it a little bit more of a headwind to continue to do well there. Just want to get a general sense here if there's been any real change there.
Fermi Wang (CEO)
No, I don't think there's any meaningful change in the last three months. I think the geopolitical situation continues to be an issue that we need to watch and deal with. I think that we talk about that Chinese market, Chinese customers really want to make sure they use some local components. But however, I think with the advantage we have, especially for customers who are focusing on the export business, they also need to use silicon from outside China. So I think that's kind of the balanced view we have right now. And that hasn't changed. We haven't seen any new regulation from any regulation to change these AI limitations.
Richard Shannon (Analyst)
Okay. Perfect. Great. Thank you, Fermi.
Operator (participant)
Thank you. One moment for our next question. As a reminder, if you have a question at this time, please press star 11. Our next question comes from the line of Kevin Garrigan from WestPark Capital. Your question, please.
Kevin Garrigan (Equity Research Analyst)
Yeah. Great. Thanks for taking my questions. And let me echo my congrats on the strong results. Fermi, on the automotive side, I know you noted that you're more focused on autonomous driving and the market is pushing more towards EVs. But are you seeing combustion engine opportunities? And are any kind of automotive OEMs backtracking from originally thinking about developing EVs to maybe giving you opportunities in combustion engine or hybrid vehicles as well?
Fermi Wang (CEO)
Absolutely. I don't think ADAS is exclusively for EV at all. I think we continue to see RFQs for combustion engine cars and also hybrid cars. So I won't say that's exclusive. But just that first design win just happened to be a pure EV company. And that also shows you that all the EV companies trying to find possible differentiations other than just the battery life but also adding ADAS capabilities is one way they can differentiate. So I think that this ADAS application will go to all kinds of cars, including both EV as well as combustion engines.
Kevin Garrigan (Equity Research Analyst)
Okay. Perfect. That makes a ton of sense. And then going off of Richard's previous question, you noted in your prepared remarks, AI inference is proliferating in multiple areas, and your AI revenue would grow at 30% this year. You have a bunch of design wins in the pipeline. Is the AI inference market kind of taking off as quickly or not as quickly as you originally were kind of thinking? And is it developing into as large of an opportunity as you had imagined?
Fermi Wang (CEO)
Well, for the IoT side, I think we do think that enterprise IoT is growing as fast as we expected. We get some surprise on the other IoT space. But I think that one thing that really didn't grow as much as we expected is automotive. We have been invested heavily on the CV3-AD market. And we got the first design win. I think there's a lot of things for us to work on to make sure that we can continue to take advantage of our investment in an AI inference engine in automotive markets.
Kevin Garrigan (Equity Research Analyst)
Okay. Perfect. Thank you.
Operator (participant)
Thank you. One moment for our next question. Our next question is a follow-up from the line of Tore Svanberg from Stifel. Your question, please.
Jeremy Kwan (Analyst)
Hi. Yes. This is Jeremy again. Just a housekeeping question. Did you provide the split between auto and IoT? And if you could, just refresh us on what those splits were for the last couple of quarters?
Fermi Wang (CEO)
You're talking about revenue split between auto and IoT? Is that question?
Jeremy Kwan (Analyst)
Yes. That's right.
Fermi Wang (CEO)
Yeah. If you look at last year, I think IoT was roughly 2/3 of total revenue, and auto was 1/3. If you look inside IoT, enterprise security still continued to be the largest portion. Last year, consumer IoT and other IoT are roughly the same size. But if you look at the growth this year, I think that inside IoT, enterprise, and other side of IoT is growing faster. And auto also expects growth this year.
Jeremy Kwan (Analyst)
Great. Thank you very much.
Operator (participant)
Thank you. This does conclude the question-and-answer session of today's program. I'd like to hand the program back to Dr. Fermi Wang for any further remarks.
Fermi Wang (CEO)
Thank you, everybody, for joining us today. I'm looking forward to talking to you in a conference call next time. Thank you.
John Young (CFO)
Thank you.
Operator (participant)
Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.