Are LTA revenues guaranteed or 'potential', and how should we model the $800M Hanwha figure?

Potential, not guaranteed; the $800M reflects gaining share on Hanwha's annual run rate over a multigenerational commitment plus CV-family ASPs well above the $15 corporate average. Louis added Hanwha is a $60B+ conglomerate and the relationship extends beyond physical security into automation, life sciences, robotics and industrial. “although our corporate ASP is $15 but our CV ASP is a lot higher than that. So if you calculate put all the things together, that's how we calculate this potential $800 million.”

Will customers share OpEx on these LTAs, and how are they funded over the next few years?

LTAs are driven by customers needing power-efficient platform silicon across use cases; in exchange customers are willing to help fund both the silicon and software platforms. “they were willing to help us to fund those platforms with , particularly not only on the silicon side but also on the software side.”

Can Ambarella take more share from Hanwha's internal SoC across multiple co-designed generations?

Yes — mutual intention to use the co-developed platform across more product lines, and Ambarella fully expects to gain more share from Hanwha. “we fully expect we're getting more market share from Hanhwa with this new development.”

AMBA

Ambarella (AMBA) Q1 FY27 earnings call: guidance and Q&A

Earnings call· Apr 2026 (Q1 FY27)· Information Technology· May 28, 2026

Source: earnings call transcript

Executive summary

Ambarella Q1 FY27 — Edge-AI leader signs $800M+ Hanwha LTA as automotive sets record

Ambarella is pivoting from project-by-project edge-AI chip sales toward platform partnerships locked in through multi-generational, multi-year customer agreements — the quarter's signature move — while automotive and commercial-vehicle demand carry near-term growth and consumer IoT stays soft. Management frames the sharp inventory build and its robotics/edge-infrastructure push as deliberate positioning for a broadening physical-AI opportunity rather than a demand air-pocket.

Highlights

Revenue $100.4M, up 16.9% YoY and slightly above the $97M-$103M guidance midpoint, at the high end of the normal seasonal range
Automotive set an all-time quarterly revenue record with strong above-seasonal double-digit sequential growth, led by commercial-vehicle telematics
Signed a Hanwha LTA with potential revenue in excess of $800M over a period exceeding 10 years — one of the largest agreements in company history
First 2nm semi-custom AI SoC LTA (product 'CV') taped out in January for the IoT endpoint market
Robotics traction: 15+ design wins (incl. drones) with lifetime revenue exceeding $100M and 30+ customers in the pipeline; enterprise security cameras grew high-single-digits sequentially

Concerns

Revenue fell 0.5% sequentially as IoT was seasonally down, with consumer IoT off double-digits QoQ
Days of inventory jumped from 99 to 145 as the company built stock amid DRAM/flash price inflation and tightening supply
Operating cash outflow of $25.6M and free cash outflow of $29.6M drove cash/marketable securities down $34.8M QoQ to $277.8M
Non-GAAP net profit was just $5M ($0.11 per diluted share)
Third-party firms see global auto production declining 1%-2% this year, and customers face higher DRAM/flash prices with potential second-half shortages

Guidance & targets

Category	Target	Timeline	Confidence
Q2 FY27 revenue	$105M-$111M ($108M midpoint) high materiality	Q2 FY27	High
Q2 FY27 non-GAAP gross margin	59% to 60.5% high materiality	Q2 FY27	High
Q2 FY27 non-GAAP operating expense	$56M to $59M medium materiality	Q2 FY27	High
Q2 FY27 net interest and other income	~$1.9M low materiality	Q2 FY27	High
Q2 FY27 non-GAAP tax expense	~$800K low materiality	Q2 FY27	High
Q2 FY27 diluted share count	~44.3M shares low materiality	Q2 FY27	High
Full-year FY27 revenue growth	10% to 15% high materiality	FY27	Medium
Automotive FY27 revenue	New all-time fiscal-year record; growth to outpace the 10%-15% automotive-semiconductor market growth high materiality	FY27	Medium
Long-term non-GAAP gross margin model	59% to 62% medium materiality	long-term	Medium
LTA revenue contribution	Expected to become an important driver of revenue growth with improved visibility, less volatility and more predictability over the long run high materiality	long-term	Low

