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AMBQ earnings / call

AMBQ Q3 2026 earnings call transcript, November 10, 2026

Ambiq Micro's Third Quarter 2026 Financial Results

ReplayOfficial webcast

Key takeaways from this call : results vs expectations, guidance, what analysts asked

  • Jeffrey Winzeler 45%
  • Management 13%
  • WhoMe 1%
  • Analysts 25%
  • Operator 8%

Management

  • Jeffrey Winzeler

    Chief Financial Officer

    8 min

  • WhoMe

    Management

    <1 min

Analysts · 3

Transcribed automatically by Lician from the company's public webcast; it can contain errors and speaker names are best effort.

  1. Prepared remarks0:00

  2. Atomic 110 remains on track for tape out by year end, with customer sampling expected in the first quarter of 2027. Customer engagement is already underway through early development platforms, allowing us to incorporate valuable feedback ahead of silicon. Atomic 120 will build on the same architecture and 12 nanometer spot platform. extending the family to more compute-intensive applications, including vision. Apollo 340 is also expected to begin customer sampling in 2027. In closing, we delivered another strong quarter with accelerating demand across the business. Our customer base and design funnel continue to expand and diversify as growing AI adoption is increasing the need for ultra-low power. compute. With our differentiated technology and expanding portfolio, we believe AMBQ is well positioned to capture that opportunity. We remain focused on executing against the demand in front of us while investing to extend our leadership over the long term. With that, I will turn it over to Jeff to cover the financials.

  3. Jeffrey WinzelerChief Financial Officer

    Thank you, Humi, and good morning, everyone. Our strong top line performance translated into growth in gross profit, which more than doubled year over year and grew faster than net sales. This reflects the impact capturing the increasing value we provide to our customers. Through our differentiated spot platform. An active focus on reducing product costs and scaling the business. Turning to the details of our third quarter financial results. Net sales were $38.1 million. Increasing 110% year over year. This was driven by strong volume growth along with a higher ASP. As our product mix continued to shift toward more advanced solutions. During the quarter we continue to see the benefit. of customer diversification with sales outside our major customers. Increasing more than 270% year over year. Sales to end customers in China represented 17.3% of. total net sales compared to 6.7% in the prior year period. This reflects continued expansion within our existing high value customer base in China. Non-GAAP gross profit increase. 128% year-over-year to $18.6 million. Non-GAAP gross margin was 48.7%, up 390 basis points year-over-year. While we continue to see higher input and supply chain costs during the quarter, our focus on The main difference. Our focus on manufacturing efficiencies is helping to offset these pressures. At the same time, we are realizing greater value from Spot as we enable increasingly sophisticated AI capabilities. Turning to operating expenses.

  4. Non-GAAP R&D was 13.1 million, up 90.1% year-over-year, reflecting investments necessary to support multiple product development programs currently underway. Non-GAAP SG&A was 9.6 million. Up 53.8% year-over-year, driven by higher compensation-related and public company costs as we continue to scale the business. Third quarter non-GAAP net loss was 1.2 million, a 2.8 million improvement. Year-over-year, non-GAAP net loss per share was $0.05, based on 24.3 million average shares outstanding. Our balance sheet remains strong, with $363.5 million of cash and cash equivalents. And no debt. Looking ahead, customer forecasts and order activity provide clear visibility into accelerating demand. And despite tighter supply conditions, we remain confident in our ability to support customers. Execute against the opportunities ahead. For the fourth quarter, we expect net sales in the range of 43.5 million to 44.5 million. Position us for our seventh consecutive quarter. Of net sales growth. Non-GAAP gross margin is expected to be roughly flat with 3Q. As manufacturing efficiencies and product mix help to offset increased supply chain cost pressures. We expect fourth quarter non-GAAP operating. Expense of $25.5 million to $26.5 million. Inclusive of half a million of IP spending. In addition to other variable costs associated with the Atomic 110 and Apollo 340 tape outs. Finally. We expect a non-gap loss per share of $0.09 to $0.03. Based on a weighted average share count of 24.6 million shares outstanding.

