Ambiq Micro Q4 Earnings Call Highlights

Key Points

• Ambiq delivered its highest quarter of 2025 with net sales of $20.7 million (up 2% YoY, 14.2% sequentially) and expanded non-GAAP gross margin to 45.5%, driven by a favorable product mix and broader adoption of Apollo5.
• Management expects 2026 to be a strong growth year and sees a “clear path to more than $100 million” in revenue, guiding Q1 net sales to $21–$22 million with non-GAAP gross margin of 44%–45%.
• Operating expense will increase sharply—about $30 million higher in 2026 (including $7–$10 million of IP purchases) to accelerate Apollo and Atomic development, while the company has no debt and roughly $217.1 million in cash after a $76.8 million follow-on to fund growth.

Ambiq Micro NYSE: AMBQ reported fourth-quarter and full-year fiscal 2025 results that management said reflected accelerating demand for edge AI, improved business mix, and benefits from the company’s strategic repositioning away from “efficiency-focused, feature-neutral” customers. Executives also outlined a 2026 outlook calling for strong revenue growth alongside significantly higher operating expense as the company accelerates development across its Apollo and Atomic product families.

Fourth-quarter results exceeded guidance as demand accelerated

CEO Fumihide Esaka said the company delivered its highest net sales quarter of 2025 in the fourth quarter, exceeding guidance as end-user demand outpaced customers’ expectations and led to incremental expedited orders late in the quarter. He attributed the sequential net sales increase from the third quarter to three factors: strong end demand for customers’ products, broader adoption of Ambiq solutions within customer portfolios, and customers upgrading to Apollo5 for more advanced edge AI functionality.

CFO Jeff Winzeler reported fourth-quarter net sales of $20.7 million, up 2% year over year and up 14.2% sequentially. Non-GAAP gross profit rose 75.5% year over year to $9.4 million, and non-GAAP gross margin expanded to 45.5%, which Winzeler said was driven by a more favorable product mix and higher sales to customers deploying multiple edge AI capabilities on Ambiq’s SPOT platform.

Winzeler also highlighted that mainland China accounted for 8.6% of net sales in the fourth quarter, down from 50% in the fourth quarter of 2024, reflecting the company’s shift in customer mix. Fourth-quarter non-GAAP R&D expense was $9.3 million (up 33% year over year and 34% sequentially), reflecting increased investment to support product development for Atomic and Apollo families. Non-GAAP SG&A expense was $7.3 million, up 19.7% year over year, largely due to public company costs.

Other income was $1.3 million, up $1.1 million from the prior year due to interest income earned on IPO proceeds. Fourth-quarter non-GAAP net loss attributable to common stockholders was $5.9 million, and non-GAAP net loss per share was $0.32.

Full-year 2025: edge AI adoption, customer expansion, and an IPO

Esaka called 2025 a “milestone year” and said Ambiq estimates that more than 80% of the units it shipped were running AI algorithms. He said net sales and non-GAAP gross profit increased in every quarter of the year, and the company delivered its highest ever annual gross profit.

Management also cited customer and product developments during the year. Esaka said Ambiq expanded its customer base across multiple end markets, including securing a large wearable customer, and strengthened and diversified its design funnel—particularly in medical, industrial, and smart home/building markets. Those programs are expected to move into production over the next 18 to 24 months, which Esaka said should provide incremental growth and revenue diversification.

On product and software, Esaka said the company expanded its portfolio for more advanced edge AI applications with launches including Apollo510 Lite, Apollo510B, and Apollo330. He also noted the introduction of HeliaAOT and HeliaRT AI runtimes, powered by the new Helia Core AI kernel library. Esaka added that the company completed a successful IPO, which he said demonstrated investor demand and confidence in Ambiq’s strategy.

2026 outlook: strong growth expected, with seasonality still a factor

Management repeatedly emphasized expectations for strong growth in 2026. In response to an analyst question, Esaka said fourth-quarter 2025 represented an inflection point and that customer forecasts were “extremely strong.” He said Ambiq expects the trend to continue in 2026 and added that the company “clearly see[s] a path to more than $100 million” in revenue.