Segment performance

Segment	Revenue	YoY	QoQ	Margin
IoT (LT applications) About three-quarters of total revenue. Enterprise security growth partially offset a double-digit consumer IoT decline; Panasonic launched the first endpoint camera running AI locally on CV72. Enterprise security camera revenue: high-single-digit sequential growthConsumer IoT revenue: double-digit sequential decline	~75% of total revenue	—	Seasonally down	—
Automotive Record quarter driven by commercial-vehicle telematics and safety applications; management expects auto revenue growth to outpace the 10%-15% automotive-semiconductor market growth despite global auto production seen down 1%-2%. All-time quarterly revenue recordOn pace for a new full-year revenue record	~25% of total revenue (implied)	—	Strong above-seasonal double-digit increase	—

Product announcements

Product	Type	Timeline
CV7X (CV7) edge-AI vision SoC	launch	Newly launched; production expected by end of FY27
2nm CVx (semi-custom 'CV') AI SoC	roadmap	Taped out January; production expected in 1H FY2028
CV72 (5nm) with transformer capability	milestone	Q1 FY27
Edge infrastructure SoC (incl. 1655) / AI Vision Box	roadmap	First product expected 2H FY27
CV5 drone/robotics platform (antigravity A1)	update	Q1 FY27

Deals & partnerships

Hanwha (South Korea) LTA — sourcing and co-development partnership Potential revenue in excess of $800M Over a period exceeding 10 years

Covers sourcing and co-development of Ambarella AI technology across Hanwha's product lines; Hanwha is a $60B+ annual-revenue conglomerate; Ambarella has an ~15-year existing relationship. One of the largest agreements in company history and among the first of its kind in the edge-AI semiconductor market.

Undisclosed IoT endpoint customer LTA — semi-custom ASIC co-development Typically 5+ years

First LTA example; Ambarella agreed to develop a semi-custom ASIC for a customer's complex AI workloads; product serves both consumer and enterprise IoT endpoint markets.

Lytx Customer design-in (commercial/public-sector telematics)

Industry leader in commercial and public-sector telematics designed CV75 and CV72 into multiple platforms.

Panasonic Customer win

Announced the first endpoint camera to run AI locally using the transformer capability in the CV72 SoC.

South Korean Tier 1 (in-cabin) and Western OEM in China Automotive design wins

Two CV72 wins for in-cabin pre-installed safety with a South Korea-based Tier 1; a CV22FS win for a Western OEM in China.

Samsung Foundry Foundry supply relationship Annual wafer commitments (no long-term contract)

18-year relationship; Samsung publicly named VDI and Ambarella as 2nm process-node customers at its Foundry event; Ambarella secures wafers annually and holds no long-term supplier contract.

Risks & headwinds

DRAM/flash price inflation and potential second-half shortage affecting customers Second half of the year

Not quantified; described as much higher DRAM/flash prices and potential second-half shortage

Mitigation:Impact is indirect; Ambarella provides engineering support to help customers re-source DRAM and optimize/reduce DRAM utilization per chip

Component supply tightening (Samsung/'Sensor') Ongoing / near-term

Not quantified

Mitigation:Supply secured; company built additional inventory as a prudent buffer

Inventory build Q1 FY27

Days of inventory rose to 145 from 99; cash/marketable securities fell $34.8M QoQ to $277.8M

Mitigation:Deliberate positioning for new product cycles and supply security, not a demand air-pocket per management

Consumer IoT weakness Q1 FY27

Double-digit sequential decline in consumer IoT revenue

Mitigation:Offset by enterprise security growth; both consumer and CapEx markets expected to grow in Q2

Weak global automotive production backdrop CY/FY27

Global auto production expected to decline 1%-2% this year (third-party)

Mitigation:Rising semiconductor content per vehicle (auto-semi market +10%-15%); Ambarella expects to outpace via telematics and safety wins

Customer/internal-SoC and wafer-supply concentration Long-term

Not quantified

Mitigation:LTAs expected to shift Hanwha share from internal SoC; 18-year Samsung relationship with reliable annual wafer commitments; no long-term supplier contract

Negative operating and free cash flow Q1 FY27

Operating cash outflow $25.6M; free cash outflow $29.6M

Mitigation:Primarily driven by the deliberate inventory build; cash/marketable securities remain at $277.8M

Q&A highlights

With auto growing faster than its end market, how should we think about full-year revenue growth versus the prior 10%-15%?