  5. Stepping back. Our performance this year has significantly exceeded the expectation. We set at the beginning of 2026. Based on our fourth quarter outlook, we now expect full year net sales of approximately $140 million compared to our initial expectation of more than $100 million. We also expect gross margin to expand by almost 300 basis points year over year, well ahead of our initial expectation for modest improvement. With that, I'll turn the call back to WhoMe before we open the line for Q&A.

  6. WhoMeManagement

    Thank you, Jeff.

  7. We have strong momentum across the business and remain focused on delivering for our customers, advancing our product roadmap, and delivering long-term growth.

  8. Q&A6:00
  9. Operator

    With our differentiated technology and expanding portfolio, we believe AMBQ is well-positioned to capture the significant opportunity ahead. With that, I will open the call to questions. operator, please go ahead.

  10. We will now begin the question and answer session. If you would like to ask a question, please press star one on your telephone keypad. To withdraw your question, please press star one again. Please pick up your handset when asking a question. And if you are muted locally, please remember to unmute your device. Please stand by. While we compile the Q&A roster.

  11. Your first question comes from the line of Liam Farr from Bank of America. Your line is open. Please go ahead.

  12. Question · BofA Securities

    Liam FarrAnalyst · BofA Securities

    Hi, thanks for taking my question. I want to start by, in August, you said supply would limit sales in both 3Q and 4Q. The 4Q guide is now up about 6 million. Is 4Q still supply limited or is capacity caught up with demand? And if it is still limited, roughly, how much unfilled demand do you think carried into the first half of 2027?

  13. Jeffrey WinzelerChief Financial Officer

    We do still have certain demand that... that we couldn't completely fill. But I believe that we will be able to support all the customers with the minimum quantity that... that we needed. Our demand continues to be strong. And like I said in the last quarter, we can meet most of the... the demand as long as within a certain lead time. Again, Q4, we had a little bit of a short lead time upside in a demand. And those are the things that we couldn't provide so that... We believe that we have been able to work with our supply chain partners to provide a product they need within a certain lead time. So to answer your question, yes, we have to leave some demand unfilled because that upside came in with such a short lead time. But besides that, our supply chain partner has helped us to deliver as much as our customer needs. So I hope that answers the question. And if I could just add one thing in a couple of cases, we were able to use expedites to bring in some of the orders. So that was a positive thing, but that's not always something that we can count on. But I would say that it's a very dynamic environment. The team has been working very closely with the various suppliers. We've been working on reducing test times and increasing. Throughputs and so forth. So I think we've done a lot. And Expedite, we do owe a lot to our supply chain partners because usually they just can't. They're sold out as well. So they've done.

  14. Way beyond what they need to do to help us out. Amazing. Thank you. And for my follow up, 3Q OPEX was a little bit below the initial guide. Did any tape out or IP spending move from 3Q into 4Q? And how should we think about OPEX going into 2027 to support all of your different product ramps, especially thinking about Atomic in 2028? Thank you. Yeah. So the answer to your question is yes, some of our spending has slipped into Q3 and Q4. We saw some of that upside in Q3 and OPEX, as we just reported, and our guide for Q4 shows that continuing to increase. Now, that said, that the primary driver behind those things are variable costs like IP spending and tape out costs associated with Atomic 110 and with Apollo 340. In terms of Looking forward into 2027, I think it's too early to really guide in terms of, you know, what our run rate of spending is going to be for next year. We're in the process of doing our annual operating plan right now. So you know, we'll come back to you at a future time and give you some insight in terms of what that looks like.

  15. Question · BofA Securities

    Liam FarrAnalyst · BofA Securities

    Thank you, Jeff.

  16. Operator

    Your next question comes from the line of Torrey.

