Ambiq Micro (AMBQ) Q2 FY26 earnings call: guidance and Q&A

How much more revenue could Ambiq have achieved in CY26 without supply constraints, and when are these issues expected to ease?

CEO Fumihide Esaka stated that customer demand is skyrocketing and continues to increase week after week, making it difficult to quantify the exact additional revenue. He noted that supply constraints are expected to persist into 2027, but strong partnerships with suppliers will help meet forecasted demand. He cited an example of a customer's product launch exceeding pre-order expectations by 3-5x, making immediate fulfillment impossible.

“I cannot put the specific number, but I'm not sure. I must say that a lot of additional demand is coming in week after week. And we believe that this trend will continue not only second half of this year, but even into the 2027.”

asked by Torres-Vonberg · answered by Fumihide Esaka

What are the key factors driving the better-than-expected gross margin performance in Q2 and Q3, especially with rising component costs?

Management attributed the strength to two main factors: strong ASPs due to pricing products to extract maximum value from customers, and significant improvements in manufacturing costs through yield and test time enhancements as products ramp to full scale. These improvements are partially offset by rising cost pressures.

“On the top side, from an ASP perspective, we continue to win business and price our products to extract the maximum value that we're providing and customers. So pricing continues to be something that we look at and make sure that we're balancing to get the most that we can from the products that we sell.”

asked by Quinn Bolton · answered by Unknown Speaker

Is there any specific wearable form factor (watches, bands, rings, glasses) seeing more demand?

Scott Hanson confirmed demand across all wearable types, but highlighted displayless trackers (smart rings, Fitbit Air) as a hot new area. This is driven by a trend towards AI agents in the cloud analyzing data, reducing the need for an on-device display and enabling more medical-like applications.

“What I will say is that one of the hot new areas is display list tracker. So that would encompass both your smart rings as well as track or Fitbit Air. There's a great demand for that.”

asked by Quinn Bolton · answered by Scott Hanson

Is the non-wearable market still comprising around 25% of the funnel, and is there a channel strategy to accelerate penetration?

Fumihide Esaka confirmed that the non-wearable market is growing strongly, doubling year-over-year, but its absolute contribution might not appear as significant due to the rapid growth in personal devices. Scott Hanson added that new designs launching next year still show roughly 25%+ in non-wearable devices. The company works with distribution partners and reps, and sees huge diversity in use cases across medical, industrial, and smart home markets, often through module manufacturers.

“Yes, and I would say that it does remain true that if we look at new designs launching next year, roughly 25% plus of that funnel is non-wearable devices.”

asked by Liam Farr · answered by Scott Hanson

Can the company achieve profitability or free cash flow break-even in FY27, or is Atomic needed for that?

Management is pleased with the progress in reducing operating losses due to fast-growing revenues and higher gross profit. However, they are currently focused on a growth model and investing heavily in product development (like Atomic 110 and Apollo 340). It is too early to discuss the tipping point for cash flow break-even or profitability, as the raised capital is intended to fund growth and new business opportunities.

“I think it's too early to really talk about that tipping point of when we'll get to cash flow break-even. We're very much focused on a growth model right now.”

asked by Liam Farr · answered by Unknown Speaker

With a stronger balance sheet, what is the strategy regarding inorganic growth (M&A) to expand product offerings?

Fumihide Esaka stated that while he cannot disclose specific strategies, the company is definitely using its funds to expand its product portfolio, potentially beyond current offerings like Apollo and Atomic. He encouraged listeners to 'stay tuned' as they are excited about the possibilities with the available funds.

“Yes, we cannot talk about what's our strategy, organic or inorganic growth, but definitely we're using that to expand our portfolio of the product.”

asked by Suji De Silva · answered by Fumihide Esaka

How much of the $7-$10 million in IP purchases for FY26 OPEX is recurring into FY27, and what is the right baseline for future OPEX?

Management clarified that the $7-$10 million for IP purchases was part of the initial FY26 OPEX guidance. These purchases are directly linked to the development of new products like Atomic 110 and Apollo 340 and are considered a variable cost. Therefore, the company will continue to spend on IP licensing for future product development beyond 340 and 110, implying it will recur as needed for new roadmap items.

“It'll be tied directly to the products that we're developing on our roadmap.”

asked by Tim McCurry · answered by Unknown Speaker

Of the year-over-year revenue growth, how much is attributable to units versus price?

Management stated that while they cannot provide an exact percentage, the primary driver for the significant revenue growth is unit-based. The demand for end customers on a unit basis is exceeding all expectations.

“I can't give you an exact percentage, but clearly to get that type of growth, it's unit-based. I mean, the demand for end customers on a unit basis is exceeding all of our expectations.”

asked by Tim McCurry · answered by Unknown Speaker