Reiterated ~10%-15% full-year growth, unchanged, with automotive growing faster than other markets.

“for the whole year, we're still thinking it's probably 10% to 15%. We're not changing that.”

asked by Ross Seymore · answered by Fermi Wang

3 min read 7 chapters

Detailed narrative

Long-term customer agreements as a new revenue phase

Ambarella framed the quarter around the emergence of long-term agreements (LTAs) that can involve standard products and/or semi-custom AI SoCs optimized for a customer's workload, typically over 5 years or more with structured volume and pricing. The first LTA involves the company's first 2-nanometer semi-custom SoC ('CV'), taped out in January, serving consumer and enterprise IoT endpoints.

The second — announced concurrently with Hanwha in South Korea — carries potential revenue in excess of $800M over a period exceeding 10 years. Management said it is engaged in additional LTA discussions but disclosed no others.

Hanwha LTA anatomy

Hanwha is a $60B+ annual-revenue multinational conglomerate spanning aerospace, defense, robotics, physical security, life sciences, industrial and more. Ambarella has an ~15-year run rate with Hanwha but historically took only a percentage of its share; the LTA is expected to gain market share on Hanwha's annual run rate and expand beyond physical security into operational automation, life sciences, robotics and other industrial markets.

The relationship covers sourcing and co-development across two generations of co-developed silicon, and management expects to win share from Hanwha's internal SoC.

Automotive record led by commercial fleet telematics

Automotive set an all-time quarterly revenue record with strong above-seasonal double-digit sequential growth, driven by commercial-vehicle telematics and safety applications. The commercial-fleet telematics installed base exceeds 100 million vehicles growing ~10% CAGR, but only ~10%-20% currently uses AI/AI-video as an ARPU-generating feature, and demand for more sensors and more complex AI workloads is lifting ASPs.

Q1 wins included Lytx (CV72/CV75 across multiple platforms), two CV72 in-cabin wins with a South Korean Tier 1, and a CV22FS win with a Western OEM in China.

IoT seasonality and product transitions

IoT ('LT applications') was about three-quarters of total revenue and seasonally down, with enterprise security cameras growing high-single-digits sequentially offset by a double-digit sequential decline in consumer IoT. Panasonic announced the first endpoint camera to run AI locally using the transformer capability in the CV72 SoC.

New 5nm CV75/CV72 products are in production ramp and expected to drive material incremental revenue this year; 10nm CV2 family continues to land wins; barcode-reader win on CV28 expanded industrial reach.

Robotics and edge infrastructure build-out

Ambarella now has 15+ robotic design wins including drones, with lifetime revenue exceeding $100M and more than 30 customers in the pipeline, spanning industrial automation, AMRs and delivery robots with a focus on perception and decision-making. The company cited a drone platform (antigravity A1) enabling 8K imaging and on-device inferencing.

For edge infrastructure it has design wins with first product expected in the second half of the year; the current SAM for AI Vision Box-type products is a couple hundred million dollars, to be updated as the roadmap expands.

Indirect sales channel launch

To address fragmented robotics and emerging edge-infrastructure markets, Ambarella is building an indirect channel launched at CES in January. It has onboarded half a dozen ISVs, all currently U.S.-based, across retail, industrial automation, transportation, healthcare and smart cities, with a goal to double the count this year and expand to Japan and Europe.

The effort also includes channel partners and system integrators, since complex edge workloads often require multiple ISVs on a single project rather than off-the-shelf solutions.

Supply chain, inventory and margins

Days of inventory rose from 99 to 145 as Ambarella deliberately built stock to service new product cycles and to hedge tightening supply — Samsung ('Sensor' per ASR) informed the company its supply is getting tighter, and customers face higher DRAM and flash prices with potential second-half shortages.

Management said the DRAM impact is indirect, mainly requiring engineering support to help customers optimize DRAM utilization. Non-GAAP gross margin of 59.9% landed above the guidance midpoint, and management reaffirmed a 59%-62% long-term margin model.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.