  17. Grace van Berg from Stiefel. Your line is open. Please go ahead.

  18. Question

    ?
    TorreyAnalyst

    Yes, thank you. And congratulations on the results. I was hoping you could talk a little bit more about the diversification. I think you said your larger customers, I think you grew almost 300%. So can you maybe highlight some potential applications there and use cases? Thank you. Why don't I, I can step in and talk about that, Tori. So actually, there was one that I believe we highlighted already, which is a glass break sensor and security system. This is what I think is kind of a bellwether opportunity within the broader infrastructure monitoring markets. And think of that being smart home related, industrial related, and we've got a number of different customers doing that. So in the past, we've talked about one company doing machine health monitoring using anomaly detection and local AI models. And we actually just had another win related to that recently. And so if you look broadly at infrastructure monitoring, whether it's monitoring smart grid or monitoring, you know, security in a home or security in a building. We see that as a really healthy and growing space on the medical side or let's call it digital health side. We're seeing a lot of opportunity as well. So we've talked about this in the past, but our portfolio of wins keeps growing there. It's everything from. EEG monitors to Parkinson's detection monitors to blood glucose monitors and and heart monitors, Holter monitors, these sorts of things. So a lot of really interesting use cases there. So those are the two that I'll highlight right now, which I see is as.

  19. Management

    being nice contributors in the coming years. Very good. And as my follow up, I think you also gave us a number for, you know, non wearables. I think you said maybe double digits by calendar 28, maybe. Yeah. Related question. What would that percentage look like if we assume, you know, customers that are buying both hardware and software and also those customers that are buying hardware, software and your model, your AI models, like, you know, what, what percentage could. That potential would be by 2028. Thank you. Well, what I'll say is that the percentage could go up. I think it's too early to quantify that, but maybe the key takeaway, I'm really glad you keyed in on the sale of the software of the AI model to the. That was that was mentioned because that is a big moment for the company. It's kind of let's call it immaterial right now in terms of contribution to revenue, but it has the potential to be significant. So we see that as a proof point. We're going to we're going to continue to pursue design in. I would say I think your intuition is right that a lot of the big opportunities for that tech product lie outside of our main customers. You know, our biggest customers are are very capable of doing a lot of that development themselves. But as we start looking at some of these non-wearables opportunities, that's the place where we can contribute value by building and selling AI models. So we'll report more on that in future quarters. But I think you're right to think that that becomes additive to that 2028 non-wear.

  20. Operator

    Thank you. Thank you. As a reminder, if you would like to ask a question, please press star one on your telephone keypad.

  21. Your next question comes from the line of Kevin Garrigan from Jeffries. Your line is open. Please go ahead.

  22. Question · Jefferies

    Kevin GarriganAnalyst · Jefferies

    This is Amritha for Kevin Garrigan. First of all, congrats. Results. And secondly, so you're expecting another strong growth year in 2027. Can you give us a sense of what you are thinking in terms of contribution from unit growth? versus higher ASPs and new products? So our customer projection continued to be extremely strong even into 2027. from both quantity-wise and also now that a lot of customers are moving towards Apollo 5, so ASPs going up, so mixture of quantity and price are both being healthy. However, it is too early for us to give you really specific numbers, and we'll be giving you guys those forecasts in the 2027 Q1 earnings call. But... What I can see right now is it was still very strong demand coming from all the existing customer, as well as a new customer that we just adopted. So, you know, we're very... optimistic that the 2027 is gonna be another great year for us. Okay, got it. And then another follow-up, another question. So last quarter... It's listed across waivers, substrates, packaging, and tests. And there still seems like there's a supply chain crunch today. So for you guys, which part of the supply chain remains the bottleneck? And where have... Secured, meaningful, incremental capacity? Like I said in the past, supply chain constraint comes in when customers give us...

  23. Management

    Such a really short lead time where, you know, like sometimes it's not really easy for us to work with our supply chain partners, but you see our growth from Q2, Q3, Q4... Our supply chain partner has been helping us to meet most of the demand with reasonable read time. So we believe that we will continue to do so in 2027.

  24. Management

    OK, thank you. We have reached the end of the Q&A session, and this concludes today's call.

  25. Management

    Thank you for attending.

  26. Operator

    You may now disconnect.

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