Asked about seasonal patterns, Esaka said he expects the first three quarters of 2026 to be “extremely strong,” while noting that the fourth quarter was “still a little bit” out and that the company typically sees seasonality peaking in the fourth quarter.

For the first quarter of 2026, Winzeler guided to:

• Net sales of $21 million to $22 million
• Non-GAAP gross margin of 44% to 45%, reflecting the ramp of the Apollo5 family and expected yield and cost improvements as it scales
• Non-GAAP operating expense of $18.0 million to $18.5 million, including about $1.7 million related to IP purchases
• Non-GAAP loss per share of $0.39 to $0.33 based on a weighted average share count of 20.38 million

Winzeler said the company sees a “clear path” to strong net sales growth in 2026 driven by new model launches, a scaled global customer ramping into mass production, higher volumes from recent customer introductions, and continued adoption of Apollo5.

Margins and spending: yield focus amid industry cost dynamics

On gross margin, Winzeler said Ambiq remains focused on maximizing value on the ASP side by targeting opportunities with higher per-unit revenue, while on the cost side it is focused on yield across the portfolio. However, he cautioned that broader industry dynamics—such as higher costs for capacity for fabless semiconductor companies—could create pressure, particularly in the second half of the year.

Operating expense is expected to increase sharply. Winzeler said non-GAAP operating expense in 2026 is expected to be approximately $30 million higher than 2025, tied to accelerated development of the Atomic and Apollo families. He said the increase includes engineering headcount growth, greater use of contract engineering to provide flexibility, and $7 million to $10 million of IP purchases necessary for product development. He also noted operating expenses will not be linear, with much of the project-based contract engineering and IP spending expected to occur in the Q2 and Q3 timeframe.

Ambiq ended the quarter with no debt and $140.3 million in cash and cash equivalents. Winzeler also said that in the first quarter of 2026 the company completed a follow-on offering generating an additional $76.8 million, which he said provides flexibility to fund growth initiatives and strategic priorities.

Roadmap highlights: Atomic, Apollo expansion, and SPOT power efficiency

Esaka said the company announced new technical details for Atomic, described as the first SPOT family built on a FinFET process with TSMC and enabling operation down to 300 mV, which he called the lowest voltage in company history. Founder and CTO Scott Hanson added during Q&A that standard operating voltage at 12 nm is roughly 0.7 V, and said that operating at approximately 350 mV versus 700 mV could provide a “fourfold energy advantage,” with additional gains possible from other SPOT-related design innovations.

Esaka said Atomic is designed for AI workloads that benefit from parallel processing and includes an integrated NPU, GPU, and embedded memory. He also said the company is accelerating product development, planning to start development of Apollo340 and Atomic120 this year, along with ongoing work on Atomic110. Winzeler said Atomic is positioned to contribute meaningfully beginning in 2028.

On end-market drivers, Esaka said wearables remain a major contributor, while noting that 25% of the company’s funnel is now non-wearables, including industrial and medical. He said the company expects non-wearables to represent a greater share in 2026. Management also discussed industrial and medical use cases such as predictive maintenance sensors, cardiac monitors, senior care devices, hearing aids, and smart building applications.

In Q&A, Esaka also noted a new customer entering mass production, saying the ramp is starting in Q1 with “very, very strong growth” quarter after quarter and expectations that it will be even bigger in 2027.

About Ambiq Micro NYSE: AMBQ

Ambiq Micro NYSE: AMBQ is a semiconductor company specializing in the design and development of ultra-low-power microcontroller units (MCUs) and application-specific integrated circuits (ASICs). The company's core technology leverages sub-threshold voltage operation to dramatically reduce energy consumption, enabling extended battery life in a broad range of portable and always-on devices. Ambiq's products are particularly well suited for applications where power efficiency is critical, such as wearable electronics, IoT sensors, medical monitoring equipment, and industrial automation systems.

The company's flagship product family, the Apollo series of MCUs, offers multi-core architectures, integrated wireless connectivity options, and advanced security features.

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